[quote=EconProf]flu, think about what you just wrote. There is NO correlation between performance and pay.
C’mon, you are smarter than that.
It may be that there is too little correlation, it may vary by company, profession, etc. But companies that pay and promote by performance tend to do better than their competitors who don’t and thus trounce them in the marketplace. Not always, of course. But that is the general tendency. That’s also what makes capitalism so annoyingly productive to its detractors.[/quote]
A lot of jobs (I would say most jobs, with the exception of sales as harvey pointed out) works like more like communism than capitalism..
For example, let’s take engineering.
If you’re a star performer versus not a star performer, what are you looking at in terms of pay raises and bonsues really? I think a lot of people would say.. “My pay raise was 4% and I was a star performer. The non-star performer was 2.5%”…So…what you’re saying is that performance pay comes down to between a 1.5% difference, and then after taxes more like 1% difference??? And let’s just assume that every enginerd makes $150k a year…(not realistic, because that’s on the high side).. So we’re talking about a $1500 difference…per year…. Each, month that’s $125 extra for being a “star”…Gee, I can get a tank and half of gas extra per month in my SUV that takes 91 octane…
For a lot of people, what they end up thinking is ….Hmmm +1% to work my ass off to be a “star” performer or have 1% less to take it easy and let someone else do the heavy lifting…Yeah, I’ll let the company/firm keep the 1%.
It goes back to the old analogy.. Hmm if I get $1 for working or $1 for not working, why should i work extra?
The exception would be if you do work that’s “good enough” and you stand out by running your mouth off by how good you are…Then bammm!…Promoted…
