A healthy salary is not a reward for the work you do but rather the work you’ve done. It’s time to absolve yourself from guilt.
CIOs are worth every penny they are paid and when some of them are paid in the region of £200,000 that is an awful lot of pennies. Unlike their staff they don’t actually do or make anything anymore – they do meetings, they hold presentations and, of course, travel a lot. But in terms of solid deliverables, well…
Now if you are at the stage in your career where director or chief features in your job title, you may feel a little bit guilty about this lack of deliverables. There you are, earning a sizable whack, sitting in a big chair, watching the projects go live and planning the next IT strategy for the organisation.
But your staff could be forgiven for grumbling about the lack of tangible work you do. Never mind telling them that you have had to make business critical decisions or that you have been trying to persuade the CEO not to outsource the entire team. It won’t wash and you will still feel guilty – bosses by definition have to be overpaid, under-worked and never there when you need them. But take heart. There is a bona fide economic theory to explain it all, which means you never need feel guilty again. It is called ‘the tournament theory’.
We have all had to attend those dreary awards ceremonies – usually sponsored by a dubious trade magazine, with prizes for riveting things like ‘most cost effective use of a database update’ or ‘best new disc drive use in the public sector’.
Let me entertain you
There enviably is too much wine, ill advised evening wear and most annoyingly of all, a ‘star’ performer comparing the event, telling jokes and handing out the prizes. Most of these performers wouldn’t know a mainframe from a JCB or Bill Gates from Bill Bo Baggins but provided they get a bit of hush, they will do their best to tell jokes loosely based on whatever industry the awards are for.
At one of these events, many years ago, comedian Bob Monkhouse was the compère. It was held at the truly glamorous NEC in Birmingham. In spite of initial hostility he won the audience around with well-pitched gags and banter. He was on the stage for maybe 40 minutes and earned about £10,000. Astonishing. But the thing is that he was not being paid for his performance on the night – good though it was – he was being paid for the years of work he had done before the event.
Economist Ed Lazear calls this the tournament theory. Lazear realised that at sporting tournaments, players are paid for winning, rather than for trying. The prize winnings are a reward for past victories and work – and are a motivation for other players to get better, not for the effort involved at the actual event.
Tim Harford, the presenter of the show, believes it is the same for business heads. Your huge salary is not a motivation for you – countless surveys have found CIOs are not motivated by money, so much as job satisfaction and challenges.
No, the big salary is supposed to be a motivation for your team. The more money you are paid, the harder they work, trying to get where you are. So the logic goes, surely the best way to motivate them then is to award yourself a nice fat payrise?
For your team this theory is more problematic. It can be hard for bosses to discover who is really doing the work – who is talented and who is a lazy no hoper. The economists say that the way forward is to do something a lazy person just wouldn’t do – like extra training or learning a language that might come in useful.
This is about your team proving themselves. The degree or language course may not actually be that useful for the job or add to the productivity of the person who takes it, but it isn’t supposed to be. It is to show that they are already useful. It is called ‘signalling theory’ and could be a way for busy CIOs in meetings all day, to figure out which of their staff are really talented and hardworking. Find out which ones are doing some sort of extra learning activity and then promote them. Oh and to really motivate them; don’t forget that big fat pay rise.