Would you publish your salary?

February 16, 2008...... at 8:26 pm | Posted in Uncategorized | Leave a comment

The other day I was having a conversation about talent retention and staff incentivisation. One guy wanted to implement a blanket policy to incentivise everybody. My view was that incentivisation should be based on a conversation with the individual being incentivised, because everybody is different. Then this morning I was reading (via Steve Ohlson): People think price is a simple unemotional math calculation, but it isn’t. If it was, all salaries in a corporation would be published on the corporate intranet, because after all, they are just numbers, right? But they aren’t published because people get emotional about the price they are getting paid for their labor. (more…)

Which got me to thinking about salaries and how 2 people doing the same job may be unequally remunerated but equally happy. Though their salaries in absolute terms are different, their levels of individual satisfaction (utility) may be exactly the same, because ultimately it is an individual thing.

Being an economist, maximising utility is very important. For some people miximum utility may come from drawing the biggest salary check that they can, but for others utility might be increased while at the same time lowering the overall cost to the company. This is a win-win opportunity which I feel is all to often lost through blind conformance to a mandated salary structure.


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