Pay Transparency Is Coming(businessinsider.com)
businessinsider.com
Pay Transparency Is Coming
https://www.businessinsider.com/pay-transparency-salary-range-disclosure-laws-colorado-employers-terrified
311 comments
While I support pay equity, will this simply cause secret renumeration to shift to bonuses/RSUs?
Bonuses and RSU are part of a pay package. If transparency is required, it will include all forms. After all, the IRS already knows.
But bonuses are typically discretionary compensation that will vary from year to year based on the performance of the firm and of the individual, no?
Or even more obviously: what if I advertise a sales job that pays only on commission?
Or even more obviously: what if I advertise a sales job that pays only on commission?
Are bonuses a mystery or do you have actual metrics that you can use to gauge whether or not you might get a bonus? Are they not part of your compensation?
Who would take a sales job that doesn't list what sort of commission they'll be getting? And wouldn't average income from such a job actually be helpful if you are deciding to take it? Sure, it is wonderful if you get commission each time you sell a car, but if folks aren't getting paid very much per year, it probably means cars aren't selling as well as the what the "possible income of xxx.xx" is saying they are.
These are all things that can be disclosed and if they aren't, do you want to work in places that have secret formulas to give you pay?
Who would take a sales job that doesn't list what sort of commission they'll be getting? And wouldn't average income from such a job actually be helpful if you are deciding to take it? Sure, it is wonderful if you get commission each time you sell a car, but if folks aren't getting paid very much per year, it probably means cars aren't selling as well as the what the "possible income of xxx.xx" is saying they are.
These are all things that can be disclosed and if they aren't, do you want to work in places that have secret formulas to give you pay?
This isn't as hard as you make it sound.
You know the bonuses you awarded last year. Being transparent means you reveal that. Foo's salary is X, last year Foo received Y bonus, which was Z% of his then salary.
A sales job that pays only commission still has compensation data: the commission percentage per salesperson, the commission paid during the previous pay period. This tells you what you are likely to make, and if your commission is the same as others.
You know the bonuses you awarded last year. Being transparent means you reveal that. Foo's salary is X, last year Foo received Y bonus, which was Z% of his then salary.
A sales job that pays only commission still has compensation data: the commission percentage per salesperson, the commission paid during the previous pay period. This tells you what you are likely to make, and if your commission is the same as others.
Bonuses should be same for same role and out put metrics.
With sales everyone should have rights to same base-pay+ commission structures. They could even choose from a few and be allowed to change them every quarter or year.
Probably. But then that too will likely become public.
I forget which Scandinavian country this is true for but I think there exists a country where compensation is a matter of public record.
I support this 100%. I want everything to be transparent here. I know where I stand skills and competency wise compared to my colleagues so I will be ok making less than those I am less skilled or less productive as. That being said I think I’m underpaid. A transparent pay structure will only benefit the employees as we learn in Economics: the more information about prices there are in a situation the better each actor can make choices.
I forget which Scandinavian country this is true for but I think there exists a country where compensation is a matter of public record.
I support this 100%. I want everything to be transparent here. I know where I stand skills and competency wise compared to my colleagues so I will be ok making less than those I am less skilled or less productive as. That being said I think I’m underpaid. A transparent pay structure will only benefit the employees as we learn in Economics: the more information about prices there are in a situation the better each actor can make choices.
It's Norway. The system is pretty neat actually in a way that all salaries are _registered_, but if you query someone, the other end figures out who queried you. So in that way, the data is still protected from large-scale scraping and has a slight reputation impact.
What prevents one person from just being "that asshole" and querying for everyone? What prevents a small hacktivist group from banding together to cover the space and then release it?
Nothing prevents anyone from being "that asshole" because nobody considers someone an asshole for researching their labor market.
The newspapers publish lists of the richest 100 in each municipality every year. It's a yearly tradition, and there are no significant protests against it.
The newspapers publish lists of the richest 100 in each municipality every year. It's a yearly tradition, and there are no significant protests against it.
Do people use it or are they afraid that the other ends get to know their query?
Seems a bit like a way to persuade you to don't use it.
For large-scale scraping protection there are other options...
Seems a bit like a way to persuade you to don't use it.
For large-scale scraping protection there are other options...
fun fact, tax returns are technically public in Italy too, so you can ask and they will be shown to you (only the last year).
On one glorious day in 2008 the head of the tax office made them actually available online, and the system was DDoS'd by people snooping each other.
After that, the authority in charge of privacy protection declared that putting them online was a bad idea, and we have not had them since, but it was fun.
On one glorious day in 2008 the head of the tax office made them actually available online, and the system was DDoS'd by people snooping each other.
After that, the authority in charge of privacy protection declared that putting them online was a bad idea, and we have not had them since, but it was fun.
> I forget which Scandinavian country this is true for but I think there exists a country where compensation is a matter of public record.
It's Sweden.
It's Sweden.
I think it’s Finland. I’m in Sweden and I’m almost sure that my compensation is not public. What you can do IIRC is to request a credit check on someone which would contain the income and the tax paid but then the person is notified who requested the data. Typically this is done when you apply for a mortgage.
In Sweden, Norway _and_ Finland.
The tax you pay is public record.
For example, in Sweden, you can get a 'tax calendar' (a bit like an old-fashioned phonebook, but with total pay instead of phone numbers). You can buy relevant pages conveniently online.
https://en.wikipedia.org/wiki/Taxeringskalendern
It is a trivial division-by-twelve to determine the salary of your co-workers and neighbours.
The tax you pay is public record.
For example, in Sweden, you can get a 'tax calendar' (a bit like an old-fashioned phonebook, but with total pay instead of phone numbers). You can buy relevant pages conveniently online.
https://en.wikipedia.org/wiki/Taxeringskalendern
It is a trivial division-by-twelve to determine the salary of your co-workers and neighbours.
