The Horka Blog

There seems to be a predilection in the press to talk about Sr. Mgmt salaries as in some way linked to the job title. I never see a discussion of these salaries in terms of the actual contributions of the people occupying the positions and the value added they provide to the corporations they work for.

I think it is time to evaluate the salaries paid to Sr. Managers in the same terms as they are evaluated for everyone else in the organization – what value does the individual add to the corporation?

After spending many decades in large corporations, I must say that it is extremely rare that I see a Sr. Manager contributing to the corporation at anywhere near the scale that would be necessary to justify their salary.

Like more normal humans they come in, have a coffee or breakfast, read news and reports, talk to subordinates, attend meetings, submit plans produced in most part by their subordinates, etc. In other words, it is not that most of them do nothing, but I have to scratch my head when it comes to pointing out which unique decisions or choices they make which materially improve the financial well being of the organization, justify their outrageous salaries, and differentiate them from much less paid subordinates. In most cases they could disappear entirely and no one would ever notice – because the bulk of the work is being performed by their underlings.

When new and innovative decisions are made – it is not as if these are new and innovative in the context of the organization. Inevitably these are ideas that have been floating around for years, but no one has had the political backing or force of personality to make the changes.

Yet, once a person enters the Sr Manager inner circle and has acquired the appropriate title – this in itself seems to provide entry to those same ranks in other corporations – irrespective of the individuals’ actual performance or contribution. To get into the inner circle requires a mentor or some form of support from within the inner circle. So, to a large extent, the inner circle is a self-perpetuating group of mediocre individuals, in large part, who have essentially “lucked out” in entering the inner circle, and have a vested interest in ensuring the group’s survival and prervailing mediocre performance. Hiring truly brilliant people with clear track records of performance and contribution would, of course, highlight their own mediocrity.

So, next time the press talks about Chief Whatever Officer salaries, they should take a moment to reflect and evaluate the person’s track record at previous institutions, and what true value these people have contributed.