The futile attempt to put a price on work

June 9, 2025
by Noriyuki Morimoto

There are jobs for which the price of the work is objectively fixed. A typical example is contracting for simple tasks, but there are also many cases in the field of professional service, which is intellectual in nature. For such types of work, it is understood that the task at hand is clear and, therefore, the outcome can be objectively measured, so the price of the work can be determined as compensation for the outcome.

In the case of work done at a company, having clear tasks does not necessarily mean that the outcome of the work is clear. Therefore, the measurement of job performance has become a critical issue in corporate human resource policies. In fact, what was once known as performance-based evaluation was an attempt to price and reward work based on its outcome, based on the assumption that such outcomes are measurable.

However, even when outcomes are measurable in the context of corporate performance, the causal relationship between the outcome and work is not clear; therefore, the price of work cannot be directly calculated. Even in a standardized task with a fixed price, what is fixed is the relationship between the task and the price, and even if the tasks are carried out as designated, it does not necessarily mean that the outcome matches up to the price.

Hence, HR’s task of putting a price to work is narrowed down to clarifying the cause-and-effect relationship between outcomes and work. And there has been an innovative shift in how to approach this issue. That is, the notion that work leads to outcomes has been turned around so that work is defined as whatever led to said outcomes.

Unfortunately, this did not solve the problem. Since numerous jobs done by numerous individuals form a complex chain of work over a variety of long and short timeframes that lead to outcomes, even if theoretically possible, in practice it is obviously impossible to precisely analyze this chain and define the work that led to the outcomes.

It can be concluded that both the efforts of defining work and putting a price on it have been abandoned. What is now emphasized in corporate HR is dialogue with the workers. Essentially, the basis of fair compensation is considered to be the agreement between the worker and the company, so it is acceptable as long as the worker is satisfied with the company’s logic of explanation.

 

[Category /Human Capital Investment]