Paid tax and taxable income is public in Sweden, just call Skatteverket (Swedish IRS) and they'll send you the info on anyone you can name.
Edit: more info in Swedish here: https://lawline.se/answers/ar-inkomstdeklarationer-allmanna-...
Edit: more info in Swedish here: https://lawline.se/answers/ar-inkomstdeklarationer-allmanna-...
In Spain the socialists tried to copy the Scandinavian model of tax information.
Very soon they realized terrorist groups like ETA or GRAPO used that information in order to extort, kidnap or kill family members of those that had high income in order to finance itself. Having access to that meant the ability to calculate the "revolutionary tax" for every entity with extreme precision.
So it was short lived, but on the Basque country they continued having access to that information because the political party that represented the terrorists had access to it.
Today travelling to places like Thailand or Mexico is extremely dangerous if they know you have money. They can kidnap your taxi driver, or put cocaine bags on you luggage.
I personally believe what I earn is nobody business but me and my family.
People have strong opinions about something they have never experienced, like socialism and communism. They really love those systems from outside, the grass is always greener on the other side.
Very soon they realized terrorist groups like ETA or GRAPO used that information in order to extort, kidnap or kill family members of those that had high income in order to finance itself. Having access to that meant the ability to calculate the "revolutionary tax" for every entity with extreme precision.
So it was short lived, but on the Basque country they continued having access to that information because the political party that represented the terrorists had access to it.
Today travelling to places like Thailand or Mexico is extremely dangerous if they know you have money. They can kidnap your taxi driver, or put cocaine bags on you luggage.
I personally believe what I earn is nobody business but me and my family.
People have strong opinions about something they have never experienced, like socialism and communism. They really love those systems from outside, the grass is always greener on the other side.
ok yikes perhaps then salaries need not be public but at least everyone in a company should know what everyone is making. All this secrecy is stupid and helps no-one.
Doesn't make it better. Look at what gitlab and many others that already have transparent wages do.
They justify paying you less for the same work because of your location. So you are as qualified as someone else but make way less.
On the other side their products cost the same globally.
They justify paying you less for the same work because of your location. So you are as qualified as someone else but make way less.
On the other side their products cost the same globally.
The mistake you're making is assuming what someone gets paid is their value to the company. That's never been the case. What you get paid is the going rate for your area that meets local supply and demand. So it makes a lot of sense to pay someone less who lives in another area, because there is lower demand for their skills there.
I think this will even out over time as more workers are remote only. Once someone in Tulsa can do the same job as someone in San Francisco, and also easily find another similar job, I think the pay in Tulsa will go up and the pay in SF will go down.
Companies are already fighting this by saying, "you'll get paid $X if you live anywhere in the US, but you'll get an extra 20% if you come into the office in San Francisco every day". So now you have to choose how much that 20% is worth to you.
I think this will even out over time as more workers are remote only. Once someone in Tulsa can do the same job as someone in San Francisco, and also easily find another similar job, I think the pay in Tulsa will go up and the pay in SF will go down.
Companies are already fighting this by saying, "you'll get paid $X if you live anywhere in the US, but you'll get an extra 20% if you come into the office in San Francisco every day". So now you have to choose how much that 20% is worth to you.
Why not move to the place with higher pay if that is important to you and so easy to figure out? At least with the formula publicly available it is simple to game; before there was also a formula but you had to guess at it.
> They justify paying you less for the same work because of your location. So you are as qualified as someone else but make way less.
But now you have that info when applying to the job and it's up to you if you consider that fair or not. So far until now it was a (probably known) secret.
Information is power.
But now you have that info when applying to the job and it's up to you if you consider that fair or not. So far until now it was a (probably known) secret.
Information is power.
Not if everyone has it.
Everyone having information is called "universal education". It's not a bad thing.
Well, at least you now know why many developers oppose salary transparency: because they ultimately will get screwed as wages regress toward a mean.
Yes, that's true. I guess I don't oppose it because I don't care. But I certainly know many developers whore highly concerned about their pay.
Was gitlab going to pay more if there wasn't any transparency?
> They justify paying you less for the same work because of your location.
Fine by me. I'm happier in the middle of nowhere, anyway.
Fine by me. I'm happier in the middle of nowhere, anyway.
I doubt they paid the same before transparent wages because transparent wages didn't cause this.
McDonalds will pay more in one town than another and sometimes pay varies depending on the location in town. They've done this for decades, and it has traditionally caused folks to take on a slightly longer commute to bring home a bit more extra money, but most folks don't because it still isn't a lot of pay.
The bigger point is that you know these things upfront. Want more money? Go ahead and live in the more expensive area.
And honestly, equal pay doesn't necessarily mean equality. Will both rates of pay give you a similar quality of life? Is it more fair that the person in Kentucky has a much higher quality of life than the person in New York?
McDonalds will pay more in one town than another and sometimes pay varies depending on the location in town. They've done this for decades, and it has traditionally caused folks to take on a slightly longer commute to bring home a bit more extra money, but most folks don't because it still isn't a lot of pay.
The bigger point is that you know these things upfront. Want more money? Go ahead and live in the more expensive area.
And honestly, equal pay doesn't necessarily mean equality. Will both rates of pay give you a similar quality of life? Is it more fair that the person in Kentucky has a much higher quality of life than the person in New York?
Is it more fair that the person in Kentucky has a much higher quality of life than the person in New York
Quality of Life isn't objective. People who choose to live in New York probably wouldn't have a better quality of life living in Kentucky and vice versa, even at the same pay, because so much of what defines quality of life for those people is tied up in the things that New York or Kentucky can uniquely offer.
Quality of Life isn't objective. People who choose to live in New York probably wouldn't have a better quality of life living in Kentucky and vice versa, even at the same pay, because so much of what defines quality of life for those people is tied up in the things that New York or Kentucky can uniquely offer.
