Does a high wage employee bring more value to a company than multiple low wage employees?

eKretz said:

So here's my take. A "high wage" employee should bring more value than a low wage one, or he oughtn't be a high wage employee. And whether you should hire one or the other is really dependent on the type of work done in your shop and the level of supervision you want the employee to work under. In a larger shop I think it would be good to have a mix... Lower wage guys for the grunt work that's basic stuff and doesn't require much thinking. Higher wage guys for supervision and/or higher grade work.

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Incentivize the higher wage, and then you don't need to play a cop all the time.

I’ve seen this first hand a bunch of times. Guy asked for a $1 raise because that’s what they’re paying down the street. The boss said no.....you’re already at top scale. Guy quits and the boss tries to match his pay while walking out the door. Boss hires 2 people to do the work of the one guy. One guy is a die designer and the other is wire edm guy.

The boss would give this guy a part print and he would have a 1-12 station double part progression die in 4-6 weeks.

The guys I’m talking about could build, program, design, weld, run CNC boring mills, grind, tryout, etc.

After “the guy” has left, the boss usually outsources a specific portion of the job and most of the time they’d lose their ass.

I've also generally found that managers are pretty bad at understanding who the bums are and who the rockstars are even after they've been working with them for years. Figuring that out during an interview is nigh impossible.

Ummmmmm if your crew is receptive then it absolutely does. All it takes is 1 person to jump start your operation in a new direction or level of quality and or standards.

DDoug said:

A high wage employee can out produce others & drive your business forward only if:
1. You give them the tools they need.
2. You give them the right to doo it. (management always shooting down the employees ideas/methods for no good reason)

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Correct on all counts.
The environment and foundation must be in place from the start.

I think a shop with 5 or more workers should have one high skilled person, perhaps the boss who is capable of monitoring the process and being active enough to spot someone making scrap. Yes, a boss should be as busy as the guys to earn his pay, and not just be a whip-cracker.

Orange Vise said:

If only it were that simple.


Not a fan of this term. It gets tossed around on social media way too often and needs to die.

People get paid for their output, not their skill level. Can a skilled employee with double the pay produce twice as much? Maybe, but it's far from guaranteed. And even if they do, that doesn't make them a rockstar. They're just doing their job.

Don't paint yourself into a corner by relying so heavily on people. People understandably need to do what's best for themselves and their families, and sometimes that doesn't align with your goals. This doesn't mean you shouldn't try to hire the best people you can, just that you should expect things to be way more complex than the way you described it in your OP.

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I know of a place that would try and hire all "top level" or "rockstar" programmers and machinists. The problem was, you are paying for that and it was mostly production in a small shop. Really maybe 2 of those guys were needed at that level. So now you have a bunch of skilled guys making good money, getting bored and dissatisfied doing machine tending. It was not a good path to be on.

You need both. When I worked in construction five decades ago, a carpenter crew consisted of a "lead man" and a bunch of "nailers". Lead men get bored doing repetitions work, but somebody has to do it. The thing to avoid is troublemakers, who get their jollies by creating dissension.

Dennis

Modelman said:

You need both. When I worked in construction five decades ago, a carpenter crew consisted of a "lead man" and a bunch of "nailers". Lead men get bored doing repetitions work, but somebody has to do it. The thing to avoid is troublemakers, who get their jollies by creating dissension.

Dennis

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Yes. The troublemakers need to go somewhere else. They can bring a whole shop down.

Ive seen a few times where a boss/owner gets a whole crew of stars who work for low wages and put him on easy street.............my late friend Jack Pierce was one of these guys.......not very bright ,but he seemed to have a huge amount of good luck with employees..

Only if the "high wage" employee performs to the level you are expecting for that wage. I've seen plenty of examples of "higher wage" people be the sources of problems because they see themselves as above others. Attitude can overcome competency if it's bad enough.

If they don't perform to the level justifying the high wages you have something to think about.

Hire for attitude AND competency, not competency and hope the attitude/impact on others will work itself out.

Short Version: 5 low wagers can be worth more than one high-wager who likes to cause trouble. 1 high wager with a great attitude is worth more than 5 low wagers who don't care about their jobs, just want to collect a paycheck, and have to be constantly monitored to get anything out of them.

In the end it's not the level of wages really, it's the attitude and competency anyone brings to the table versus what your employment needs are in your business..

In my experience, anyone who likes to cause trouble should be shown the door. Places where it is a pleasure to work always seem to get more done and have better communication and learning going on for those who need it. People who aren't afraid of being belittled are way more likely to ask questions and try to expand to work outside their envelope, so to speak. That's not to say you can't bust somebody's balls for a stupid move once in a while, just ensure that it's done in a way that they understand is friendly.

Also, a high wage guy that's worth his salt can sometimes help act as an unofficial supervisor. If they see someone doing something that is not going to end well they can speak up and help to stop a disaster before it happens. There is another side to this coin also. The low wage guys need to keep an open mind and not get offended if someone asks a question about what they're doing and why. I've also seen bad atmospheres in shops because some people that are not very knowledgeable tend to act like know-it-alls. That can be a recipe for a lot of expensive scrap or even someone getting hurt. Supervision needs to be on the lookout for both ends of that spectrum and keep a firm hand at the helm.

