I was watching a sports program that discussed athlete salaries. It seems that there are two schools of thought regarding the relationship between salaries and team performance. For instance, the New York Yankees have one of the most expensive rosters in their league and their performance makes a case that the bigger the budget the higher the chances for success. On the other hand, there are other teams in professional sports who don’t have the same outcome given the expense of athlete salaries.
I was wondering what we might find if we compared project team member salaries to success and whether we can draw any conclusions by examining this issue. There is an implicit assumption in business that more experienced professionals earn higher salaries than individuals with less experience. This assumption is related to another assumption that more experienced professionals have a higher chance of success. These statements can obviously be argued and I don’t have access to data as far as manager attitudes related to these assumptions.
If I try to conduct some qualitative analysis of various projects I’ve been involved in, primarily as project manager I think that the salary issue plays a role in determining team capability. For example a project team that has team members who earn significantly below average salaries is likely to include individuals who are not motivated and in some instances incompetent. However, in my experience a team that is composed of individuals who make significantly above average salaries does not have a significantly higher chance of success.
There is another factor that impact success when it comes to salaries and that has to do with the super star status. Much like sports, a team that is composed entirely of superstars can face significant problems due to the ego issue. I recall one instance where we had a 15 person team of what can only be described as superstars within the organization. Each of these team members were compensated extremely well however the unfortunate result was a failed project. The team members simply were not willing to work together and their egos got in the way.
In the end the issue of salaries in my opinion is only one factor that can help predict future performance but without other data points it can not be used alone to make the case that management should run out and hire the most expensive resources.