I read an interesting article last week that re-affirmed my disdain for the corporate workplace. It will only take a few minutes to read so if you have the time go ahead and read it, otherwise I’ll give you the Cliff Notes version below. It’s actually a pretty interesting article..
This article tells the story about a mid-level energy company that was experimenting with fracking during the 1990’s. The company’s profits were dwindling, the stock price was falling and the CEO was unfortunately stricken with cancer. It seemed like a recipe for bankruptcy but then a young engineer discovered the perfect mix to unlock natural gas from shale and almost single-handedly saved the company. In two years, Mitchell Energy’s gas production went up by 250% and the company was sold for $3.1 billion. The owner, George Mitchell was now worth $2 billion and the engineer who discovered this breakthrough process that is now applied in fracking processes across the world made $100,000 the year the company was sold. He never even received a bonus.
The 40 Hour Work Week
I will never understand why people go into work and kill themselves working long hours and sacrificing their social life just to make someone else richer. If you’re getting paid by the hour, then you’ll see a direct correlation between how many hours you work and how much money you make. Unfortunately though, most high paying jobs aren’t hourly these days so you’re stuck working for a fixed salary.
I don’t know who decided that the work week should be 40 hours in America but if I were to sign onto a job and they told me they were going to pay me X amount of dollars for 40 hours a week then they’re going to get 40 hours a week. It’s usually laid out pretty clearly in your employment terms yet there seems to be an unwritten rule in certain industries that you have to work more than 40 hours a week just because everyone else is doing it. I guess I’m selfish in that respect since I feel that if you’re only going to pay me for 40 hours a week, then I’m only going to work 40 hours a week.
The fracking article is just one example of a guy who was probably killing himself to keep his job and the company afloat yet he received nothing beyond his normal salary in return. The piece goes into detail about how nobody thought Steinsberger’s method would work, yet he kept at it and refused to give up. I guarantee he was working 60-80 hours a week trying to prove that his method would succeed. And ultimately, Steinsberger was right. The process he discovered made billions of dollars for the owner and probably millions for upper management yet Steinsberger never even received a bonus.
The Correlation Between Performance and Pay
I can’t speak for every industry but I know that there’s very little correlation between performance and pay in my industry(engineering). In fact, at my last job, I had a co-worker who worked 10 hour days nearly every single day while I worked strictly 8 hour days. We were both smart and good employees but I’ll be the first to admit he worked a lot harder than me. After 8 hours, I was ready to go home or go to work for my second or third job. The last thing I wanted to do was stay another hour(I was even paid single time for overtime at my last job) but there were lots of people who stayed late and worked tons of overtime.
At the end of the year, my friend got a 4.5% raise and I got a 3% raise. I was happy just to keep up with inflation and that 1.5% extra meant absolutely nothing to me. Honestly, I thought he deserved way more than 4.5% and I would have been pissed if I were him. Isn’t this the the reason why communism doesn’t work? If people aren’t rewarded for success then they won’t be motivated to work hard.
Driven by Incentives
Whether it’s right or wrong, when it comes to employment I’m driven by incentives. I’ve always done well in school and I’m in about the same position now that I’m working. I’ve never felt the need to over-achieve when it comes to my job though. I go in and work hard for 8 hours, but at the end of the day I want to go home and relax, spend time with my fiancee or hang out with friends.
One of the things I like most about working for myself online is that I see a correlation between how hard I work and how I’m rewarded financially. I know I’m doing a good job working online because of how much money I’m making. If I slack off and don’t work for a month, I’m not going to get paid and that’s the way I like it.
In the corporate world, you will come across the over-achievers and you’ll also come across the under-achievers. I’m probably right about in the middle yet all three are often paid the same. I think engineering is a tough industry to distinguish elite performers from non-elite performers since there aren’t many quantitative metrics you can use to judge performance. In jobs like sales, the top seller is your best employee and you can pay him or her accordingly. If you have a firm of lawyers, your top lawyer will be the guy who brings in the biggest clients, bills the most hours and wins the most cases.
It’s not like that in a lot of fields though. First impressions and likeability could play more of a role in your compensation package and evaluation process than whether you’re actually good at your job or not.
Why be Loyal?
In the corporate world, there’s very little loyalty from employer to employee. As companies get bigger, they have shareholders to report to and they have to show profits. Don’t forget that you are one of their most easily expendable resources. No matter what you’ve done for them in the past, if the company isn’t turning a profit, they’re going to lay people off where it makes financial sense. So young and cheap workers like me will get to stay on while old and expensive workers will get the axe.
Ultimately, I’m not the type who’s going to ever kill myself working for someone else. If my contract says I get a $100,000 salary for 40 hours of work per week, I’ll be more than happy to work my ass off for that amount of time and be done with it. But now that I’m working two jobs, I value my free time even more and you’re going to have to pay me if you want me to work more than that.
Readers, do you find that you are rewarded financially the harder you work? Or do you put in long hours and see a measly 1.5% bonus like my friend(Btw, after taxes, that’s only .75% since it’s being taxed at your marginal rate!)?
-Harry @ The Four Hour Work Day