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Salary is more than money.
Oil fund manager Nicolai Tangen loses his own fortune to be able to work in the public sector. It is the work itself, and not the salary, that motivates you. Photo: Håkon Mosvold Larsen
The salary settlement in Norway is now in full swing. Interest groups and unions fight for their members.
Fagbladet figures show who has won and who has lost the most in the municipal sector in recent years, and by how much. It’s a depressing read.
Since 2016, for example, domestic helpers and cleaners have had a wage increase that is less than the rise in prices in society.
In real purchasing power, these two occupational groups have therefore fallen by 7,500 and 4,000 crowns in wages in these years, respectively.
Is it because the municipalities do you have bad advice? Oh not then.
The directors and municipal councilors have had a salary increase of 14 percent in the same period. In purchasing power, this means a salary increase of NOK 70,000.
The salary differences have of course, many natural explanations.
In principle, no formal education is required to work as a domestic worker, while in comparison you should expect to have a high level of education and massive work experience to become a senior manager.
Education level, degree of responsibility, workload, and risk factors should naturally affect how much you earn.
The argument most often However, the reason the salaries of public executives should be high is that they should be high enough that the smart ones bother to work in the state and municipality.
Employees are the resources of the company, and if you want to buy the best managers, you must be able to pay. Otherwise, the private company will come quickly and steal them, is the idea.
But does it really work that way? I think there are two problems with the public sector trying to compete with the pay of private executives. The first is that it doesn’t work. The second is that the money could have been better spent.
The numbers are clear. Public leadership positions cannot compete with private ones, even if they try. Does this mean that all the gluttons work in private companies, and that we are left with a bunch of idiots to run the health and defense service, the schools and universities, the municipalities and the political bodies?
Of course, no. The answer to why many highly educated and insightful people still choose a job with a lower salary than they could get privately is simple: Salary is more than money.
Meaningful work. Power and influence. Be able to contribute to your local community. Reputation and attention. Safety and solid job security.
The reasons for applying to the public sector are endless. Salary is just one of them.
One who has understood This is the kingdom of Norway that is most talked about today, oil fund manager Nicolai Tangen.
To get a job in the public sector, he has gone from an annual salary of 1.3 billion to 6.65 million. Considering that it also pays approximately 60 million in estate taxes annually, Tangen in practice pays tens of millions of crowns a year to work for us.
By his own statement, he lives well with it. Tangen has come to realize that life is more than a salary, and reveals a poorly hidden secret: It’s not just money that motivates hard work.
– the best I know It’s pizza, Tangen said this spring. He further explained that a pizza still does not cost more than 200 crowns, and he never in the world manages to eat his fortune. Therefore, money no longer motivates him.
In the language of economics, it is called the diminishing marginal utility of money. The more you have in salary in the first place, the less difference a salary increase will make to your lifestyle.
The first pizza tastes better than the fifth, so to speak. The tenth most likely you will not consume.
The reasoning is supported by research: Princeton University found that when a family income exceeds what is currently equivalent to 860,000 crowns, an additional increase in itself will not make you much happier.
The Pincer Reveal And the research, therefore, points in the same direction: if you are going to spend money on motivating employees, it is better to spend the money on those who earn less than before.
It is very strange that we accept that top managers can only be motivated by money, while nurses live well with receiving applause on the balcony from time to time.
In many ways, it is an insult to both parties.
I do not think that what motivates domestic helpers to work effectively is an increasingly wealthy top manager. They also want pizza, right?
Tangen explained that at first he was unwilling to give up his fortune to get the position in the Petroleum Fund. It was only after spending time talking to motivated and competent employees that he had landed to say yes.
It was the human capital that made it worthwhile.
This is how I think it’s for really good leaders. So spending money on salary increases for employees at all levels, rather than managers at the top, can be an investment only in such skilled managers.
Employees who eat pizza make better employees, and good employees attract skilled bosses.
Everyone agrees that employees should have a living wage.
At the same time, senior public managers must have more to live on than their salaries. If not, they may not be the leaders we need.
Commentaryr
Commentary articles in BT are written by the newspaper’s editors and commentators. Writers have great freedom to express their own opinions. Sometimes these deviate from BT’s official views, which are promoted in editorials.
