Why the Best People Leave: Breaking the Rules That Keep Corporates Stuck
- Katie Tamblin
- Sep 17, 2025
- 8 min read
In every organisation for which I’ve worked, one rule has held firm: the manager earns more than the people they manage. The bigger your team, the more you earn. The ultimate manager, the CEO, earns the most. In FTSE 100 firms, that means earning 122 times more than the average UK full-time worker, according to a High Pay Centre Report1 released in August 2025.
In the U.S., the average CEO-to-worker pay ratio was 285-to-12 for S&P 500 Index companies in 2024. I do not believe that there are many CEOs out there that are 285 times more productive, or 285 times more valuable, than their colleagues, frankly. But this pay structure reinforces a hierarchy where every promotion becomes a step toward a better life — and the only path to more money is to climb the management ladder.
Rules That Need Breaking
It’s time to shatter the myths that hold big organisations back:
• Rule #1: Managers should always earn more than their team.
• Rule #2: Performance raises should be modest, even, and incremental.
• Rule #3: Good workers make good managers.
These rules are not just outdated — they’re dangerous. They’re driving away top talent, fuelling burnout, and weakening the long-term performance of organisations built for predictability and scale. A number of progressive and top-performing companies that rely on technical experts are already breaking these rules. The rest of us should consider following suit.
Want to change? Stop thinking in hierarchies. Start thinking in systems.
The Promotion Trap
Workers chasing salaries that increase commensurately with life changes (kids, mortgages, ageing parents, pensions) typically seek management positions. However, there is only one manager for each team. Experts say that no manager should have more than five direct reports. So only 20% of the workforce can credibly achieve this sort of upward mobility.
Let’s take a step back and have a look at that: in your average chunky corporate, 80% of the workforce will not have a path to upward mobility. 80%, therefore, will see limited pay increases throughout their careers. So what happens to the 80%? They stagnate—unless they leave. Which is exactly what the strongest performers in the 80% do.
In and of itself, this system creates perverse incentives. Any worker who wants to earn more will logically be looking to move into management. However, highly productive workers do not equal good managers. It is a rare quality to be able to perform a skilled individual contributor role well and also have the time, inclination, and dedication to effectively manage others.
Promoting the Wrong People
We’ve all seen it. The brilliant analyst who gets promoted and suddenly has to deal with performance reviews, team dynamics, and budgets, with no training or no interest. Maybe they just want the status. Maybe they just want the pay rise. Maybe they want to be good managers but don’t know how. Over and over, we reward technical brilliance with a management role — a completely different job — because that’s the only way to give someone a large pay raise.
As a manager at multiple chunky corporates in my career, I experienced the frustration of managing high performing workers that I could not compensate commensurate with the value they added to the business. Repeatedly, I put forward requests to senior leadership to provide substantial pay raises to junior workers who were outperforming their peers. Repeatedly, these were refused as being overly generous. They were deemed out-of-line with the pay range associated with the role.
A 10-15% pay increase is not considered normal, regardless of what the absolute value of a 10% increase represents. I was baffled when I managed a top performer who had joined our organisation a year previously, right out of university, on a salary of £40,000. I wanted to give her a £5,000 raise to ensure she wasn’t tempted to leave for a better paying job. I was refused the request by my senior leadership team but simultaneously given approval to give a £10,000 raise to a person earning £125,000. Why couldn’t I break the rules and give £5,000 to my lowest earner? Anything over a 10% increase was not possible. The absolute value of the raise was irrelevant.
Guess who left the company for a better salary less than six months later.
One really simple way to unlock efficiency in a business seeking predictable performance is to reduce workforce churn. New hires are risky. Risk is margin diluting. Therefore, it follows logically that compensating workers for predictable performance is more efficient than hiring new workers on a rolling basis.
The longer a colleague has been with the business, the more predictable his or her performance is, and compensation should rise accordingly. Not compensating stable contributors aligned to value delivers a false economy.
Penny-pinching on salaries costs organisations dearly in lost expertise and rising churn. For every dollar you save in compensation, you give up a multiple of it through the inefficiency of onboarding unproven replacements. Predictable financial performance is a chunky corporate’s greatest strength. Incentivising workforce churn undermines the very thing that makes a chunky corporate an attractive investment.
A Better Way: Pay for Performance, Not Position
Under the constraints of chunky corporate compensation practices, I watched as high performers left my teams, seeking compensation elsewhere that better reflected their market value. In the wake of their departures, the incidence of old mistakes rose. New people come in without the institutional knowledge of those who left, so they make the same mistakes their former colleagues made. The organisation slows down while new starters re-learn what those who left already knew. Even for the best manager in the world, some incidence of old mistakes is impossible to avoid when churn is high.
Some companies are starting to offer career progression for technical experts who don’t want to manage — with titles like Senior Associate or Principal Engineer — but most frameworks are too narrow. The solution? Build out more levels. Pay more for higher expertise and proven performance, even if that person doesn’t manage a single soul. Yes, that might mean an engineer makes more than their manager. That’s not a problem. That’s how value works.
