There’s a Mad Men scene where Harry Crane where learns that a colleague makes $100 a week more than he does. He believes he deserves a raise, and he ultimately receives a slight raise from his intimidating boss. Do you believe he was happy with the outcome? How about you? Are you paid fairly? In this episode, compensation expert David Buckmaster is going to unpack this fascinating topic based on his book Fair Pay.
- The path to determining a fair wage
- The absolute vs. the relative value of a fair wage
- Do Google engineers complain about fair pay?
- Information asymmetry
- Necessary ingredients for fair pay – authenticity and rigor
- The history of salary surveys (Basset and Patton)
- FOWLs – Future Work of Leaders
- Pay transparency
My Favorite Excerpts Explaining Fair Pay
When pay is fair, there is a shared perception between all parties that the process has been honest, with a nonnegotiable understanding that all people should be paid at least enough for their essentials, including some discretionary income.Page 24, Fair Pay
Expecting empathy around pay should be universal, because empathy isn’t about status or rank, it’s a human, instinctual response.Page 32, Fair Pay
If you manage people, think about what will happen if you ask for a pay raise for yourself.Page 176, Fair Pay
Key Terms to Watch For in Fair Pay
I’ve already mentioned several of the most critical terms and concepts in this book. Since much of this material is new to me, here are a few more terms and ideas to watch out for. If you read this book in a small book club, consider adding this list to discuss in one of your meetings.
- Line of sight (p. 68)
- Pay grades
- Equal Pay/Equal Work
- Fair Pay – not a formula
- Compensation team
- The 70/20/10 Rule
- Improving pay transparency
- The future of work
- Simplifying pay raises
- History of salary surveys
- The Dan Price story
- Information asymmetry
- Last trust
- Pay sincerity
- Job description alignment
- Compensation Philosophy
T/F Quiz – For CEOs and HR Professionals Only
Answer true or false to the following statements, and be ready to explain your reasoning.
T/F – I view minimum wage workers as though they are invisible.
T/F – I believe a person’s minimum wage is only temporary.
T/F – Increasing minimum wages lead to higher unemployment and prices.
T/F – Low pay; that’s just how the world works.
T/F – I should replace the term minimum wage with minimum viable wage.
Some of David’s Favorite Books
- Books by Wendall Berry
- Life in the Crystal Palace
- The Management Myth
- David highly recommends The Good Jobs Strategy – I view this as the perfect pairing for David’s excellent book.
- My favorite book review of David’s book at Charter Works
- David’s website
- David’s LinkedIn profile
- The MIT Living Wage Calculator mentioned by David
The Management Myth
Accounting’s Impact on Human Capital