While we all know that folks have preferences, your salary determines whether or not you can live the life you want. A salary that grants you a comfortable life in Kentucky with a decent amount of spending money (especially if you buy a cheap house) won't give you the options in New York. In some salary ranges, housing costs alone are going to do it and will be the difference between a stressful, penny-pinching life and living with some cushion. This is the objective area of quality of life.
Even between, say, Chicago and NYC is a huge difference if the salaries are equal (because housing prices are cheaper in Chicago, and the quality of cities isn't going to be so different).
Even between, say, Chicago and NYC is a huge difference if the salaries are equal (because housing prices are cheaper in Chicago, and the quality of cities isn't going to be so different).
If you mean "New York City", then please say that when comparing it with another state, because I can tell you from first-hand experience that large swathes of Upstate New York have a similar cost-of-living to much of Kentucky.
location-based quality of life is mostly wherever you have been long enough to make family and friends, except for a small window of young flexible adults.
> They justify paying you less for the same work because of your location. So you are as qualified as someone else but make way less.
And you can know this thanks to the transparency and it help to make an informed choice. And if this policy prevent them from recruiting good worker, they will change it.
In a non transparent setup, they could be doing it a none would be wiser.
And you can know this thanks to the transparency and it help to make an informed choice. And if this policy prevent them from recruiting good worker, they will change it.
In a non transparent setup, they could be doing it a none would be wiser.
> Second, thanks to the boom in working from home, big national companies that have at least one employee in Colorado now find themselves required to post pay levels for any remote role that could potentially be performed in the state. Some employers tried to get around the new rule by barring Colorado residents from applying for their remote positions. State regulators quickly clarified that such exclusions are illegal, and moved to crack down on them.
While I am a fan of pay transparency, something about this bothers me. Does Colorado actually have standing here?
While I am a fan of pay transparency, something about this bothers me. Does Colorado actually have standing here?
Why does it bother you more that Colorado is fighting for their citizens' right to work more than businesses excluding an entire state from being able to apply?
This particular law is fine. What I find concerning is the notion of <state where I don’t reside> enforcing its laws in such a way that I, a resident of <elsewhere> am affected.
What matters is where you do business.
Well the point is rather that a company is really trying not to do business in Colorado.
The law being discussed here only applies if the company employs someone on Colorado. So it would be hard to make the case that the company is trying not to do business in Colorado.
[deleted]
That’s an unavoidable effect of remote work. It blurs the boundaries between states/countries
And is also why full global remote will not happen. Governments will make sure that hiring people in their countries/states will remain annoying.
I'm not so sure. I could see the typical response being a compromise where the governments tolerate the unenforcability of their laws' against remote parties so long as the remote employer still pays local taxes. This would be to prevent a "just pay me in cryptocurrency" alternative from becoming popular.
EPTR is Colorado law affecting employers whose employees (>= 1) live in Colorado.
Welcome to the lives of non US citizens.
The idea of one state legislating the behavior of people in other states is weird and disturbing. I don't know where you live, but I'm pretty sure I don't want Texas imposing law here.
It already happens in certain cases like divorce and child-support. See Full Faith and Credit Clause.
Sure but presumably one of these people is already a Colorado citizen.
I don't look forward to Texas enforcing anti-abortion laws in other states. You think that's far fetched? How about facilities across the border providing abortions to Texas residents? Or if someone advertises abortion services online, that triggers laws that criminalize advertising services to Texas residents?
Unless the US Supreme Court puts a stop to it, these laws are absolutely coming.
I don't look forward to Texas enforcing anti-abortion laws in other states. You think that's far fetched? How about facilities across the border providing abortions to Texas residents? Or if someone advertises abortion services online, that triggers laws that criminalize advertising services to Texas residents?
Unless the US Supreme Court puts a stop to it, these laws are absolutely coming.
I think you mean residency. Divorce requires one to be a resident, but not necessarily a citizen, in order to file. However spousal maintenance (i.e. alimony), child support and modifications thereof can be enforced across state lines (and even international lines) even if neither parties are residents of the state which had jurisdiction over the original order.
But getting back to the subject at hand, the Texas law, if it survives legal muster, would likely only affect Texas residents who seek abortions within or across state lines as well as non-residents who seek an abortion in Texas. The legality of out-of-state facilities themselves would be left to the courts and legislatures of the states where those facilities operate, regardless of how close they are to the Texas state line. Advertising limitations are a 1st amendment issue, and could easily be challenged in a federal court. Commercial speech is protected speech. If other states like Georgia or Tennessee follow, similar circumstances and limitations would apply.
I don't agree with the law, in fact I find it repulsive, but I think your claim of "different state, no jurisdiction" being a firm rule of American jurisprudence lacks substance. There have been plenty of legal rulings disproving that philosophy where a so-called compelling government interest is involved.
Take car crashes. If a resident of state A crashes in state B, the at-fault party can be sued in state A if the has court relevant subject-matter jurisdiction (which most civil and criminal courts do) over the case and personal juridiction over the plaintiff (which every state court does over its residents).
But getting back to the subject at hand, the Texas law, if it survives legal muster, would likely only affect Texas residents who seek abortions within or across state lines as well as non-residents who seek an abortion in Texas. The legality of out-of-state facilities themselves would be left to the courts and legislatures of the states where those facilities operate, regardless of how close they are to the Texas state line. Advertising limitations are a 1st amendment issue, and could easily be challenged in a federal court. Commercial speech is protected speech. If other states like Georgia or Tennessee follow, similar circumstances and limitations would apply.
I don't agree with the law, in fact I find it repulsive, but I think your claim of "different state, no jurisdiction" being a firm rule of American jurisprudence lacks substance. There have been plenty of legal rulings disproving that philosophy where a so-called compelling government interest is involved.
