ICS co-hosts Jake Rosenfeld

On April 24, 2024, ICS students had the opportunity to talk to renowned sociologist Jake Rosenfeld, a Professor at Washington University in St. Louis. He is the author of two books, You're Paid What You’re Worth and Other Myths of the Modern Economy (2021) and What Unions No Longer Do (2014). His primary research revolves around the determinants of wages and salaries.  During his talk he discussed the widespread lack of understanding about how pay is determined and the inherent challenges of implementing a pay-for-performance system.

Rosenfeld highlighted that while many workers believe they should be paid based on their individual contributions, for firms the reality is far more nuanced. Isolating individual contributions in most occupations proves to be extremely difficult – calling into question the usefulness and fairness of pay-for-performance systems. Rosenfeld argues that factors like power dynamics, mimicry of industry standards, inertia in traditional pay structures, and equity considerations all play significant roles in determining compensation. These factors – which are largely invisible to workers – make it difficult for employees to understand and navigate the realm of compensation. For organizations, concepts like justice and fairness in compensation become more intricate and more important to be addressed. [A more detailed discussion can be found in his article for the Harvard Business Review.] 

Rosenfeld suggested that employers should focus on clearly communicating to their employees how pay decisions are made and how rewards are distributed.  This is a call to action for HR professionals to not only be experts in designing and implement systems, but also to be experts in communicating with employees.