I wonder if status incentives are the reason why so many academics tend to borrow and share similar views. In theory, academic work should be about searching for the truth, no matter how much it upsets people and exploring your curiosity, which takes a lot of courage. In practice, it's usually the opposite. The fear of getting fired from your academic because you have a different view from your peers is a real one, and it's becoming an obstacle when it comes to truly learning. Courage is something that a lot of modern academics lack, and one of the reasons why is because of status incentives.
I own a security guard company in Toronto. I inherited it in 1994 . We now have 5000 employees working as security guards, which is to say the client pays their wages. They earn minimum wage up to five dollars more than minimum wage : $17-$22.
My management team has one president $700k, 7 VP’s $220k, 20 directors $130k and 40 managers $70-$90k.
Ours is a low status business. You have to wear those funny weird security guard uniforms. (Not managers) Management are promoted from within, they used to be security guards. People never leave to go to competitors. They are too insecure. They correctly judge the danger that would be involved. These people want money but safety is far more prominent in their thinking. As a psychological phenomenon this is interesting but in my experience people would never be so cavalier about their ability to succeed elsewhere. Human politics are 90% of the equation - job performance 10%.
Much of this does not compute with me probably because of my long corporate career working for generally well run companies. In my experience there was a lot of effort put into rewarding and promoting based on demonstrated capabilities and productivity. Certainly other criteria played into the decisions like time on the job (demonstrating a level of loyalty to the business, and also probably indicative of greater institutional knowledge compared to other employees with less time on the job), and also relationships within the organization. However, this also demonstrates value to the organization as those with a wider and deeper network of relationships within the organization would be more effective at diplomacy and negotiations.
We have job descriptions and salary grade level ranges within each. Employees move up in grade levels as they demonstrate increased mastery of their job... and hence increased productive value to the organization. Many employees also have an incentive component that rewards greater productivity within a job. Those are always tricky because what gets measured with rewards generally gets done. If you are rewarding the wrong things, you will get the wrong things.
For example, I used to manage a large IT help desk as well as other functions. We started providing an incentive for the number of trouble tickets handled and closed. We did this until we discovered that savvy help desk analysts would create temporary fixes so they handle the same problem multiple times. The would also close tickets too quickly without good customer service delivery. So we changed that incentive to count permanent fixes and customer feedback on the quality of help.
In general where I see the disconnect from productivity and pay is in the public sector as well as unionized organizations. I worked in the steel workers union for about 12 months when I was right out of high school and attending night classes at the community college. I was doing it because of the high hourly wage to increase my savings account to pay for my continued college education. After a few months on the job I was threatened by a group of long-term employees to reduce my productivity so the bosses did not start expecting it from everyone.
I did both private sector and public sector consulting and experienced the clear dichotomy of productive talent. The state agencies I worked for all had a similar problem with incompetent people in decision authority, and a few talented people that were unmotivated because of the former. In the private sector we would label these public sector organizations as severely dysfunctional and in need of significant reorganization. But in the public sphere it was common and accepted.
The root cause of this difference was/is competition. Competition causes the promotion based primarily on the criteria of merit. Lack of competition causes the promotion based primarily on things other than merit. It does not take but one bad choice in promotion to destroy productive motivation within the organization. The military is different in that the command and control hierarchy is so rigid and compliance based, and the general time employees spend on the job is short (4 years, etc.), that incompetence at the top does not so impact the productivity below. Outside of that level of tight organizational standards and control, people will just slack off to do the minimum.
There is a principle in old soviet Russia that the workers pretend to work and the bosses pretend to pay them.
My experience with the private sector excellence in management and leadership to maximize the success of the organization by maximizing the productivity of the workforce is why I 100% reject DEI or anything that replaces merit as the primary criteria for which we hire, reward and promote workers. DEI is basically the collectivist-minded people pushing their unionized and public sector dysfunction into the private sector as they lack enough productive merit and so it serves them better.
This is an incredibly accurate take. The stories I've heard from a long shoreman friend that ala "don't move that piece of pipe, because that's someone else's job" mirrors exactly your description of my take on what unions and public sector jobs have become. Look at what it's done to our education system. Just a travesty.
