Bloom: On Compensation–Further Thoughts
Jan 23 2018
Compensation is probably the most sensitive, personal, and unexamined issue in any organization. Its rules of determination are usually driven by individualized market forces and negotiated, and therefore, transactional. While transparency, priorities, and sustainability all show up as critical questions in organizational planning, compensation philosophy and the values underlying it are rarely articulated, and often not practiced. While personnel expenses constitute a significant portion of an organization’s financial statements, those statements convey nothing of the stress or joy experienced by the staff in accomplishing their work. A financially sustainable organization may very well not be sustainable for the people carrying it.
Financial sustainability and human sustainability are different and require discreet perspectives and approaches to assessment. Finances are measurable in time-delineated units. People’s work, their capacity to direct their production, is not “measurable” in this time sense, though the production itself may be parsed into efficiency units or micro-divisions of labor. When this is the modality of measurement, work is considered part of a system designed to eliminate the humanness (or the recognition of the individuality) in the worker. This latter picture assumes the human as a machine and labor as a commodity—Taylorism at its worst and Charlie Chaplin’s Modern Times at its hilarious and ironic best.
In the dynamic between financial and human sustainability, compensation in its many forms takes on a kind of intensified focus. Compensation, wages, and income can weigh heavily on those who depend upon them for their livelihood. For many, what they are paid for their work defines their sense of self-worth. In an earlier essay on this topic, “What Am I Working For?” I mentioned the advertisement that instigated my exploration—the bold statement encouraging MBA enrollment: Earn What You Are Worth. The advert struck me deeply as a synecdoche for the whole economic system that reduces the human being to a product or commodity. This is economics at its shadow worst, a dehumanizing materialistic view that says that some people are worth more than others because the market will pay for it. By logical extension, then, those without market value are worth nothing. Really? How can this be acceptable? And yet it is the “compensation” convention with which we live. How did we come to tie the value of a human being to their income, earned or not? From an economic vantage point, one that incorporates the reality of interdependence, how can we imagine that even if we earn a wage of privilege, we are in any way separate from those without that privilege? Often, it is those without who make the privilege possible. We are all part of an integral system no matter if we imagine a more disconnected story. From an ecological standpoint, we all breathe the same air, walk the same earth, and inhabit the same climate.
To be clear, I am not describing a problem of capital or a problem of labor in and of themselves. Air and all natural resources, capital in one form or another, and the capacity for work, physical and mental, are completely necessary as part of life as we know it. What I am describing, however, is the current problematic way in which the three—natural resources, capital, and labor— are treated and interrelated in our current ecologically unsustainable economy.
For the purpose of shifting perspective, consider that spiritual wealth and spiritual poverty know no boundaries or measure, and are in no way connected to the presence or absence of financial assets. There is no budgeting for such individualized inner matters, and no one, but through self-knowledge, can assess that condition and take responsibility for it. We are not really conditioned to think of our individual capacities and gifts in this way. Our current system of compensation intentionally ties pay to our labor rather than the product of our labor. This system is designed to dissociate us from our individual creative will for the sake of efficiency, that is, to monetize our value in the chain of production. There is an occasional discussion in the political-economic sphere about the inequality that has resulted from this system. However, the question of the value of human beings and their work is a spiritual and cultural problem, not a political one.
If the dignity of human beings and their contributions to the body social through economic activity is to be raised again as our highest aspiration—and this is really is an “if” question needing a huge investment of transformative energy—then we need also to transform our understanding of work, money, wealth, and knowledge. There is no dignity in wealth got by greed or the wage slavery made necessary to support that greed. The possibility of making the change to recognizing human dignity sits with each of us as individuals and in the community and how we want to be in and create our culture. What change is each of us, and each of us in our organizations, willing to make to lift this human-centered value? Also, it is incumbent on those with privilege to recognize that not everyone either has privilege or the wherewithal to make such an assessment and the possible corrective choices. It is time to consider that the price of privilege is to take leadership for this systemic change, even as we honor those who have already led or are leading in this direction. And maybe the highest leverage for systemic change can come about through reconsidering compensation: how we conceive of it, exercise it, understand it, and form community around it as the leading edge.
A new approach to compensation requires a systemic recognition that our work is not a commodity and cannot be bought. Instead, compensation is a means to support us so that we can offer our capacities in service to the economy. To fully implement and adopt such an approach requires a radical shift in our view of education throughout which fundamental social and economic attitudes are formed. Then, as working adults in a community developing a shared sense of values and engagement about the nature of work and compensation is complex in the extreme. An additional difficulty is to change how our society holds and reflects back to us that vision as an ethical path and not one of winners and losers—a vision counter to current culture. One key to effecting this shift in understanding and practice is to see that compensation—the income to meet our material needs—is decoupled from the work that we do, and money is no longer treated or used as reward or measure.
The reality is that we are heavily conditioned to think that we should earn what we are worth. In this framework, money is a reward based on an estimate of that worth rather than a functional necessity to free up each of our value-producing capacities in service to the whole of the economy. The interdependent reality is that we work to meet others’ needs, contribute to the whole regardless of the particular function, and as a result, our needs are met from that whole.
This concept is a radical definition of a commonwealth. Since we would all be contributing to supporting each other in varying degrees through the circulation of money, a new sense of work community could emerge, one that evidences the importance of human sustainability alongside that of the financial. One simple way to start this change—and it is only a minimal gesture toward disconnecting work from compensation—is to pay in advance of the work being done. It is a demonstration of trust and a recognition that it costs money to free up one’s time for the work. Ideally, it also shifts the focus away from thinking that one works for oneself. Such a transformation in the view of compensation would radically change our notions of work, vocation, and purpose for being human in economic life. If we can succeed in changing this one aspect of the economy, who knows what else might then start to change for a more human future.
For additional thoughts regarding compensation, see related posts:
John Bloom is vice president of organizational culture at RSF.