I was considering recently whether a person higher in an organisation’s hierarchy should override a decision taken by their subordinates if they thought it was wrong. I realised an underlying assumption that I ignored in that discussion. The assumption is that decisions, taken higher up the chain of command, are more important because of a higher level of responsibility bestowed on the person taking them.
I don’t have a clear answer is my head yet, so I welcome your input on the few thoughts that follow.
I have always been told that managers and senior managers and directors in organisations earn more money than “regular” employees because they have more responsibility. I suspect this is a fairly common point of view. Those who are paid more have a larger share of the money, more skin in the game so they should also have a larger share of responsibility – they approve decisions and they should be held to account. Sounds like a sensible justification (or should I call this a rationalisation perhaps).
Looking at it in a systemic way: more responsibility means more money and more money means more responsibility… can you see it yet? A reinforcing feedback loop; A small factor perhaps to explain why in some businesses pay of the top staff spiral out of proportion.
Responsibility seems to be something people are not very comfortable with. It is often easier to have someone else to fall back on than to face all the consequences yourself. For some, it provides sufficient justification for not progressing with their “careers” – they don’t want the extra responsibility. For others, who are willing to take the extra burden, it’s the expectation of an additional remuneration. The pigs and chickens story comes to mind too.
Yet for some reason this logic always seemed flawed to me.
I have rarely seen the most senior people in organisations take the most responsibility. The very thing they are allegedly paid to do, they seem to, somehow, escape. Instead, when things go wrong, they look downwards to find someone to lay the blame on. Imagine the CEO of a supermarket issuing a personal apology when you’ve been sold and out-of-date product? No? Me neither.
It would appear more logical for the level of pay to be related to your contribution (success mode) rather than your assumed responsibility (failure mode). Alas, people are not entirely rational; psychological experiments demonstrate we focus more on avoiding losses than increasing gains, even if the loss is only a perceived one.
So far I only know of a handful examples where this common status quo is challenged, where pay is influenced or even decided by the employees, where contribution is more important than responsibility. Semco comes to mind, perhaps Netflix or Fogcreek to some extend and companies turned into partnerships like John Lewis.
What do you think?