… ya think?! lol. Humans are currently FAR TOO emotionally and socially inept and our sense of justice FAR TOO skewed to process these realities — they get swept under the rug.
When I was a young entry level auto mechanic there was a Jiffy Lube in a nice part of town paying pretty well for “lube technician” jobs. I chose to make less money at a small mom n pop auto repair shop to avoid the stigma even though I was doing essentially the same work I was a “mechanics apprentice”. The shop went out of business and I ended up working at Jiffy Lube anyway.
This post reminds me of the interesting book by David Brooks: “Bobos in Paradise: The New Upper Class and How They Got There.” Great read about the paradoxes of that generational cohort. I gave that book away so maybe time to get another copy for a second read, as I read it nearly a decade ago. Thank you Rob for another thoughtful post!
I really enjoyed this article and the way you looked at motivation in the workplace. However, what motivates people in the workplace is not dualistic. There are other factors such as community, friendships, and purpose that motivate people.
Putting on my Austrian and Chicago schools of economics hat and see what we get. When someone picks prestige over income or job security, both schools would agree it boils down to individual choice and subjective value—but they frame it a little differently.
From the Austrian perspective, it’s all about subjective value. What one person finds valuable might be meaningless to another. So, if someone prioritizes prestige, they’re chasing psychic income—those intangible rewards like status and recognition that don’t show up in a paycheque. Austrians would say this person is acting to maximize their marginal utility, or what makes them feel most satisfied, whether it’s money, job security, or the thrill of being admired.
Now, if we look at it through the Chicago school lens, it’s all about rational choice. People make decisions based on what they think will give them the most utility—the most benefit for them, personally. Choosing a prestigious but lower-paying job? That’s just a trade-off. They’ve weighed the opportunity cost of losing out on a higher salary or job security and decided that the status or recognition they gain is worth more to them.
Both schools land on the same conclusion: in a free market, these decisions are efficient. The Austrians say that the market naturally reflects the different values people have. One person might crave recognition, while another wants a fat bank account, and the market adjusts to let them both get what they want. The Chicago school sees it a bit more like a well-oiled machine. As long as people are free to make these trade-offs, the market efficiently adjusts to account for all these different values—monetary or otherwise.
So, both schools are cool with the idea that someone might go for prestige over cash or stability. For the Austrians, it’s all about subjective value driving the choice, while the Chicago view emphasizes rational actors making trade-offs to get the most bang for their buck (or in this case, their prestige). Put them together, and it makes sense why non-monetary rewards like status can be just as valuable as the cold hard cash in today’s market.
re: "According to the theory of competitive labor markets, workers are supposedly paid based on the value of what they produce for employers."
Don't put too much faith in this theory. In the private sector what determines what we are willing to pay an employee is entirely based on how much it would cost to replace them. Lots of things factor into that -- I started to talk about them but saw the note would end up way too long -- but the value of what they produce is really only a factor when you are thinking of firing them, or shutting down the business altogether.
Also, it very much does not follow that those who are producing most of the revenue in your organisation according to Price's Law would also produce that much in a different organisation. The most productive people have a very good fit between their skills and personality and the job they are doing, as well as with the culture of the firm, which may have taken them years of working not particularly productively to learn. Legions of talented and skilled people who changed jobs and then crashed and burned in a different organisation have found this out the hard way.
To put a finer point on it, the claim is that people are paid consistent with the marginal product of their labor. Disentangling what the MPL might be given all the other inputs (e.g. other workers, and various sorts of capital) is not easy. Nor is determining what they are paid in that some of the pay is in money and some is in status, flexibility etc. The claim is still a useful heuristic even if it is tough to test given these difficulties.
Seeking a fancier job title strikes me as a false economy. First there is the inflationary aspect mentioned, with titles degrading as more people get them. But second, most people think that long job titles are ridiculous, and the subject of mockery. Or at least that's true in the UK.
