John Norris: When it comes to business, fairness is relative

September 12, 2017, by John Norris

While he wasn’t the first to bring up the idea, Karl Marx was known for saying: “From each according to his ability, to each according to his need.” The thought process is the strong will carry the weak, until it is their time to be weak. That sounds fair, and isn’t that the way it should be?

Some months ago, my daughter and I had a conversation about economics. When I gave her my thoughts on a particular issue, she said: “That’s not the way it should be; it isn’t fair.” To which I replied: “That is the way it is. With a few exceptions, people will act in their own best interests before worrying about someone else’s.”

A good example of this is a discussion I had with a friend a few years ago. He was a salesman for a technology company. By the end of September, he had exceeded his production goal for the year, and his manager told him he had maxed out on his annual payout. As such, he should continue working his sales pipeline through the end of December, but he wasn’t going to earn an additional dollar on it. The company’s reasoning? According to him, it wouldn’t have been fair to everyone else for him to make that much money.

I asked him what he was going to do, and he was candid: “I have a full pipeline, and I am going to stay in front of my prospects. But, I am not going to close anything until January when I can get credit for it. Why would I do anything different?”

Initially, I felt like saying it would be good for shareholders and all the other people at the company. That would be the fair thing, right? My buddy had already maxed out on his pay, why shouldn’t he help the rest of the firm max out on theirs?

Did my friend have the ability to close additional business before year end? I don’t know for certain, but he said he did. Would this have helped others to meet their needs? Presuming a bigger paycheck in late December is indeed a need, which it is for a lot of people. If so, the company should have forced him to close more business without paying for it. Certainly, that would have been the fair thing to do!

However, I thought about for a split second and told him: “They are stupid to max you out with a quarter to go. Especially if you have a bunch of business which you could or should move by the end of the year. That doesn’t make any sense. Everyone would be better off with you out there generating revenue, as opposed to basically goofing off for a few months.”

To be sure, my friend isn’t a bad guy. He fully understood he was only going to get a fraction of the revenue he generated for the company. The rest of it would go to other salaries, bonuses, the cost of the equipment, corporate overhead and a whole host of other things. No one was debating that. He simply didn’t want to work for free. Why would he? That wouldn’t be fair, would it?

The problem with fairness is it is relative, all the more so when someone else is determining it. The same could be said of abilities and needs. Do you want them to tell you what yours should be?

(Read this article as previously published in the Montgomery Advertiser on September 12, 2017)