Take car crashes. If a resident of state A crashes in state B, the at-fault party can be sued in state A if the has court relevant subject-matter jurisdiction (which most civil and criminal courts do) over the case and personal juridiction over the plaintiff (which every state court does over its residents).
The idea that the state of Texas could prosecute a resident of Texas for walking across the border and having an abortion (or buying booze on Sunday, or smoking pot) is plenty weird and disturbing all by itself.
But the subject of this thread is advertising for jobs. Why doesn't that fall into commercial protected speech?
But the subject of this thread is advertising for jobs. Why doesn't that fall into commercial protected speech?
The way the Texas law as currently written allows for private citizens to snitch and sue on behalf of the state. Texas has not explicitly criminalized abortion but has instead made abortion significant difficult and costly. It's different from the way booze and weed are regulated. Booze is legally regulated in the state where it's sold. So if you buy a beer in Colorado you're consuming it under the standards set by Colorado law. Weed is federally classified as a controlled substance, but the Feds have relaxed prosecution with regards to possession and usage and left it to the states to regulate within their own jurisdictions.
Yes, the original subject was jobs. IANAL, but the Colorado law is a likely a 1st amendment issue in that the state is compelling disclosure of information from private companies. If a lawsuit ever hits a federal court I expect to see the law upended.
Yes, the original subject was jobs. IANAL, but the Colorado law is a likely a 1st amendment issue in that the state is compelling disclosure of information from private companies. If a lawsuit ever hits a federal court I expect to see the law upended.
Because in our federal system, if you don't like the laws of one state, you are free to get up and move to a different state that has laws more to your liking.
If I have a company based in, say, Arizona, and I put up a posting for remote workers, why should I be forced to abide by the laws of a different state if I'm willing to forgo the talent pool in that state?
I agree with the parent, I'm very curious what standing Colorado has to sue.
If I have a company based in, say, Arizona, and I put up a posting for remote workers, why should I be forced to abide by the laws of a different state if I'm willing to forgo the talent pool in that state?
I agree with the parent, I'm very curious what standing Colorado has to sue.
If you're other comment is accurate about it only being allowed if they employ workers in Colorado I think that's a fairly reasonable compromise.
You can get around the law if you entirely pull out of the state but otherwise you must play ball.
Regardless, I think the increase in remote work is going to lead to a lot of cases like this where we'll see some things become defacto national requirements because it will be cheaper to come up with one policy that is legal everywhere than 10 policies that are legal in different subsets of the country.
You can get around the law if you entirely pull out of the state but otherwise you must play ball.
Regardless, I think the increase in remote work is going to lead to a lot of cases like this where we'll see some things become defacto national requirements because it will be cheaper to come up with one policy that is legal everywhere than 10 policies that are legal in different subsets of the country.
I guess let's take an extreme case. Say Arizona allows businesses to hire children and Colorado doesn't. Can a business in Arizona hire a child who lives in Colorado?
That's far less extreme than you think- different states have different rules about if/when/where/how much under 18 year olds can work. I was able to get a job working as lifeguard for the school district at 15 in my home state. In others states that would have been illegal until I was 16.
Hopefully not. We pay taxes so that the government will uphold the law. If there's a law designed to protect Colorado's children, it should be enforceable whether or not the threat to those children is also in Colorado. If that's not the case, then the law probably deserves a rethink.
I don't think so. They can't tell out-of-state businesses how to operate. It's not discrimination because geographic location is not a protected class.
My guess is that they can only take action if the company does some kind of business in Colorado. But most probably do.
I wondered this as well, and after searching found the key is that if you have any employees in Colorado, then you are considered a "Colorado employer" and thus you can't post job listings for remote jobs that try to skirt the pay transparency requirements by saying that job can't be performed in Colorado.
If you have 0 employees in Colorado, you're free to do whatever you want then.
https://www.gibsondunn.com/colorado-department-of-labor-and-...
If you have 0 employees in Colorado, you're free to do whatever you want then.
https://www.gibsondunn.com/colorado-department-of-labor-and-...
> Think about it: Every business, from tiny boutiques to online giants like Amazon, tell you exactly how much each of their items costs. Why shouldn't it be the same when we're shopping for a job?
Despite the question being rhethorical, the answer is everything that's wrong about this proposal: Because the most important attributes are very hard to gauge and almost impossible to prove — Grit, dedication, responsibility, excellence and loyalty.
I've got people with the same job title with almost a magnitude of difference in actual output. Sure, on paper, they're "doing the same thing", but if someone forced me to shoehorn them into categories, that would mostly serve to punish top performes with little credentials and push them somewhere else.
I feel strongly about this, mostly because it happened to myself: After being sold, the first company that employed me introduced a "completely fair and transparent" compensation scheme. After I saw the scheme projected to the wall in the big All-Hands, I realized that without any degree I'd have to wait 10 years for stock options while the PhDs would be in almost immediately.
I called a recruiter the next day and was out a few months after.
Pay transparency is something that has upsides imho, but isn't a clear-cut win. It can turn out to be a net negative. Some further reading: https://www.wsj.com/articles/the-downside-of-full-pay-transp...
Despite the question being rhethorical, the answer is everything that's wrong about this proposal: Because the most important attributes are very hard to gauge and almost impossible to prove — Grit, dedication, responsibility, excellence and loyalty.
I've got people with the same job title with almost a magnitude of difference in actual output. Sure, on paper, they're "doing the same thing", but if someone forced me to shoehorn them into categories, that would mostly serve to punish top performes with little credentials and push them somewhere else.
I feel strongly about this, mostly because it happened to myself: After being sold, the first company that employed me introduced a "completely fair and transparent" compensation scheme. After I saw the scheme projected to the wall in the big All-Hands, I realized that without any degree I'd have to wait 10 years for stock options while the PhDs would be in almost immediately.
