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I just retired after over 60 years of working. I started building machines when I was 10 years old using plain machine tools and arc and gas welding. I became very good at it. The I went to war via the USN and, instead of repairing broken machines, I spent my time as a compartment cleaner and mess cook. I did learn how to be bored. After returning to civilian life I did get a job as a prototype machinist earning pretty good money. What I could not stand was being disrespected by the engineers and other bosses for just being a machinist.
I quit and went to college and spent the next forty years as an exquisitely bored bureaucrat. The result is I have a decent pension and money in my investments. I did not have to stand on cold concrete and be looked down on by the bosses. After I get sufficiently bored I'll look around and find something interesting to do.
Judging by the bosses I have worked for or served under in the Navy I believe most shouldn't have had the job let alone be paid for the destruction they can do to their companies or their troops. Look at the recent massive recalls in the auto industry. People have been killed and the corporations will loose billions because some manager(s) were covering their arses instead of admitting their was a problem and fixing it ASAP.
IMHO the only condition that might justify executive salaries would be if the executives were liable to the full extent of their personal fortunes for corporate liabilities.
Wrong. First as the poster above aptly stated revenue and profit are not the same. 2nd, if you flip burgers, you are providing a widely available commodity, and like any other commodity, the lowest cost is the best cost.
I know that, but any calculation you want to use to figure out for how valuable a position or employee is starts at revenue generated.
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Originally Posted by TaxPhd
Just as I thought. You have no idea how businesses operate.
You're right. I've never taken a business course or even sniffed at a P&L. Please enlighten me on how wrong I am about the relationship between the $ an employee brings in the value of that position.
How would you even know that you are just making assumptions?
My sister works one. They have at minimum 200 available applicants at any time. The process to actually pick one involves very little time, as there are no claims of skills amongst the applicants that require intensive interviewing to insure they are true.
PS: Her "interview" to get hired took less than ten minutes.
You're right. I've never taken a business course or even sniffed at a P&L. Please enlighten me on how wrong I am about the relationship between the $ an employee brings in the value of that position.
You made the claim. The burden is on you to support it.
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The fair value of a job is not how many people can do it; it's how much revenue that job generates for a company
You made the claim. The burden is on you to support it.
My support is in the statement and self-explanatory.
You're the one saying that using the revenue a position generates is an absurd metric to determine compensation. You're the one that needs to explain why connecting revenue generated to wages doesn't make business sense.
Especially considering that's exactly what "commission" is.
I know that, but any calculation you want to use to figure out for how valuable a position or employee is starts at revenue generated.
You're right. I've never taken a business course or even sniffed at a P&L. Please enlighten me on how wrong I am about the relationship between the $ an employee brings in the value of that position.
An employee's "value" is simple: rarity of skill and ability
A brand management associate will often be in charge of a business line between 2 and 10 million dollars. These guys start around 85k a year. the size of the P&L isn't important. . .its that a company can find people with the skills to be successful at running that size of p&L and they want a minimum of 85k
A worker at flipping burgers. . .isn't rare at all. You can get high school students to do the job (for example) and thus there are lots of people. So you put out a salary of $5.00 an hour and if you get the employee of the appropriate skill and ability your fine
The work the person does . . really doesn't matter short-term. Generally though the greater the workers impact to the organization, and the more rare the employee, the more the employee is paid.
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Originally Posted by EddieB.Good
My support is in the statement and self-explanatory.
You're the one saying that using the revenue a position generates is an absurd metric to determine compensation. You're the one that needs to explain why connecting revenue generated to wages doesn't make business sense.
Especially considering that's exactly what "commission" is.
Commission, or the change in companies paying it, is a good way to think about it I think. At first you had multiple places offering commissions. Shoe stores, Appliance stores, etc. In general a commission workforce can have negatives but due to the ability they are higher paid. . than non-commission. Commissions cost more though. . .the workforce at Commission stores are paid more, products are paid more expensive, you get better service.
so what happen - commission is gone. Best Buy, etc. . .all gone. Why? Well customers didn't value the service (or found it a negative) and swapped their purchases to places without the service but could pay less. Customers traded in better service for lower prices. Stores adapted.
I.e. if you have the internet, I don't need help from Joe Schmo on what TV to buy.
So now these places all pay for a lower quality workforce but offer cheaper product. Customers demanded it.
good news is that for those who suck at selling stuff, and aren't qualified for commission roles our now employable. Win win for customer and employees. . .
My support is in the statement and self-explanatory.
You're the one saying that using the revenue a position generates is an absurd metric to determine compensation. You're the one that needs to explain why connecting revenue generated to wages doesn't make business sense.
Especially considering that's exactly what "commission" is.
We are talking about minimum wage burger flippers. Tell us all about how their compensation is tied to the revenue they generate.
We are talking about minimum wage burger flippers. Tell us all about how their compensation is tied to the revenue they generate.
Do you remember me saying this:
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Originally Posted by EddieB.Good
It doesn't matter what their skills are. If by doing their job correctly, they earn their company hundreds of dollars an hour, it's entirely fair & justified for them to ask for a bigger share of that haul than they're getting.
That's in response to the conventional "wisdom" that you can't pay min wage workers more b/c they're low-skilled/easily replaceable.
So what's the alternative to deciding wages if it isn't that absurd application of S&D? Well...
An employee's "value" is simple: rarity of skill and ability
No it's not.
Quote:
A brand management associate will often be in charge of a business line between 2 and 10 million dollars. These guys start around 85k a year. the size of the P&L isn't important. . .its that a company can find people with the skills to be successful at running that size of p&L and they want a minimum of 85k
A worker at flipping burgers. . .isn't rare at all. You can get high school students to do the job (for example) and thus there are lots of people. So you put out a salary of $5.00 an hour and if you get the employee of the appropriate skill and ability your fine
The work the person does . . really doesn't matter short-term. Generally though the greater the workers impact to the organization, and the more rare the employee, the more the employee is paid.
All of that is irrelevant. It's a nice story that rich people tell everyone else to justify why they think it's okay to have employees in poverty.
Too bad that logic falls apart when you try to apply it to executive compensation. I'd say the vast majority of mid-level managers earning >$100k could replace the vast majority of VPs & C-level executives in their industry. So with all that "competition" how is justified that they earn high six-figure/low seven-figure salaries?
Quote:
Commission, or the change in companies paying it, is a good way to think about it I think. At first you had multiple places offering commissions. Shoe stores, Appliance stores, etc. In general a commission workforce can have negatives but due to the ability they are higher paid. . than non-commission. Commissions cost more though. . .the workforce at Commission stores are paid more, products are paid more expensive, you get better service.
so what happen - commission is gone. Best Buy, etc. . .all gone. Why? Well customers didn't value the service (or found it a negative) and swapped their purchases to places without the service but could pay less. Customers traded in better service for lower prices. Stores adapted.
I.e. if you have the internet, I don't need help from Joe Schmo on what TV to buy.
So now these places all pay for a lower quality workforce but offer cheaper product. Customers demanded it.
good news is that for those who suck at selling stuff, and aren't qualified for commission roles our now employable. Win win for customer and employees. . .
Thank you for proving my point.
A place like Best Buy at one point thought the value of the position could be determined as a share of revenue generated. W/ no change in the skills of the work force or the availability of people to do the job, suddenly that model shifted to "we can't pay you a lot b/c you're easily replaceable."
Was Best Buy wrong in the past & digging itself into bankruptcy? Or are they just being tricky/shady/unfair today by using the current "market wages" model b/c it let's more money flow to the top?
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