Why your boss is overpaid
Why your boss is overpaid. The ugly truth is that your boss is probably overpaid–and it’s for your benefit, not his. We work our socks off in underpaying jobs in the hope that one day we’ll win the rat race and become overpaid fat cats ourselves. Economists call this “tournament theory.” The second, and more counterintuitive, prediction of tournament theory is that the more luck is involved in work, the larger the pay gaps should be between the winners and the losers. If Jack’s promotion is 90% luck and 10% effort, Jack may be inclined to goof off–unless, of course, the rewards for promotion are absolutely astronomical. And they sometimes are. ...