[FoRK] RPE and understanding company performance

Stephen D. Williams sdw at lig.net
Fri Jun 18 02:31:41 PDT 2010

On 6/18/10 12:35 AM, Bill Humphries wrote:
> On Jun 18, 2010, at 12:03 AM, Stephen D. Williams wrote:
>> What do you think I said that was offensive??  To whom?
> I'm not arguing about the relative wage of the stock puller vs. the VP of Product Development, heavens, I understand wage theory.
> What I found offensive is that you wanted to remove the labor of the warehouse workers from the calculation of average profit per employee.
> First because I thought your remark implied that they are superfluous to revenue and profits and somehow orders would magically ship without them. If that were the case, Amazon wouldn't hire people to do that work.

Oh.  Well, I didn't say that.

> Second, because I think it's dismissive of them as people, and I read your comment as "well, it's not like they are real people like the ones in the front office."

I don't see how trying to compare companies fairly is dismissive of 
anyone.  It isn't a "little people" (to quote the BP exec) vs. big wig 
issue.  You could just as easily talk about eliminating management and 
sales personnel, i.e. the supposed "big wig" managers and "controllers", 
when comparing contract consulting companies.  In that case, the "little 
people" are often the key producers / creators.  That is a good model 
for those in the entertainment industry too.  You compare earnings per 
entertainer, not EPEnt / entourage.  The latter would be highly 
misleading and mostly meaningless.

There are all kinds of companies and combinations.  In some of them 
there are various kinds of commodities, including certain kinds of jobs, 
and in others there aren't.  A commodity is anything that is plentiful 
and more or less interchangeable.  Some working roles are 
commodity-like, sometimes with "diminishing marginal utility"[1].  Some 
companies have commodity positions at the top, bottom, middle, external 
contractors / companies, etc.  Sometimes the commodity is expensive 
(like a plumber) and sometimes not (like most clerks).

> The people in warehouse may be unskilled labor, but until Andrew's robots do that work, they are needed to fulfill orders, regardless of if they are paid $20K or $120K a year.

Of course.  But if one company has them as employees and another 
outsources / subcontracts them, is it somehow disrespectful to them to 
normalize a computation comparing the companies?

[2] is interesting to read before [1].  "Water and diamonds" is a good 
analogy for many relationships.

> - whump


[1] http://en.wikipedia.org/wiki/Marginal_utility
[2] http://en.wikipedia.org/wiki/Labor_theory_of_value

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