What If Managers Didn’t Get Paid More?

One of the many surprises from The Year Without Pants is that Automattic, makers of WordPress.com, doesn’t pay employees more when them become a team leader. They consider being a leader a role, not a job. One of the fun experiments this enabled for me while I worked there was to step down as lead and report to someone who used to report to me, something I’ve rarely seen done gracefully before.

If managers don’t get paid more, this dramatically changes several dynamics about management and leadership:

  • Money is removed as the motivation for becoming a leader
  • Instead only people who purely want to be leaders take the role
  • If they’re unhappy in the role, they have no reason to stay
  • (Related: list of why managers become assholes)

In many organizations getting promoted into management is the only promotion path. The result is many people ill suited and even uninterested in leading groups take on those roles, with negative consequences across the organization. If you know of managers who clearly don’t like managing, you and they have been victimized by an organization that has misplaced how and why it rewards people.

During my 20 months working at WordPress.com the people in lead roles were mostly stable, and many people had been in a leadership role for two years or more. But the clarity around leadership being a role changed how leads behaved. It made leaders far less territorial, for they knew, much like being a Senator or a representative, that they were part of a larger system. Leadership as a role was one of many cultural attributes at Automattic that are unusual for corporations, and it’s their culture that allowed them do to so many things we’d all love in our own workplaces.

Of course management and leadership are not precisely the same things, and a manager in one organization has differently responsibilities than in others. But the question remains: would changing how managers are rewarded lead to people better suited for the task being interested and better performance in the position?

[Update 1/29/15] The concept of dual ladders is one way to officially support a path for increased rewards without having to become a manager.

32 Responses to “What If Managers Didn’t Get Paid More?”

  1. Scott

    The obvious retort to this is “the quality of managers would decline, as since there is far more and harder work to be done by managers, no one would want to do it if they didn’t get paid more”

    But that’s a fascinating set of assumptions isn’t it? Are managers always doing harder or more work?

    Reply
    1. Jon

      That’s probably true, but then again, I’m sure the ones who really want to lead won’t let the lack of a pay increase stand in their way.

      Reply
      1. Scott

        Another argument I can imagine is that “not enough people are natural leaders who would want to do it, so we have to fill those slots somehow and motivate people to fill them.” Which is sad or terrifying in its own way.

        Reply
        1. Sam K

          On the other hand, if leadership positions were mainly filled with natural leaders, they would likely nurture more leaders. In a company where management is “awarded” to the strongest individual contributors, you get a culture where genuine interest in developing others becomes an obstacle towards taking on a leader role.

          Reply
    2. B Luxor

      The problem is that the best managers in the market would go elsewhere – i.e. go to companies that did pay managers more. If you argue that you could offer all employees the big bucks that well-paid managers in other companies make, then you will be at a significant disadvantage in terms of operational expenditures, profitability and ability to invest in the business.

      The bottom line is that any business that does this is creating a large competitive disadvantage for themselves at any kind of real scale. This may work for small companies with low management needs, but at any scale they will crumble under the weight of poor management capabilities or an incredibly high op-ex burden.

      Reply
      1. Sam K

        If you’re motivated exclusively by money, you’re likely not a very good manager. A company with this philosophy could attract managers with the promise that THEIR managers would be interested in developing new leaders, not in using them as pawns to further their own careers. I know which I’d rather work for.

        You still need to pay good managers well; good managers are skilled knowledge workers with in-demand skills, after all. This approach would work best in knowledge intensive industries where all contributors are paid fairly well.

        Reply
    3. Daniel

      I don’t think managers necessarily do significantly ‘harder or more work’ than many other roles. Managers would be expected to demonstrate particular skills, including leadership and co-ordination; likewise a software developer (for instance) would be expected to be proficient in technical skills necessary for that domain. The developer being promoted to manager would find it ‘harder and more work’ to come up-to-speed if they lacked the proficiency in those management skills. Similarly, a manager being ‘promoted’ to a software developer would equally find it harder and more work to develop the necessary skills and become productive in that role.

