“SIX DANGEROUS MYTHS

ABOUT PAY”
 Reality: What matters is not pay rates but productivity (and pay
is just one mngt practice that impacts commitment, teamwork,
and performance – need congruence)
 Reality: Low labor costs perhaps least sustainable competitive
advantage (better to achieve competitive advantage through
quality, customer service, innovation, or technology leadership –
harder to imitate)
 Reality: Individual incentive pay undermines performance (e.g.,
teamwork) and overemphasizes short-term focus and political
behavior (and organizations paying on more collective basis
outperform those who don’t)
 Reality: People work as much or more for meaning (and fun!) as
they do for money (orgs may spend too much time trying to
attract, retain, motivate through compensation – not enough
through work environment) (pay openness?)
 Exceptional orgs see and pursue a better business model