Ask HN: Why salaries are not openly discussed?
19 comments
It’s mostly a benefit for employers. It reduces the penalty for underpaying people. No one is going to up and quit because they get paid more than people on the team who they perceive as equals (or even if they get paid less than people they clearly perceive as more senior), but they’ll certainly bail if they feel relatively underpaid.
The only thing keeping salaries secret can possibly achieve is paying people less than their peers (in the same company or the same industry).
In other counties salaries (or at least relatively narrow bands) are well known and the world hasn’t ended.
One of the things I was most proud of my time at Second Measure (and this is due to the cofounders) is that we had 11 “levels” for engineers and data scientists and everyone at a given level was compensated (pay and equity) exactly the same. If you figured out the level of someone on the team (and we were transparent about the criteria used for leveling) you could pretty much work out their comp by extrapolating from your own.
World didn’t end. People didn’t quit en mas. Some people left because they felt under compensated. They were wrong; they weren’t as good as they thought and I’m fine they decided to leave. (Some people also left because they got insanely good offers elsewhere and I genuinely congratulated them and wished them well).
Talk about your compensation with your coworkers. Then use that information to demand fair compensation.
The only thing keeping salaries secret can possibly achieve is paying people less than their peers (in the same company or the same industry).
In other counties salaries (or at least relatively narrow bands) are well known and the world hasn’t ended.
One of the things I was most proud of my time at Second Measure (and this is due to the cofounders) is that we had 11 “levels” for engineers and data scientists and everyone at a given level was compensated (pay and equity) exactly the same. If you figured out the level of someone on the team (and we were transparent about the criteria used for leveling) you could pretty much work out their comp by extrapolating from your own.
World didn’t end. People didn’t quit en mas. Some people left because they felt under compensated. They were wrong; they weren’t as good as they thought and I’m fine they decided to leave. (Some people also left because they got insanely good offers elsewhere and I genuinely congratulated them and wished them well).
Talk about your compensation with your coworkers. Then use that information to demand fair compensation.
As an employer in a small company (circa 50 employees), salaries are one of the harder things to get right.
Firstly, most everyone rates themselves relative to their peers higher than they rate them. Anecdotally I had 3 staff, "doing the same job" all (individually) complain to me that they were better than the other 2, and thus deserved more.
Of course at this level there's no such thing as "the same job" and a myriad of factors come into play. Some emps are quiet, but effecient - some appear to get more done but ultimately their work needs more oversight and correction.
Some put in hours at home (leading others to think they work longer). Some used to be effective, but have lost motivation etc.
(bear in mind that it's hard to reduce salaries, so some end up being overpaid for a while before remedial action is seen. Most of that action, while ongoing, is also not advertised to other staff.)
Some people offer value to the whole outside of the formal work parameters. They help their peers get unstuck, they are good teachers, they create cohesiveness and model our desired culture and so on. Customer support is a job, and two people can do it, and solve the problem, but customers might perceive it differently based on other softer skills.
All of this to say, when it comes to salaries we do yhd best we can.
We don't advertise because if we did we'd be explicitly inviting people to compare themselves in a success / failure way. Ie a zero sum game. And doing that means most of the staff will perceive failure, even the ones who get more. It creates unnecessary psychological input which has mostly downside to everyone.
Everyone has value. It's unnecessary to start ranking people explicitly based on salary.
Edit: We have no problem with people comparing salaries, and people can an do ask for raises.
Firstly, most everyone rates themselves relative to their peers higher than they rate them. Anecdotally I had 3 staff, "doing the same job" all (individually) complain to me that they were better than the other 2, and thus deserved more.
Of course at this level there's no such thing as "the same job" and a myriad of factors come into play. Some emps are quiet, but effecient - some appear to get more done but ultimately their work needs more oversight and correction.
Some put in hours at home (leading others to think they work longer). Some used to be effective, but have lost motivation etc.
(bear in mind that it's hard to reduce salaries, so some end up being overpaid for a while before remedial action is seen. Most of that action, while ongoing, is also not advertised to other staff.)
Some people offer value to the whole outside of the formal work parameters. They help their peers get unstuck, they are good teachers, they create cohesiveness and model our desired culture and so on. Customer support is a job, and two people can do it, and solve the problem, but customers might perceive it differently based on other softer skills.
All of this to say, when it comes to salaries we do yhd best we can.
We don't advertise because if we did we'd be explicitly inviting people to compare themselves in a success / failure way. Ie a zero sum game. And doing that means most of the staff will perceive failure, even the ones who get more. It creates unnecessary psychological input which has mostly downside to everyone.
