Re:The myth of big salaries (it's all marketing)
by 3pt14159 on Monday March 23, 2009 @10:38AM
(#528593)
Just because 1000 people want the job and are "qualified" doesn't mean they would do as good a job. Consider this example:
Company A has 1000 employees that they pay 100 dollars a day, totaling $100,000.
They can hire Joe to be COO for $1000 a day or Zach for $5000 a day. Based on both mens track record the company estimates that Joe will increase efficiency 1% while Zach will increase efficiency 10%. Since a 10% increase in efficiency will likely gross them $10,000 a week and only cost them $5000 (Zach's salary) they hire him instead of Joe.
The same thing happens all over the place. Someone that can make a 10% change company wide is worth FAR more than someone that can only make a 1% change.
Company A has 1000 employees that they pay 100 dollars a day, totaling $100,000. They can hire Joe to be COO for $1000 a day or Zach for $5000 a day. Based on both mens track record the company estimates that Joe will increase efficiency 1% while Zach will increase efficiency 10%. Since a 10% increase in efficiency will likely gross them $10,000 a week and only cost them $5000 (Zach's salary) they hire him instead of Joe.
The same thing happens all over the place. Someone that can make a 10% change company wide is worth FAR more than someone that can only make a 1% change.