what are people paid for?

New post on Chron.com on What Are People Paid For? This is a cross-post so please comment on the Chron site if interested.


schipulmug.jpg

Ed Schipul

Two questions I like to ask in the interview process are below. (Oh don’t worry, most job applicants don’t take the time to google things like “schipul interview questions” so I’m pretty sure I’m not giving anything away.)

The first question is quite simple:

What is the goal of business?

The answer is simple:

To make money.

Now before you run me out of town on suspicion of being a citi-group-harvard-educated-asset-denuding-specialist, I’d like to differentiate between a business and the leadership. A business is a cold-hearted piece of paper that lives and dies on the oxygen of money. This does NOT mean the leadership can behave themselves in an unethical way. It just means that the business itself lacks a soul and that the soul must be transplanted in through ethical leadership and ethical employees working to create “greater value than cost” for clients. And the business must make a profit or at some point it will fail. And we all would lose our jobs. That sucks. Thus profit is good.

I would say about 50% of the applicants get the “what is the goal of business?” question correct. 25% say it out right. (I like that group.) 25% say it apologetically like they are embarrassed to admit they like money. (Baroo? Ya, check it. Money is awesome.) And 50% of the applicants just ramble on about “providing a service” and “interacting with customers” and “making management happy” and blah blah. For those applicants I always wonder “gee, are they going to work for us for free?” Yes take care of the customer, but you have to make a profit or you aren’t a business, are you? You can do both.

Regardless of the answer to the “what is the goal of business” question I always explain the correct answer and why. I wish someone explained that to me when I graduated from TAMU with stars in my eyes and a political science degree, bent on saving the world. (Then life happened. Now I’m a capitalist. Harumph. I’ll get another go at it when I retire.)

Regarding social responsibility I highly recommend reading James O’Toole on “The Ethics of Human Capital.” From the article:

I believe it can be argued reasonably that the creation of an ethical corporate culture is the prime role, task, and responsibility of a virtuous leader. For that to be the case, an ethical corporate culture would be defined as one in which all the stakeholders of an organization are treated with due respect. That is, the legitimate needs of customers, owners, suppliers, host communities, and employees would be both acknowledged and addressed by an organization. – James O’Toole

The second question I like to ask? It’s about compensation. It is:

What are people paid for?

I’ve never had an applicant get this one fully right. They usually respond with “taking care of the customer.” And I ask “so everyone in customer support at Amazon makes exactly the same?” They say “No.” I ask “Why?” and nobody gets it. My response is below (Note: I googled it extensively but can’t find the original source. This is my interpretation and if you know the source please tell me?)
Blue Acrobat at OVO! by Cirque de Soleil in Houston

What are people paid for? People in a business are paid for two things; responsibility and expectations.

  1. People are paid first for their level of responsibility.
    1. With power comes responsibility. Responsibility is hard. A manager should usually make more money than their employees. They have more responsibility.
    2. Responsibility does NOT mean strictly “management.” We have some awesome employees with huge amounts of financial or technical responsibility that are compensated for this while they don’t directly manage any “people.”
    3. Level up – organizations should give employees the ability to take on responsibilities that are smaller to prepare them for more responsibility later. Examples are things like managing the training schedule, managing interns, advanced reporting and research to help business decisions, keeping the break room clean, making sure we have paper in the printers. All of these things are responsibilities. If you are above cleaning the coffee pot you won’t work at our shop. (But I get that some people worship MBA’s, I am just not one….)
    4. Most applicants agree that paying people for their responsibility is fair. Tenure is nice, but younger more ambitious employees can and do pass up more senior employees in compensation. That is fair.
  2. People are next paid for “what they are EXPECTED to do.” This one is more complicated. The good news is the employee is in complete control of managing their superiors’ expectations of them. Examples:
    1. Events – Events change expectations.
      1. If your star quarterback just won the super bowl they should be paid quite well next season. But wait! What if the day after winning the super bowl they crash on their motorcycle and shatter their throwing arm in 10 places? Well, then their new pay rate is zero. Harsh, but that one event completely changed your expectation of what they will do next season. To protect the other players and the owners, you can’t pay someone you think isn’t going to do anything the same as someone you think might win the super bowl. (Hopefully football teams take out insurance to take care of their players!)
    2. Tasks – Small tasks EXACTLY equate to bigger tasks. Humans are consistent like that.
      1. If you ask someone to clean the coffee pot and you get a delayed “<pause….> OK” then you can BET that is exactly how they will treat your 100k/year annual account. The applicant will TELL you they will differentiate, but once they settle in, small responsibilities are the best indicator of how they will handle larger responsibilities. An intern who doesn’t want to load the dishwasher to help out on their first day is best fired immediately. Pride is deadly. Servant leadership rules.
    3. Training – consume training like candy.
      1. Training is good for the employee because nobody can ever take knowledge away from you.
      2. It prepares them for greater responsibility (see 1 above)
      3. It means they are ready for new opportunities down the road. “Just in time training” is crap, be trained BEFORE the opportunity happens or else it is just an “event” and not an opportunity at all.
      4. If you don’t know a technology an employer is looking for, invest $30 in yourself and learn all you can at sites like Lynda.com or YouTube. (Side note: last Thanksgiving they asked me to ‘carve the turkey’. Why? Why would you let the guy who doesn’t spend much time in the kitchen ruin the bird on the most important family meal of the year? Luckily, I solved it with training on turkey carving. True story.)
    4. Hard Work and Initiative.
      1. Ideas vs Results – A well meaning employee says “hey I have this great idea for the company!” An employee that you expect will rock the world later has an idea, prototypes it, takes it as far as she can take it without company resources, and then schedules a meeting with you to go over “initial results and research.”
      2. I once had a sales job applicant interview with me and he started the meeting by showing me a six page marketing plan he had developed for the company. He presented it in its entirety and I was floored! Who wouldn’t expect this guy to be a rock star? (Side note: the plan was completely wrong because he didn’t know our revenue model. But WHO CARES?! This guy’s initiative and demonstrated work ethic was unbelievable. Sadly I lost him to a competitor.)
      3. Tabitha, who recently joined the company, set herself apart by doing her entire resume as a pop-up book. A skill she learned by watching YouTube videos in less than a week. THAT is initiative. And I am very glad she joined our team before a competitor hired her!

Compensation is a loaded conversation. Job applicants always have some idea of what they think they should be paid (not what they are “worth” but what they think they should be “paid” – big difference). The ones right out of school are told some industry average, some too high, some too low, by the University. Those numbers don’t add up. And I have yet to talk to an applicant who says “the school told me I should be able to create X value for the corporation. I realize the money paid to me initially is earned by the other workers and I really appreciate them taking a risk on training me.” Ya, that doesn’t happen. Ever.

See? That second question, what are people paid for, is a LOT more complicated. But there is an answer. And YOU are in control of setting expectations of yourself. So in many ways, people are very much in control of their income. They just frequently prefer to hide behind the “management hasn’t promoted me” excuse without working hard to increase their responsibilities and the expectations of what they will do in the future.

I would love your feedback on this post. And despite the last paragraph of my last big post, on this one I welcome your IDEAS! – Thanks!


Chron.com on What Are People Paid For? This is a cross-post so please comment on the Chron site if interested.