Managers' pay versus workers' pay

[Dahak]

Some part of the increasing salaries here in Germany is the American example and they had liked to have some more money themselves. Mostly clad in the "if we don't give more, the good managers will be bought off by hugely paying companies abroad" argument.

Another problem is the two-tier board system in Germany and the intermixing of boards. The probability is quite high that one supervisory board member of company A is the CEO of company B and vice-versa. If he then denies the raise for the CEO, he runs the risk that his next raise might get stopped by that CEO in his function as supervisory board member.

And thirdly, I believe it's like everywhere in life, that they managed to do it because they could. There was no huge opposition to such slowly increasing salaries and the spotlight turned on it when it was already too late... Now we have discussions if the government should act, if one should put hope in the morality of said overpaid managers, or other ideas....

[The Kernel]

Interesting; this is something I didn't know. And how the fuck can the pay gap between managers and workers in the US spike 20% in just one year? What the fuck is going on down there?

Supply and demand. Do you know how hard it is to find good managers? I'm on the front lines of hiring every day (I do at least a couple of cross functional interviews a week) and it's nearly impossible to find good managers in this job market (at least in the software industry).

However, if it makes you feel better, it's just as hard to find good engineers right now and a good engineer at a company like the one I work for can make ridiculous sums of money. We treat these guys like gold because they are nearly impossible to replace.

[Darth Wong]

If it's nothing more than supply and demand, why is it happening far more in the US than Canada? We Canadians have supply and demand too.

[Havok]

Could it have something to do with Management keeping their jobs longer and the work force turning over faster. When you start bringing in new employees they will be at the bottom of the pay scale in that particular job, while management holds onto their jobs and gets periodical increases in pay, thus creating the wide margin.

[Gaidin]

I've never seen someoe who is "just an organizer" because if he doesn't have a fucking clue how the productive process is organized, what is he worth anyway? Nothing.

I have. My first manager knew he wasn't a programmer. He knew he didn't know the first thing about databases. His two biggest roles were being our talking head to the upper management of the company and keeping them off our backs.

[Gaidin]

Ghetto Edit: His two biggest roles other than the normal management tasks...

[CmdrWilkens]

I would guess de-layering is the biggest culprit. The more middle management and front line management you eliminate the more you have to pay the individuals left over for them to be willing to take on the tasks they are assigned. Hell even without that the more you eliminate front-line management the more your "management" staff is composed of further removed and higher paid middle management who now serve some wierd hybrid role of middle and front line management.

Let me take retail because I do have some anecdotal experience. My old company, JCPenney, has been through a LOT of restructuring in the alst several years. The general result was that prior to the shift you woudl have a store with a Ladies Manager, a Men's Manager, an Accessories and Lingere Manager, a Home Dept Manager, an Assistant Store Manager (for all the non sales floor shite) and a Store Manager. Given that you have so many front-line managers the one or two district and regional people (if you are averaging salaries out) were heavily outweighed. Cut to a few years later and stores might run with 2 Dept Managers and 1 Store Manager so while their slaries haven't change if you averae them with that same few district and regional people the number is MUCH higher.

[The Kernel]

If it's nothing more than supply and demand, why is it happening far more in the US than Canada? We Canadians have supply and demand too.

Are you sure it doesn't apply to Canada as well? If you take out heavily regulated industries like health care and education, I'll bet that the salary levels are comparable, especially in Canada's tech, telcom and financial services industries.

[The Kernel]

Just to add to what I said before with a bit of evidence, I decided to take some samples of jobs in management from a couple of American cities (Denver and Chicago) and compared them to a Canadian equivalent (Toronto) using Monster Salary Center. I've also included some lower level jobs so that we can check cost of living and see if the ratios are off.

Here's the results (mean):

Management

Treasurer

Denver: $178, 830
Chicago: $184,276
Toronto: $144,870

IT Director

Denver: $156,313
Chicago: $161,073
Toronto: $146,086

VP of Marketing

Denver: $162,761
Chicago: $167,718
Toronto: $152,613

CFO

Denver: $303,990
Chicago: $313,247
Toronto: $175,005

CEO

Denver: $653,448
Chicago: $673,348
Toronto: $319,607

Non-management

Software Engineer III

Denver: $86,853
Chicago: $89,498
Toronto: $83,160

Accountant III

Denver: $73,858
Chicago:$76,107
Toronto: $72,813

There's a few things we can learn from this small sample.

1) It appears that non-management is roughly at parity, although Toronto might be a tad bit lower.

2) Mid-level management has a larger difference between jobs in Canada and the US, but it's nothing tremendous.

3) Upper management has an absurd delta (CEO and CFO).

So Darth Wong, I think we are both right here. Middle management isn't really more lavishly paid than their Canadian counterparts, the real difference is in the handful of upper management jobs.