Is it really true that we need to pay huge money to get the best talent?

steddyeddy

Why is it that people still subscribe to the hypothesis that large sums of money is required to attract the best talent. Given the large amounts we pay political advisers and members of boards is there any evidence that this is true? I can certainly think of a lot of great accomplishments that were achieved without large financial gain. We also hear that people will migrate to the jobs with the highest pay. If this was true then Ireland would have some of the best lecturers in the world.

Considering the cuts to health and education isn't it time that we stop buying the BS that top money attracts top talent?

Ave Sodalis

steddyeddy wrote: »

Given the large amounts we pay political advisers and members of boards

Members of boards, eh? Someone must have forgotten to tell Dav to pay me then so :P

Mint Aero

On the contrary. Evidence shows that monetary bonuses for work is only effective for manual labour. Complete 4,000 bras for underworld and i'll give you a bonus kinda thing. In fact offering huge wads of cash to these exec types results in poorer performance overall Probably because they're too busy mentally **** over their yachts while at "work"

kupus

Best for the job, seriously, They cant do the ****ing job in the first place. The whole reason somebody works in a top government appointed job is cos they're **** all use in the private sector. Or anywhere else for that matter.

How do I know this? Experience.

Anita B Jaynow

Can't beat the old adage, money talks!.

wil

Anita B Jaynow wrote: »

Can't beat the old adage, money talks!.

All mine says is "Goodbye"

darkpagandeath

Yeah I love it when RTE trot out we have to pay these guys loads or they will goto the BBC ... Irony is most of the time BBC would not take them or even know who they are.

Karl Stein

If the last few years have proved anything they've proved that high wages attract people who liable to destroy wealth.

KyussBishop

Very good point. The answer I would say, is that it depends upon the type of job.


There is a recent article here, how CEO pay is largely pegged to the pay of other CEO's, and is rigged to increase over time, and that the payment of executives between the public/private sphere, actual help to push up wages in the other (such as, excessive payment of management positions in public services, gets used as justification for bumping private managerial/CEO payments).

...
The business press, meanwhile, now rigorously tracks executive pay. The result is that shareholders today know far more about C.E.O. compensation than ever before. There’s only one problem: even as companies are disclosing more and more, executive pay keeps going up and up.

This isn’t a coincidence: the drive for transparency has actually helped fuel the spiralling salaries. For one thing, it gives executives a good idea of how much they can get away with asking for. A more crucial reason, though, has to do with the way boards of directors set salaries. As the corporate-governance experts Charles Elson and Craig Ferrere write in a recent paper, boards at most companies use what’s called “peer benchmarking.” They look at the C.E.O. salaries at peer-group firms, and then peg their C.E.O.’s pay to the fiftieth, seventy-fifth, or ninetieth percentile of the peer group—never lower. This leads to the so-called Lake Wobegon effect: every C.E.O. gets treated as above average. With all the other companies following the same process, salaries ratchet inexorably higher. “Relying on peer-group comparisons, the way boards do, mathematically guarantees that pay is going to go up,” Elson told me. “Higher pay becomes a kind of self-fulfilling prophecy.”

On top of this, peer-group comparisons aren’t always honest: boards can be too cozy with C.E.O.s and may tweak the comparisons to justify overpaying. A recent study by the labor economist Ron Laschever shows that boards tend to include as peers companies that are bigger than they are and that pay their C.E.O.s more. The system is also skewed by so-called “leapfroggers,” the few C.E.O.s in a given year who, whether by innate brilliance or by dumb luck, end up earning astronomical salaries. Those big paydays reset the baseline expectations for everyone else.
...

http://www.newyorker.com/talk/financial/2013/10/21/131021ta_talk_surowiecki

Corporations are built to be autonomous and self-sustaining, and the vast vast majority of the work and maintenance of the business happens below the CEO, yet it is the CEO who gets to take credit for much of the success of the business, and who can even create situations where long-term failure (but short-term profit) benefit them greatly (huge salary/bonuses for them in short term - cash in hand - long term destruction for the company, which they can walk away from intact) - a good example, of how pay can relate little to 'talent' at running the business, and more their 'talent' at looting the business (obviously though, CEO's vary in integrity and character as much as any group of people, so I don't apply this to all).