Back in the '90s, I used work at the American headquarters of a large Swiss-owned corporation. We were very well paid, and had amazingly generous benefits packages - far better than most other comparable American-owned companies in those days. However, I remember a lot of employees would complain about their job titles; their counterparts at American companies had much more impressive titles, whereas the Swiss clearly felt that "Senior Vice President" was about as fancy as you should get - and you needed to actually BE a senior-level executive with 20 years of experience to be called that. The American companies tended to bestow a "vice president" title on relatively low-level employees. It surprised me how much people cared about their job titles, because we all knew that we'd make less money and have much crappier benefits somewhere else.
I work in architecture now, and architecture is definitely one of those fields that is very prestigious but relatively low paying when you consider the amount of education and the long path to licensure. My boss, the owner of the firm, liked to point out that the plumbing subcontractor on the project usually made more money than he did, with the added plus of not having student loans for bachelor's and master's degrees. But, it's a prestigious profession (remember how George on Seinfeld always pretended he was an architect when he wanted to impress someone?). The end result is that it tends to attract people from upper-middle-class or wealthy backgrounds; they don't have to worry as much about the money aspect so the status aspect is more important to them.
Does this help explain why so many people who are not now and never will be members of the governing elite adopt the "luxury beliefs" characteristic of those elites? I suspect that status anxiety and class envy explain as much or more about American politics than many other, more practical, factors.
In Paul Fussel’s book, “Class: A Guide through the American Status System” a, “comprehensive, and carefully researched guide to the ins-and-outs of the American class system with a detailed look at the defining factors of each group, from customs to fashion to housing,” published in 1992, the author posits that the best measure of an American’s “status anxiety,” [his term *not mine*], is the car you drive (in lieu of an aristocracy like European cultures). If someone drives a safe old car, no matter their present income, they have less “status anxiety.” According to the authors amusing theory, if you drive an expensive safe car, you are telling everyone how much disposable income you have every moment you drive that shiny, impressive [to some] vehicle. I find this interesting to observe driving around New England. Another great reason to drive less, consume less social media, patronize your local library, and buy loads of books. I have so many books that I have read that some of them line the shelves of my home, and many more of them reside at my parents house 🏠 lols 😂. Luckily my parents do not charge me anything to babysit my books in my childhood home until I am able to buy my second home. However, this Gen X gal is renting for now until the federal reserve lowers interest rates. Perhaps our generational cohorts would bicker less online if the American Dream of a white picket fence was still statistically probable for anyone younger than me. But all we can do about that is vote reliably (like the Boomers do now & the Silent Generation did before that). What I like about Rob’s content is a willingness and Courage to pose these questions to his dear readers in the first place. I also appreciate everyone’s comments, because to me a democracy is a system where differing people, with differing views and customs, come to the table to negotiate solutions that work for the group. Everyone could then maybe leave that metaphorical table with what they really need, and no one (or one group) would ever leave with everything they want. That would be cool & beautiful to see in actuality as an adult, so that we could continue to teach our children to believe in that, hope for that, and sustain that for generations. Curious how this comment will be perceived 😉
Your name on here reminds me of the Bob Dylan song, “It’s just me Ma.” 💕 Love his music and messages as the “voice of his generation.” Timeless art is timeless because it’s holds the key to truth no matter the year, decade or generation.
I concur that some individuals prioritize prestige over monetary compensation, but this is an oversimplification, as numerous factors are overlooked. While not always linked to management, seniority is a nuanced metric that is difficult to quantify. The debate between the value of management and labor is ongoing, as productivity does not necessarily equate to value. A product's value is shaped by multiple inputs, with labor contributing anywhere from minimal to significant.
Competition tends to be higher in industries where labor is crucial in determining value, driving costs down, and aligning them with labor supply. On the other hand, businesses with substantial capital and overhead expenses only achieve profitability with low labor costs, strong demand, and limited competition. Price's law, which suggests a small portion of contributors produce the majority of results, works best in conditions where equal opportunity exists — though such situations are rare.
As companies expand and mature, Pareto's distribution (MPP and Kienbaum) often takes precedence, and as you pointed out, factors like job title and image begin to influence decision-making. Additionally, age, career aspirations, external circumstances, and company culture play significant roles in shaping outcomes.
I like this leadership article ( PLI ) pointing out how Price's Law can be applied.
