I own a small IT company. What value is produced by my security guard?
I own a small IT company. What value is produced by my security guard?
Some things protect value, investment, and assets. Do you also buy insurance? But if you are a small business owner and can't figure out what value you are getting from the security guard, you should probably get rid of him.
Right. Which is why I took issue with:
1) Compensation is a factor, but not the sole factor.
2) Rewards are not always a raise, and in many instances are not the best motivator.
When I worked IT, rewards were a mixture of financial and fun/time away. Sometimes I got a cash bonus, but sometimes the rewards were tickets to some attraction and time off to do it or a department outing for the team, such as a canoe outing on company time. Once I hit a certain level of income, I'd rather have the time away from work and the fun.
From the look of this guy's company, he's not attempting to motivate solely with money, yet that's what the focus has become because now its apparently a political statement to give your employees a raise above market standards. Pepsi must not have had as good a PR team.
Yeah security guards are another form of insurance. We all pay money for insurance. What value is produced by buying insurance? Until you face a loss or threat of loss, then you may not realize the value.
Paying a wage that is higher than the value of the job only ensures there's a line for positions of only the best candidates. If he's paying this wage and failing then he hired the wrong people.
The problem with socialism is that sooner or later you eventually run out of other people's money.
I'm predicting that this grand experiment in generosity will indeed fail altogether, but at least it will be with his own money once it eventuates.
All true. It's all about risks, aversion of risk, and benefit analysis. Another ingredient is the discount your insurance carrier might provide you on your policy if you have a security staff on duty. I'm not sure but I'm thinking in some cases, it maybe the cost of doing business to be in compliance with laws.That's true, but one way of determining the value produced would be to determine the cost of a given loss that the security guard would be intended to guard against and how much would be recouped by insurance. Perhaps the insurance would not fully compensate for the loss, especially in time down and business lost, so greater efforts to prevent a loss rather than respond to one are justified. However, without making that analysis, how would you know whether the security guards $20,000 in value vs. $100,000 in value. If it's $20,000 under best estimates, them maybe paying him $30,000 isn't a good business decision. Taking the loss on an individual security event may be cheaper than preventing the event. If he adds $100,000 in value because that will be the uninsured loss in the event that a security event is not prevented, then maybe he's the bargain of the century.
That's true, but one way of determining the value produced would be to determine the cost of a given loss that the security guard would be intended to guard against and how much would be recouped by insurance. Perhaps the insurance would not fully compensate for the loss, especially in time down and business lost, so greater efforts to prevent a loss rather than respond to one are justified. However, without making that analysis, how would you know whether the security guards $20,000 in value vs. $100,000 in value. If it's $20,000 under best estimates, them maybe paying him $30,000 isn't a good business decision. Taking the loss on an individual security event may be cheaper than preventing the event. If he adds $100,000 in value because that will be the uninsured loss in the event that a security event is not prevented, then maybe he's the bargain of the century.
That's true to an extent, but not every job is worth $70,000 no matter how well it is done. My son (still in high school) works at Wendy's. He could be perfect at his job and he will not produce value to justify an annualized salary of $70,000. Based upon what I have read, there are positions at this company that fall into that category.
If by having a security guard, a computer programmer with a stalker is less distracted at work and performs better due to the reduced worry about personal safety, is that value added to the programmer or to the guard? If, absent the security guard, the programmer would have quit because the stalker knows where she works, how is that measured? Does the CPA learn how many people have such a worry? What about a manager getting death threats from a former employee who was fired and lost his visa, so is now living illegally in the US and has sent bomb threats in? How do you determine the value in having the guard in terms of productivity and retention of not just the manager, but people who are concerned about being attacked in an active shooter or bombing scenario? How does your CPA figure that in?
This isn't a hypothetical by the way, both occurred at the IT company I worked at. Prior to the stalking incident, we didn't even have access controls on the doors (swipe cards or codes, etc.)
Paying a wage that is higher than the value of the job only ensures there's a line for positions of only the best candidates. If he's paying this wage and failing then he hired the wrong people.
At that point you'd have to add more responsibilities or further specialize current ones. You could hire a physics PHD as a burger flipper at Wendy's for $80k a year if you required him to use his skills to make the absolute perfect burger using physics and math. Silly example I know, but it's not impossible, would you pay $50 for a damn perfect burger?
All interesting. An analysis of keeping a specific person employed with security necessary versus another person where it is theoretically not can be undertaken. Even if the dollars and cents seem not to justify it, In the end, you may have reasons to spend the money on a security guard. That's a business owner's choice, but that choice may bite into the bottom line and depending upon the margins, may be the difference. Certainly you choice to make. However, in context, are you paying him $70,000 a year? If not, why not?
...You could hire a physics PHD as a burger flipper at Wendy's for $80k a year...
Which is it? There's more than one factor or human nature says they'll equalize toward the least common denominator? That comment is what brought this whole "other factors" argument out in the first place.
How does a secretary equalize with a web site designer?
So again, I can't be happy with my slice of the pie unless it is bigger than the next guys? Then how am I personally happy with my slice even though everyone else on the PD with the same seniority has the exact same base rate as me? When I get a raise, they all get a raise. Why did so few people quit, and why did the IT guy quit because the money was TOO good so he was afraid he'd get used to that level of income and not leave to pursue something else? Why were they able to hire over 30 new people?
I think you guys are more in agreement than not. Would we be having this argument if the company owner in the OP had given everyone, whether they had 30 years in or 30 minutes in the company 6 weeks of vacation? What Jamil asserted is not necessarily wrong. It may not be true in every case but there is truth there. In general, people like to be treated fairly. Different people have different methods for coping with perceived inequity of compensation (in whatever form it may be awarded). As an example, I've seen guys decide that taking away of certain benefits while hourly people got better benefits cope by assigning "paid time off" value to that loss...and then take that time off, in addition to the vacation time they ordinarily accrue.