The Sawmill
Jake and Justin, 23-year-old twin brothers, worked for a large sawmill not far from where they grew up.
As a friend of the sawmill’s owner, their father was aware that even though both sons had essentially the same job title and duties, Justin was paid significantly more than Jake. Curious as to why, the father asked the owner about the variance. In response, the owner invited this dad to drop by his mill and casually observe the activities.
Two days later, the father showed up at the mill. After the friends exchanged small talk for a few minutes, the owner picked up the phone and called Jake into his office. He said to him, “There’s a trucker from Portland at the gate with some logs he wants to sell us. Go find out what he’s got.” Within fifteen minutes, Jake returned and said, “I checked out the load and it looks like he’s carrying about 40 to 50 large logs, mostly pine, and all appear to be in pretty good shape.” The owner thanked Jake and dismissed him from his office.
He then summoned Justin and made the same request. “There’s a trucker from Portland at the gate with some logs he wants to sell us. Go find out what he’s got.” A half hour later, Justin came back and said, “I counted 38 pines; most are about 20 feet and are in really good condition. There are also 11 aspens which are slightly shorter, and all but 3 are in pristine condition. He wants $1,000 for the whole load. Sam McHenry was down here twice last week looking for aspen for this large furniture project he’s working on, so I called him and asked if he’s still in the market for aspen. He told me he’d take the eight good aspen off our hands and offered $150 for each. If we accept his offer, we’ll make all our money back plus 20% and the 38 pine will be pure profit.” The owner told Justin to sell the aspen to McHenry, then thanked him and sent him on his way.
He then looked at the father. “If this were your mill, would you pay those two employees the same amount?”
“Absolutely not,” the father said. “Though equal, it certainly wouldn’t be fair.”
(The Sawmill is a parable by Eric Chester.)
ON POINT – Compensating employees using time spent on-the-job as the sole metric (hourly wage, monthly salary, etc.) may be simple to calculate, but it does little to engage employees and incentivize top performance. The most effective compensation methods are those where employees are paid in direct proportion to the value they bring to their organization. This is not simple or easy, but it is a prerequisite to building a great workplace culture and being recognized as an employer of choice.
I think we have a certain mentality that just showing up is enough. Part of capitalism is to see that guy making more money and figuring out what you have to do to make that happen.
The minute I let the “F” word enter in — “Fair” — then I’ve given up any right to develop myself and to make me valuable to my employer.
I agree, David. Thank you.
Love this!! I work at the USPS where this happens everyday!! Many should be paid much less for the effort they put out.
I’ve heard many times, “It doesn’t matter how hard I work I’ll still get paid the same.”
I hate that!!
Wonderful post!!
Glad the post hit the mark with you, Steve. I have all the respect in the world for postal workers, but like you, detest the “It doesn’t matter how hard I work I’ll still get paid the same.” mentality.
All you can do is set the example that you hope others follow.
Great parable, Eric. And, I know I’m going over the top because it is a parable, but for me it raises questions about the owner’s role in the disparate performance of the twins.
* Is the under-performing twin (relative to his brother) aware of the performance and compensation gap? And, is it clearly communicated exactly what he needs to do to achieve those higher levels of compensation?
* Does management clearly spell out how the compensation system works; that performance X earns you this level of compensation while performance Y earns a higher level?
* How is performance measured – are there objective, easily understood measurements in place that tie exceptional performance to exceptional income?
* What about training, mentoring, coaching, etc…
* And why, other than the friendship with the father, does the owner tolerate this kind of performance gap between the twins?
My point is that you can’t just look at the employee, you have to look at the employer too and the system they’ve put into place to grow and reward excellence across the board. Exceptionalism among employees should be rewarded but the smart company understands that it’s their responsibility to put a system in place to foster exceptionalism among all it’s workers and then reward both not only in healthy paychecks but in recognition and opportunity as well.
What happens to a company when all the “twins” perform at an exceptional level? They win and everybody gets a trophy because everybody earned it!
Love this school of thought, Tom. I agree wholeheartedly. This parable could be a book rather than a short blog post, and it raises great questions that every employer, leader, and manager needs to be asking. Thanks for playing along.
I couldn’t agree with you more Eric. I work in the fire service and as a union employee it irritates the crap out of me that people that do so much less get paid the same as I do. It doesn’t make sense for someone that busts their ass everyday to make the same as someone who would rather hold a recliner down from flying away for 24 hours. I guess that’s why I’m wanting to get out of that world and become an entrepreneur.
I can understand your frustration, Joe. It’s a huge loss for all of us when one of our best people in government services is motivated to leave because of the ‘everybody gets paid the same’ socialized methods by which they are compensated. Whatever you decide to do with your career, don’t ever stop busting your ass.
Many years ago I worked at a non-union sawmill construction in Alberta. I was hired as a laborer without a clear understanding of what my pay rate was and, although a number was mentioned, I wasn’t sure. Another laborer asked what I was getting paid and when I told him what I thought he said “Can’t be. I’m getting X dollars (quite a bit less) and I’ve been here a year and a half.” (I was a Saskatchewan farm boy, he was from an Alberta city.)When payday came he was getting $1.25 per hour less than me. He wouldn’t talk to me the rest of the time I worked on the project. I believe that our pay difference was based on my experience. I was familiar with heavy machinery maintainance and repair, could weld, operate any loader they had and Saskatchewan boys generally had a reputation for a good work ethic. Pay was often based on prior experience not on job description. With union rules much of this is prohibited so, yes, it is becoming a fact that just showing up is enough. If your job description does not embrace previous knowledge then union rules prohibit its use. And that is sad. It encourages a poor work ethic since good work is no longer required. Just showing up is, indeed, enough.
Sad truth, Marvin. Your extremely relevant example proves again that equal pay and fair pay are not the same thing. Thanks for chiming in!
How politically incorrect to pay people according to value!!! Imagine a workplace actually based on merit instead of seniority…. shocking…
Great article. This shows why unions don’t work. Also why equal pay for female won’t work. Some women should be paid more and some less.
The scenario is irrelevant. The owner failed to provide specifications on what was to be reported back to him. On the contrary, since neither of the boys had their employment terminated for failing to conduct their “duties”, the failure (value variance) was not due to “differences” in the boys, but due to the failure of the owner to properly train the boys as part of ensuring consistent quality of performance. Eric, is it your goal to bash workers or improve organizations that will benefit both the workers and organization? Let us NEVER FORGET that the American Silent Generation was the most prosperous generation in American history, which included a mix of union and non-union workers, civil service employees, private industry employees, and so forth. I hope Eric that you are not “one of those” who denigrate such American accomplishments as the Apollo Space program, which successfully sent Americans to the Moon and back to Earth, as being conducted by “socialists” and therefore must be privatized. By the way, my studies of quality and so forth center from the research conducted by Dr. W. Edwards Deming. I look forward to reading more of your blogs, however, my expectation is that you apply the win-win scenario in which both workers and their associated organization prosper together such as what the American Silent Generation had achieved.