When was younger (and made little money), sure. But I have enough money now. Time for a fancy title!
Relatedly, I had a friend at my first real job who got he manager to approve a business card that said Systems Engineer. But my friend then inserted the work Hyper in front before he sent it out. His boss was not amused.
Thanks for the article, hadn't thought of some of the points mentioned. I may have missed the main point, but it made me ask a question: Why would someone leave a well paying job while another would stay knowing they could probably do better financially elsewhere? I would say while status and money are important, there are other factors involved.
"It is puzzling how we spend so much time preoccupied with discussions of economic incentives but relatively little on discussions of status incentives. Perhaps because the latter are more embarrassing to acknowledge."
There is another alternative, explanation: money is easy to measure. Status is not. But I think people should recognize that inequality of wealth, consumption, income is not the entire picture, and probably not the most important part of the picture when it comes to measuring how well-off people are relatively speaking.
And most people would be better off not trying to make everyone equally well off even in expanded terms, but rather how they can improve their lives themselves, e.g. by feeling gratitude, focusing on status in areas where they excel, developing personal relationships, participating in community organizations, pursuing personal projects to fruition (including a smattering of those that help others).
I like wealth and the things it buys as much as anyone else (part of that being tied to a notion of earned success), but I try to keep in mind that there's a whole lot of other important sources of life satisfaction that really are free, even if they require some work!
There definitely something to the title vs earnings trade off. Everything being equal (money, benefits, and workload), the fancier job title could, theoretically, be parlayed into a better job in the future. Fancy job title just looks better on the resume, it’s playing the long game in some cases. Plus it’s just more fun to explain to new acquaintances that I’m a JCL Specialist or something that sounds more impressive than a coding clerk or whatever would accurately describe my just above entry level position…..
I wonder if status incentives are the reason why so many academics tend to borrow and share similar views. In theory, academic work should be about searching for the truth, no matter how much it upsets people and exploring your curiosity, which takes a lot of courage. In practice, it's usually the opposite. The fear of getting fired from your academic because you have a different view from your peers is a real one, and it's becoming an obstacle when it comes to truly learning. Courage is something that a lot of modern academics lack, and one of the reasons why is because of status incentives.
Indeed, a most highly meritorious and underrated virtue is Courage…
I own a security guard company in Toronto. I inherited it in 1994 . We now have 5000 employees working as security guards, which is to say the client pays their wages. They earn minimum wage up to five dollars more than minimum wage : $17-$22.
My management team has one president $700k, 7 VP’s $220k, 20 directors $130k and 40 managers $70-$90k.
Ours is a low status business. You have to wear those funny weird security guard uniforms. (Not managers) Management are promoted from within, they used to be security guards. People never leave to go to competitors. They are too insecure. They correctly judge the danger that would be involved. These people want money but safety is far more prominent in their thinking. As a psychological phenomenon this is interesting but in my experience people would never be so cavalier about their ability to succeed elsewhere. Human politics are 90% of the equation - job performance 10%.
Much of this does not compute with me probably because of my long corporate career working for generally well run companies. In my experience there was a lot of effort put into rewarding and promoting based on demonstrated capabilities and productivity. Certainly other criteria played into the decisions like time on the job (demonstrating a level of loyalty to the business, and also probably indicative of greater institutional knowledge compared to other employees with less time on the job), and also relationships within the organization. However, this also demonstrates value to the organization as those with a wider and deeper network of relationships within the organization would be more effective at diplomacy and negotiations.
We have job descriptions and salary grade level ranges within each. Employees move up in grade levels as they demonstrate increased mastery of their job... and hence increased productive value to the organization. Many employees also have an incentive component that rewards greater productivity within a job. Those are always tricky because what gets measured with rewards generally gets done. If you are rewarding the wrong things, you will get the wrong things.
For example, I used to manage a large IT help desk as well as other functions. We started providing an incentive for the number of trouble tickets handled and closed. We did this until we discovered that savvy help desk analysts would create temporary fixes so they handle the same problem multiple times. The would also close tickets too quickly without good customer service delivery. So we changed that incentive to count permanent fixes and customer feedback on the quality of help.
