Why happiness matters more than compensation

Google is allegedly fighting all attempts to get them to disclose what they pay women. You can probably guess why. As a group, women are paid less than men. This isn’t big or new news and remains one of the biggest problems for most industries. Fixing this problem is almost impossible because with very few exceptions we don’t know what someone should be paid for a job.

So, let’s talk about the trouble with compensation, how employees and managers are impacted by the issue and how it is far more painful a problem than you likely think.  

The inherent unfairness of compensation

Let’s take two hypothetical people doing the same job, man or woman. If one of them started right out of college and worked hard, but never changed jobs their salary 20 years into the job will be based on the raises (performance, advancement, cost of living) they got during that period. But if they changed jobs every few years their compensation will likely be based on increases they were given every time they changed companies. Doing the same job, the person who was disloyal and changed firms, can make up to 2x what the person who didn’t change makes. Granted, it is generally more like 20 percent to 30 percent more, but that is a huge discrepancy for the same work.

If the person with the lower salary finds out about this, he she will become very upset. They may then become an HR problem even though they were there for every raise and their unhappiness is not caused by what they make, but what their higher paid peer makes.

If we then toss in things like education level and family responsibility, this can seem even more unfair. For instance, two people doing the same job with equal performance where one has college degree and one does not will typically have a significant difference in salary, as will two people one with a family and one who is single. This last is particularly fascinating/annoying because there is no guarantee that the higher paid employee will always be the more productive employee.

This is all to say that salaries are unfair, but you can either let the discrepancies reduce your job satisfaction and happiness or learn to game the system. You can also work to retrain yourself to focus on what is important, which often isn’t salary.

Sales

If you want to have the best odds of both making the most money in an industry and in being paid fairly go into commission sales. Granted you have to be a people person, good at manipulation, have a very strong work ethic and be able to handle rejection (a lot of it). You’ll typically find some of the highest paid people without degrees in sales. This is pure pay for performance. Yes, there can be games in terms of territories, support, shared commissions and experiences that cross harassment borderlines, but the productive sales person generally controls what he or she makes, almost always is in high demand and has far better tools to deal with the related BS than almost any other position in the company.  

I worked at a large tech company where the top sales people brought home higher salaries than the CEO (granted the CEO got better stock options).   But, we are talking seven-figure incomes and while there was just one male CEO the top sales people were men and women and far more numerous and far less well-educated.

Gaming the system

Much like it was in colleges and universities where the smart student gaming the GPA learns to pick their classes (something I didn’t learn very well I might add), there are ways to game the company. There are managers who aggressively use compensation, and those that don’t believe in raises, there are departments that are well-funded, and those that are being cut back, and there are companies that are growing, and those that are being downsized.   What you want for higher salaries are managers who aggressively use compensation as a motivator, who are in departments that are growing, in companies that are growing.  

You’ll also likely find that folks near headquarters and that come into the office advance more quickly than those that are in satellite offices or work from home. And, finally, those who have broad interests and socialize inside the company, and outside with folks in the same industry, have the best opportunities and advance more quickly.  

So rather than complaining about a system that is unfair, learn to use the unfairness to your advantage. But that isn’t what I want to leave you with.

Is compensation that important?

I was trained to be a CEO and have been recruited to be one three times, I’ve turned down every offer. The reason for this is that I grew up with CEOs, and I’ve studied them. Generally, they have a ton of responsibility, far less actual authority than you would think, they have, as a group, a surprisingly lonely existence, and they have a very high risk of losing perspective and losing their jobs because of abusing their power. Like celebrities they are often surrounded with people who just want to use them.  

At the end of their term as CEO they tend to drop into obscurity and related depression having been hooked on the status they no longer have and the perks they can no longer afford.   Even founder CEOs find what they loved so much about starting a company is gone when they must run the thing once it matures. Now there are those who love command and actually do a nice job with work-life balance, but we don’t call them out often and they typically aren’t the example that folks try to emulate (though they should).  

So, I’ll leave you with a lesson I learned, and applied. My best friend’s father was a guy who came up the hard way, was a CEO of several firms, made and lost several fortunes, and ended up living in a small room in a hotel he owned and largely started with. From that I learned how important it is to focus on taking pleasure out of life and pretty much screw everything else. Find what you enjoy and do that, don’t worry about what other people have or make, focus on the people that bring pleasure into your life. He died a few years ago, but I watched him learn those lessons the hard way and he was one of the folks who seemed to do well and find the secret of happiness, which I think is a far better goal than accumulating money and things.  

So back to the issue at Google, there are likely folks there who are upset at the salary discrepancies being reported. Surely there are those with their heads down continuing to do the things they love. Then there may be some going off to find jobs at companies that treat them better. I’m suggesting the latter two groups are the ones you want to emulate if you want a happy life, and that a happy life can be far more rewarding than a large estate.   They say it is the journey and not the destination, life is like that and it makes little sense to sacrifice life quality just to acquire things you’ll leave behind anyway. Something to noodle on this weekend.