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Why would the appropriate method of compensation for a computer software worker and an...

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cdeeneedham | Valedictorian

Posted November 27, 2012 at 12:32 AM via web

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Why would the appropriate method of compensation for a computer software worker and an assembly worker be different?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted November 27, 2012 at 12:48 AM (Answer #1)

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The appropriate method of compensation would be different for these two types of workers because they do very different kinds of jobs.  The ways in which they work, and the ways in which their work creates value, are so different that they should be compensated differently.

An assembly worker is generally going to produce a given, unvarying amount of value for every hour that he or she works.  The assembly worker shows up at work and does their job at a steady pace for the amount of time that they are scheduled to work.  Because they create value just by showing up and working, this type of worker should be compensated on an hourly basis. 

This method of compensation makes less sense for a software worker.  A software developer does not simply work at an assembly line.  Instead, such workers work using their brains.  They have to be creative and insightful.  Therefore, such workers ought to be compensated based on what they have actually created.  They should be compensated through a performance-based compensation plan.  Workers who do very well and create more value for the firm should be compensated more highly than those who do not create as much value, even if they both work the same amount of hours.

Thus, different types of workers should be compensated through different methods.

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