In general where I see the disconnect from productivity and pay is in the public sector as well as unionized organizations. I worked in the steel workers union for about 12 months when I was right out of high school and attending night classes at the community college. I was doing it because of the high hourly wage to increase my savings account to pay for my continued college education. After a few months on the job I was threatened by a group of long-term employees to reduce my productivity so the bosses did not start expecting it from everyone.
I did both private sector and public sector consulting and experienced the clear dichotomy of productive talent. The state agencies I worked for all had a similar problem with incompetent people in decision authority, and a few talented people that were unmotivated because of the former. In the private sector we would label these public sector organizations as severely dysfunctional and in need of significant reorganization. But in the public sphere it was common and accepted.
The root cause of this difference was/is competition. Competition causes the promotion based primarily on the criteria of merit. Lack of competition causes the promotion based primarily on things other than merit. It does not take but one bad choice in promotion to destroy productive motivation within the organization. The military is different in that the command and control hierarchy is so rigid and compliance based, and the general time employees spend on the job is short (4 years, etc.), that incompetence at the top does not so impact the productivity below. Outside of that level of tight organizational standards and control, people will just slack off to do the minimum.
There is a principle in old soviet Russia that the workers pretend to work and the bosses pretend to pay them.
My experience with the private sector excellence in management and leadership to maximize the success of the organization by maximizing the productivity of the workforce is why I 100% reject DEI or anything that replaces merit as the primary criteria for which we hire, reward and promote workers. DEI is basically the collectivist-minded people pushing their unionized and public sector dysfunction into the private sector as they lack enough productive merit and so it serves them better.
This is an incredibly accurate take. The stories I've heard from a long shoreman friend that ala "don't move that piece of pipe, because that's someone else's job" mirrors exactly your description of my take on what unions and public sector jobs have become. Look at what it's done to our education system. Just a travesty.
Bravo, Henderson, the last part made me chuckle.
“Perhaps because it’s embarrassing…”
… ya think?! lol. Humans are currently FAR TOO emotionally and socially inept and our sense of justice FAR TOO skewed to process these realities — they get swept under the rug.
When I was a young entry level auto mechanic there was a Jiffy Lube in a nice part of town paying pretty well for “lube technician” jobs. I chose to make less money at a small mom n pop auto repair shop to avoid the stigma even though I was doing essentially the same work I was a “mechanics apprentice”. The shop went out of business and I ended up working at Jiffy Lube anyway.
This post reminds me of the interesting book by David Brooks: “Bobos in Paradise: The New Upper Class and How They Got There.” Great read about the paradoxes of that generational cohort. I gave that book away so maybe time to get another copy for a second read, as I read it nearly a decade ago. Thank you Rob for another thoughtful post!
Rob,
I really enjoyed this article and the way you looked at motivation in the workplace. However, what motivates people in the workplace is not dualistic. There are other factors such as community, friendships, and purpose that motivate people.
If would be great if we all had the privilege of being mission driven at work, while also being about to sustain the costs of raising a family.
Putting on my Austrian and Chicago schools of economics hat and see what we get. When someone picks prestige over income or job security, both schools would agree it boils down to individual choice and subjective value—but they frame it a little differently.
From the Austrian perspective, it’s all about subjective value. What one person finds valuable might be meaningless to another. So, if someone prioritizes prestige, they’re chasing psychic income—those intangible rewards like status and recognition that don’t show up in a paycheque. Austrians would say this person is acting to maximize their marginal utility, or what makes them feel most satisfied, whether it’s money, job security, or the thrill of being admired.
Now, if we look at it through the Chicago school lens, it’s all about rational choice. People make decisions based on what they think will give them the most utility—the most benefit for them, personally. Choosing a prestigious but lower-paying job? That’s just a trade-off. They’ve weighed the opportunity cost of losing out on a higher salary or job security and decided that the status or recognition they gain is worth more to them.
Both schools land on the same conclusion: in a free market, these decisions are efficient. The Austrians say that the market naturally reflects the different values people have. One person might crave recognition, while another wants a fat bank account, and the market adjusts to let them both get what they want. The Chicago school sees it a bit more like a well-oiled machine. As long as people are free to make these trade-offs, the market efficiently adjusts to account for all these different values—monetary or otherwise.
