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On Salary

Mar 7th, 2014 | By | Category: Nick Kemper's Blog

Nick KemperOne of my favorite co-workers announced today that he is leaving us. I don’t think his future is set — it sounded like he wasn’t sure what he was going to do next. He wasn’t insulted (I don’t think) when I asked if he is retiring, about it because he might be old enough to retire, and I thought he is one of these people who is kind of secretive about his personal life and he might have been stashing away 40 percent of his paychecks so he can enjoy life while he is still healthy. It seems like there are fewer and fewer of those people in the world today. In fact, we seemed headed toward a world where about 99.8 percent of us will never be able to retire AND enjoy life.

We talked briefly today and I got the gist of why he is leaving. Although it might not have been at the heart of matter, I got the idea that the push/pull between hourly and salary pay was at least in a nearby organ. I am on salary. Most managers I have worked with have been on salary. Most drivers and sales reps I have worked with have been on commission. Most everyone else I have worked with has been hourly.

I often wonder about the institutional scotoma that many organizations have about valuing employees. A scotoma, if you don’t know what that is, is a blind spot. I learned that word from the late, great Lou Tice, a man who continues to help me every day with his insights into why people do what they do. From an employee’s perspective, being on salary sounds like a good idea because it usually means you have more money, more power, more freedom and more flexibility with scheduling. What it should mean is WARNING, WARNING, TOTAL TIME DOMINATION IMMINENT. Because from the employer’s perspective, it sometimes means “no overtime pay.” You give the employee more money in salary than they would earn hourly, IF they worked no overtime. The naïve, unsuspecting employee strolls right into the trap, smiling and confident, and then a few years down the road crawls out a shell of their former self, having lost 20 years life expectancy, gotten divorced, with concussion-like symptoms that might never go away.

It’s the big trade-off. When I first started in this industry and showed signs of self-motivation, twice I was offered an assistant manager position. I was a commission driver and the position carried very part-time responsibilities that I would need to fit into my regular work. I had to calculate how much time those work duties would take away from my commission-earning time and then determine whether it made sense. Because I did pretty well on commission, and because the “salary” on top of my commission they were offering me was underwhelming, it didn’t make sense to me. The way it was marketed to me was that this was a “step” toward something better, and it probably was. I was very footloose and carefree at the time, considered myself a mercenary, so I passed.

Eventually I was lured into the world of management and remain there still. I have fallen into the trap at times, committing so much time and effort into my work that I began taking anti-depressants (thankfully, I no longer need them) or lost touch with my family for extended periods, and forgot about what really mattered in life. Probably the most important thing that happened to clarify what really mattered in life was that my lovely wife contracted Ulcerative Colitis and after about the third debilitating flare-up she had, when she was hospitalized for 18 days when our youngest was 6 months old, I came to my senses. In the months that she battled for her life (she eventually had surgery to address the problem, with relatively minor long-term effects, thankfully), I figured out that TIME was not the factor that governed my contribution to my employer. It was the quality of my work, the value of my contribution — not the sheer volume of time spent in front of a computer screen.

In fact, I came to understand that too much time working actually hindered my performance to such an extent that there was a point of diminishing return, and it wasn’t much over 50 hours per week. I truly believe that our value to our employer maxes out around 47 hours per week (for an hourly worker, it’s more like 37). That’s a completely unscientific statement, but it might be right, nonetheless. If you put in 47 good hours per week, you’ll have greater value than if you put in 74 good hours per week, because the hours stop being good, and you become unbearable to be around.

I get that there are only so many people out there to hire who will give you an honest day’s work. I believe in the 20/80 rule – 20 percent of the people do 80 percent of the work. What I don’t understand is why employers are continually surprised by that. Plan for it. It you get a 40/60 work force, you’ll be pleasantly surprised and probably highly profitable.

I encourage employers to embrace balance in the life of their employees, and in their own lives. I encourage employers to discourage salary employees from staying late every day and coming in on weekends. If you’re the owner of the company, and that’s what you enjoy doing (staying late and working weekends), by all means you have my blessings. But don’t be surprised if your employees don’t act like they own the company. They don’t. It’s not their truck, their office, their break room, their bathroom, or even their work, if you’re talking about ownership. You actually own the rights to their work. It IS their life, and you want bright, fresh, happy people walking in the door every day, ready to be very efficient for eight hours. If it’s not enough, hire a second shift. If they are inefficient in their eight hours, you are completely justified in addressing that. I’m reminded of a Dilbert cartoon where the boss catches Wally carrying a box of computer and office equipment to his car and asks him what he’s doing and he says, “You told me to act like I own the company, so I’m taking this stuff home.”

Just be careful what you wish for.

Have a safe and profitable week.

Nick Kemper