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04/18/2017

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That is relatively interesting, Dan. The organization that pays everyone at the 40th percentile competes with the peer enterprises that pay at the 80th %ile, too; but if the former improves its CEO pay ratio faster than the latter, the gap would still remain absolutely immense for decades.

Excellent point Jim. Once you fall behind it is very hard to catch up with 1 or 2% differentials. It never seems like much when it is happening, but like the proverbial frog in the pot, sooner or later the water begins to boil and you get cooked!

I may be a few years outdated but the last time I saw the pay increase by level, internationally, the % has been opposite than the ones in the US. For example, the unskilled labor getting about 7%, professionals 5% and Execs 3%. It would be interesting to understand why they do it that way overseas and why in the US we flip it around.

Thanks Jules,

I have seen similar data over the last several years. The differences are even greater when you go down to individual country comparisons.

I have been told that they are doing this outside the US because of inflation issues and because workers outside the US are becoming more skilled and their wages are still very low relative to the US. Things tend to balance out as US companies who have outsourced, or offshored, some jobs find that the cost savings no longer support the move. These jobs may then move to other countries or back to the US. There is also the competition from employers in other developed countries as well as those continuing to develop.

The executive level pay is an entirely different issue and more information is needed.

Another more obscure reason for the longstanding "imbalance" in pay increases by level is the underlying sample demographic variable. Did research on it years ago and it's always been reality. Hourly workers stay on their jobs longer, switching employers for pay gains but generally keeping the same occupational title. Professionals, managers and above get relatively smaller annual increases by job title but prosper far more via vastly greater income growth through promotions and new jobs at larger firms. Barber and bricklayer is a lifetime trade, but no staff accountant wants or expects to hold that same job title for 20 years.

not sure the average ee gives a hoot.

Thanks Jim. Very interest observation. I wonder how many people working in those types of jobs are aware of this fact.

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