Everyone has value. It's unnecessary to start ranking people explicitly based on salary.
Edit: We have no problem with people comparing salaries, and people can an do ask for raises.
Because if you don't share salaries, companies can negotiate 1 on 1 with every employee for salary. If their max budget is say 100k and individual employees negotiate in the range of 100k to 50k for the same job, the company saves a lot of money. If employees discuss salaries, the 50k person will discover they're being paid half as much as a colleague for the same job and will demand a raise.
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Enployers don't want you to talk about it to enable them to negotiate lower wages for as long as possible.
People don't talk about it even when it's not forbidden because they are worried they will find out they make less or more than others, which may cause frustration or friction between colleagues
People don't talk about it even when it's not forbidden because they are worried they will find out they make less or more than others, which may cause frustration or friction between colleagues
My understanding is that this has been one of the primary concerns of InfoSec.
Like IBM even ran tv ads about the dangers of payroll leaks.
Nothing ruins a business faster than everyone finding out that so and so down the hall gets paid more than you do - and to think they slack off even more than you!!! How the heck is that fair???
From there if you cant get a raise you'll probably feel frustrated and taken advantage of- and want to take advantage of things in reverse, trying to do less for the same pay. Enter a race to the bottom between you and coworkers as bosses begin scrambling to decide who to let go.
If you ask me the issue lies in the human inability to hold contradictions to the self and continue to act. The old payroll model requires that workers be grateful to have their labor taken advantage of. So we can move to coops where we are all paid the same, but then the question arises: why do traditional organizations beat cooperatives?
In my experience coops tend to fizzle when everyone gets paid the same but a few key folks "make things happen". These people eventually feel resentment or burnout and leave for something that rewards their initiative. The coopers get left without the do-ers, and "told you so's" don't pay the orgs bills.
If you think you can engineer a way for humans to know what each-other are earning, don't become demotivated, and don't succumb to burnout or resentment amongst those with initiative then you have something innovative.
As for why its all hushed? Same reason other taboos in society exist: theres some sort of deeply psychologically rooted issue in play that has no happy answer, so we plaster over it in an effort to "be polite". When the foundations legitimately shift is when taboos can be reexamined, and when foundations have not actually shifted breaking taboos will rub others the wrong way.
Maybe colorado is up your alley?
From there if you cant get a raise you'll probably feel frustrated and taken advantage of- and want to take advantage of things in reverse, trying to do less for the same pay. Enter a race to the bottom between you and coworkers as bosses begin scrambling to decide who to let go.
If you ask me the issue lies in the human inability to hold contradictions to the self and continue to act. The old payroll model requires that workers be grateful to have their labor taken advantage of. So we can move to coops where we are all paid the same, but then the question arises: why do traditional organizations beat cooperatives?
In my experience coops tend to fizzle when everyone gets paid the same but a few key folks "make things happen". These people eventually feel resentment or burnout and leave for something that rewards their initiative. The coopers get left without the do-ers, and "told you so's" don't pay the orgs bills.
If you think you can engineer a way for humans to know what each-other are earning, don't become demotivated, and don't succumb to burnout or resentment amongst those with initiative then you have something innovative.
As for why its all hushed? Same reason other taboos in society exist: theres some sort of deeply psychologically rooted issue in play that has no happy answer, so we plaster over it in an effort to "be polite". When the foundations legitimately shift is when taboos can be reexamined, and when foundations have not actually shifted breaking taboos will rub others the wrong way.
Maybe colorado is up your alley?
Thanks for excellent elaboration.
I just don’t get the last phrase
> Maybe colorado is up your alley?
Could you explain it to non-american please?
I just don’t get the last phrase
> Maybe colorado is up your alley?
Could you explain it to non-american please?
My experience is that they are semi-openly discussed. At places I have worked, generally you do get a sense of what most people are making.
But at the same time, it's a bit taboo because no good can come of it. Everyone is not the same, and individual circumstances dictate what somebody's salary is. If you think you make more than the norm, why would you share that around and risk pissing people off. And if you make less, what do you have to gain by advertising that widely?
Imo, your salary is between you and your employer. You know, or can estimate and confirm how much you can get on the job market, and your employer knows the same about how much they have to pay to get someone they want. Between people, who literally are never completely the same, it just creates animosity and anger and has no upside.
