Four kinds of relationships, and why pay design goes wrong

Series「People Don't Follow the Org Chart」 · Part 9 of 13 · Part 3 · Why people put in effort
Prologue：The people who aren't on the org chart

A company introduces a "mutual-aid bonus" for people who stay late to help colleagues, hoping to encourage collaboration. Three months later nobody helps for free anymore; everyone is calculating what this favor is worth. The company concludes its employees have become mercenary. What actually happened is that the company swapped one kind of relationship for another.

Four relationships, four rulebooks

In 1991 the anthropologist Alan Fiske proposed that all human social relationships fall into four elementary models, each with its own rules and none convertible into another.

Communal sharing: give according to need, keep no accounts. Families, tight small teams. The rule is "we are one." Authority ranking: distribute by position; those above get more and carry more. Armies, grade systems. The rule is "who is above whom." Equality matching: tit for tat, settled one for one. Taking turns paying, the favor ledger. The rule is "even." Market pricing: convert by ratio; everything has a price. Wages, trade, bonuses. The rule is "what is it worth."

Fiske's key observation: applying one relationship's rules inside another is experienced as an offense. Paying your mother for dinner after a family meal is offensive because it converts communal into market. Asking a subordinate to take turns buying is offensive because it converts ranking into equality. The theory has been replicated across cultures; the dispute is mostly about boundaries, whether four models exhaust the cases or hybrids exist. The distinction among the four itself is rarely questioned.

All four in one company

An organization isn't one relationship. It's four stacked on top of each other, each governing different things.

Inside a team, daily life is communal: whoever is free helps, nobody keeps score. The grade system is ranking: people above earn higher base pay and carry more responsibility. Favors are equality matching: the kari and kashi of the favor ledger. Bonuses and salary negotiations at hiring are market: what is this person worth, what is this result worth.

Coexistence isn't the problem. Crossed wires are. The mutual-aid bonus converted the team's communal relationship into market pricing, and once converted it doesn't convert back. The reverse mistake is also common: setting pay by communal logic, "everyone the same, no special treatment," and losing the people with high market value, because they know what they're worth elsewhere.

The design decision: three tracks, three relationships

I design pay on three tracks: the person's grade sets base pay, the role sets responsibility pay, results set the bonus. Through Fiske's lens, the reason the three must be kept apart is that they map onto three different relationships.

Grade sets base pay: this is authority ranking, distributed by position, stable, not swinging with short-term results, telling people where they stand in the organization. Role sets responsibility pay: this is the border between market pricing and ranking, what one responsibility module is worth in the market, paid to whoever carries it. Results set the bonus: pure market pricing, output converted by ratio.

And the communal relationship inside the team is touched by none of the three. No mutual-aid bonus, no score for "team spirit," no converting help for a colleague into money. Communal sharing works by not keeping accounts; the moment you keep one, it's gone.

This matters especially in Japan. Communal relationships in Japanese organizations are usually stronger than in the West (the cohesion of the place), so touching them with market logic produces a bigger backlash. At the same time, ranking is often too strong: grades set by seniority rather than responsibility. That's another crossed wire, ranking rules applied where market pricing belongs.

Back to the method

In the patterns layer of my organizational diagnosis I check which relationship's rules each of a company's systems is using, then look for crossed wires. Most pay problems become visible at this step. The person in A 50% raise and he still left left because the company was using market pricing to solve a ranking problem.

Your company's most recent pay reform: which of the four relationships did it touch?

In this series
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The responsibility track is most useful when someone is rehired at 60 and the role has to be rebuilt. I went through that case in rehired at 60 in Japan.