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 it’s pretty bad. You can sort of buy coolness with money through philanthropy, but it’s very expensive. You can sort of turn power into money (and money into power), but you have to be careful about it if you don’t want to go to prison for corruption. In general, I’ve found it’s usually easier to accumulate what you want through time and work than try to convert between currencies.
My manager friend was an expert in understanding this. He ran a fairly boring back-office department, but it was widely considered one of the best teams around. He was, presumably, limited in how many dollars he could pay – back-office is not sexy – but instead paid his team a lot in autonomy and great peers. If someone wanted more fun and less money, he figured out how they could spend some time on a slightly useless but super-fun technical project instead. He worked hard to find interesting people for the team, and then put in more time and effort to make sure people actually got to know each other. By thinking creatively about the problem, he was able to pay people in ways other than money.
But this isn't just for managers. I think it's a useful framework for deciding what to do next. For a long time, I thought I wanted money – so I reverse-sorted my job options by salary and picked the one at the top. But at some point I realized that making more money next year was going to cost me other things I cared about, like purpose, fun and autonomy. Money was no longer my main constraint. On reflection, I’m happier now to take something that pays fewer dollars in exchange for more of the other things I want.
If you look at it this way, some jobs that seem to pay poorly actually can pay quite well. That low-paid government job pays in stability. That precarious journalism job pays in status and influence. Working at a startup pays in fun, autonomy and potentially fast career growth, even if the value of your equity goes to zero.
Don’t get me wrong. It’s still the case that some people get paid more and some people get paid less. Some people have jobs that don’t pay very much money, status, prestige, autonomy or anything else. Many such jobs exist, and they’re bad. Some people have jobs that pay lots of all or some of these – Sam Altman's job, for instance, pays in dollars, status, coolness and fun (most of the time). It’s important to pay attention to how much you’re getting paid overall, when you sum up all the currencies.
But the next time you switch jobs, I suggest you think about this a little. If the salary seems low, is it because you’re actually getting paid in something else? If it’s high, what are you trading off for it, and are you okay with that? What do you actually want to be paid in, and are you getting it?
Thanks to Dave P for inspiration, Holden L for feedback, and Rebecca W for substantial comments and editing suggestions!
I enjoyed your discussion of this on Complex Systems.
Very true! I want to know more about the unpublished book!