(I'm talking about professional jobs, for unskilled jobs where people are commodities, ie union jobs, you everyone probably does know each others pay, and nobody wins because people know they make the same no matter what they do)
But at the same time, it's a bit taboo because no good can come of it. Everyone is not the same, and individual circumstances dictate what somebody's salary is. If you think you make more than the norm, why would you share that around and risk pissing people off. And if you make less, what do you have to gain by advertising that widely?
Imo, your salary is between you and your employer. You know, or can estimate and confirm how much you can get on the job market, and your employer knows the same about how much they have to pay to get someone they want. Between people, who literally are never completely the same, it just creates animosity and anger and has no upside.
(I'm talking about professional jobs, for unskilled jobs where people are commodities, ie union jobs, you everyone probably does know each others pay, and nobody wins because people know they make the same no matter what they do)
>no good can come of it [sharing ones salary]
>Everyone is not the same, and individual circumstances dictate what somebody's salary is.
And yet, ones individual circumstance can lead them to doing the same job as a colleague, yet making significantly less money in silence.
'Individual circumstance' did not dictate a salary- the salary did not simply materialize from ones 'individual circumstance'; it came from a necessity to have a job, and eventually a number written on a contract by a person or committee just as susceptible to bias and prejudice, conscious or unconscious, as any single person.
How many more jobs do you think we can outsource to people who do 100x more work for 100x less money before we feel comfortable sharing our salaries?
>Everyone is not the same, and individual circumstances dictate what somebody's salary is.
And yet, ones individual circumstance can lead them to doing the same job as a colleague, yet making significantly less money in silence.
'Individual circumstance' did not dictate a salary- the salary did not simply materialize from ones 'individual circumstance'; it came from a necessity to have a job, and eventually a number written on a contract by a person or committee just as susceptible to bias and prejudice, conscious or unconscious, as any single person.
How many more jobs do you think we can outsource to people who do 100x more work for 100x less money before we feel comfortable sharing our salaries?
> How many more jobs do you think we can outsource to people who do 100x more work for 100x less money before we feel comfortable sharing our salaries?
Good question. Maybe all of them? I feel it is directly interlinked with this- > the salary did not simply materialize from ones 'individual circumstance'; it came from a necessity to have a job
So what if the answer to the first question is: all the jobs can be outsourced to people willing to work for less. Now there are no jobs. Now that no one has jobs no one has their job simply materialize.
They now face necessity to find a job, and the jobs are filled by lower wage workers.
This person now must either lower their valuation or acknowledge that they aren't facing the necessity to work that the people the jobs outsourced to face.
Its literally a privilege to be outsourced from, or to not be desperate enough to work.
The initial circumstances have so much to do with it all. I would feel like an undervalued failure if i worked at mcdonalds- meanwhile people are hopping trains through central america and risking arrest and death just for the oppotunity...
Good question. Maybe all of them? I feel it is directly interlinked with this- > the salary did not simply materialize from ones 'individual circumstance'; it came from a necessity to have a job
So what if the answer to the first question is: all the jobs can be outsourced to people willing to work for less. Now there are no jobs. Now that no one has jobs no one has their job simply materialize.
They now face necessity to find a job, and the jobs are filled by lower wage workers.
This person now must either lower their valuation or acknowledge that they aren't facing the necessity to work that the people the jobs outsourced to face.
Its literally a privilege to be outsourced from, or to not be desperate enough to work.
The initial circumstances have so much to do with it all. I would feel like an undervalued failure if i worked at mcdonalds- meanwhile people are hopping trains through central america and risking arrest and death just for the oppotunity...
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Unpopular opinion, but there is little to gain from talking about salary. It's not the business of your co-workers what your salary is.
I think salary is fine though to be shared anonymously like in trusted sites though and this helps create transparency in the industry.
From my experience, talking about salary with colleagues just creates a toxic environment where-in people spend too much time and attention thinking about whether their colleagues deserve their salary.
If I thought that I was not being paid enough, I could just apply and look for a higher paying job. I don't need to know what my colleagues are making.
Also, if an employer wants to pay employees differently then that is perfectly fine, since every employee is different in their contribution.
I think salary is fine though to be shared anonymously like in trusted sites though and this helps create transparency in the industry.
From my experience, talking about salary with colleagues just creates a toxic environment where-in people spend too much time and attention thinking about whether their colleagues deserve their salary.
If I thought that I was not being paid enough, I could just apply and look for a higher paying job. I don't need to know what my colleagues are making.
Also, if an employer wants to pay employees differently then that is perfectly fine, since every employee is different in their contribution.
