I ran across an article on VentureHacks this week that neatly encapsulated one of the core principles of managing employees in an otherish business:
“we don’t pay you to work here–we pay you so you can work here.”
This principle was tied to another important insight:
“The problem isn’t that money is a weak motivator. The problem is that money is a terribly strong motivator. By itself, money motivates the wrong people to do the wrong things in the quest for more money.”
If both of those things are true, it means there are some pretty perverse incentives in the way most businesses approach hiring and compensation. Most employers of which I am aware approach hiring as if the the exchange is a simple market transaction. In this model, the company is interested in buying the employee’s time and skill at the lowest possible price. The employee’s interest, on the other hand, is to sell his particular services at the highest price he can. The result is a transaction that fits neatly onto the traditional demand/supply curve we remember from Econ 101.
What we miss, and what the post on VentureHacks accurately perceives, is that paying an employee to work for you focuses the transaction on how much money the employee can make. If he can make more, he goes somewhere else. If not, he’ll bluff and try to get as much out of us as he can.
So much for trust.
