robert young
Posts: 361
Nickname: funbunny
Registered: Sep, 2003
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Re: Rapid Hiring & Firing to Build the Best Teams
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Posted: Mar 16, 2010 6:54 PM
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> i think you are confusing compensation (to each employee) > with revenue (for the company)?
No, in fact, I wasn't. The revenue for companies such as kayak are not capital intensive, return on real capital, based. They are service based, which is to say billable hours to clients. Ultimately. Whether the company is doing so on direct contracts, or for "inventory" (building an application "for sale" in the future), revenue is attributable to exercise of labor, not extracting value from purchased/built real capital (what economists call plant and equipment). The notion of "intellectual capital" is specious, in any case. So, kayak's, and similar, revenue is traceable to individuals. But, if one compares superstar payments in, say, basketball to journeyman, the payments are way out of whack based on actual production. The justification there is "bottoms in the seats". So the surmise remains (I'm only askin' not expecting an answer), is it the case that average revenue, net of direct expenses, gets disbursed based on objective metrics of production? Or do "managers" and "rain makers" scoop up most of the million? I'm not implying that doing so is necessarily wrong, only that the facade of equity is, in my experience, just that. kayak is not unique; consulting companies have been run that way for decades.
> > i was talking about revenue per employee as a gauge to see > if our company is efficient
relative to what?
> > if you are asking about compensation -- > > 1) top performers should and do get paid more than the > average performer > > 2) we generally pay at or above industry standard > > --pme
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