I think it’s often a bit of overkill when people tie this to the company or employer. The way I was raised, discussing money in any sort of non utility ways was consider extremely rude. Asking someone’s salary was incredibly offensive. When you think about it how could it be anything else? You’re effectively asking someone’s value. For the majority of people there is no other standardized metric, so it is often perceived as asking “how valuable are you? Tell me and then let me judge”. Everybody feels more valuable when their salary is higher, and everyone has the ability of bias, wether they account for it or not, to belittle those who are payed less comparatively.
I'm not entirely sure why, but I think it's because many people don't like to brag. If you earn more than the people you're talking to, that could be taken as a "look how much of a big shot I am" kind of comment, even if it wasn't meant to be. There's also a good chance that asking for a raise is futile, in which case jealousy could easily strike.
Some people are discouraged by their managers from discussing their pay; to me, that indicates a bad work environment.
> what does employer gain from it? The employer can afford to only pay people who are good negotiators more, while keeping the rest at a lower pay or worse benefits. New hires earning more than the old blood because of differences in contracts can also happen. If you get the suggestion to keep quiet about compensation, my guess would be that it's probably because some workers have gotten a worse deal than others and their managers don't want people to leave or ask for a raise.
There are good reasons for why you don't pay two people doing the same work the same amount of money. Maybe one person does the job a lot better, maybe one person has more time off or has negotiated never to work when their favourite sports team is playing. Maybe someone has kids and can't be relied to do overtime in periods of crunch, or maybe someone asked for a newer company car instead of a pay rise. Maybe someone has negotiated special perks that they worry will be taken away if people find out and come asking for the same exceptions.
At the end of the day, there's more to compensation than pure monetary value. People value different kinds of compensation differently, so discussing this objectively gets harder the more flexible your employer gets. It's easy to become outraged about money because it can be easily compared ("Julie earns more than 10 grand more than James!").
There are good reasons why you would only discuss your salary if you have the time to go into details. There are also many bad ones.
If people have the same contract terms, work the same hours and do the same job, then there's no good reason for difference in pay, in my opinion. But, as many people have discovered when companies decided to cut pay when they relocated to a cheaper area, you're not worth what you contribute to the company; only what you can manage the company to spend on you. If you don't have a lot of options, your employer can screw you over significantly.
Some people are discouraged by their managers from discussing their pay; to me, that indicates a bad work environment.
> what does employer gain from it? The employer can afford to only pay people who are good negotiators more, while keeping the rest at a lower pay or worse benefits. New hires earning more than the old blood because of differences in contracts can also happen. If you get the suggestion to keep quiet about compensation, my guess would be that it's probably because some workers have gotten a worse deal than others and their managers don't want people to leave or ask for a raise.
There are good reasons for why you don't pay two people doing the same work the same amount of money. Maybe one person does the job a lot better, maybe one person has more time off or has negotiated never to work when their favourite sports team is playing. Maybe someone has kids and can't be relied to do overtime in periods of crunch, or maybe someone asked for a newer company car instead of a pay rise. Maybe someone has negotiated special perks that they worry will be taken away if people find out and come asking for the same exceptions.
At the end of the day, there's more to compensation than pure monetary value. People value different kinds of compensation differently, so discussing this objectively gets harder the more flexible your employer gets. It's easy to become outraged about money because it can be easily compared ("Julie earns more than 10 grand more than James!").
There are good reasons why you would only discuss your salary if you have the time to go into details. There are also many bad ones.
If people have the same contract terms, work the same hours and do the same job, then there's no good reason for difference in pay, in my opinion. But, as many people have discovered when companies decided to cut pay when they relocated to a cheaper area, you're not worth what you contribute to the company; only what you can manage the company to spend on you. If you don't have a lot of options, your employer can screw you over significantly.
What can you gain from it?
If someone makes a higher wage, you may be frustrated, and if lower you may stick at your current job just because it pays well.
Pay is important, but there are many parameters that determine your worth to a company, such as your familiarity with a specific system, potential to grow, performance, etc.
People don't need to know each other's salaries, and your employer already publishes your salary history in case another company needs to verify it while negotiating with you (Work Number, InVerify, etc.).
That practice simply works in the favor of employers. They can negotiate downwards if you are already being under-paid. It also provides a disincentive to change jobs if you can't get a sufficiently big increase.
Yeah, so? They won, deal with it.
When did anyone ever say, "He earns what? Well he deserves it". Human nature seems to take a great interest in who is being given more.
But in most — there was no serious barriers, but still it was never talked about among colleagues except between very close friends.
Why is that, i wonder?
Why it is sometimes in the contract — what does employer gain from it?
Why people tend to avoid these discussions even when it is not forbidden?