Of course, mismatched pay (and this topic) is not limited to CEO's: Usually though, what you will find, is that such mismatched pay is tied to special privileges, that only a relative minority get to enjoy.

For a lot of professions with exaggerated pay, ranging from lawyers, doctors (not all of the latter mind), politicians, CEO's etc., there isn't exactly an equal opportunity for the wider population to compete for these positions, it is often a matter of who you know (particularly family you're born into), and the resources you have at your disposal - this creates a class of people who are specially privileged, in having the unequal opportunity to seek out these roles.

Anyone can try to compete for these roles, but the odds are stacked in favour of a relative few, for achieving these positions.


So, a lot of these professions with exaggerated pay, simply have a deliberately constrained pool of potential workers, and/or have many barriers placed in the way of achieving these positions (favouring a minority with the right resources/connections) - these professions with artificial constraints, have artificially exaggerated wages; however, I think that professions without such artificial constraints (your average worker mostly), can benefit a lot from competitive/large-sum wages.

errlloyd

Mint Aero wrote: »

On the contrary. Evidence shows that monetary bonuses for work is only effective for manual labour. Complete 4,000 bras for underworld and i'll give you a bonus kinda thing. In fact offering huge wads of cash to these exec types results in poorer performance overall Probably because they're too busy mentally **** over their yachts while at "work"

I dunno if you just read Outliers and wanted to paraphrase it, or read the full stuff and just forgot it, but that's not ecactly what the study I think you're referring to proved. It proved that offering direct financial incentives for performance of tasks that required creativity could often stifle the creativity and actually delay completion of the task - when comparing like for like candidates. It didn't say if you offer bankers / politicians the minimum wage you will get better bankers / politicians. because it won't. You won't be comparing like for like candidates anymore.

In answer OP sometimes you don't have to pay for the best. Professions considered honourable are often professions good people do without needing massive money. Judges for instance mostly take a pay cut to become judges, most of them are earning far more as Counsel or as Solicitors. Many college lecturers could make more money practicing in their field but choose not to. I had a college lecturer in ucd who was one of the highest paid men in his field in the state, the lecturing salary he was on meant nothing to him.

But you'd have to pay me a lot to be a politician, to deal with the stuff they have to deal with. If wanna be on a lot more than they are now.

WilyCoyote

You've only got to read Animal Farm.

darkpagandeath

WilyCoyote wrote: »

You've only got to read Animal Farm.

Or watch the VHS ?

wil

If you are working for a charity, it should be for the charity, not a dream job to cream off an executive salary at the expense of those the charity was set up to serve.
A private company generating its own income is a completely different entity and there should not be the worn out tired self serving excuse of comparing execs salaries as like with like. For that matter if the ceo of a medium sized country earns less than a charity CEO then time for the charity to get real.

The first place one of the Anglo chaps bailed to was a charity board.
While these positions are viewed as nice little earners that up till now have hardly been questioned, well then what do you expect they are going to attract.

It should be the other way around - people who have already been at the peak and want to give back - welcome.
Bill Gates need apply

Matt_Trakker

You're a newly qualified Doctor whose specialisation is in pediatric neurology, do you:
a) work in Ireland for a decent enough salary
b) go to America and become a millionaire?

The only way to attract top talent to our soggy backwater is to pay them huge amounts of money.

Mr.McLovin

You pay for the best, you get the best...

Sure take the boom times, mad money paid to bankers, politicians, senior civil servants and look how things turned out...

hmmm...

professore

Matt_Trakker wrote: »

You're a newly qualified Doctor whose specialisation is in pediatric neurology, do you:
a) work in Ireland for a decent enough salary
b) go to America and become a millionaire?

