Saturday, May 30, 2009

Idle Brain Output - Pay

When not working it's not particularly amazing how much idle time you get to think whatever pops into your head. I tend to think about such things constantly until I write them down. So I'm going to write them down.

Money is important. Lots of other things are as or more important, but money comes quite high on the list, partially because it takes care of things further up the list like food and shelter.

Anyway, I mention this as a lead in to a discussion about salaries. I've seen two main methods of calculating salaries for full time positions, which basically boil down to internally driven and externally driven. Internal is where you figure out the value an employee brings to the company, much as you would when deciding whether or not to buy new servers. External is where you figure out the market rates for the given position and pay the new employee accordingly.

What I've been thinking about of late is the concept of calculating a salary based on what a person does as an employee. Basically the idea is that you take a position and divide it up into five components, and then figure out the salary from the five components. I think it would be nice to know when you got a job that you were being paid based on some sort of rational system that applies across a whole lot of different industries rather than someone pulling a figure out of thin air.

Time. Although in the full time world everyone gets hired to work the same amount of time (basically 40 hours a week) there is an implicit - and depending on the contract maybe an explicit - assumption that more hours will be worked as necessary. Figure out how many actual hours someone is expected to work a week and compensate accordingly.

Responsibility. The closer somebody has to stand to the fan when it gets hit by the proverbial, the more compensation they should get for it. Simple.

Aggravation. There are things in ever job that nobody wants to do, be it get up at 4am for a flight, or clean up soiled bedsheets. If possible, enumerate these tasks and compensate each one separately.

Difficulty. Not everybody can do every job, and more difficult jobs should get paid more. I think it's important to separate the desired qualifications and experience from actual ability to do the job here.

Excellence. Excellence is a bit of a weasel word, but it more or less covers the topic of quality and it makes for a better acronym than TRADQ (Time Responsibility Aggravation Difficulty Excellence, see?). Anyway, this is where most people get pay rises based on performance, and rightly so.

It would be interesting to do some analysis using these criteria to see if there is consistency in wages across different industries. Of course that would be a lot of work, and I'm lazy.

Final note: I have given more detailed thought to the criteria, but this post is already long enough.


  1. wow, the things you find when you're at home with a sick kid :)

    You know, you should write a book and do a conference circuit, people pay thousands to hear someone tell them stuff like this.


  2. I like the ideas here, but the problem is getting higher ups to define just how difficult your job in and how much you are expected to do, and then stick to that when it comes time to look at performance.

  3. Not to mention the higher ups seem to do less work, but take more of the pay...


  4. It certainly would take a lot of surveys and interviews and horrible statistics to reach the point it was useful, but like I say I'm sitting around just thinking about stuff at the moment.


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