Hello Reader,

This is the fifth email in a six-part series exploring wage imbalance, payroll decisions, and the value of work. I know this is a bit of a departure from what I usually write, but it connects directly to time, attention, and the idea many of you know well from my work: productiveness. If something here resonates—or misses the mark—hit reply and tell me. Your feedback is shaping this series as I go.

We’ve talked about how productivity often defaults to what’s easiest to measure (quantity), while productiveness insists we balance quantity with quality—without forsaking either. Today is about how that balance shows up in the real world, especially in payroll.

In practice, productiveness means designing mechanisms that protect the base (frontline wages, headcount stability) and align the top (executive incentives) with outcomes customers actually feel. It’s less about slogans, more about systems.

The Four Pillars of “Productiveness in Payroll”

If you want productiveness to live inside your compensation strategy, build it on these:

1. Guardrails (not guesswork): Set clear, automatic triggers so tough choices don’t rely on heroic judgment calls. Example: if margin dips below a threshold for two quarters, executive cash bonuses above $X are automatically reduced by Y% and redirected to a frontline stability pool.
2. Shared scoreboards: Tie a portion of company-wide bonuses to customer-facing KPIs—the things people actually experience: CSAT/NPS, safety/quality, and on-time/service reliability. When those move, everyone feels it in their paycheck.
3. Promotion pathways: Treat internal mobility as a cost-saving, culture-building strategy, not a perk. Publish internal-to-external hire ratios, run 8–12 week micro-upskilling tracks, and measure time-to-competency, not just seats filled.
4. Wage floor indexing: Link the lowest rungs to a living-wage benchmark or CPI so the bottom never quietly erodes while the top compounds.

“Okay, but does this work?”

Here are three snapshots based on companies we’ve already brought up in this email series:

1. Costco (Payroll as investment): Costco’s long-standing approach—above-industry pay and promotion from within—turns payroll into a moat. Lower turnover, deep institutional knowledge, and customer trust are the returns. It’s productiveness at scale: quantity (throughput) without sacrificing quality (service, culture).
2. Ben & Jerry’s (Ratio restraint): For years, Ben & Jerry’s capped top pay relative to the lowest-paid employee. The exact ratio evolved over time, but the principle mattered: a visible boundary that kept compensation aligned with values and culture. Guardrails signal priorities—and prevent drift.
3. Japan (Cultural ballast): In many Japanese firms, CEO pay is far closer to frontline wages than in North America. Whether the ratio is 10–20x versus 300–400x, the point is cultural: long-termism, community, and purpose anchor compensation. Think ikigai applied to corporate design: what we make and how we make it both matter.

Different industries, different eras, same throughline: balance is not charity; it’s durable strategy.

Concrete mechanics you can copy

Steal these and adapt them to your context:

• If-this-then-that clawback: If EBITDA margin < X% for two consecutive quarters, reduce executive cash bonuses above $Z by N% and transfer funds to a “frontline stability pool.”
  No debate. It just happens.
• Company-wide bonus pool (simple and fair): Create a 1–3% of payroll pool funded by executive variable comp + profit. Payout pro-rata when 2 of 3 shared KPIs are hit: (1) CSAT/NPS, (2) safety/quality, (3) on-time/efficiency. Everyone sees the same scoreboard.
• Anti-gaming guardrails: Pair speed KPIs with safety/quality KPIs so no one wins by cutting corners, prevent “ratio laundering” (e.g., outsourcing lowest-paid roles to make the ratio look better), and audit titles/comp annually to block relabeling that dodges triggers.
• Internal mobility pipeline: Publish internal posting stats, Run recurring Gemba-style leadership hours (leaders on the floor with teams), and reward line-level improvements (suggestions that reduce waste or defects) with micro-bonuses.

What changes when you adopt productiveness?

• Retention becomes a leading indicator, not an afterthought.
• Customers feel the difference (fewer missed handoffs, calmer service, faster recovery).
• Leaders start optimizing for the whole, not just their slice (because their pay rides on shared outcomes).
• Attention returns to the work—less firefighting, fewer context switches, more compounding craft.

Short-term, it can feel slow. Long-term, it feels inevitable. Because quality compounds—and compounding is a time superpower.

Addressing the predictable pushback

• “We’ll lose top talent.” You may lose folks who win only under old incentives. You’ll gain leaders who want to build. Also: AI has commoditized parts of high-paid analytical work. Scarcity isn’t what it used to be.
• “Shareholders won’t like it.” Many will, if you show the math: lower churn, steadier revenue, fewer incidents, higher LTV. Put the 12-month before/after on one slide.
• “Too complex.” Not if rules are automatic and public. Complexity comes from exceptions and backroom deals. Simpler triggers = stronger trust.

Looking ahead

Next time, we’ll pull it all together: how to turn these practices into a broader movement—inside companies and across industries—so balance isn’t an exception; it’s the norm.

For now, a question: If one leadership bonus lever had to move with the exact metrics your customers feel, which lever would you choose—and why?

I genuinely want to hear your take. Hit reply and tell me what would change first where you work.

– Mike

P.S. I recognize that this email features several acronyms and bits of jargon—that’s by design. Part of this series is to spark curiosity and reflection, not just provide neat answers. If you come across a term that isn’t clear, you’ve got two options: reply to this email and ask me directly, or take a moment to look it up. Both are ways of investing a little attention—and that attention is where learning begins.

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