But what
does specialization do to worker pay? That’s the topic of research by Nathan Wilmers, a professor at MIT Sloan School of Management, published in Administrative Science Quarterly. The question is very
interesting because it is commonly assumed that wages are determined in some
labor market that rewards workers first by observable skills, such as training
and education, and later through performance on the job. The problem with this
conception is that it assumes that observable skills map cleanly onto
organizational tasks. This assumption is never quite correct, and it gets worse
in organizations with highly designed jobs.
Instead,
consider jobs organized by the degree of task specialization, and consider
wages not as set in a market but as an implicit negotiation between worker and
employer. A highly specialized job usually means that there are many potential occupants
and that the post-hire training to do the task is easy. Probably the specialist
isn’t pre-trained before hiring, but that does not matter because the training
is inexpensive. That means lower wages, because a worker occupying a
specialized job is expendable. In organizations, narrow job turf means low pay.
A general
job that covers the gap between specialized jobs is exactly the opposite.
First, efficient job design requires having many specialists and few
generalists covering the gaps, so the generalist is necessarily rare. Second, the
generalist work is complex and specific to the job design of the employer.
Again, the generalist isn’t pre-trained, and it takes a while for a newly hired
generalist to be efficient. In the implicit wage negotiation, the generalist
has a strong position. In organizations, broad turf means high pay.
Wilmers
found sizable effects when analyzing the data. Workers who equally split time
between tasks would lose 11 percent of their pay if they were split into groups
that specialized in one task. A worker who moved from having the average level
of generalization to the 95th percentile of generalization would gain more than
8 percent pay. These differences in pay levels mean that increases in job turf
are well worth fighting for.
Two
additional notes are worth considering. The estimates I cited above are among
the more conservative estimates of how big the differences were in those
organizations. Moreover, the data analyzed come from a single type of organization,
which means that the effects could be bigger or smaller depending on the
employer analyzed. In fact, chances are that in most firms, the advantages to
having a job with broader turf are greater than in this analysis. You see,
Wilmers analyzed labor union employees, and unions are known to favor pay
equality.
So
organizations that pursue efficiency seek specialization, and workers who want
high pay seek a broad turf. Clearly this is an area of work design that
involves negotiation, because smart workers will not willingly accept a more
specialized job. They will fight for their turf.
