Why are managers so highly paid?

Everyone, thanks for the responses.

I, like many others, can’t stand managerial tasks, such as organizing things, documentation (although I’m a decent writer), and other administrative tasks. They just bore the hell out of me and I while doing them I often find myself wishing I was having a root canal.

That being said, I’m very good at organizing people.

I’m facing a potential crossroads in my career where I have to choose whether I’ll be taking on managerial responsibilities or sticking to strictly technical tasks. My current job has offered to put me in either position, but I fear that unless I take on managerial duties, I’ll be hampering my career, at least with this company. At any rate, I’m the lowest paid by about 20k.

Being a “good” manager involves a lot more (typically) than simply being good at organizing people . You have to have a looong fuse and a good sense of the macro objectives of an organization and be williing to plow through paperwork. Techs are a dime a dozen in the current job market. Try the management path. It might be interesting.

BTW is some fields like real estate and related commission based sales jobs, managers are usually in the middle to lower middle of the pay pack not at the top.

I’m the resident clue in my branch of my company and I DETEST working with most of our customers. 5 minutes with one of our pickier customers and I am screaming for one of the sales people to take this whiny blithering idiot and speak slowly to them while I go give myself a “stick my finger through my eye socket brain swirly”* to cope with the mind numbing stupidity I have just faced.

And quite often the coflicting priorities of different departments, I as inventory want to see smooth targetted product flow where needed, the sales force wants to carpet bomb every customer with product and pray for a sale. This rarely results in civil discussions between me and the sales force.

  • forgot the doper that said this originally but it took me weeks not to laugh when I even thought this phrase

Well, I’m not sure how much more than me my manager makes(enough m’s?), but she earns whatever it is. She has to manage 9 cranky systems engineers, deal with our customers(especially if we screw up), deal with the sales reps, manage our cabling group, and budget. All I have to do is deal with the customers. While I’m more technically qualified, and am out on site, I wouldn’t switch jobs for just about anything. Too much crap to deal with.

I have in front of me, well actually next to me in a pile of work an excellent study (forthcoming) entitled Executive Compensation in America: Optimal Contracting or Extraction of Rents? (Bebchuk,et al. University of Chicago Law Review.

Economic study, despite the lawerly publication source.

Quite interesting, marshalls evidence of serious agency issues in re upper-level managerial compensation, leading to a degree of market failure in re the same.

I was going to make a long posting on this very subject, but have been sidetracked.

The word then, in economic terms, is that while certainly compensation is being driven by supply and demand, up the ladder, the market appears not to be functioning efficiently.

More would require rather more commentary.

My instinct is that many managers are indeed overpaid in an economic sense.

It is true that a good manager is worth his (or her) weight in gold, but in my experience, most managers are not particularly good. They are average people who have convinced senior management (through political means) that they should be promoted.

Here’s a thought experiment: If your company went out of business tomorrow, who would have the easiest time finding a similar job at the same (or better) pay? Who would have the hardest time?

People have mentioned salesmen in this thread, but I think there is an important distinction between sales and management. A top salesman gets paid a lot (IMHO) because it is generally very easy to measure his contributions to the company. Managers get paid more (IMHO) because they are in a better position to take advantage of company politics.

Of course these are fairly gross generalizations. Every industry has its own quirks.

How do all you people find out how much your bosses are making? The sort of stuff doesn’t tend to be divulged over the water cooler, in my experience.

We have one person above who was asked to open a file that had that info. Okay, but where do the rest of you get it? I’d really like to find out what my co-workers get.

By the OP’s thinking a coach shouldn’t make more than his players. Certainly a few players might make more but most make less. Of what value is a coach?

A truly good manager is worth their weight in gold. Also remember that when downsizing happens middle-management is usually the first to get the axe. That happened in my company and the engineers (of which I was one) who actually made the money for the company mostly kept their jobs. The managers were swept out on a great wave. It’s sad to see a 45 year olg middle manager out of work as they have very little prospect for a new job (they are wading through a sea of other unemployed middle managers).

Andrew Carnegie (responsible for the Carnegie fortune) once said that his great ability wasn’t to do the job his employees did. His accountants, engineers, etc. were all FAR better at their job than he could ever be. Carnegie said his success was due to his ability to get those smarter than himself to work for him.

I just thought of another parallel to draw:

Why do Generals get paid more money than grunts? The general probably couldn’t hit the broad side of a barn with a rifle and they don’t have to slug it out in the trenches and face getting shot like those working for them do. Would you suggest that Generals should make lower than a Private’s salary since it is the Private who is doing all the ‘real’ work?

Generals, like managers, lead the whole shebang. Some are downright crappy, most are soemwhere in the middle and a few are indispensible. A Rommel, Patton, Genghis Kahn, etc., can do miracles. I’ve personally seen managers single-handedly turn around a losing proposition in a corporation (although unfortunately I’ve seen more drive it into the ground).

Ah, blessed is the manager who retains his associates, as it is turnover, hiring and salary that are the biggest costs to most companies.

Blessed is the manager who can increase his associates productivty, because it is through increased productivity that we increase profits by reducing costs.