      When you have various team members (managers, analysts, developers, testers, etc.) performing at the same level towards a common goal, their pay should be similar otherwise resentment would develop. Ideally, pay should reflect proficiency in the role and impact on the company’s destiny. As long as this compares favourably with the rest of the market, then the quality of particular team members shouldn’t have reason to decline.

      Reply
  2. Jon

    Sad, indeed. Do we really want those who just “fill in the slots” to be our leaders and to motivate us when we need it?

    Reply
  3. Dan Ritz

    I imagine delegation would be an easier concept for a leader that is closer to a peer than a boss. Which also makes me think that immature leaders who horde responsibilities are a byproduct of trying to seem/feel as important as their position implies.

    Kinda makes me think the great leaders are more valuable because so few seem to get past that hurdle. If that hurdle didn’t exist, would great leaders be as rare and valuable?

    Reply
    1. Scott

      The notion of great leaders is incredibly romanticized. Most workplaces just need a good, smart, trustworthy, fair person. Even those seem uncommon, don’t they?

      You’re right about delegation and ego – same goes for micromanagement. The compulsion to micromanage is a lack of trust in employees, and the ability to cultivate trust in both directions would seem to be a critical skill for anyone in a leadership or management role.

      Reply
      1. Jay Schumacher

        Micromanagement – in addition to lack of trust in employees – can also be a result of leaders/managers who don’t really know what they SHOULD be doing as a leader… Removing barriers for their team(s), facilitating strategy and future vision, socializing the value and success of their team(s) – those are some of the immediate things that come to mind that micromanagers aren’t doing because they either don’t know how or don’t realize that’s where the lions share of their efforts should be.

        Which ties back to your point about people being put in management that really aren’t good fit for that type of role, or who are never really properly trained or mentored on how to do it well.

        Reply
  4. Sean Crawford

    At my for-profit agency junior leaders only got paid a dollar an hour more. This finally changed about ten years ago when the government insisted on standardizing all agencies, partly to discourage job hopping but mostly, I suspect, as mere meddling. I haven’t noticed any change in leadership ability with the new wages.

    I’m pleased we don’t have bad leaders or dysfunctional meetings. I read about such meetings on the internet, but I am spared such.

    Reply
  5. Anthony Bubel

    Fantastic points – but, I think, ones that would (sadly) fall on deaf ears among the typical/large/bureaucratic corporations of the world with an already-established corporate culture (that may or may not suck). Because in their world (typically), a promotion into a management role is only really a promotion if additional compensation is involved.

    Does it make for some poor leadership? Absolutely. People generally say “I’m going to work my way up to management” because they’re tired of driving a Volkswagen and want an Audi. Not because they want to truly grab hold of a leadership role. It’s just more paperwork for them, anyway. :)

    Would love to see an experiment happen in more of a typical workplace with established management ideals that don’t gel with those of Automattic (disclaimer: I work there).

    Reply
    1. Scott

      Thanks for the comment Anthony.

      Culture change is really hard in any direction, much harder than technology change. As you point out there is a very deep set of assumptions at work at any company, and the bigger the company the more dangerous it is to question those things. Suggesting changes to how hierarchy, rewards, job definitions, vacation, etc. are all sensitive topics at any company.

      I’d love to see some experiments. The rub is few executives are ambitious enough about these ideas to want to run experiments on their own organizations. That was perhaps my deepest complaint at Microsoft when I was there a decade ago – it was a big enough company that they could afford to let different groups work differently (different division of labor, different bonus/review systems, whatever) and learn from the results (This didn’t happen of course :) I don’t know of any Fortune 500 company that has experimented in this way.

      Reply
    2. mwgrigs

      The experiment occurs everyday in most every organization. There are people who assume leadership roles within the organizational culture who rarely, if ever, receive public recognition or compensation for their contributions, yet their loss would often be more devastating than the loss of the CEO! Everyone knows that Sue, or Bill, or Ted is always going to step up and give 110%, that’s why they’re always getting the new project, difficult account, or last-minute miracle need. What are they, if not informally compensated and recognized leaders?

