The Price of Time
It's a common strategy for companies to offer gifts in kind, probably the most common form of a corporate thankyou (or maybe well known) is the frequent flyer program. Airlines often have excess capacity on flights, the variable cost of having a customer sitting in that seat is let's say $40. Even though a flight to Hawaii might cost you $1100 if you would only take that seat on that flight because you can pay for it with frequent flyer points you get an otherwise empty seat so you get a flight you value at $1100 and it only costs the company $40. This works so long as the system is set up so a paying customer never gets bumped for a ff awardee.
I've been reading on win-win strategies under game theory and I was thinking about the old pay rise negotiations.
Firstly negotiation under game theory (and in practice) is daunting enough, but the thing about pay rises is that they are more or less the opposite of the above situation.
You see thanks to Income tax (and HECS) is that an employer values a pay rise much more than you do. An extra $4000 might represent depanding on your tax bracket as little as $2200 a year or $42 a week to you but it means $76 a week your employer has to pay. That's of course a worse case scenario and generally the more you earn the more you claim back on tax. But to someone like me who has no deductable expenses (apart from donations to recognised charities) combined with short term cashflow problems having half a pay rise locked away for a year (or 50 if using tax effective super contributions) just isn't something I get all fussed about.
So it costs a company up to twice as many dollars to get the same impact out of me, the taxation system not only taxes better performance but it reduces the incentive for a company to say thankyou in cold hard cash.
Now when I was a casual employee you don't talk salaries but in hours, like $9.80 an hour to be seniour management at HJ's and $21 to talk shit on a phone. And it made it clear cut what time was worth, infact pay was related directly to time. Performance measures generally held steady and you had that 1:1 relationship between time spent and revenue raised. ie. for every 1 hour worked you sold 23 burgers. but most jobs and indeed work don't follow this cycle. take retail, for two months of the year (november & december) the value of an hour goes up alot during the christmas retail period, I think it's something like 80% of the years business happens in December. Hence you see the casual staff numbers balloon up at this time and then be cut back massively come February.
And most full time jobs are the same but it gets obscured by the fact that time isn't the only factor that can increase or decrease your value, it can just be sheer capacity, your strategic fit, customer demand, timing, seasonality, business cycles, government investment, overseas interest rates, deregulation, regulation and so on and so fourth, but the fact is that not every hour you put in is worth as much as every other hour you put in.
Your energy and concentration are not as good at the end of a day as at the beginning of the day, or the shipping deadline is 2pm and customers tend to only use your services up until this time.
Furthermore, if people were really honest with themselves they would admit that they only put in at maximum around 3 hours of productive effort a day, yet most of us are at work for 8. Some people do pile on the effort and work a phenomenal amount of hours productively and these people are why Unemployment is high, they should actually be highering graduates to do their book keeping and other things for them that they are currently micromanaging like Donald Rumsfield. Yes they may have to sacrifice their pay but this again comes back to the same question?
What is the value of time?
8 hours work, 8 hours rest and 8 hours recreation is the basis of the 8 hour day. Outside melbourne trades hall we fitted a monument to this notion, it is what many, but not I would consider a 'balanced' day. But If I have to work as many hours a day as I'm sleeping I'm not doing one or the other efficiently.
If say you shift the balance to 10 hours work (pretty common) and cut back to 7 hours recreation and 7 hours rest already we see that the situation is unbalanced. Now you would also notice that this breakdown adds up to 24 hours, lot's of assumptions have been made here, or ommitted for want of simplicity. For example what is commute time? is it working day or recreation day, in the mornings it's more likely to come out of rest time. Say you are the average Melburnite and your commute is 1 hour each way through rush hour traffic - 10 hours became 12. Or even in the balanced perspective 8 hours becomes 10. You may even enjoy driving and good old breakfast radio or like me enjoy a 15 k ride to work whilst listening to music. It doesn't really matter if you enjoy it or not it's part and parcel of your decision to work. And I don't really begrude work for not being sub 1 minute travel time for my place of residence. I'm a realist but really the decision to sell your time to an employer really leaves two things to negotiate at a table and most often we only negotiate one side of the deal and worse give away the other.
How often does work give you money because it may as well or to make a favorable impression? once a year if that, and believe me a company would rather give money to customers to say thank you than employees.
Yet we give away time that is our recuperation time, valuable time to a company and in reality the company probably doesn't value it anywhere near what you or I do.
Infact if anything by the time you sign your first contract you've probably overprovisioned your time for what the company demands in value.
You could probably get out 75% of the output in 50% of the time you work now, and I feel that estimate is conservative. as such 50% of your hours should be negotiable.
So there is time that you value more than your employer does, and then there is pay which an employer values more than you do.
So I would have thought if anything hours would reduce as you moved up in a company but the reverse tends to happen.
That's what I call a lose-lose anyway I'll see how I go at the negotiating table.