THE ILLUSION OF LOGIC IN WORKPLACE REMUNERATION FORMULA

Human capital experts tell the world that the payment structure in a workplace is based on a logical formula consisting of complex variables namely the function complexity, skill scarcity, skill criticality, undesirability, risk, accountability and responsibility. It is rational expectation that the higher the indicator on a variable the higher the compensation.

It is also sensible to conclude that work experience and academic qualifications assist the recruiters to determine the best candidate for the position. This skill and credential matrix is forwarded in sophisticated microeconomic platforms as the foundation for the remuneration system.

The majority of workplace participants believe that the current remuneration structure is natural. It is accepted as the only way to determine appropriate remuneration. The corporate captains and industry bosses on the top of the remuneration scale vow that they perform the most complex functions. They say they possess the scarcest skills and hold the highly undesirable jobs. It is their strong view that their position put them in the highest category of health, emotional and physical risk. It is killing a sacred cow to question superiority of accountability and responsibility levels of members at the top of industry echelon. But is this myth really true?

There are many examples that can be used to illustrate unscientific design of remuneration packages. It is highly tempting to pick secretarial and management function but let’s use technical jobs of a Cleaner and an Accountant as an example. It is fascinating to put a public toilet Cleaner and an Accountant on pay fairness scale using the stated logical matrix of human resource management. The current unnatural remuneration structure is clear that the Accountant must be paid many times over.

The function complexity index of a Cleaner indicate repetitiveness and organising physical space while an Accountant is involved mainly in putting figures into correct pigeon hole and using basic arithmetic of addition and subtraction. There is high scarcity of Accountants, although a view is held that many people do an accounting function very well, and Cleaners are highly available. The scarcity of Accountants is created by professional body governance of accounting profession whereas cleaners have no governance in place.

The workplace cannot expect to survive without an accounting function. It will mean financial chaos. Accounting is also a public function with huge impact on internal and external stakeholder relationship. Thus this function is highly critical. No organisation can do without a cleaning function.

The cleaning function has huge motivating factor to employees and set a tone for external stakeholder’s relationship. Most people will choose neither of two jobs. When forced to choose, it is likely that accounting will find more participants than cleaning. The functions are equally undesirable. The risk is much higher for cleanliness, especially hygiene and health. The easy and subjective measurements of the Cleaner’s output reduce job security, thus increasing risks factor.

Accountability and responsibility is generally assumed to tip on the side of Accountants. This wide held assumption is also highly questionable. Controller and owner of means of production will take the accountant view extremely seriously. It is equally serious business for user of workplace toilet to find it clean and ready. Cleaning is therefore also work with high responsibility and accountability.

It is easy to make the same analysis that a Miner working underground should be paid much higher than a Mine Manager on the surface. It is therefore rational to conclude that the Cleaner and an Accountant should be paid the same for equal unit of labour. The remuneration structure needs fundamental change. It is not based on science but rather has its foundation on greed, immorality and genuine abuse of power. Those paid to design organisations give themselves higher compensation for no scientific reasons.

This illogical distribution of wealth that is inconsistent with creation of value is the integral part of the capitalist system. The capitalist system is based on parasitic relationship and sustained by artificial illusions.

By Sbusiso Xaba

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