This morning's Stanford Report reminds us of the politics of

pay plans, values, power, and privilege
over Stanford employees

by Jack Truher 2010-12-15,
Stanford student 1956- 1960, employee 1965-1996
Stanford retiree and alumnus

While Stanford's "Pay for Performance" program hasn't changed in recent years, the university choses to emphasize that there are no grounds for employees' catching up with salary freezes, or cost of living, or inequities among staff - except by the inevitably subjective opinion of supervisor and administration over employees - and only considering point of "performance". For decades, Stanford's pay plan was explicit as to the University's effort to consider all such inputs and considerations that result in reasonable, equitable, and competative pay structures. Merit was one element among others. I believe that the result of Stanford's current program is simply a statement of raw power by management over staff. Staff is left with no appeal to any argument other than supervisory opinion. It's very trendy to imagine that some of us are better than others of us, but ultimately, that's all nonsense. It's more true that none of us could get along without the rest of us - to press a point. The University's position on salary is more a political statement than a business decision.

There is certainly a place for merit pay in any pay plan, but how such plans are defined makes all the difference. Some occupations and employment relationship, especially short term contracts, can operate on pure merit evaluations, while long term relationships, and socially complex organizations suffer great risks. A family run as an autocratic meritocracy is unstable over time, unless coerced by terror.

Stanford Report, December 15, 2010
Wealth, health, what's new: SR's most popular stories of the year

Below are the top 25 stories; based on reader clicks ; from Stanford Report in 2010.

1. Peck discusses salary program for FY11

In this question-and-answer article from April 15, Diane Peck, outgoing vice president for human resources, discusses Stanford's performance-based salary program for fiscal year 2011.

V.P. Peck's announcment is from April 2010 on the University Pay System. It explains Stanford's pay system as being 100% "merit based".

the article reads

Wealth, health, what's new: SR's top stories of the year

Money, health, campus life and groundbreaking research top the 2010 list of subjects the more than 17,000 subscribers to Stanford Report care about. Not surprisingly, a story on salaries heads the list. After that, readers' choices suggest an eclectic range of interests including the Dalai Lama.

Are we allowed to notice the contradictions and contrary values at play only as humor. Or is there ethical juxtapositioning apparent? Compare a populist Eastern guru, lecturing on variations to the Golden Rule. Compare that to a social order that distributes wealth, the good life, and power disproportionately.

Such disparities have always been in place with us, but never so wide as in the last decade.

There's great news for those who are being well treated, well matched to their daily work, and otherwise happily situated. What about all the rest, who - for no reason of their own, may have crossed their erring human supervisor, had a bad day with the wrong administrator.

The University's merit-only pay plan would be great if supervisors were 100% objective in their assessments, with their own personal self-interest 100% absent, and not subject to a personnel system that demands losers.

The inequity preservation principle is well at work in America. Stanford now has even better ways to enhance all the inequities and disparities of power that are already pathalogical.

What the 100 merit based system really means is the establishment of an absolutist command-control local economy.

It means that Stanford has become a much less desireable place to work for all those classes that might not be advantaged for one reason or another, or lucky in hiring date, or by family relationship, or all those reasons that justify mistreatment of subordinates.

No reason to belabor inequities of positioning as the real cause for advantage. It's so blatantly obvious.

The S.F. Chronicle had an article today on decision-making for the congress, something about the politics of finance industry buying out our politicians.

That's how the emerging motivational and reward systems really work and everybody knows it.

Relating Power and Pay

A traditional pay plan in past decades pays primarily for the job description. This was how the industrial world was built, but only when demanded by unionized workers. A pure merit plan in labor history leads to directly to abuse of power, allowing for too many subjective decisions by managers, by favoritism, and various other types of corruption and disincentivizing motivation among peers.

A pay plan which leaves all such decisions to the opinions and biases of individual bosses is favored by plantation owners, slavers, and powerful industrial powers.

Abuses are common where managers can exercise subjective judgements. Soldiers in combat for example are likely to succumb to bitterness and disagreement, and forget the mission altogether if arbitrary differences in pay among peers are awarded. Greater equity in payment is needed because soldiers have options in combat to retaliation that would threaten both peers and superiors.

Stanford's pay choice is only possible because employee power to demand fairness and equity has been eroded to the vanishing point. Selective bonuses at Stanford for employees were unheard of, until the early 1980s, when pay disparities began to be used, ostensibly to motivate and improve behavior. More likely, such disparities only ensure widening social disparities, a result which Stanford contributes to, intended or not.