      Reply
  6. Adolfo González Uzábal

    I really think it should be just a matter of supply and demand.

    You should pay each one according to the costs you should have to pay if they leave. If there are just a few good leaders out there, then, please, pay your good leaders well, so they don’t have another incentive to quit.

    But also, if you’re running out of good developers (or testers, or salespeople or whatever) and you think you won’t fill the slots easily, then you’d better pay them according to it, for just the same reason.

    Reply
  7. mwgrigs

    Fantastic post Scott. Are you able to share practically how Automattic did compensate their workers so that eventually they could get rid of the VW beetle and step into a better status symbol? I work as a manager for a large municipality, I have seen my fair share of people “just waiting for their turn in the big chair.” Perhaps this question raises more than just the “What is authentic leadership?” question, but also raises the question of what is truly equitable compensation? And why? I really like the concept of “leader as a role” not as a job–a worthy exploratory topic!

    Reply
  8. Hellish

    I find it interesting in that a large percentage of senior and junior management attain their role solely because they have a piece of paper saying they have sat a course….as to if they have any practical experience really doesn’t come into it and once the big boss gets in, they generally bring in all their friends under them, experienced or not. Its these roles that always seem to take a chunk of the wage bill yet without the front line staff, they wouldn’t have a job at all.

    Reply
  9. Tobias Mayer

    Thanks for writing this. A necessary subject to bring into the light. I think the key assumption is incomplete though. It isn’t only (or even mostly) money that compels people to management. It is power. It is not uncommon for individual contributors to move into a management position at the same pay rate. There is a promise of more pay later, of course, as they climb the hierarchy, but the immediate rewards are i) status, ii) power/influence/control, iii) maybe a window cube :) To achieve these things many will be happy with no pay increase (some may even accept a pay deduction!). Thus, I don’t think it is the payment that’s the problem. It is the hierarchical structure itself—as you point out, the only way to make progress is upward. I’d be interested to see your take on another “what if”…

    “What if there were no managers (and no hierarchy), and each worker was able to pick their own mentor?”

    Reply
  10. Carbonware

    I think this is not only wrong thinking but often behind these ideas is some consultant who, while convincing management to do this kind of thing also gets paid for making it happen, not just the consulting and upper management often get some of the funds that would have gone to the managers os of coarse executives love this kind of thing.

    Instead, the better solution is to provide tracks for both leaders and individual contributors. Every company has plenty of IC’s who are great at all kinds of things but are not suited to leadership, or perhaps have no interest in it. We need amazing worker bees and when companies promote them or reward only for becoming managers they set up many for failure and remove the example the IC contributes to the team as a whole.

    As for management, I’ve yet to work for any company that was not very demanding of managers at all levels, they may get paid a bit more but they often have to be quick thinkers, daring, decision makers, able to size up problems and opportunities very fast, willing to make tough decisions in the best interests of their teams and company often at the risk of their own best interests.

    As a leader I am often the first in and the last out, often required to put in twice the hours of my team, often held to the fire for their mistakes and sometimes I have had to sacrifice my position to protect others. Leaders earn more because they should have experience, know how to motivate, and don’t need to be the best person or the smartest in the room. But do know what to do with those great people and bring teams together that can succeed.

    I earn every penny I make and then some, and anyone who claims that money should not be part of the motivation has either had very little real responsibility to has become one of those executives who see people as cogs and not associates and fellow team members.

    I do too much, care too much, and put up with too much to do what I do without being compensated for it. Anyone selling that you should lead strictly for the privilege or some honor is hiding something, most likely they are hiding the money they should be paying you to line their own pockets.

    Reply
    1. Different Scott

      Where I work many of the managers spend most of their time going to out of town conferences (really how many are necessary for doing their jobs better?), calling some extra useless meetings to waste everyone else’s time when they are around, and forwarding emails that someone else sent them. Yes, they make decisions after holding endless meetings and playing politics up the management structure. This part kind of sucks for them I’m sure . . . so I guess they get paid to be in a slightly crappy job, play politics, and deal with the crap that sometimes flows downhill. On the good side, some of them act as partial blockades to prevent some of the crap from flowing down into teams that need to get things done so they can be helpful at times.