I called a recruiter the next day and was out a few months after.
Pay transparency is something that has upsides imho, but isn't a clear-cut win. It can turn out to be a net negative. Some further reading: https://www.wsj.com/articles/the-downside-of-full-pay-transp...
I also feel very strongly about this. Many moons ago I literally got paid half of what a friend of mine got paid for exactly the same position, responsibilities, and output, and yes, I can gauge the output, as it was a position for which this is quite rigidly defined. Just because he said a different amount than I that he was willing to work for during negotiations.
From that point on I have consistently refused to 'name my amount'. Literally, I would say something like: "A company like yours must have a defined salary scale for the given position, why don't we start from there, and see how it aligns with my expectations?". If they push on, it goes something like: "So, are you saying that salaries at your organization are ad-hoc, and you're looking for the cheapest person who can fill the role?". In which case, I'm really not interested anymore.
From that point on I have consistently refused to 'name my amount'. Literally, I would say something like: "A company like yours must have a defined salary scale for the given position, why don't we start from there, and see how it aligns with my expectations?". If they push on, it goes something like: "So, are you saying that salaries at your organization are ad-hoc, and you're looking for the cheapest person who can fill the role?". In which case, I'm really not interested anymore.
Criticizing the HR department I'm possibly gonna be working for, is not the approach I would take. Instead I'd try to get them to understand my perspective.
There's lots of approaches to this, but I usually go along these lines at the very start of negotiations:
* "I'm well respected and well-paid at my current job. I'd need to see a good salary bump though before I accepted any offer. Moving jobs during a pandemic is, well, risky..."
Honest and straightforward. You give them something to work with, and also what you're expecting.
* "I would like to see $X" where $X is just outside their zone of comfort.
Ideally they should be feeling pain or discomfort because your number is 10% outside their salary window. Usually you can make an educated guess about where $X is, and if you were way outside, you probably didn't want to work for that company anyway.
* "I don't want to waste anyone's time here. What's the range you're looking for?"
A lot of people in HR will give up the range if they're having trouble filling the position -- which many people are these days. And if the top is acceptable, be honest about it. If it's not, be honest about it with the expectation the call will end after that.
If you detect a dodge or resistance (1) to give any detail whatsoever, it's easy just to end the conversation at that point. There's no reason to get angry, frustrated, or to argue your case, you're just turning down a number at that point in time -- or in some cases a lack of a number.
(1) I would expect an investment bank (e.g.) to not give up their total compensation package. But they should still be able to say whether it's acceptable or not.
There's lots of approaches to this, but I usually go along these lines at the very start of negotiations:
* "I'm well respected and well-paid at my current job. I'd need to see a good salary bump though before I accepted any offer. Moving jobs during a pandemic is, well, risky..."
Honest and straightforward. You give them something to work with, and also what you're expecting.
* "I would like to see $X" where $X is just outside their zone of comfort.
Ideally they should be feeling pain or discomfort because your number is 10% outside their salary window. Usually you can make an educated guess about where $X is, and if you were way outside, you probably didn't want to work for that company anyway.
* "I don't want to waste anyone's time here. What's the range you're looking for?"
A lot of people in HR will give up the range if they're having trouble filling the position -- which many people are these days. And if the top is acceptable, be honest about it. If it's not, be honest about it with the expectation the call will end after that.
If you detect a dodge or resistance (1) to give any detail whatsoever, it's easy just to end the conversation at that point. There's no reason to get angry, frustrated, or to argue your case, you're just turning down a number at that point in time -- or in some cases a lack of a number.
(1) I would expect an investment bank (e.g.) to not give up their total compensation package. But they should still be able to say whether it's acceptable or not.
> Usually you can make an educated guess about where $X is
Can you? I'm currently looking for a mid-senior level software job and don't feel confident at all I know salary ranges at any of these companies, except the huge ones on levels.fyi and Blind.
Can you? I'm currently looking for a mid-senior level software job and don't feel confident at all I know salary ranges at any of these companies, except the huge ones on levels.fyi and Blind.
The goal isn't to get the most money that you can from the company. The goal is to get that premium salary compared with all other software engineers.
Yeah, you might work as a high paid prostitute at a shitty company for a while, but when you leave you'll leave richer than being paid half at a friendly mom and pop shop. But generally I've found the higher paying jobs are usually better anyway.
Today in 2021, $175k-ish seems like a fair number for a mid-senior software job. If you're really good, you should consider $200-220k or higher.
Yeah, you might work as a high paid prostitute at a shitty company for a while, but when you leave you'll leave richer than being paid half at a friendly mom and pop shop. But generally I've found the higher paying jobs are usually better anyway.
Today in 2021, $175k-ish seems like a fair number for a mid-senior software job. If you're really good, you should consider $200-220k or higher.
>But generally I've found the higher paying jobs are usually better anyway.
This doesn't work if you have several years of experience and senior responsibilities, but are paid significantly less than entry level employees.
It's a catch-22, because getting paid more means being severely demoted.
And this has nothing to do with small companies, there are lots more people working as low paid prostitutes at big, shitty, but obscure companies.
This doesn't work if you have several years of experience and senior responsibilities, but are paid significantly less than entry level employees.
It's a catch-22, because getting paid more means being severely demoted.
And this has nothing to do with small companies, there are lots more people working as low paid prostitutes at big, shitty, but obscure companies.
It's not the companies job to make sure your salary is commensurate with your pay. It's your job to do that.
In fact it's your job to get the salary you want, not your company's. The best way to do that is to negotiate up front or leave for a job that will.
In fact it's your job to get the salary you want, not your company's. The best way to do that is to negotiate up front or leave for a job that will.
>In fact it's your job to get the salary you want, not your company's. The best way to do that is to negotiate up front or leave for a job that will.
