The Gervais Principle, or The Office According to "The Office"

> While some may be losers in that sense too, they are primarily losers in the economic sense: those who have, for various reasons, made (or been forced to make) a bad economic bargain: they’ve given up some potential for long-term economic liberty (as capitalists) for short-term economic stability.

Halfway with the author so far. Generally, being salaried is a bad economic bargain for people with the self-discipline and perseverance to go off on their own. There's other reasons it can be good - a friend of mine is a business consultant that's really good, really brilliant, could definitely run his own shop. But he makes decent enough coin and loves his work and coworkers, and said he doesn't want to deal with the highs and lows of self employment. He's trading off lifetime net income, most definitely, but maybe he's happier? I keep trying to convince him to do some kind of entrepreneurial project with me and failing, but maybe someday. He certainly is extremely happy.

But anyway, I'm still with the author mostly. Next point:

> Traded freedom for a paycheck in short. They actually produce, but are not compensated in proportion to the value they create...

This is sometimes true. If your work isn't set on incentives, then you aren't compensated in proportion to the value you create. This relates to the above: If you want lifetime net income, look to get compensation tied to incentives as closely as possible.

Being self employed and only getting paid for performance gets you there the fastest, but that doesn't only mean you only make more money! Some months you work very hard, and have LESS money at the end of the month for your troubles. This sucks quite badly when it happens.

> ... (since their compensation is set by sociopaths operating under conditions of serious moral hazard).

And herein lies the author's mistake - the reason people aren't compensated accordingly to their production is that it's incredibly hard to judge production. Jack Welch, one of the better HR people of all time, said he only got 2/3rds of his hiring decisions correct at the very end of his tenure and peak of his skills at GE.

The person who holds back the coin from the productive salaried employee is not his boss or the company owner. It's the unproductive salaried employee. Great companies recognize highly productive people and try to compensate and reward them accordingly, but production is notoriously fickle and variable.

Bosses and especially owners don't scheme to keep pay for productive people down - they want to pay stars, because they want to retain their stars. And if a competitor isn't paying their stars, they'll happily give them a raise and a signing bonus for jumping ship. It's just that it's so damn hard to evaluate who really is producing. The guy that produces 10x the normal amount of production for his job isn't having his pay thwarted by any "sociopaths", he's having it thwarted by colleagues who shuffle papers, schedule meetings, and make themselves appear busy while producing nothing of value.

There's reasons (primarily stability, but others too) to stay in this arrangement, but if you want to maximize your net income, you need to move to a way where you get paid based on what you produce, and be willing to accept the swings and bad things that come with that. That's easy to do in measurable fields like sales. To do it in a more intangible field you might have to open your own company.

If it does nothing for the customer, then what's the value?

It's also not usually (at megacorp) the developers responsibility to decide what will be valuable to the customer.

Sometimes you wind up working for an oblivious or sociopathic boss - but then you need to go apply for another job elsewhere. It's like if the closest restaurant to your house is no good: You ought to take the effort to get out of there, and that is your responsibility.

But generally speaking, even halfway decent managers and owners go out of their way to compensate their best people. Now, low-middle managers are not always halfway decent, but then, they're probably not getting directly compensated on production either. Once you get to "head of division", "head of region", and any ownership role or incentive based on real production from a manager's unit, you're going to get managers that want to pay their people well. It makes a bigger pie, so to speak.

Instead, autonomy, complexity, and achievement, and recognition are related to motivation. I'd rather make $80k a year doing something I love than $95k a year doing something I hate (assuming that $80k is enough to meet my living expenses and other hygiene needs).

http://www.netmba.com/mgmt/ob/motivation/herzberg/ for a brief overview.