> The answer is to remove it all; enable true pride in work, fair compensation, leadership, continual improvement, education and self-improvement. This works better.
A key question in the idea of "fair compensation" is what do you mean by "fair"?
If one of your superstar outliers is contributing 5x, 10x or more business value than the average, what does fair compensation look like? Is it 100% of the compensation of the average? 110%? 150%? 250%?
In my experience, few firms have compensation structures so flexible as to reflect the true range of contributions of different employees. As a result, their compensation philosophy tends more towards "equal compensation" than "commensurate compensation".
The question is whether fair lies closer to "equal" or to "commensurate" on the spectrum.
(I obviously understand the argument that equal might result in a more cooperative workforce and a stronger company, all other things being equal. But the very strongest performers, assuming their strength is portable to another firm, will have an incentive to migrate to a firm willing to compensate them more commensurately to their contribution, again, all other things being equal.
Once one of these firms springs into being, they may become a magnet for talent as great people like to work with and for other great people. If one can do that to a greater extent at this magnet firm AND have a higher income, enabling more retirement and family financial security, better vacations, etc, those will be powerfully aligned forces.)
A key question in the idea of "fair compensation" is what do you mean by "fair"?
If one of your superstar outliers is contributing 5x, 10x or more business value than the average, what does fair compensation look like? Is it 100% of the compensation of the average? 110%? 150%? 250%?
In my experience, few firms have compensation structures so flexible as to reflect the true range of contributions of different employees. As a result, their compensation philosophy tends more towards "equal compensation" than "commensurate compensation".
The question is whether fair lies closer to "equal" or to "commensurate" on the spectrum.
(I obviously understand the argument that equal might result in a more cooperative workforce and a stronger company, all other things being equal. But the very strongest performers, assuming their strength is portable to another firm, will have an incentive to migrate to a firm willing to compensate them more commensurately to their contribution, again, all other things being equal.
Once one of these firms springs into being, they may become a magnet for talent as great people like to work with and for other great people. If one can do that to a greater extent at this magnet firm AND have a higher income, enabling more retirement and family financial security, better vacations, etc, those will be powerfully aligned forces.)