Sorry I wasn't clear enough. You shouldn't assume random strangers are in fact passive whiners. My comment was based on my experience demanding an decent salary and then leaving for an even larger raise. I've changed jobs four times since getting my degree.
The problem is your BATNA. You can't get a better deal than what someone thinks yours is. Flat out lying or even misleading someone is bound to come back to bite you in the job market, more than say, buying a car.
Sorry I wasn't clear enough. You shouldn't assume random strangers are in fact passive whiners. My comment was based on my experience demanding an decent salary and then leaving for an even larger raise. I've changed jobs four times since getting my degree.
The problem is your BATNA. You can't get a better deal than what someone thinks yours is. Flat out lying or even misleading someone is bound to come back to bite you in the job market, more than say, buying a car.
> * "I would like to see $X" where $X is just outside their zone of comfort.
How, exactly, are you supposed to know their "zone of comfort" if they don't even post a salary range?
How, exactly, are you supposed to know their "zone of comfort" if they don't even post a salary range?
"Look, I'm not comfortable at haggling, so I'm going to treat this question as a binary search: How about $1,000,000? No? How about $500,000?..."
An educated guess, but also a leap of faith. I've been friends with recruiters, so I guess that makes it a little easier. But you can certainly figure that out from looking at job postings.
But the easy answer is $200k/year is what most people should be aiming to make professionally (even if they don't currently). And so every job switch you make should be a jump in salary. If you're making $120k, there should be nothing wrong with saying you want $160k.
The big issue is just getting yourself psyched up to utter what you want to a recruiter. If you've been paid around $80k for five years with 3% annual raises, it's hard to say to a recruiter, "I want $140k". People tend to internalize that their worth is what that paycheck is, not what the market is willing to pay them. In that sense, it's just a leap of faith you need to make on your part.
But the easy answer is $200k/year is what most people should be aiming to make professionally (even if they don't currently). And so every job switch you make should be a jump in salary. If you're making $120k, there should be nothing wrong with saying you want $160k.
The big issue is just getting yourself psyched up to utter what you want to a recruiter. If you've been paid around $80k for five years with 3% annual raises, it's hard to say to a recruiter, "I want $140k". People tend to internalize that their worth is what that paycheck is, not what the market is willing to pay them. In that sense, it's just a leap of faith you need to make on your part.
The responses I wrote can (and should) be delivered in a friendly, half-joking, and easy-going manner. I don't believe you should ever get into a defensive and argumentative mode in a job interview. Well, not just job interview, ever, really.
However, I only agree with the last of your bullet points, as that's basically what I'm suggesting, just expressed in a more straight-talking manner.
Regarding the other points. The first bullet-point is not something I'd do. I mean, for the right position at the right place I might be willing to go for a salary reduction as well. The second bullet point is not really workable, as another commenter says, you can't know their comfort zone. Moreover, they will note it down that this candidate wants more than we are willing to offer, and therefore might soon start to look for other opportunities. Unless you go for a hyperbole, in which case this is pointless, and may be even worse than just not giving an amount. Depending on delivery.
So, basically, there is nothing to gain if you are the first one to state an amount.
However, I only agree with the last of your bullet points, as that's basically what I'm suggesting, just expressed in a more straight-talking manner.
Regarding the other points. The first bullet-point is not something I'd do. I mean, for the right position at the right place I might be willing to go for a salary reduction as well. The second bullet point is not really workable, as another commenter says, you can't know their comfort zone. Moreover, they will note it down that this candidate wants more than we are willing to offer, and therefore might soon start to look for other opportunities. Unless you go for a hyperbole, in which case this is pointless, and may be even worse than just not giving an amount. Depending on delivery.
So, basically, there is nothing to gain if you are the first one to state an amount.
Even joking doesn't always follow since I didn't follow it in your original comment. I just find it easier to be honest from my side, since it always makes you look professional. It also means you don't have to risk being a jerk.
Edited to add:
I think the issue is that if you're trying to "win" the one interview you're in currently, then yeah, odds are you're going to lose typically with this strategy. If you're desperate you're gonna take a lower offer.
But if you see the world as bunch of potential interviews, and start interviewing with a bunch of companies you'll figure out pretty quick what the salary range is gonna be, and you'll know that a startup is gonna pay less on average, and a fortune 500 company has more room to absorb labor costs.
You don't try to win every interview. You're winning the game of interviewing. Because if you try to win one particular interview, you might only be able to get an offer below your market worth, and waste a lot of time doing it just to get that offer. Instead you want to go after the jobs that are going to pay what you're worth.
It's not really that hard to figure out your own market worth.
Edited to add:
I think the issue is that if you're trying to "win" the one interview you're in currently, then yeah, odds are you're going to lose typically with this strategy. If you're desperate you're gonna take a lower offer.
But if you see the world as bunch of potential interviews, and start interviewing with a bunch of companies you'll figure out pretty quick what the salary range is gonna be, and you'll know that a startup is gonna pay less on average, and a fortune 500 company has more room to absorb labor costs.
You don't try to win every interview. You're winning the game of interviewing. Because if you try to win one particular interview, you might only be able to get an offer below your market worth, and waste a lot of time doing it just to get that offer. Instead you want to go after the jobs that are going to pay what you're worth.
It's not really that hard to figure out your own market worth.
Another option is to study the market, interview at multiple places, and give a high but realistic amount. This way you will get ~highest possible offer
The part of the discussion is not just about pay, it is also about company culture. I really don't want to work at a place willing to haggle and fill the position with the cheapest eligible person.
There are often good teams but they need to work with a compensation department/committee to get actual numbers. IMO it seems a bit early to judge the company culture just by an interaction with the recruiter.
But maybe you consider that to be a part of company culture too. What I’ve noticed though is even fantastic engineering companies might crappy departments for other things.
But maybe you consider that to be a part of company culture too. What I’ve noticed though is even fantastic engineering companies might crappy departments for other things.