The only way to attract top talent to our soggy backwater is to pay them huge amounts of money.

Why isn't the UK and continental Europe empty of them in that case?

J_E

It's all about connections and a bit of luck, really. The richest/most successful people today didn't get there through hard work.

darkpagandeath

professore wrote: »

Why isn't the UK and continental Europe empty of them in that case?

I don't think mad money attracts the right people for the job. Someone who wants a really high salary is obviously in it for the money. Where as someone who takes a reasonable salary and perks is probably going to act more ethically in their filed as they like the job.

burnhardlanger

If you're good at something, never do it for free - The Joker.

steddyeddy

Matt_Trakker wrote: »

You're a newly qualified Doctor whose specialisation is in pediatric neurology, do you:
a) work in Ireland for a decent enough salary
b) go to America and become a millionaire?

The only way to attract top talent to our soggy backwater is to pay them huge amounts of money.

Based on this there are no good consultants in Germany which has lower wages than America.

Rabelais

I work for a company that has a requirement for extremely specific skills in engineering and project management. Those who work in these roles are very well paid. They are well paid because they are intelligent, skilled and hard working and have niche skills that are in demand.

The idea that they should be paid less, or that we'd attract these sort of employees by paying them less is laughable.

mikom

Ryan Tubridy is on €495,000 a year.
It really true that we need to pay huge money to get the best talent....

steddyeddy

Rabelais wrote: »

I work for a company that has a requirement for extremely specific skills in engineering and project management. Those who work in these roles are very well paid. They are well paid because they are intelligent, skilled and hard working and have niche skills that are in demand.

The idea that they should be paid less, or that we'd attract these sort of employees by paying them less is laughable.

What's well paid? I work in research and some people are very well paid ~140k a year maybe (before tax). They are paid more money than a research scientist in Germany's max planck institute. I want to be a lecturer in Germany and not here. Why is it that we don't have some of the worlds best scientists here.

Anyway I'm not saying people aren't attracted to top wages. I'm saying that top wages does not mean you'll attract the most talented. This is easily demonstrated.

steddyeddy

The idea for this thread came from hearing about Jonas Salk who cured Polio. When the vaccine was made Jonas was asked whether he would patent it. His response was "There is no patent. Would you patent the sun?". That is slightly off topic to the thread but I use it to demonstrate that true talent isn't always connected to huge financial incentives.

Miss Lockhart

While there are exceptions, I think you do have to offer excellent money and conditions to get the best. Offering these won't guarantee you talent though - of course not, it's silly to suggest otherwise. Chancers and wasters will no doubt jump at a good offer too. It's down to good recruitment and monitoring practices to ensure they're not successful though. But I see little evidence that poor or even average packages succeed in attracting talent.

steddyeddy

Miss Lockhart wrote: »

While there are exceptions, I think you do have to offer excellent money and conditions to get the best. Offering these won't guarantee you talent though - of course not, it's silly to suggest otherwise. Chancers and wasters will no doubt jump at a good offer too. It's down to good recruitment and monitoring practices to ensure they're not successful though. But I see little evidence that poor or even average packages succeed in attracting talent.

Well currently I see zero evidence that the top wages attract the best talent. I'm not saying poor wages attract talent. I'm saying top wages don't guarantee it. We are paying more for lecturers, scientists and politicians for example than a lot of other countries. We are not producing the top talent.

awec

steddyeddy wrote: »

Well currently I see zero evidence that the top wages attract the best talent. I'm not saying poor wages attract talent. I'm saying top wages don't guarantee it. We are paying more for lecturers, scientists and politicians for example than a lot of other countries. We are not producing the top talent.

That's because you only hear the bad news.

"CEO on massive salary is a massive success" is hardly something people particularly care to read or hear about.

awec

professore wrote: »

Why isn't the UK and continental Europe empty of them in that case?

