salary – Pertinent Observations

Corporate Culture

In good times, when you like the core aspects of your job, you don’t really care about your “organizational culture”. You don’t care so much about how they treat you, about how they make you feel. All you care about is that you are enjoying your time there, that you think there’s some value that the job is adding to your life, and you are happy receiving your salary.

When your organization’s “culture” starts mattering is when things aren’t going all that well in your job. It’s when you stop liking the core aspects of your job, and start wondering why you’re doing what you’re doing. That’s the time when all the “cultural” and “feel good” things about your job that come to the fore. That’s the time when any problems that you have with the organizational culture get highlighted, and you start focusing more on that and less on your work (after all, you’re trying to think whether there’s a reason apart from your core work for you to stay in the job).

As an employer, the risk with not paying attention to your organization’s culture is that when one of your employees doesn’t feel that good about his/her job (and this is bound to happen; irrespective of how much one loves his job, one is bound to go through these cycles), if he realizes that he doesn’t like the culture of your organization, it is that much more easier for him to get extremely disgruntled, and think of deserting ship. By maintaining a great organizational culture, on the other hand, even when someone is going through the troughs (in terms of core work), there is value that they see in sticking on to job, and living to see another day in the job, when (hopefully) the cycle would’ve been reversed.

As a prospective employee, if you see a high degree of attrition in a prospective employer, think twice before joining even if the core nature of work really appeals to you. For, the attrition indicates something is possibly wrong with the culture of the place, and that sooner or later that is bound to bite you.

Working for money

One of these days during lunch at office, we had a fairly heated discussion about why people work. One guy and I were of the opinion that the primary reason people work is for money, and everything else is secondary. The third guy, who among the three of us perhaps works the hardest, argued that “people who make a difference” never work for money, and that it is only “ordinary people”, who have no desire to “make a difference” that work for money. He took the examples of people like Steve Jobs and a few famous scientists to make his point.

Now, while I agree that money is the primary reason I work, and which is what I argued that day during lunch, I disagree that the end-of-month salary credit tells the whole story. The way I see it, you need to take a longer-term view of things. So while the short-term money you make is important, and affects important decisions such as quality of short-term life, a more important thing is sustainable returns. While you do your work and get that end-of-month salary credit to bolster your bank account, an important thing is about how much the work you’re doing now will contribute to your income later on in life.

Digression 1: I keep oscillating between wanting to retire at forty and wanting to retire at sixty. And I must admit I haven’t frankly decided which one is more suitable for me. This analysis is more relevant with the retirement at sixty model (which is what I think I’ll end up following, health etc permitting). End of Digression 1.

Digression 2: Not so long ago, some people in my firm wanted to recruit “software engineers from IIT with two to three years of work experience”. Being one of the “CS guys” around, I interviewed quite a few people for that role. Their CVs indicated that had we “caught them” on campus, they would have been sure hires. But two years at a software services shop, I figured in all cases, had made them “rusty”. Spending all their time in mind-numbing activities (like building UIs), they had failed to build on the skills that would have been useful for the higher-up-the-value-chain job I was recruiting for (finally that team went to IITs and got a bunch of campus hires. They gave up on lateral hiring altogether). End of Digression 2.

Those two digressions weren’t particularly meaningless. I guess you know where this post is headed now. So, the thing with a job is that along with the short-term benefits it provides, it should also help you build on those skills that you think you can monetize later on in life. Every job (most jobs, really) teach you something. There is constant learning everywhere. But what matters is if the learning that the job offers is aligned with the kind of learning that you think you are geared for, which you think you can monetize at a later point of time in life.

I still claim that I work for money, but just that I take a longer-term view of it. And I strive to learn those things on a job which I think will be helpful for me in terms of monetization at a later point of time in my life.

Compensating Teachers

This is yet another of those things which I’ve been thinking about and have been intending to write about for a long time but have never gotten down to it. Pinky wrote this excellent post on the topic today and that has got me thinking. To quote her,

A bad teacher makes a bad student. A teacher who looks at teaching as just another job is doing no good to anyone. She neither grows in her life nor contributes to the positive growth of a kid.There have been a few teachers in my life who i have tremendous respect for, not because they taught me effectively enough to pass in their subjects but because they taught me to listen, think and speak!

I don’t have any solutions yet but I thought I should just put some bullet points here, just to try and give a structure to the problem. Let me know your thoughts

If we consider a person’s salary as Society’s recognition of his/her worth, school teachers are not recognized enough
Abysmal salaries drive away a large number of potential school teachers away from the profession
Love for teaching is important, but if teaching pays as abysmally as it currently does, the opportunity cost of doing what you love is way too high for some people, and so they end up in other professions
We have a market failure in teaching – how do we run a school profitably while paying teachers competently while on the other hand keeping fees reasonable, and not resorting to any subsidies?
India suffers from what I call the “official’s wife bug”. In the 60s and 70s, the teaching profession got flooded by women who weren’t really looking to make much money, but more to just pass some time and use their bachelor’s degrees rather than being housewives. This has fostered a culture of low schoolteachers’ salaries in India. People who weren’t looking to make money out of teaching crowded out those who found the opportunity cost of the low salaries in teaching too high.
McKinsey interview level arithmetic: assume a school having classes 1 to 12, 4 sections per class, 40 students per section. 8 periods a day 5 days a week gives a total of 12 * 4 * 8 * 5 = 1920 periods per week. Assuming each teacher can take 5 classes a day (or 25 a week) we will need 77 (round it off to 80) teachers. Number of students is 12 * 4 * 40 = 1920, so essentially 25 students have to pay for one teacher’s salary, and this is apart from expenses towards school building, maintenance, overheads, etc. McKinsey level handwaving. 10 students have to pay for one teacher’s salary. Doesn’t sound feasible
Primary and secondary education is simply way too important to be left in the hands of unmotivated disinterested people, but that seems like the situation we are in (I dont’ mean to say all teachers are unmotivated or disinterested; just that the situation doesn’t incentivize talented motivated people to enter the profession).
Universities attract talent by allowing faculty to make money by other means such as consulting and organizing for-profit courses. Will something like that work for schools? And no, I’m not talking about private tuitinos as the other source of income. Is there something else?
Government intervention is not a solution. In a place like India it will only end up messing up things further and draining more money from the system.
In the pre-IT era, teaching salaries were more competitive (with respect to competing jobs) than they are now, so they could attract better talent
I wonder if it is only in India that such a large proportion of school teachers are women. This is just a general pertinent observation, and has nothing to do with the rest of the post
The officer’s wife model was good when it started off – some motivated people came into the system because fo that. Just that the system is not sustainable and we’re facing the problems of that now and because a lot of school managements fail to take into account that the model isn’t sustainable

