Adjustable Employee Salaries
Posted: Wed Oct 26, 2016 5:03 pm
One of the ideas in another thread by piermario was about adjustable salaries. I was just brainstorming some ideas about this because I thought it could be interesting in the game, and perhaps move it a step closer to being a more detailed and accurate real world simulation.
Imagine if you could adjust the wages in your businesses, and the competitiveness of the salaries you offer affected the retention rate of keeping your skilled employees (and similarly, your ability to draw skilled employees away from from competitors), as in the real world. And why should a new business have to start from scratch and train up employees from nothing when realistically they should be able to attract some great employees by offering good wages?
You could have the skill pool of a city be variable depending on how much training corporations have been doing, and how much the city's economy has been expanding (more jobs and business mean more new untrained employees entering the sector). The skills should be sector specific, meaning the skills the retail worker pool is separate from the manufacturing pool, etc. And ideally, employees would be tracked separately (age and skill for each worker), though average skill could be used within each business unit to determine its level. Also ideally, wages could be set for each business building, because a company-wide wage setting seems like too broad of a brush to paint with for it to be interesting.
There should be a slow decline in skill over time to represent the constant flow of retiring skilled workers being replaced by young newcomers. There could also be a slow natural increase in skill over time too, from work experience. These 2 factors together would mean that the competitiveness of wages would affect the skill of the employees your company has even with no training going on in the city, as experienced employees keep migrating to the better paying companies, while lower paying company keep losing the experienced people and are always taking on new young employees.
Of course, this must be balanced so that one cannot just offer the best wages and ignore training and have that be a clearly optimal strategy at all times. I think it's best to find the best balance by looking at reality in order to add intuitive complexity to the game. There should be several factors at play:
A: Employees want as much money as they can get, but employers want the best employees, so they must be the best to get the best job. So both supply of skilled labor and competitiveness of companies to obtain the best should be factors to consider.
B: Offering training should be seen as something attractive to employees, as it will help their career progress and let them move to the highest paying jobs. So actively training helps draw and retain better employees, at least until they can achieve a significant pay raise by making a move to a new employer.
C: Possibly, employees could lose some skill by changing jobs, as they will likely be doing something a bit different or following a different process at the new job, so this could act to make employees change jobs only if their current skill is considerable higher than the skill of employees currently at a higher paying business. This can be done to reduce fluidity of employees changing jobs too easily. Or instead of losing skill, the wage difference between jobs could simply affect the likelihood of an employee making a job change, so employees are unlikely to bother making a change for a small difference in pay. They'd instead wait until they are qualified for a much better job.
D: Possibly, setting a lower wage only affects wages for new employees, but cannot change existing employees wages. But a higher wage affects all employees. This prevents temporary wage increases just to attract skilled employees, followed by an unrealistic breaking of those contracts.
E: Perhaps the attractiveness to employees of companies offering job training (as explained in "B") could be variable based in some way on what kind of future wage the employees could achieve from that training if their skill improved. The game could just calculate what the average wage is for each level of employee skill, and then employees could guess what would earn them the most money through their whole career, considering their age and how long it'd take to level up their training. They could take job X, with higher wage but less training, or staying longer at job Y with lower wage, but more training, and thus greater future earning potential. So depending on the employee's age, and how much training he'd get at a job and how quickly he'd advance in skill, he could decide whether to stay or change jobs. Based on the calculations, older employees closer to retirement would care little about training, but younger employees would find training more attractive.
F: Employees could slightly favor staying within the same company sort of like a loyalty mechanic, moving to a higher paying building within the company sort of like simulating a promotion.
G: The wage adjustments could possibly affect the real wage in the city. High competition for employees using high wages increases real wages. Or oversupply of high skilled labor may make businesses lower their wages because they can get the desired skills without paying much. This could allow some interesting grand strategies, like Henry Ford's idea of paying the employees enough to buy what the make (pay high wages and increase sales and sale-prices), or focus on training and keep wages low to keep prices down for more favorable exporting profits.
H: I think if factories (and retail) only gain capacity/throughput bonuses from training levels, it makes determining the ideal training level pretty straightforward. That is, it should be at the level that allows them to reach nearly full capacity and utilization, but no more because that is a waste. But if there could be some other factors at play, such as a bit of change in quality of the product (perhaps partially dependent on what the product is), the decisions can be more complex. You'd have to consider the quality concern against the cost concern, and also how much you'd have to pay in wages and training for different levels of quality. You'd try to have the best employees for the most quality dependent products, employees that may have be promoted up from your less quality-dependent factories.
I: Also, if farming is the only type of business that gains quality from better training, I think farming would have disproportionately higher wages and training than the others because of the huge dual bonuses of quality + quality gains in the farm. Or perhaps farms should not get quantity gains from training, but only gain quality.
J: There's the possibility of factoring in the desirability and availability of housing near the workplace as a factor for how much the employees value the job. This could make real estate considerations into an important point for factories, etc. as it is in real life.
To be a fun addition to game, these factors should create different scenarios for CEOs to consider, rather than just being formulaic. For example, I think the changes proposed here would create different tiers of competitiveness among companies for different tiers of employees. At the bottom is low wage, no training companies that compete (using wages) to retain their experienced employees or gain them from others. At the top is high wage, high training to get the best of the best. Some companies can attract old experienced employees using high wages but low training, and other companies can get the best skilled younger workers by offering great training. A good CEO could identify the situation and determine the best course of action.
The amount CEOs should be willing to pay should depend on what kind of improvement in skill levels they'd be getting for a certain amount of increase in wages. If there isn't many high skilled employees, or there are too many companies competing aggressively for the best employees, it should be a good strategy to avoid that race and get a much better value by seeking more average employees at a comparatively large discount, or attracting good employees with training (employees who know there is great earning potential if they can reach that high level).