So, both schools are cool with the idea that someone might go for prestige over cash or stability. For the Austrians, it’s all about subjective value driving the choice, while the Chicago view emphasizes rational actors making trade-offs to get the most bang for their buck (or in this case, their prestige). Put them together, and it makes sense why non-monetary rewards like status can be just as valuable as the cold hard cash in today’s market.
Excellent article.
re: "According to the theory of competitive labor markets, workers are supposedly paid based on the value of what they produce for employers."
Don't put too much faith in this theory. In the private sector what determines what we are willing to pay an employee is entirely based on how much it would cost to replace them. Lots of things factor into that -- I started to talk about them but saw the note would end up way too long -- but the value of what they produce is really only a factor when you are thinking of firing them, or shutting down the business altogether.
Also, it very much does not follow that those who are producing most of the revenue in your organisation according to Price's Law would also produce that much in a different organisation. The most productive people have a very good fit between their skills and personality and the job they are doing, as well as with the culture of the firm, which may have taken them years of working not particularly productively to learn. Legions of talented and skilled people who changed jobs and then crashed and burned in a different organisation have found this out the hard way.
To put a finer point on it, the claim is that people are paid consistent with the marginal product of their labor. Disentangling what the MPL might be given all the other inputs (e.g. other workers, and various sorts of capital) is not easy. Nor is determining what they are paid in that some of the pay is in money and some is in status, flexibility etc. The claim is still a useful heuristic even if it is tough to test given these difficulties.
Seeking a fancier job title strikes me as a false economy. First there is the inflationary aspect mentioned, with titles degrading as more people get them. But second, most people think that long job titles are ridiculous, and the subject of mockery. Or at least that's true in the UK.
Back in the '90s, I used work at the American headquarters of a large Swiss-owned corporation. We were very well paid, and had amazingly generous benefits packages - far better than most other comparable American-owned companies in those days. However, I remember a lot of employees would complain about their job titles; their counterparts at American companies had much more impressive titles, whereas the Swiss clearly felt that "Senior Vice President" was about as fancy as you should get - and you needed to actually BE a senior-level executive with 20 years of experience to be called that. The American companies tended to bestow a "vice president" title on relatively low-level employees. It surprised me how much people cared about their job titles, because we all knew that we'd make less money and have much crappier benefits somewhere else.
I work in architecture now, and architecture is definitely one of those fields that is very prestigious but relatively low paying when you consider the amount of education and the long path to licensure. My boss, the owner of the firm, liked to point out that the plumbing subcontractor on the project usually made more money than he did, with the added plus of not having student loans for bachelor's and master's degrees. But, it's a prestigious profession (remember how George on Seinfeld always pretended he was an architect when he wanted to impress someone?). The end result is that it tends to attract people from upper-middle-class or wealthy backgrounds; they don't have to worry as much about the money aspect so the status aspect is more important to them.
Does this help explain why so many people who are not now and never will be members of the governing elite adopt the "luxury beliefs" characteristic of those elites? I suspect that status anxiety and class envy explain as much or more about American politics than many other, more practical, factors.
In Paul Fussel’s book, “Class: A Guide through the American Status System” a, “comprehensive, and carefully researched guide to the ins-and-outs of the American class system with a detailed look at the defining factors of each group, from customs to fashion to housing,” published in 1992, the author posits that the best measure of an American’s “status anxiety,” [his term *not mine*], is the car you drive (in lieu of an aristocracy like European cultures). If someone drives a safe old car, no matter their present income, they have less “status anxiety.” According to the authors amusing theory, if you drive an expensive safe car, you are telling everyone how much disposable income you have every moment you drive that shiny, impressive [to some] vehicle. I find this interesting to observe driving around New England. Another great reason to drive less, consume less social media, patronize your local library, and buy loads of books. I have so many books that I have read that some of them line the shelves of my home, and many more of them reside at my parents house 🏠 lols 😂. Luckily my parents do not charge me anything to babysit my books in my childhood home until I am able to buy my second home. However, this Gen X gal is renting for now until the federal reserve lowers interest rates. Perhaps our generational cohorts would bicker less online if the American Dream of a white picket fence was still statistically probable for anyone younger than me. But all we can do about that is vote reliably (like the Boomers do now & the Silent Generation did before that). What I like about Rob’s content is a willingness and Courage to pose these questions to his dear readers in the first place. I also appreciate everyone’s comments, because to me a democracy is a system where differing people, with differing views and customs, come to the table to negotiate solutions that work for the group. Everyone could then maybe leave that metaphorical table with what they really need, and no one (or one group) would ever leave with everything they want. That would be cool & beautiful to see in actuality as an adult, so that we could continue to teach our children to believe in that, hope for that, and sustain that for generations. Curious how this comment will be perceived 😉
Well said
Your name on here reminds me of the Bob Dylan song, “It’s just me Ma.” 💕 Love his music and messages as the “voice of his generation.” Timeless art is timeless because it’s holds the key to truth no matter the year, decade or generation.
