Equal Pay for Equal Play

Who should decide how much you are worth?
 

Once again this year’s Wimbledon tournament was dominated by the argument over whether the women players should receive the same prize money as the men.

Some argue that the men deserve more as their matches are settled on the basis of the best out of 5 sets, whereas the women’s are settled on the basis of the best out of 3. If the women want the same money they should play 5-set matches – equal pay for equal play.

Think of it like this; if a football league was set up for short games lasting 45 minutes, the fans would not be willing to pay the same as for 90 minutes.

But is this true?  In cricket the top players can already earn more money playing in a short Twenty20 matches than they can in a 5-day test series.  The reason is that the public’s interest in and enjoyment of that particular format of the game is bringing in vast amounts of advertising and sponsorship revenues.

Cricket therefore gives us a clue as to a possible solution to the argument in tennis.  Since the money that goes to the players originates from the fans and spectators, why not sell tickets for the various matches by auction on ebay and see how much people are willing to pay for the different matches.

Instead of receiving prize money, the players could then receive a percentage of the takings.

I do not make this as a serious suggestion, but I raise it to make the point that what a thing is worth is whatever someone else is prepared to pay for it.

Auctioning tickets would therefore end the debate by making it completely transparent what each player and each match was worth to the paying customers.

Interestingly, there is a company that uses a similar process to set the pay of its managers. 

Semco is a Brazilian manufacturing company who have gained something of a reputation as a maverick.

At Semco, managers set their own pay and benefits – they can pay themselves whatever they like!
“What a crazy system” I hear you say, “don’t they bleed the organisation dry?”  The answer is no; the system works perfectly because it is regulated by demand and supply. 

It works for two reasons; the first is that managers pay is made public to all staff and the second is because it is the staff who hire and fire their own managers.

In most organisations managers are hired on a top-down basis. At Semco they do it differently because they have reasoned that the job of a manager is to make the workers who report to them more efficient and effective.  Since the workers are themselves paid by results, it is therefore in their best interest to have a manager who is effective and does their job well.

The workers are effectively the ‘customers’ of the manager and are therefore best placed to decide whether they add value or not.
Interestingly, although Semco has achieved great success with its radical approach to setting pay and benefits, I am not aware of any other companies that have followed its lead.  Perhaps there are good reasons why they have not, or possibly it is because the managers in those companies lack the confidence to open their pay up to public debate.

Next time you are at work, why not ask yourself what would happen if your colleagues or subordinates voted on your pay – would it go up or down?
About the author
Alistair Schofield is managing director of Extensor Limited and can be contacted at .