      They may work a little bit extra here and there, but by no means do double time, nor I think should they. Working double the time of everyone else seems symptomatic of a problem above them or that they are just wasting a lot of time on things they shouldn’t if their work load is reasonable.

      Maybe a manager deserves extra pay for being a human crap blockade or for working double the hours, yet think how much happier managers and their teams might be if they 1) worked reasonable hours, 2) weren’t a levee to try to prevent the political crap from flowing onto their teams Katrina-style, 3) made reasonable time and scope estimates for projects so deadline and scope estimates were realistic and so they and their teams weren’t in crunch times more than necessary.

      I know not every workplace is perfect and at least the managers where I work are neither insane nor evil and can be somewhat reasonable as people. They’re just often ineffectual. I’ve worked for some managers with some major psychological issues . . . so I’d take ineffectual but somewhat reasonable over evil or crazy any day.

      I think many managers have good intentions and often believe they themselves are good managers (or carefully avoid considering the question much). Or maybe they do the best they can given problem management above them. I wouldn’t consider most where I work to be particularly great . . . but at least they only get in my way a medium proportion of the time and can be reasonable most of the time when they are forced to work through something. I believe their own assessments of themselves regarding their management skillls might be a bit off and they’re all transplants into management from other areas because they’d been around a while and wanted to work up into more pay and less strenuous thinking about details and more of a fun time dealing in broad generalities and flapping their hands around like birds.

      Reply
  11. Rohit Gupta

    Perhaps a different way to look at this is “What if a non-manager could be paid as much as or even more than a manager”? This implies that you would get more than you were making before you became a manager, but that would not imply that you were getting paid more than someone that worked for you. Much like a coach on a professional sports team.

    The current salary structures force people to choose between their core competency and management because that is mostly the only way to make more money.

    Reply
  12. Joan Rogers

    My manager found an easy way to make money without actually being a “manager”. He is definitely NOT a leader. The 2 honest things he has said all year:
    1. “I took the job for the money” “When you make money; I make money.”
    2. “I don’t know what to do.” This man can’t make a decision on anything if his life depended on it. He has to go to another manager and let them make the decision.

    I see him as the man who sits in the lazy-boy recliner counting the dollar bills lining his pocket every day.

    Yep. That’s my “manager”.

    Reply
  13. Cesar

    I never really questioned that much the manager salaries when I wasn’t a manager. I just tought they had the responsibility of deciding who grows in the company and who leaves, which is a big thing. Once I became a manager myself and realized that even though I had a big responsibility, once teams become stable you really don’t need to do that much on a daily basis, it even gets boring some times (and other times really stressful since you have the pressure to deliver but depend entirely on your team to do so, but again, can’t do much yourself to really help). When trying to be really honest to myself, I didn’t really see why I should be paid more than my direct reports as a general rule.

    But then I left the team and saw why. After I left the team a lot of people started leaving the company, not to follow me, I stayed in the company, just on a different project, but for some reason they didn’t feel as engaged in the project after I left. I think people are more loyal to other people (like their managers) than companies or projects. And I think we all agree that just a manager can make the worst company a good place to work or viceversa. So that’s why they earn more money, not because they work more, but because their work has more impact on the company than any other team member alone. To put it in numbers, if that person is not well paid and leaves the company, the risk to the company is higher (since a manager change can mean the team will lose more people or maybe just motivation and productivity), that’s why they need to mitigate that risk by investing more money in that person that, as mentioned above, only really needs to be a good, smart, trustworthy, fair person mostly to be successful at the role.

    Reply
    1. Scott Berkun

      This is an excellent point – a (good) manager’s value to the organization has many intangibles like loyalty and trust that are hard to measure directly. Most of the organizations I know of, like Automattic, that see leadership as a role and not a job happen to be in knowledge work professions where individuals may very well be more autonomous (and whose loyalty and trust is more to the organization, than to the boss, than average).

      Thanks for the comment. I’ll think about this more.

      Reply

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