Your thoughts?
Imagine if you could adjust the wages in your businesses, and the competitiveness of the salaries you offer affected the retention rate of keeping your skilled employees (and similarly, your ability to draw skilled employees away from from competitors), as in the real world. And why should a new business have to start from scratch and train up employees from nothing when realistically they should be able to attract some great employees by offering good wages?
You could have the skill pool of a city be variable depending on how much training corporations have been doing, and how much the city's economy has been expanding (more jobs and business mean more new untrained employees entering the sector). The skills should be sector specific, meaning the skills the retail worker pool is separate from the manufacturing pool, etc. And ideally, employees would be tracked separately (age and skill for each worker), though average skill could be used within each business unit to determine its level. Also ideally, wages could be set for each business building, because a company-wide wage setting seems like too broad of a brush to paint with for it to be interesting.
There should be a slow decline in skill over time to represent the constant flow of retiring skilled workers being replaced by young newcomers. There could also be a slow natural increase in skill over time too, from work experience. These 2 factors together would mean that the competitiveness of wages would affect the skill of the employees your company has even with no training going on in the city, as experienced employees keep migrating to the better paying companies, while lower paying company keep losing the experienced people and are always taking on new young employees.
Of course, this must be balanced so that one cannot just offer the best wages and ignore training and have that be a clearly optimal strategy at all times. I think it's best to find the best balance by looking at reality in order to add intuitive complexity to the game. There should be several factors at play:
A: Employees want as much money as they can get, but employers want the best employees, so they must be the best to get the best job. So both supply of skilled labor and competitiveness of companies to obtain the best should be factors to consider.
B: Offering training should be seen as something attractive to employees, as it will help their career progress and let them move to the highest paying jobs. So actively training helps draw and retain better employees, at least until they can achieve a significant pay raise by making a move to a new employer.
C: Possibly, employees could lose some skill by changing jobs, as they will likely be doing something a bit different or following a different process at the new job, so this could act to make employees change jobs only if their current skill is considerable higher than the skill of employees currently at a higher paying business. This can be done to reduce fluidity of employees changing jobs too easily. Or instead of losing skill, the wage difference between jobs could simply affect the likelihood of an employee making a job change, so employees are unlikely to bother making a change for a small difference in pay. They'd instead wait until they are qualified for a much better job.
D: Possibly, setting a lower wage only affects wages for new employees, but cannot change existing employees wages. But a higher wage affects all employees. This prevents temporary wage increases just to attract skilled employees, followed by an unrealistic breaking of those contracts.
E: Perhaps the attractiveness to employees of companies offering job training (as explained in "B") could be variable based in some way on what kind of future wage the employees could achieve from that training if their skill improved. The game could just calculate what the average wage is for each level of employee skill, and then employees could guess what would earn them the most money through their whole career, considering their age and how long it'd take to level up their training. They could take job X, with higher wage but less training, or staying longer at job Y with lower wage, but more training, and thus greater future earning potential. So depending on the employee's age, and how much training he'd get at a job and how quickly he'd advance in skill, he could decide whether to stay or change jobs. Based on the calculations, older employees closer to retirement would care little about training, but younger employees would find training more attractive.
F: Employees could slightly favor staying within the same company sort of like a loyalty mechanic, moving to a higher paying building within the company sort of like simulating a promotion.
G: The wage adjustments could possibly affect the real wage in the city. High competition for employees using high wages increases real wages. Or oversupply of high skilled labor may make businesses lower their wages because they can get the desired skills without paying much. This could allow some interesting grand strategies, like Henry Ford's idea of paying the employees enough to buy what the make (pay high wages and increase sales and sale-prices), or focus on training and keep wages low to keep prices down for more favorable exporting profits.
H: I think if factories (and retail) only gain capacity/throughput bonuses from training levels, it makes determining the ideal training level pretty straightforward. That is, it should be at the level that allows them to reach nearly full capacity and utilization, but no more because that is a waste. But if there could be some other factors at play, such as a bit of change in quality of the product (perhaps partially dependent on what the product is), the decisions can be more complex. You'd have to consider the quality concern against the cost concern, and also how much you'd have to pay in wages and training for different levels of quality. You'd try to have the best employees for the most quality dependent products, employees that may have be promoted up from your less quality-dependent factories.
I: Also, if farming is the only type of business that gains quality from better training, I think farming would have disproportionately higher wages and training than the others because of the huge dual bonuses of quality + quality gains in the farm. Or perhaps farms should not get quantity gains from training, but only gain quality.
J: There's the possibility of factoring in the desirability and availability of housing near the workplace as a factor for how much the employees value the job. This could make real estate considerations into an important point for factories, etc. as it is in real life.
To be a fun addition to game, these factors should create different scenarios for CEOs to consider, rather than just being formulaic. For example, I think the changes proposed here would create different tiers of competitiveness among companies for different tiers of employees. At the bottom is low wage, no training companies that compete (using wages) to retain their experienced employees or gain them from others. At the top is high wage, high training to get the best of the best. Some companies can attract old experienced employees using high wages but low training, and other companies can get the best skilled younger workers by offering great training. A good CEO could identify the situation and determine the best course of action.
The amount CEOs should be willing to pay should depend on what kind of improvement in skill levels they'd be getting for a certain amount of increase in wages. If there isn't many high skilled employees, or there are too many companies competing aggressively for the best employees, it should be a good strategy to avoid that race and get a much better value by seeking more average employees at a comparatively large discount, or attracting good employees with training (employees who know there is great earning potential if they can reach that high level).
Your thoughts?