In our current paradigm, our ability to meet our needs and conditions of communal thriving rely heavily on pay; it is a requirement for life in consumer society that (Jeff Noonan, 2012), depending on context, extends from basic needs for living, care and learning through to luxuries.
Rethinking pay involves many things and it directly connects to realities of life in the workplace and wider society. It asks people to reach deep within the structures of their lives, what begins as a conversation about finance or value, can veer towards control, fairness, politics, equality, equity, justice, power, accountability, responsibility and more. It can draw up issues that have long lurked beneath the surface, that we sometimes lack the toolkit to dissect, the language to articulate or the time and listening ability to fully engage with.
On a personal level, pay relates to whether we feel valued, whether we feel seen, whether we feel we can cope, or whether we feel we can thrive. Individual thoughts and feelings about pay are often highly personalised; they can bring emotions (and trauma), latent beliefs and former experiences to the surface.
At a group level, overhauling the distribution of pay means being willing to engage in - and act on - deep listening about power redistribution, structural inequality and different personal narratives.
Despite the daunting-sounding challenges that it surfaces, pay is among the most promising sites to unlock different ways to show up together. Through #BeyondtheRules, we’ve reimagined pay in our own setting and spent time hearing from people who’ve innovated around pay, taking us beyond the symptomatic challenges of CEO pay ratios or the gender pay gap, to consider what it means for pay to help scaffold individuals and groups to show up in full agency for the challenges of today and tomorrow.
<aside> <img src="/icons/search_blue.svg" alt="/icons/search_blue.svg" width="40px" /> Fortunately, these are among the most enriching conversations that you can have, if you are willing to genuinely open your hearts to these questions as a group. And if you are wondering whether it is better to avoid these conversations altogether, the example of Basecamp perhaps provides a warning to us all about what it looks like to further entrench the existing ‘rules’ of the system in an age when people are aching for new ones.
</aside>
One participant at the Reimagining the Wage event in March 2021 proposed, “the focus on the pay gap has blinded us to question the assumptions of what pay is, and the many ways it codifies injustice”.
A typical company is explicitly driven by singular (or a few) understandings of value - profit and assets - that is coded in the accounting and reporting structures and the company purpose.
People and groups who have been able to own assets and rent them out, generating profit through a socially accepted and legally backed concept of ‘ownership’ as a valid way of organising things in the world (including land, material things and living beings), have typically been able to extract high profit and, in correlation, personal wealth (Katharina Pistor, 2019).
This structure incentivises us to seek ownership and invites us to view it as an indicator of personal ‘success’, linked to ideas about the freedom from a ‘boss’/someone else’s decisions and control. The ‘corporate ladder’ is a metaphor for the widely accepted goal to take on higher levels of control and power, each in turn correlating to an increase in pay. The lower rungs of this ‘ladder’ - often manual, practical work - is often where an under-accounted portion of core value lies (as encapsulated in Jean-François Zobrist’s phrase “value is created on the shop floor”).
Not only is pay a poor indicator of real value creation, it can also have a negative correlation, rewarding those who extract value from others and penalising those who create it (as explored in this 2009 New Economics Foundation paper A Bit Rich).
“Traditional accounting (P&L and balance statements) aren't designed to recognise how value is created or delivered, only the money captured. Could shifting the conversation to "value" (including how it's captured & destroyed) provide insight into how people participate in "pay"?” - Susan Hasty
“Value is not just about skill, years of experience, or how quickly you can do things. Actually, there are lots of the young people we work with who will ask one question that's hugely poignant, that could completely impact the way we might think about a piece of work. That person asking that question is massively valuable. And for me, that's about like the perspective that people bring into their work.” - Tessa Cooper, Collaborative Future
Work that has an intention of creating shared benefit/’public good’ has an interesting place in these structures. It is often poorly paid (if at all) as a ‘sector’, particularly compared to its private and capital accumulating counterparts, and highly relied upon. Where this work becomes structured into formal organisation, it also often adopts the similar organisational structures of the modern firm (separation of duties, managerialism, top-down decision-making etc), including in relation to pay and the differential between executives, managers and the ‘front line’ workers within charities or social enterprises (we explored this in this earlier #BeyondtheRules blog). Lower paid ‘public good’ workers are often also among the highest creators of social value in society, yet the value they create is not profit and is not commensurately rewarded, in turn, through pay. They are commonly double impacted financially by both this type of work and the adopted structures within it.
A recent study by the Living Wage Foundation finds that a fifth (17%) of workers in the third sector earn below the Living Wage, amounting to 388,000 workers nationally (UK). Following from a previous study this shows that the conditions of low pay have not improved in 5 years COVID-19 has only exacerbated the situation where there has been an increase in demand for the work done by the third sector leading to increased costs and workload while at the same time there has been a slow down in numerous funding streams. The study also highlights how these changes disproportionately impact the already low paid workers and within them women, people of minority groups and disabled workers are further disportionately affected with lower pay.
The increase in demand for work done by charities (63% charities reported an upsurge in demand) during the pandemic highlights the public value provided by people working in them which stands in stark contrast to how their work is lowly valued through compensation.
As the work of ‘public good’ currently is largely funded from public sector funding or public and private grants, granting and commissioning norms commonly exacerbate this when they invite groups to compete in ‘value for money' metrics to secure funding, contributing to a race to the bottom within and amongst social organisations to demonstrate low-as-possible expenditure to compete for funds.
<aside> <img src="/icons/book_orange.svg" alt="/icons/book_orange.svg" width="40px" /> Read more on how hierarchical pay and managerialism is not suited to addressing the challenges of tomorrow:
The problems with hierarchical pay and managerialism
</aside>
<aside> <img src="/icons/book_orange.svg" alt="/icons/book_orange.svg" width="40px" /> Read more on this here including some propositions about what some of these narratives shifts might look like:
Rethinking Narratives of Pay and Value Creation
</aside>