Any thoughts on this? Any possible solutions? Of course it’s not possible to implement any macro-level solution. All I’m looking at is a school-level solution. How do you plan to run one school (of size I mentioned in my bullets) sustainably while ensuring teachers are paid adequately enough to not scare away interested people?

Return to corporate whoredom

Waking up early in the morning
Formal shirt and trousers, neatly pressed
An hour’s commute each way

Conversations by the water cooler
Team lunches; Expense accounts
Hourly coffee breaks

Meetings. Conference calls. Presentations
Studs. Fighters. Free-riders.
Reviews. Deadlines. Status reports.

Salary credit!

Compensation Etc.

For a change I’m keeping up a promise that I’ve made on my blog – I’m actually writing a follow-up post that I’d promised. In the past, I’ve guilty several times of promising to continue something in a follow-up post and then conveniently forgetting about it.

So I had mentioned in my last post that the word “compensation” as used to describe salary is not really misplaced. There has been a lot of debate on this topic. The opponents of the word have said that you aren’t losing an arm or a leg in order to be “compensated”. They say that you are only getting paid for the value you add, and so the use of the word “compensation” is plain wrong. I must admit I haven’t really bothered to read the arguments of the people who support the use of the word.

The basic fact: you work because you need the cash flow to fund the rest of your life.

I know a lot of career-minded folks among you will jump on me for this, but I stand by this. Just get down a little deeper, and ask yourself why you are doing what you are doing. Maybe you don’t get the kind of questions in your head that I normally do, and described in my previous post. Maybe your jobs have put you in the kind of comfort zone where you don’t really need to ask yourself such questions (I was in a similar state not too long back, I must admit). But I encourage you to make that effort and ask yourself this uncomfortable question. And it will be down to the money.

You might say that you are doing some stuff “for the sake of career development”. Rephrase that and you will find that you are doing that in expectation of higher future earnnigs. You might say that you are doing something because you want to “achieve something”. Dig deeper and you may find that you define the fruit of your achievement in monetary terms.

So where does “quality of work”, “impact on society”, “value add”, etc. all fit in? I know that in the not-so-distant past, I’ve also talked a lot about these things. I have rejected a number of potential job offers because I don’t like the “quality of work”. This definitely needs to be incorporated into the model, right?

The next basic fact: work is inherently unpleasant.

I don’t think I’ll spend too much time elaborating this here. Maybe I’ll explain this in the comments if you want. So this is where things like “quality of work”, “value add” etc. all fit in – they make work so much less unpleasant. For example, I enjoy spreadsheet modeling. So if my work involves a lot of spreadsheet modeling, I’ll feel so much less unpleasant doing it. Of course, what I am doing remains “work” and it has to be done, in a certain way by a certain day, and so it remains unpleasant. But the fact that I enjoy the core activity makes it less unpleasant.

Similarly, if you think that the work that you are doing gives you a sense of achievement, then it is as if you are doing a part of the work for yourself, and not for someone else, and thus need to be compensated less. “Compensated less”. So this is where it fits in. You get “compensated” because work is inherently unpleasant. You need some incentive to do the stuff that is inherently unpleasant. So you get compensated.

You may have to live in a city that is not your preferred choice – you need to get compensated for that. You may face an extremely long commute where you waste your time – you need to get compensated for that. You might have to work long hours which can intrude on your personal time – you need to get compensated for that. You may have to deal with lousy colleagues or customers, you need to get compensated for that. The list goes on. And if you think about it, a large part of the money that you get out of your work is just that – compensation. Compensation for your time, your effort, your mindspace, your willpower, etc.

So why work at all, you might ask. Go to basic fact one. You work because you need the money. You are in a certain job because you believe that after compensating for all your “sacrifices” for the job, it will leave you with some more money to fund your life. If you think that the money your job leaves you if you take out the “compensation” part of it is lower than what you need to sustain life, you need to question why you are doing that job.

Investment bankers (the inside the wall type) usually end up spending a lot of their time at work, and despite the reasonable bonuses they get, they might feel they are not being compensated enough. They are doing it because they expect that when they ultimately get promoted they will make enough and more to cover for all this unpleasantness. It is basically an “investment”. If, however, you think you are in a job where you are inadequately compensated but don’t see any hopes of significantly higher compensation in the future, you are cheating yourself by not looking for another job.

This also explains why it is a bad thing to compare your salary with your peers and your old classmates and then feel good or bad about it. No two people have the same needs. No two people find the same things unpleasant to the same degree. No two people make the same trade-offs. Comparing your salary with you peer gives little information.

On a closing note (I know it’s already monstrously long) I find the phrase “work-life balance” amusing. I think it is a construct brought about by the pigs so as to con the sheep into workign harder for them. There is no “balance” between life and work. Life is the master and work is the slave.