Plenty of people have to go from the UK to the US for medical treatment.

Earthhorse

It's not as simple as paying them well or not. The point is usually that wages should be competitive, not astronomical. People at the top need to be paid well, very well IMO, and they do a better job than you hear about; newspapers aren't going to report on what politicians did right, it doesn't sell papers the way scandal does. You're going to have wastage in all organisations. We shouldn't be looking at something as simple as salaries but instead should be looking to see what we can do in the information age to make performance in public organisations and charities more transparent so we can decide whether they're worth the money we pay them.

steddyeddy

awec wrote: »

That's because you only hear the bad news.

"CEO on massive salary is a massive success" is hardly something people particularly care to read or hear about.

I definitely would. I love to hear stories of talented people taking small companies and making them a success. Even better would be stories of CEOs who made massive savings for a particular body eg Irish water or HSE ect. That would be great to read. I just don't see it in Irish society.

awec

steddyeddy wrote: »

I definitely would. I love to hear stories of talented people taking small companies and making them a success. Even better would be stories of CEOs who made massive savings for a particular body eg Irish water or HSE ect. That would be great to read. I just don't see it in Irish society.

Good for you.

But bad news sells. And companies are unlikely to attribute success to a single person, but are more likely to attribute failure to them.

Miss Lockhart

steddyeddy wrote: »

Well currently I see zero evidence that the top wages attract the best talent. I'm not saying poor wages attract talent. I'm saying top wages don't guarantee it. We are paying more for lecturers, scientists and politicians for example than a lot of other countries. We are not producing the top talent.

Yes. If you read my post you will see I said top wages don't guarantee talent. How would it?! And who ever suggested it? It doesn't mean the answer is to stop offering top wages though.

Conditions, prestige and lifestyle are crucial factors too of course. We're often lacking in such areas. I'm familiar with several cases where top international lecturers turned down or left Irish universities based on conditions and lifestyle factors. None went for average paying positions either though.

steddyeddy

awec wrote: »

Good for you.

But bad news sells. And companies are unlikely to attribute success to a single person, but are more likely to attribute failure to them.

I would dispute that. Bad news might sell in the tabloids but surely papers like the Financial Times or any decent broadsheet don't operate that way. I can think of several self made millionaires that have single handedly created huge business from nothing.

Carpet diem

awec wrote: »

Good for you.

But bad news sells. And companies are unlikely to attribute success to a single person, but are more likely to attribute failure to them.

Very true - like a fund manager attributing good performance of his portfolio to his stock selection and blaming the market for his poor performance.

titan18

Depends, if it's a case of two companies in Dublin who are offering a similar job, and the candidate has the choice of both, then the one with more money will more than likely be the choice.

If it's something that there isn't much of a choice of employers in (politicians for example, plenty of others) then surely the aim is to attract people interested in being a politician and doing what's good for the country and not people looking to make lots of money.

Pointless at using other countries as a benchmark too for some positions as in most cases, people won't leave their home and country to earn that bit more somewhere else. As long as they're being paid a good wage and can afford to have a good life here, I'd reckon very few would leave to work somewhere else (even if they could cos of language or visa requirements). Depends on the area of course, some professions probably have a big risk of people leaving and would need to pay the high salary to keep people, but those would be few.

Capt'n Midnight

When Steve Ballmer quit Microsoft shares went up 10%
http://www.forbes.com/sites/bruceupbin/2013/08/23/ballmer-quits-instantly-makes-almost-1-billion/

Capt'n Midnight

steddyeddy wrote: »

The idea for this thread came from hearing about Jonas Salk who cured Polio. When the vaccine was made Jonas was asked whether he would patent it. His response was "There is no patent. Would you patent the sun?". That is slightly off topic to the thread but I use it to demonstrate that true talent isn't always connected to huge financial incentives.

If you dig deeper you may find that the reason he didn't patent it is because he couldn't because of lots of prior work.

More PR spin than altruism