The Nonlinear Library LW - What are you getting paid in? by Austin Chen
Jul 17, 2024
06:11
Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: What are you getting paid in?, published by Austin Chen on July 17, 2024 on LessWrong.
Crossposting this essay by my friend, Leila Clark.
A long time ago, a manager friend of mine wrote a book to collect his years of wisdom. He never published it, which is a shame because it was full of interesting insights. One that I think a lot about today was the question: "How are you paying your team?"
This friend worked in finance. You might think that people in finance, like most people, are paid in money. But it turns out that even in finance, you can't actually always pay and motivate people with just money.
Often, there might just not be money to go around. Even if there is, managers are often captive to salary caps and performance bands. In any case, it's awkward to pay one person ten times more than another, even if one person is clearly contributing ten times more than the other (many such cases exist).
With this question, my manager friend wanted to point out that you can pay people in lots of currencies. Among other things, you can pay them in quality of life, prestige, status, impact, influence, mentorship, power, autonomy, meaning, great teammates, stability and fun. And in fact most people don't just want to be paid in money - they want to be paid some mixture of these things.
To demonstrate this point, take musicians and financiers.
A successful financier is much, much richer in dollars than a successful musician. Some googling suggests that Mitski and Grimes, both very successful alternative musicians, have net worths of about $3-5m. $5m is
barely notable in the New York high society circles that most financiers run in. Even Taylor Swift, maybe one of the most successful musicians of all times, has a net worth of generously $1b; Ken Griffin, one of the most successful financiers of all time, has a net worth of $33b.
But more people want to be musicians, and I think it's because musicians are paid in ways that financiers aren't.
Most obviously, musicians are way cooler. They get to interact with their fans. People love their work. They naturally spend their days hanging out with other cool people - other musicians. They can work on exactly what they want to, largely when they want to - they've won the American Dream because they get to work on what they love and get paid! And in that way, they get paid in radical self-expression.
(This is a little unfair, because I know some financiers who think that work is a means of radical self-expression. Knowing their personalities, I believe them, but it doesn't help them get tables at fancy New York restaurants the way Taylor can.)
I don't want to be too down on finance. People are different, and it's a good fact about the world that different people can be paid in different ways. My math genius friends would hate interacting with most fans and musicians. They instead have stable jobs, rent beautiful apartments in New York and solve fun technical problems all day with their friends. That's exactly how they want to get paid.
But when I worked in finance, people would sometimes shake their heads and ask why bright 20-year-olds would take the huge risk of moving to New York for unstable and uncertain careers as musicians, actors, or starving artists. I probably asked this question myself, when I was younger. Hopefully this provides some insight to the financiers.
So how do you make sure you get paid the way you want to? From what I can tell, the best way is to pick the right industry. It's fairly straightforward to tell how an industry pays. Politics pays in power. Finance pays in money. Music and art pay in 'coolness.' Nonprofit work, teaching and healthcare pay in meaning and, a friend reports, sometimes a sense of superiority over others too.
There's an exchange rate between many of the currencies you can get paid in, but ...
Crossposting this essay by my friend, Leila Clark.
A long time ago, a manager friend of mine wrote a book to collect his years of wisdom. He never published it, which is a shame because it was full of interesting insights. One that I think a lot about today was the question: "How are you paying your team?"
This friend worked in finance. You might think that people in finance, like most people, are paid in money. But it turns out that even in finance, you can't actually always pay and motivate people with just money.
Often, there might just not be money to go around. Even if there is, managers are often captive to salary caps and performance bands. In any case, it's awkward to pay one person ten times more than another, even if one person is clearly contributing ten times more than the other (many such cases exist).
With this question, my manager friend wanted to point out that you can pay people in lots of currencies. Among other things, you can pay them in quality of life, prestige, status, impact, influence, mentorship, power, autonomy, meaning, great teammates, stability and fun. And in fact most people don't just want to be paid in money - they want to be paid some mixture of these things.
To demonstrate this point, take musicians and financiers.
A successful financier is much, much richer in dollars than a successful musician. Some googling suggests that Mitski and Grimes, both very successful alternative musicians, have net worths of about $3-5m. $5m is
barely notable in the New York high society circles that most financiers run in. Even Taylor Swift, maybe one of the most successful musicians of all times, has a net worth of generously $1b; Ken Griffin, one of the most successful financiers of all time, has a net worth of $33b.
But more people want to be musicians, and I think it's because musicians are paid in ways that financiers aren't.
Most obviously, musicians are way cooler. They get to interact with their fans. People love their work. They naturally spend their days hanging out with other cool people - other musicians. They can work on exactly what they want to, largely when they want to - they've won the American Dream because they get to work on what they love and get paid! And in that way, they get paid in radical self-expression.
(This is a little unfair, because I know some financiers who think that work is a means of radical self-expression. Knowing their personalities, I believe them, but it doesn't help them get tables at fancy New York restaurants the way Taylor can.)
I don't want to be too down on finance. People are different, and it's a good fact about the world that different people can be paid in different ways. My math genius friends would hate interacting with most fans and musicians. They instead have stable jobs, rent beautiful apartments in New York and solve fun technical problems all day with their friends. That's exactly how they want to get paid.
But when I worked in finance, people would sometimes shake their heads and ask why bright 20-year-olds would take the huge risk of moving to New York for unstable and uncertain careers as musicians, actors, or starving artists. I probably asked this question myself, when I was younger. Hopefully this provides some insight to the financiers.
So how do you make sure you get paid the way you want to? From what I can tell, the best way is to pick the right industry. It's fairly straightforward to tell how an industry pays. Politics pays in power. Finance pays in money. Music and art pay in 'coolness.' Nonprofit work, teaching and healthcare pay in meaning and, a friend reports, sometimes a sense of superiority over others too.
There's an exchange rate between many of the currencies you can get paid in, but ...