Photo: Widnes, England, circa 1880. From: libertygibbert
The model we have now comes out of the Industrial Revolution. The aristocracy (with the help of newfangled steam power and cheap fossil fuel) decided to transform cottage industries that had worked just fine for thousands of years into feudal slave camps (see William Blake’s “Dark Satanic Mills). The management model came out of a military or prison hierarchy, a structure whose function was based on control, rather than results.
It transformed how children learned from adults, too—but that's a story for another day.
“The Container Store pays its 6,000 employees an average of $48,000 a year, according to CEO Kip Tindell’s new book Uncontainable.
As he told Business Insider, 'That’s a lot of money for a retail sales clerk.' In fact, median pay for retail sales workers is just $21,410 a year. The company also gives 'big' raises each year, he said, from 0 percent for low performers to as much as 8 percent. The company still performs well while paying more than double what’s typical for the industry. It has annual sales of nearly $800 million. And Tindell credits at least some of that performance with the higher pay. His theory is 'one equals three,' he told the Wall Street Journal: “one great person can easily do the business productivity of three good people,' which means a company can pay that one high performer '50% to 100% above industry average.'
And that brings returns back to the company. He told Business Insider that the company gets three times the productivity even while paying two times as much in wages. '[Y]ou save money, the customers win, and all the employees win because they get to work with someone great,' he said. Plus the company has a 10 percent turnover rate, while the rate for the entire industry is about 75 percent, and turnover is very costly. Tindell credits high wages for the low rate, saying, “[P]ay is more important than most people realize, particularly if you’re trying to attract and keep really great people.”
— Bryce Covert, ThinkProgress
"A definite shift in the traditional career arc is taking place. In addition to careers of advancement there are now increasingly careers of achievement. If a person is happy in what they're doing, they should be able to earn more power/credibility/compensation/etc for continued contributions instead of having to get promoted--often into a job they don't really want to do and may not even be great at.
We try to reflect that in our compensation. As long as you continue to contribute, voice your opinions, make things happen. You can continue to build a reputation and a career without having to change jobs. That's a really important framework a lot of people in traditional enterprises don't get.
I'm not sure every employee gets that either. Promotion is recognition. You always hear from older, traditional managers, 'These kids all want to get promoted in six months, they all want to be CEOs in six months.' What's really happening is people say they want to be heard, want to be listened to, want to be recognized, and in a traditional organization the only way for that to happen is to get promoted.
If you let people build influence without moving up the ladder, they aren't dissatisfied. With many ambitious people the outlet for their ambition is having more influence on the company and being a great contributor and building a followership. Contributing, influencing, leading: those are incredibly fulfilling in a way a job title can never be.”
— Jim Whitehurst in conversation with Jeff Haden, Inc.