I concur that some individuals prioritize prestige over monetary compensation, but this is an oversimplification, as numerous factors are overlooked. While not always linked to management, seniority is a nuanced metric that is difficult to quantify. The debate between the value of management and labor is ongoing, as productivity does not necessarily equate to value. A product's value is shaped by multiple inputs, with labor contributing anywhere from minimal to significant.
Competition tends to be higher in industries where labor is crucial in determining value, driving costs down, and aligning them with labor supply. On the other hand, businesses with substantial capital and overhead expenses only achieve profitability with low labor costs, strong demand, and limited competition. Price's law, which suggests a small portion of contributors produce the majority of results, works best in conditions where equal opportunity exists — though such situations are rare.
As companies expand and mature, Pareto's distribution (MPP and Kienbaum) often takes precedence, and as you pointed out, factors like job title and image begin to influence decision-making. Additionally, age, career aspirations, external circumstances, and company culture play significant roles in shaping outcomes.
I like this leadership article ( PLI ) pointing out how Price's Law can be applied.
https://mindpotentialpower.com/prices-law-inequality-success-failure/
https://www.kienbaum.com/blog/prices-law-and-the-trouble-of-operationalizing-performance/
https://professionalleadershipinstitute.com/tips/prices-law/
"Seventy percent of people would take a title over money." Citation? Is it the Anderson, et al paper?
Yes—got it from the Anderson paper.
If true, I’m firmly in the 30%.
When was younger (and made little money), sure. But I have enough money now. Time for a fancy title!
Relatedly, I had a friend at my first real job who got he manager to approve a business card that said Systems Engineer. But my friend then inserted the work Hyper in front before he sent it out. His boss was not amused.
Thanks for the article, hadn't thought of some of the points mentioned. I may have missed the main point, but it made me ask a question: Why would someone leave a well paying job while another would stay knowing they could probably do better financially elsewhere? I would say while status and money are important, there are other factors involved.
"It is puzzling how we spend so much time preoccupied with discussions of economic incentives but relatively little on discussions of status incentives. Perhaps because the latter are more embarrassing to acknowledge."
There is another alternative, explanation: money is easy to measure. Status is not. But I think people should recognize that inequality of wealth, consumption, income is not the entire picture, and probably not the most important part of the picture when it comes to measuring how well-off people are relatively speaking.
And most people would be better off not trying to make everyone equally well off even in expanded terms, but rather how they can improve their lives themselves, e.g. by feeling gratitude, focusing on status in areas where they excel, developing personal relationships, participating in community organizations, pursuing personal projects to fruition (including a smattering of those that help others).
I like wealth and the things it buys as much as anyone else (part of that being tied to a notion of earned success), but I try to keep in mind that there's a whole lot of other important sources of life satisfaction that really are free, even if they require some work!
There definitely something to the title vs earnings trade off. Everything being equal (money, benefits, and workload), the fancier job title could, theoretically, be parlayed into a better job in the future. Fancy job title just looks better on the resume, it’s playing the long game in some cases. Plus it’s just more fun to explain to new acquaintances that I’m a JCL Specialist or something that sounds more impressive than a coding clerk or whatever would accurately describe my just above entry level position…..