For anyone who follows baseball, VORP has become an important statistic used to describe a player’s value. It stands for Value Over Replacement Player, and quantifies how much better a specified player performs relative to the average replacement player available on the market. In baseball, the only statistics that really count are runs generated and outs produced, so that’s basically how VORP is calculated.
I was talking with friends last night about how the collection of data and resulting statistics may or may not have changed professional sports today. Most would argue that significant changes have resulted, especially in how teams value their players, how contracts are structured, how new talent is scouted, and how fans are engaged.
The question, then, is how do the companies we work for determine our value?
VORP makes sense for baseball players (or basketball, etc) because it’s easy to count runs and outs and compare a player against another. All baseball players score runes and get outs, from 4th graders playing tee-ball to Triple-A minor leaguers. But would that work for marketing managers? Would it work for Java team leads? Not as cleanly.
Much of what we do at work is difficult to turn into performance metrics. And even if we could gain consensus that one person facilitates meetings better than a replacement resource, how could we determine what that’s worth?
Instead of trying to establish performance metrics for some of the more intangible job skills, I’m thinking more broadly. There are two questions I’m going to ask myself on a regular basis:
- How much would it cost my company to replace me?
- Could my company pay the same price for replacement person who performs at a higher level?
In my experience, we rarely consider these questions when we self-determine our value. We look at others who earn more and think, “Hey — I could do that!” Or we expect consistent salary/compensation growth year after year, even when we aren’t changing roles or necessarily adding skills.
But having 20 years of experience doesn’t mean you’re worth as much as all the other 20 year employees. Especially not if someone with 10 years of experience could do the same job for less compensation. It’s easy to look at your peers and expect to be paid the same, but they may be overpaid, too. Of course, they may be underpaid. Yet another reason to not tie your hopes to the compensation of your peers.
So the question remains, could your company replace you for cheaper and get the same performance? Or could they get better performance at the same rate?
As we edge out of The Great Recession, I suspect we’ll find people and corporations treating employment with more of contract model. That is, an employee provides talents X, Y and Z, and those skills are worth $50,000 to a company. So long as the employee is happy giving those skills to the company for that rate, the contract will continue. But if the employee builds additional skills and wants more compensation, they’ll have to find a new contract. That could mean a new role (promotion or lateral move) within the same company, or a different position with a different company who is willing to pay more for skills X, Y, Z and ZZ.
A lot of people are unhappy with their comp right now. But while unemployment remains high and revenue is still sagging across many industries, that’s not likely to change. It’s easier than ever to replace someone. And while I don’t advocate that approach for any companies who care about employee satisfaction or marketplace reputation, it’s still important for all of us to remember that (and act like) our value to the company is only as high as the cost to replace us. We should all strive to make ourselves many times more valuable than the next best option. That’s real job security.