Such an awesome essay, Michael, thanks a lot for that! I would like to point out a numerical error in your logic, if I may.
When someone receives a 30% raise, it means their new salary is 130% of the old one. But the company was not underpaying them by 30% ā it was actually underpaying them by less than that.
Suppose the salary at the company was $100.
The employee left to earn 30% more ā $130.
Now, how much was the company underpaying relative to the new salary?
(130-100)/100 ~ 23.08%
In other words, the company was paying approximately 23% less than the market rate, not 30%.
So the percentage difference is not symmetrical because the bases are different. A 30% increase over the smaller value is not the same as a 30% decrease over the larger value.
The general rule is, if someone receives a raise of x%, the company was actually underpaying relative to the market by: x/(1+x)
the obvious disconnects about corporate level missteps you mention, I know little about. my experience with corporations and committees being minimal. At one time I employed 25-30 employees in a gas station and later 2-10 employees in construction remodeling projects, so that might be a very small scale microcosm of team relationships .
I slowly learned that some folks tend to be better leaders or willing to take initiative when given the chance, and those folks I gave the responsibility for the team they lead. I eventually realized it was not wrong to acknowledge sincere efforts and people respond better when they are recognized as individuals, (even when their efforts may be misplaced). A team work ethic or "espre de corps" or good morale always being essential to making headway.
Without unity of will and consensus about the objective, being effective/efficient is blunted. Experience in athletics and "the battles of Briton were won on the playing fields of Eton" gave me an ideal of performance to strive for. Lastly, and what took me a while to learn, was if I did not explain what I expected or teach my team how to do the job properly, then it was not their fault, but mine, if goals were not achieved. From knowing very little at the beginning to having a real crack team of cooperative, effective, and loyal people, was a real achievement for me. And after putting a good team together, there are few things sadder than leaving that group and not taking them on to other endeavors.
Such an awesome essay, Michael, thanks a lot for that! I would like to point out a numerical error in your logic, if I may.
When someone receives a 30% raise, it means their new salary is 130% of the old one. But the company was not underpaying them by 30% ā it was actually underpaying them by less than that.
Suppose the salary at the company was $100.
The employee left to earn 30% more ā $130.
Now, how much was the company underpaying relative to the new salary?
(130-100)/100 ~ 23.08%
In other words, the company was paying approximately 23% less than the market rate, not 30%.
So the percentage difference is not symmetrical because the bases are different. A 30% increase over the smaller value is not the same as a 30% decrease over the larger value.
The general rule is, if someone receives a raise of x%, the company was actually underpaying relative to the market by: x/(1+x)
In the case of 30%: 0.3/1.3 ~ 23.08%
Kind Regards,
Rod
Lol. I love that and those sorts of percentages always make my head hurt! Iām glad you pointed it out though.
the obvious disconnects about corporate level missteps you mention, I know little about. my experience with corporations and committees being minimal. At one time I employed 25-30 employees in a gas station and later 2-10 employees in construction remodeling projects, so that might be a very small scale microcosm of team relationships .
I slowly learned that some folks tend to be better leaders or willing to take initiative when given the chance, and those folks I gave the responsibility for the team they lead. I eventually realized it was not wrong to acknowledge sincere efforts and people respond better when they are recognized as individuals, (even when their efforts may be misplaced). A team work ethic or "espre de corps" or good morale always being essential to making headway.
Without unity of will and consensus about the objective, being effective/efficient is blunted. Experience in athletics and "the battles of Briton were won on the playing fields of Eton" gave me an ideal of performance to strive for. Lastly, and what took me a while to learn, was if I did not explain what I expected or teach my team how to do the job properly, then it was not their fault, but mine, if goals were not achieved. From knowing very little at the beginning to having a real crack team of cooperative, effective, and loyal people, was a real achievement for me. And after putting a good team together, there are few things sadder than leaving that group and not taking them on to other endeavors.
Great points and I love that quote about the battles of Briton because itās so true.