At a point when they ask me my salary expectations, I would expect to be talking to someone who has the authority to speak about salaries.
Doesn’t change the point I’m making unless you’re saying this is a manager you’d be reporting to. In which case your stance is justified. Otherwise my point stands.
The problem with this approach is that while the team that is spending their budget on your salary probably doesn't give two shits about an extra $5-20k/yr the disconnected HR department has always been laser focused on pushing back on salary numbers for some reason.
I interviewed at a place where I knew someone who worked there and knew exactly the number they were looking to hire at, I named that number in my interview and they still tried to undercut me. I said, no I want $original_number in my response email and they caved in literally 5 minutes. Why?!?!? You found someone willing to take the job at exactly the team's budget. Shouldn't you be popping the champagne that it's painless and everyone's happy?
I interviewed at a place where I knew someone who worked there and knew exactly the number they were looking to hire at, I named that number in my interview and they still tried to undercut me. I said, no I want $original_number in my response email and they caved in literally 5 minutes. Why?!?!? You found someone willing to take the job at exactly the team's budget. Shouldn't you be popping the champagne that it's painless and everyone's happy?
The hiring team and the HR team have different local incentives. The hiring team just needs a position filled within a specific budget. The HR team is doing its best to manage company wide expenses. So it is worth it to them to take a crack at reducing the cost of a hire.
If you can identify a company's inconsistencies in policies or behavior, you can identify different sets of incentives different parts of the company are under.
If you can identify a company's inconsistencies in policies or behavior, you can identify different sets of incentives different parts of the company are under.
This attitude is common on Reddit and HN, but I think you misunderstand what the norm is. Comparative few companies "spare no expense" when shopping for their average employee. And yes, a developer is a average employee, a worker bee.
A few really big companies might have a different attitude, at least for their major players. I know for a fact that these big companies will offer less than $70k to work in silicon valley, which is a slap in the face to a new grad that was getting better offers in low COL areas.
So where are these mythic companies that don't care about money and give all new hires a fortune without trying to control costs at all?
A few really big companies might have a different attitude, at least for their major players. I know for a fact that these big companies will offer less than $70k to work in silicon valley, which is a slap in the face to a new grad that was getting better offers in low COL areas.
So where are these mythic companies that don't care about money and give all new hires a fortune without trying to control costs at all?
Every company is looking for the cheapest person who can fill the role. The question is how skilled does the applicant have to be to be accepted.
That's a fair point indeed, and it's what these laws are supposedly made to counter. I mainly wanted to raise awareness to the fact that tipping the scale in favor of people sharing the same concerns as you do will also tip it to disfavor others.
But transparency doesn't necessarily mean no wage disparity. You can still have bonuses and raises.
>From that point on I have consistently refused to 'name my amount'
You're cutting off your nose to spite your face. I don't see why you can't just ask for what you want. When you found out about your friend why not just ask for the same from your manager?
If you don't ask you don't get, your problem of being paid less is self inflicted by your refusal to tell them the price you're satisfied with.
>and see how it aligns with my expectations
You clearly have a concept of your worth, just ask for it with a few grand more, the worst they can say is no and you can just go elsewhere.
You're cutting off your nose to spite your face. I don't see why you can't just ask for what you want. When you found out about your friend why not just ask for the same from your manager?
If you don't ask you don't get, your problem of being paid less is self inflicted by your refusal to tell them the price you're satisfied with.
>and see how it aligns with my expectations
You clearly have a concept of your worth, just ask for it with a few grand more, the worst they can say is no and you can just go elsewhere.
Based on my past experiences with the above strategy, both my proverbial face and nose are fine, thank you! Before that though, I have done both - named an amount too high for a job that I really wanted, which I got passed on, and then named an amount too low for a different position leading to the aforementioned situation. So, yeah, YMMV, but for me just not playing the game works great.
Definitely can understand and sympathize how you'd end up in that situation after being passed over for a job you really wanted. But please never lowball yourself, the price you walk through the door with defines your entire worth during your time at that company.
It can take longer if you ask higher but at least the company you end up with you'll know they're happy to pay more.
It can take longer if you ask higher but at least the company you end up with you'll know they're happy to pay more.
I think this sums up whats wrong with pay transparency perfectly. You feel cheated because a company didn't pay you the same as another employee.
But your value should not be measured by how much somebody else is getting paid, but by how much another company is willing to pay you.
But your value should not be measured by how much somebody else is getting paid, but by how much another company is willing to pay you.
> But your value should not be measured by how much somebody else is getting paid, but by how much another company is willing to pay you.
Who are you to say that? Is the invisible hand prescriptive now? What if I value fair treatment over marginal nominal compensation? What if I don't know how much to ask for when I'm looking for work because I'm so underpaid that my perception of the market is fucked?
Who are you to say that? Is the invisible hand prescriptive now? What if I value fair treatment over marginal nominal compensation? What if I don't know how much to ask for when I'm looking for work because I'm so underpaid that my perception of the market is fucked?
Same way you work out how much your house is worth, you get two or more companies in a bidding war for your time.
What is "fair" treatment? Are different levels of negotiating abilities unfair?
Your value to the company is also constrained if the company pretend they can't afford your real worth, while they pay that worth to comparable employees. You don't know the worth you should be demanding because there's no transparency. The person was being cheated by their employer here.
That's the point, you never have any grounds to demand more unless you have another job offer on the table.
When companies say they can't afford to pay you x, they mean they don't want to pay you x.
Yes, sure, perhaps the employee was being cheated, but pay transparency is not going to fix that, that just insures everybody is being cheated evenly.
The cheating happens when the profits of the company are not distributed to the people that run it, but to the people who own it.
When companies say they can't afford to pay you x, they mean they don't want to pay you x.
Yes, sure, perhaps the employee was being cheated, but pay transparency is not going to fix that, that just insures everybody is being cheated evenly.
