I was consulting to a development manager at a tech company. He told me that the CEO, his boss, wouldn’t give him the salary and option freedom he needed to close a great programmer he’d found. Salary would have been 20% above what he had approval to offer; and, thanks to the new accounting standards for stock options, he didn’t have the authority to offer options. He lost the potential new hire and had to settle for someone merely “good”. Ironic thing is that he had several open positions so, once he gets through hiring several people, he’ll end up paying more in the aggregate than he would have paid for the superstar – and probably won’t get as much productivity.
Why do we persist in evaluating productivity as if the only model for productivity is the assembly line? Creative work is anything but incremental--it's in fact inherently exponential. If Einstein could accomplish a civilization's worth of "work" in a single calendar year (1905, while he was "working," incidentally, as a patent examiner), why don't we recognize that it's more efficient to value productivity on the content of the contribution alone?
Curiously, the only "jobs" now valued in this way are top-level executive positions, where the results are indeed measurable in company earnings, and where all measurements indicate that an investment in higher salaries has no positive effect.
Shouldn't it be the other way around? Let executives "earn" their salaries in the form of a profit share, but make capital investments in talent.
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