It is really something when you get a shop full of guys pulling together as a cohesive team. You do that and with proper management you're going to make some real money. I only worked in a couple places like that, and boy were they great. And that applies across the board of the working world; doesn't matter if it's a machine shop or one of Gary what's-his-name's hotdog stands.

If only life was so simple .......last place I was ,both bosses had personal issues that were played out at work........It was quite disruptive at times,and quite unhelpful.

john.k said:

If only life was so simple .......last place I was ,both bosses had personal issues that were played out at work........It was quite disruptive at times,and quite unhelpful.

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Yeah, but from your stories of your time in the work force, you've never worked in a place that would be legal in the US.

TeachMePlease said:

Yeah, but from your stories of your time in the work force, you've never worked in a place that would be legal in the US.

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JohnK's postings follow closely to the autobiography I read of the band from down under "INXS"......

One chapter devoted when they were still local, had them driving a micro bus across the country...thru the desert, stopping at small bars to play for money.
The micro bus was fueled with cocaine....

People get paid for their output and what the work or business can afford. It would not likely be possible to generate or pay $10 an hour with a push mower.
A college doctorate degree should not grant a person top wage just for putting names in alphabetical order. 10 or 30 bucks an hour because people are willing / or want that the high wage is not the answer.
It seems the market system regulates wages in an Ok manner.
The government regulating wages seems not to work very well.

You don't always get what you pay for, but you very rarely get more than you pay for.

If you're running production you should be investing heavily in automation; a $100K robot installation will pay for itself pretty quick running 24/7/365. You get a few high end people who can setup and manage that automation, and you don't need an army of button pushers. Still probably need a forklift driver to get the stock into the automation cells and the pallets of finished parts out. That's how Bobcat's plant in North Dakota was running 20 years ago.

I think one thing to note here is that there are ALOT less "ROCKSTARS" than there are so-so's or "bums". Where we are located, GOOD machinists who can actually do it all (complete from programming to finish) and do it well in a reasonable time are hard to come by, those that are around, dont jump ship because they already are getting paid what they are worth. For every 100 applications i see for a top level, top dollar machinist, maybe 2-3 are actually top level machinists. It is much easier for an employeer to find "ok's" than "rockstars"....I know if we had the option we would hire only rockstars at top pay but unfortunetly there just are not enough of them out there to do that.

TeachMePlease said:

Yeah, but from your stories of your time in the work force, you've never worked in a place that would be legal in the US.

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I can ID a solid 50% of John's posts without seeing his name, always figured the rest of you could too and it sounds like the answer is yes.
Often in a situation there's a clear right thing to do, a wrong thing to do, and a blatantly wrong thing to do. If the post is about the last of those 3 categories, odds are John's telling the story .

On topic, offering higher pay within a range gives you the opportunity to get better, more productive staff. It's your job to provide the filtering (aka good hiring, managing, developing and if needed firing) to make sure you get the productive ones, not just the first people wanting that wage who walk in the door. It's also your job to put them to appropriate use.

For example, I make 2x what one of my junior coworkers in a similar role makes, and that guy makes 2x what one of our techs makes.
About 90% of the things our tech does, I do better. Do I do them 4x better? Hell no! The other 10% of the thing our tech does they do better than be, despite the fact that I cost 4x as much. So, if all of your tasks are the sort our tech does best, you should not hire me, nor anyone else demanding my wages. It'll cost you more, and you won't get much for it.
Am I 2x as fast as the guy in the middle? Now it depends. At tasks within his skillset he's better at a few, I'm better at a few, and it's close to a wash for the rest. Maybe I'm 20% better on average than him. On the other hand, if you pick a task that I'm able to do, but it's simply too far out of his skillset/experience level then it's worth it. In those cases it's going to take him 10x as long as it does me, if he even gets it right. So, if that's your need I'm a great fit, and a bargain in comparison.
Along these lines, as a manager, you need to keep me doing what I'm good at, and not doing what someone else should be doing. For example, I actively enjoy doing one of the tasks that our tech does. Say I develop a process. Our tech and the junior guy can't develop the process, so I have to do it. However, once it is developed, you need to make sure I don't just keep doing it because I'm already there. If I do the tech is idle (adding on value) and I'm getting paid 4x the wages of someone who could do it just as well now that I have it running.

So, wages too low can be bad, but there's a lot more to deriving more value than just paying someone more, and sometimes more money simply won't fix a problem.

Its called "gettn -R- dun".............when I quit they ended up with three young guys trying to do what I did ...........unfortunately .... three guys who dont know what to do ,or how to do it ,dont actually replace one who does .......the manager was very bitter that I "didnt train anyone",yet when I offered to come back as an instructor for $100 /hr ,the offer was rejected out of hand.