Blessed is the project manager, for he somehow manages to communicate the business plan to the techy who couldn’t communicate with anyone who wasn’t highly versed in the history of Pong or the ways of the Force…not to mention the inner workings of the Enterprise. The sharpest and hippest techy I know is still a school boy when trying to determine a companies business plan and create a plan for saving money and creating profits. Many a man/woman has failed miserably at life’s “soft skills”…the skills of the manager.

Baron, you may be able to parlay that bit of info into a pay raise to the point where your OP becomes a “Somebody Else’s Problem.”

First find a better (pay, benifets, work hours, location, or whatever) job elsewhere. Second approach your management and say that you would like to stay but they would have to make it worth your while.

Of course the risk is all yours. They may call your bluff and cut you loose. They may find you are looking elsewhere and make your job even worse.

Ask yourself this question:

If they wanted you to be manager, for less or equal money, would you do it?

My guess is that, particularly in technical/engineering type disciplines, most of the tech folks would want to keep doing what they are doing as that is what they enjoy doing. Many of the managerial tasks and responsibilities are not the sort of thing that make one leap out of bed in the morning energized for another day’s work.

Although the Machavellian aspects are an intrigue to some

Just a short anecdote to show how managers work in a very scaled-down environment…

I have my own company with just 3 people (and a few others here and there). When we break out the payroll, the guy who made the referral (“sales”) gets 5% off the top of the project’s net (what’s left after the company gets 10%). Then the guy who was project manager (spent time on the phone, at meetings, dealing with the client, etc) gets 10% of what’s left. Then the 3 company leads (me…) get 5% each of what’s left. THEN, the guys who actually did all the coding and all the work get their fair share of whatever’s left (% based on time and work done).

If you just made the referral and did all the phone work, you could end up making a lot more than the people who did the actual work.

Why did we set it up this way? Because no one WANTS to be project manager or salesperson, and it’s an extra incentive to do it. Right now, one guy’s been doing all the sales and managerial work as well as coding and being a company lead…he gets about 50-60% of the gross while I get maybe 25%. I work 12-18 hours a day like he does, and I do just as much coding, but while i’m coding he’s on the phone and at meetings and working on weekends to get his coding done. I don’t envy him at all.

By the way, you should thank your lucky stars that your manager doesn’t know how to do your job.

Management is like everything else. When done right, you barely notice. When done poorly, they stick out like a sore thumb. A good manager will make your job easier in ways you never imagined while a bad one will drive you crazy.

See if this helps:

You have much more to fear from 100 sheep being led by a single lion than you do from 100 lions being led by a single sheep.

Not sure who said it, but I have to say, I’ve seen it apply. I’ve seen groups led by incompetent managers become worthless, even with lots of good people in the group. I’ve also seen groups do great things under a good manager, even with not so great people.

<< I am also the only one in the office who can do what I do >>

The speed typist might say the same thing.

The supply-and-demand question is not generated internally, but externally. There are market statistics to indicate what various jobs are paid, and these are based on the external market, not the internal market.

… and the external market values managers above the people being managed.

Agreed, if we’re talking top-level executive compensation (CEOs of multi-billion dollar companies), pay differentials have gotten WAY out of hand.

Baron, from your last post, it sounds like your frustration is not so much that managers get paid more. It is that a great developer must choose to be a manager or face a compensation ceiling. (Hope I am not putting words in your mouth).

I too find this disconcerting. And it is further exacerbated by the fact that many development managers are developers-promoted and do not possess the skills so highly acclaimed in this thread. :slight_smile:

I’ll move this thread to Great Debates since I doubt there can be an identifiably correct answer here.

Just once in my life I would like to be under worked and overpaid

First of all, there’s a significant difference between managing in a technical field like engineering or computers, and managing normal business functions. I’m the I.S. manager, and I certainly don’t know more than any one of my employees; I would have to be a genius, because I would be a master of databases, networking, system administration, application development, and all of my managerial duties. Can’t be done, and it’s ridiculous to assume it could be.

But in every other area of the business–finance, operations, marketing–the manager is the most knowledgable one in the department, and got the job not just because they’re the most knowledgable, but because they can manage the rest.

Management never seems hard until you do it. Dealing with the various characters and temperments in your department; dealing with other managers; dealing with the company as a whole. All the (apparently) ridiculous paperwork and organizational tasks. It’s hard, and that doesn’t even take into account when things go wrong, like when you have to fire and replace someone, when someone blows a deadline, or when your budget gets cut because another department fucked up.

I come from a tech background, and I struggle to keep my hand in the tech work. I think all tech people should have to do a tour of duty as a manager–not as a “walk a mile in my shoes” thing, but so that the tech has a real understanding of how their job fits into the organization.

One of the great learning experiences I’ve had at my current employers is how essentially clumsy any organization is. It’s really, really hard getting a large group of people to work towards a common conception of a common goal, and it gets exponentially harder the larger it gets. It also gets harder in a competitive marketplace, where the last 5% makes the difference.

Ten engineers and a manager will always accomplish more than eleven engineers.