THESE days, even envy is interactive. At a site set up by American trade unionists, disgruntled employees can tap in their own pay and benefits (they are asked a little sarcastically whether they receive free country-club membership, a luxury company-car or the use of a penthouse suite), and then find out how many times more their company's chief executive is paid. The site's most recent figures show the average boss taking home $7.8m, 326 times the average factory worker. In the 1960s that ratio was 44:1.

This phenomenon does not stop with chief executives. On Wall Street, the average salary in 1997 was $182,000. Even in more humdrum industries, boosted by a rising stockmarket, managers have seen pay increases of 10-20% a year. Managers of large companies now own around one in ten of their firms' shares, either directly or through share options and other incentive schemes.

Why is this happening? Maybe it is about politics: a shift in the balance of power between managers and workers. But maybe it is also to do with drudgery: the increasing demands of managers' jobs, and the decreasing satisfaction they get from them. Certainly, managers feel sorry for themselves (see chart 1), and they are not the only ones. Consultants talk about companies producing burnt-out “human cinders” and the rich-but-unhappy syndrome known as “affluenza”. Why? Four main reasons:

• With most companies having thinned the layers of corporate bureaucracy, most managers work longer hours. According to Laura Lofaro, a Wall Street headhunter at Sterling Resources, an investment bank will these days ask three managers to do the work that five would have done in the past, and pay them more. This behaviour is encouraged by analysts who increasingly judge firms according to their revenues per employee. At the same time, thanks to globalisation, many managers spend an inordinate amount of time travelling, clocking up more hours in jumbo jets.

Plenty of studies have shown that most would willingly give up some pay for shorter hours. Indeed, the ability to set your own hours is one reason why many managers gaze enviously at peers who leave big companies to become independent consultants. Asked why he plans to quit his job after next year's bonus, one Wall Streeter, en route from Miami to Vienna, replies “to see my family”. In Detroit, the Big Three firms have been embarrassed by the haste with which older white-collar staff have scrambled to take up early-retirement packages.

• Managers have been forced to give away power to semi-autonomous teams. Firms have also outsourced operations that managers used to regard as part of their fiefs. Status-enhancing perks, such as executive dining rooms, have long since disappeared; now some companies expect their managers to be out on the road so often that they are forced to “hotdesk” and share offices.

• Thanks to flatter management structures, the old reliable ladder of career advancement has gone. Careers tend to proceed in great jumps. Those who are left out feel they are going nowhere. Some of those who are rapidly promoted flourish; others arrive at their new positions unprepared—and, because of the flatter structures, there are far fewer consiglieri-types to help.

• Above all, there is the danger of losing your job. Last year American firms sacked 677,795 people, the highest figure this decade (see chart 2). Many of the extra profits of the 1990s have come from thinning managerial ranks. A survey by Challenger, Gray & Christmas, an employment consultancy, last year showed that 41% of discharged managers had worked for four or more firms. Even at the top, job security is not what it used to be—as various senior people at Bank of America, AT&T, Disney, Goldman Sachs and Apple can attest.

The biggest ten mergers in American history all took place in the past year. Most have yet to announce their rationalisation plans. Head offices are usually the place where the duplication is greatest.

The Dilbert generation

The change from the moderately paid, reasonably secure “Organisation Man” to the highly paid, insecure types that inhabit Scott Adams's Dilbert cartoons has made America more efficient than it used to be, and more efficient than Europe. Yet it is now becoming clearer that this can also hurt companies.

The main loss may be to corporate loyalty. Rather than “belonging” to companies, managers increasingly see themselves as mercenaries. Charles O'Reilly, at Stanford Business School, points out that this cast of mind may suit some employers at deal-oriented investment banks, for instance, or young Internet companies intent on selling out. But most companies, even in Silicon Valley, would like to build longer-term competitive advantages. That means emphasising things such as loyalty, trust and shared values.

Firms that have become what Jeffrey Pfeffer of Stanford Business School calls “toxic workplaces” often have to pay even more. It took a lot of money to persuade managers to work for Scott Paper when it was run by Al “Chainsaw” Dunlap. The big Hollywood studios, where executive suites often look like the set of “Die Hard”, are having to pay vast sums to lure managers. According to a new book about Mars*, the secretive chocolate firm pays more than its rivals; but it also pushes its people harder and has a tendency to what one employee dubs “seagull management”—where top-most managers swoop down, make an unpleasant deposit and fly away.

This sort of “soft” stuff has been preached before: Peter Drucker was talking about knowledge workers in the 1940s. But as Jock Encombe, an expert on organisational behaviour at Monitor, a consultancy, points out, there are more and more reasons to take it seriously. “Intangible assets” (often guru-speak for people) typically now make up at least half of most American firms' market value. If a manager leaves, the total cost of hiring a replacement (the head-hunter fees, the premium required to entice him and the time it takes him to settle into his job) is usually several times the outgoing person's salary.

This week Citigroup, the world's biggest financial-services company, introduced a new compensation package in an attempt to head off mass departures. But pay, argues Mr Pfeffer, is the most fungible of all the resources at an employer's disposal; if it is an employer's sole source of loyalty, then he always runs the risk of being outbid.

Anyway, pay does not top the list of managers' priorities. John Stanek of International Survey Research, a Chicago-based firm, reports that the two things that senior managers cite most often when discussing loyalty are corporate pride (“I'm with ABC Corp”) and trust in their chief executive's ability to take decisions. “How you are treated”—a category which is as much about respect as it is about pay—comes third. A forthcoming book†, based on interviews by Gallup with some 100,000 managers, reaches broadly the same conclusion. As long as pay is not seen to be insultingly out of line, other things matter much more in keeping good managers.

Some companies are acting on such findings. Mr Pfeffer points to firms such as Applied Energy Services, an independent power provider that has kept 17 out of the 20 people who helped start it in 1985, and SAS Institute, a software firm whose turnover of staff is only 3% a year (30% is the Silicon Valley norm). Both pay modestly, but they have taken trouble to ensure that people have a life as well as a job. Firms that appear to care may reap other benefits too. Hewlett-Packard's managers recently took a temporary cut to avoid job losses.

Naturally, the best answer is to pay people well and look after them—if you can afford to. Cisco Systems, for example, has made hundreds of managers rich through share options, but also managed to hang on to them. The Internet-equipment firm checks that the people it hires and the firms it buys will fit; it loses only around 6% of the technologists it gains in acquisitions.

What happens to managers if share prices fall? Experts disagree. Some think firms will have to find new ways of keeping talent; others point out that life always get harder for managers when the market turns down. Dilbert, for one, expects little. Mr Adams's latest book is optimistically entitled “The Joy of Work”—and subtitled “Dilbert's Guide to Finding Happiness at the Expense of Your Co-Workers.”

* “The Emperors of Chocolate”, by Joel Glenn Brenner. Random House, 1999.

†“First Break all the Rules”, by Marcus Buckingham and Curt Coffman. Simon & Schuster, forthcoming.