A chunky corporate can easily expand on existing frameworks by introducing more levels and providing a wider range of pay growth across them. So, instead of having a junior software developer and a senior software developer, expand this framework to have five-to-seven levels of development expertise, with compensation rising commensurately with expertise and performance.
This is a small, imminently achievable change that any chunky corporate can make with relatively minor investment. It might be slightly more revolutionary to reevaluate the cardinal rule that team members always earn less than their managers. In doing so, we must accept that a Principal earning £125,000 a year might be managed by a Team Manager earning £75,000 a year, and that’s ok.
If we really want to reduce churn amongst chunky corporate teams, we will also stop promoting the best analytical and technical thinkers to managerial roles. The skills that make you a really good analytical thinker rarely overlap with the skills that make you a good manager. Highly analytical thinkers are very rarely proactive communicators. Most of them, like me, would rather sit at a computer screen all day than speak to colleagues. That does not make a good manager. Not at all. And yet we keep promoting these types of colleagues to managerial roles. We are destined to keep promoting them until they fail. Why? Because the highest paid workers are the managers3 in traditional hierarchical organisations.
The Leverage Game
Here’s the truth: in most corporates, the only time workers get paid what they’re worth is when they get a competing offer. I saw this myself. After four promotions in six years, I was up about 15% over my starting salary. Not bad, until a head-hunter offered me 50% more to jump ship. Suddenly, my current employer found the budget to match it. Overnight. It felt weird. I felt like I had done something underhanded: seeking another offer and then staying in my current role.
What did that teach me? Staying loyal doesn’t get you paid. Leverage does. Most of us aren’t Michael Jordan. But the principle still holds. When Jordan signed with Nike, his mother negotiated a deal that gave him a cut of the profits, not just a fee. That deal has netted him over $1.3 billion. It’s not all about how hard you work. It’s about whether you have the leverage to capture the value you create.
And other workers have figured this out, too. Median job tenure is falling. Young workers switch jobs every 1–2 years. Why? Because that’s the only way to get paid more. The theory that relative wages naturally align with productivity has been thoroughly debunked. From 1980 to 2010 in the UK, real wages fell 25% while GDP and productivity surged. In the U.S., the pattern is the same. Productivity up, wages flat. Workers know this and they are now seeking negotiating leverage over dedication to delivering good work.
A Systems-Based Alternative to Traditional Pay Structures
What would a compensation system look like if it were built on systems thinking rather than outdated hierarchies? Here are four principles that shift the logic from title-based to value-based:
1. Recognise Centrality, Not Just Rank
High-performing organisations are networks, not pyramids. The most valuable workers aren’t always at the top. Salaries should reflect contribution, not position on an org chart. Compensation should consider the centrality of workers in the network system.
Use network analysis or role mapping to identify high-impact positions: those that connect teams, drive outcomes, or prevent failure. These roles may not be managerial, but they’re essential. Reward them accordingly.
2. Create Dual Career Ladders
Introduce parallel tracks for technical or specialist roles that allow for pay progression without requiring a move into people management. Senior contributors should be able to earn more than their managers.
This is already common in engineering (e.g. Principal Engineer, Distinguished Engineer), but it should extend to roles in strategy, design, analytics, and other knowledge functions.
3. Uncap Reward for Uncapped Value
Instead of arbitrary limits on raises or bonuses, build systems that align rewards with measurable outcomes, not subjective performance ratings or tenure.
Why? Because value flows not to the most productive, but to the most powerful. Yes, this requires more thoughtful performance management. But the alternative is a system that breeds frustration and flight.
4. Invest in Manager Capability — Not Just Titles
Being a good manager is a skill, not a reward. Stop using management as the default path for progression, and start selecting and training leaders based on aptitude for managing others, not seniority.
The Takeaway
If you're a corporate leader, stop pretending loyalty and tenure will keep your best people. Start paying them what they’re worth before they walk. Create real progression paths for high performers who don’t want to manage. Ditch the outdated idea that pay must follow hierarchy. If you don’t:
· Your best technical people will leave or be promoted into a job they aren’t good at.
· The rest will stop trying.
· And you’ll be stuck managing a machine that doesn’t work anymore.
Break the rules. Or lose the game.
References
https://highpaycentre.org/ceo-pay-in-the-ftse-100-reaches-record-high-for-the-third-year-in-a-row/
“Occupational Outlook Handbook,” September 8, 2022. https://www.bls.gov/ooh/management/computer-and-information-systems-managers.htm.
Katie Tamblin is the multi award-winning author of The Lean-Agile Dilemma: Product Management Inside a Chunky Corporate, named Best Production Innovation book of 2025 in the Hustle & Heart Book Awards and awarded Silver in the Nonfiction Book Awards. She has previously held Chief Product Officer, Board, and Advisory roles across a number of tech-enabled organisations. Katie has advised a number of investment houses, whose combined assets would total over $220bn. She is currently a data and software consultant who offers training and advisory services to businesses and investors.
