Some Thoughts on Compensation

Money Makes the World Go Around

People think about money a lot, and I’m no different. Especially recently, since I’m looking to make more as well as facing paying a lot out to people for various goods and services. Rent, legal bills, utilities, loans, maintenance, and much of the same things everyone has. Probably not in the same ratios, however.

I have mounting legal bills because of a divorce that has been in proceedings for around 7 months. We’re no closer today to closing our case than we were 7 months ago, but I’ve managed to amass thousands in legal bills for my lawyer’s services. That got me to thinking: what other jobs and fields are there where people get paid not based on results or outcome, but on product, and in some cases, just showing up day after day? My lawyer is very skilled in the courtroom and drafting/filing paperwork. He is very unskilled when it comes to managing an office (aside from reliably sending out invoices) and closing cases. But for divorce lawyers, there’s a conflict of interest in how they are compensated. It behooves them to keep the cases open because an open case represents a money tree. If he/she needs money, file a motion. Send an email or make a phone call. They bill down to 6 minutes at a time in some cases, and it’s not unheard of a divorce lawyer to charge $375 an hour. The retired judge who was handling our second round of mediation, which failed as expected, was surprised to learn my lawyer “only” charged $275 an hour. And for the mediator to show up and accomplish nothing, he himself was paid hundreds of dollars, as was my attorney. They basically passed notes back and forth between my wife and me on our behalf until I was forced to walk away.

In much of business, business owners hire employees based on their output capabilities. Labor is like a machine and is judged and paid based on that premise. It’s not depreciable, however. When looking for a job, the candidate must show that he/she can produce quality work consistently, under stress or whatever the position entails. That’s why it’s good to have a job where you can quantify your work accurately.  If you have one where it’s tricky to measure your output, so that you can justify your wages and justify increases, you might find yourself on the low end of the pay scale. Secondary school teachers face this. College professors don’t because their value to schools is in the ability to publish articles. The teaching aspect isn’t what is compensated, which is proven by the difference in what adjunct teachers are paid and tenure-track professors are. The difference between the two is only that the latter is expected to publish, and do service. The number of articles and level of journals that they appear in is easy to see, and the ones that do so at a high-level research school are paid more than those a lower level teaching school.

Government administrative jobs usually are viewed and compensated more on input than output. But that varies of course. In some cases, compensation is simply a reflection of what the other guy is making somewhere else. Although the public county school system I live in is one of the most poorly run in the country, the new superintendent just received over a $100,000 raise because that’s what some other people make elsewhere. It had nothing to do with the fact that the school system is on probation for all sorts of violations, the state is threatening to take over, and the superintendent was already doing the very same job for $100,000 less. Meanwhile today, teachers are picketing at the state capital and threatening a walkout over their pay packages.

Doctors are paid similarly as well, and “earn” comparably high salaries. They are paid whether you get well or die, however, not on the quality jobs they do. Just on whether they attend to you as a patient or not is why they’re paid. It’s why I’ve had to bring my little daughter to see a doctor, even though what was to take place could have been done over the phone. In order for the doctor to be paid by the insurance company, he needed to have the patient physically standing there.

Engineers are paid well, but they are paid on quality and scope of work. Makes sense. Executives are similarly paid. There are goals and metrics in place they must achieve. A lot of people speak poorly of the amount of money a CEO makes, but at least he/she can justify why or why they didn’t earn the money. The same can’t be said for many other professions though. It makes you wonder what types of people gravitate to each type of job? Some people are fine being judged by their work and have their pay depend on their productivity, like most salespeople. Others rely on protections to warrant a paycheck, whether they do a good job or not, or at all. Union jobs, tenured jobs, political jobs, etc…


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