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Why Your Boss Is Over salaried Tim Harford 05.23.06, 3:00 PM ET It is a regular(prenominal) Dilbert strip. The boss announces, Our CEO has voluntarily slashed his give birth from $6 zillion per year to $4 meg. In a written statement, he said he wants to sh ar the pain. Do you feel better now? A downtrodden intern replies, I make my underpants from get up bags. But thats office life, is it not? Bosses make obscene sums of capital while downtrodden cubicle slaves craunch almost without reward. It skill calculate insane, but economists have a surprise for us: The insanity reflects nothing more than quiet economic logic. There is method lay outing in the madness. The piteous truth is that your boss is probably overpaid--and its for your benefit, not his. Why? It might be because he isnt being paid for the get to he does but, rather, to inspire you. In other words, we work our socks off in underpaying jobs in the hope that one mean solar daylight well win the rat rac e and become overpaid fat cats ourselves. Economists call back this tournament theory. After all, managers find it hard to spot an charming performance. It is a rare job where workers can fairly be paid according to some objective criteria. There are some exceptions, of course. Critics and audiences may disagree about the literary merits of Dan Browns go seller, The Da Vinci Code. Yet from a business point of view, the dominate is easy to banner. He has sold about 40 million books and is rewarded with a payment for each one. Another superstar, tennis torpedo Roger Federer, has qualities that cannot be so easily calibrated. So instead of act to beat his performance in objective terms, as Dan Browns is measured, we measure it in relative terms. If Federer beats Andy Roddick in the final of the U.S. Open, he has succeeded. Federer is not paid to try hard, nor to produce objectively lustrous tennis. He is paid for beating other players. Yet that is generous to get t he best out of him. It is likely that employ! ers have yen since noticed that...If you want to get a full essay, identify it on our website: OrderEssay.net

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