The cheating happens when the profits of the company are not distributed to the people that run it, but to the people who own it.
The initial value could be measured this way. Market price discovery. Without external influences (collusion, etc.) the market will generally define price bands. The stock market is an example of this (to a degree). The job market is also an example of this.
Over time, employees show their value or not. The higher value employees should be appropriately compensated for what they deliver, e.g. more market price discovery, but for rarer assets.
The danger of transparency is that you will discover the presumed market value difference, without seeing reasoning behind those differences. Which, honestly, will result in many angry people.
Over time, employees show their value or not. The higher value employees should be appropriately compensated for what they deliver, e.g. more market price discovery, but for rarer assets.
The danger of transparency is that you will discover the presumed market value difference, without seeing reasoning behind those differences. Which, honestly, will result in many angry people.
I think another option when naming your amount is to name an amount that would make you happy, not just one that you are willing to work for.
So let's say you name an amount that would make you happy, and you get it. Someone else names their (higher) amount, and they get it.
You're both happy!
Two months later you find out their amount.
Why does their happiness amount affect your happiness? Would you be happier if they were paid less? Maybe they should be paid the amount that would make you happy instead of what would make them happy? Why? Their circumstances are different, they are different people, whose requirement for happiness is different than yours.
Surely you'd be happy making more, as much as they do, but we already established that you were already happy two months ago.
So let's say you name an amount that would make you happy, and you get it. Someone else names their (higher) amount, and they get it.
You're both happy!
Two months later you find out their amount.
Why does their happiness amount affect your happiness? Would you be happier if they were paid less? Maybe they should be paid the amount that would make you happy instead of what would make them happy? Why? Their circumstances are different, they are different people, whose requirement for happiness is different than yours.
Surely you'd be happy making more, as much as they do, but we already established that you were already happy two months ago.
> name an amount that would make you happy
This doesn't really exist. What people want is the most they can get, and this will make them as happy as is possible in the market. They would be as happy as anyone could possibly be about wages if they were offered an infinite wage.
"The amount that would make you happy" is a pragmatic minimum amount that would tempt you away from your current employment (or from further looking for other employment.) It's a buyer's price, not a seller's price.
> Why does their happiness amount affect your happiness? Would you be happier if they were paid less? Maybe they should be paid the amount that would make you happy instead of what would make them happy? Why? Their circumstances are different, they are different people, whose requirement for happiness is different than yours.
This is the problem with reifying the concept of an "amount that would make you happy." You've fallen into abstraction and spiritual condemnation. It's not illogical or irrational to not be happy with being paid less than you could be paid doing the same job, and it's insulting to treat employees like fools with this backwards logic.
If the employer is happy paying that other employee twice as much as you, why wouldn't they be happy paying you just as much? If they're happy with the deal with the other employee enough to continue it, why wouldn't they be happy with giving you that same deal? Really silly reasoning.
This doesn't really exist. What people want is the most they can get, and this will make them as happy as is possible in the market. They would be as happy as anyone could possibly be about wages if they were offered an infinite wage.
"The amount that would make you happy" is a pragmatic minimum amount that would tempt you away from your current employment (or from further looking for other employment.) It's a buyer's price, not a seller's price.
> Why does their happiness amount affect your happiness? Would you be happier if they were paid less? Maybe they should be paid the amount that would make you happy instead of what would make them happy? Why? Their circumstances are different, they are different people, whose requirement for happiness is different than yours.
This is the problem with reifying the concept of an "amount that would make you happy." You've fallen into abstraction and spiritual condemnation. It's not illogical or irrational to not be happy with being paid less than you could be paid doing the same job, and it's insulting to treat employees like fools with this backwards logic.
If the employer is happy paying that other employee twice as much as you, why wouldn't they be happy paying you just as much? If they're happy with the deal with the other employee enough to continue it, why wouldn't they be happy with giving you that same deal? Really silly reasoning.
> This doesn't really exist. What people want is the most they can get, and this will make them as happy as is possible in the market.
Well I think it does exist. You can be happy with what you have regardless of what others have, can you not? Otherwise you're doomed to unhappiness, unfortunately.
> It's not illogical or irrational to not be happy with being paid less than you could be paid doing the same job
Agreed, it's not illogical or irrational, but it is sub-optimal if one is concerned with being happy with what they have rather than comparing against external entities and adjusting happiness downward unnecessarily.
> treat employees like fools
I don't think it's backward or disrespectful to ask someone what would make them happy and then give it to them.
I think it would be illogical to say "I want to make more than, or just as much as, anybody else doing what I do". Actually, I think maybe it's emotionally childish, rather than illogical. Not that I've never though that way myself. It's just that from a personal growth perspective, I don't think it's a mentality that leads to happiness in the long run.
Well I think it does exist. You can be happy with what you have regardless of what others have, can you not? Otherwise you're doomed to unhappiness, unfortunately.
> It's not illogical or irrational to not be happy with being paid less than you could be paid doing the same job
Agreed, it's not illogical or irrational, but it is sub-optimal if one is concerned with being happy with what they have rather than comparing against external entities and adjusting happiness downward unnecessarily.
> treat employees like fools
I don't think it's backward or disrespectful to ask someone what would make them happy and then give it to them.
I think it would be illogical to say "I want to make more than, or just as much as, anybody else doing what I do". Actually, I think maybe it's emotionally childish, rather than illogical. Not that I've never though that way myself. It's just that from a personal growth perspective, I don't think it's a mentality that leads to happiness in the long run.
Sure, I’m unhappy in this scenario, because my previous happiness was due to an information asymmetry. I don’t know how high HR is willing to go; apparently they were willing to go higher, and if I had that information I would have specified a bigger number because, while there is certainly a lower bound on numbers that make me happy, there is no upper bound.
> there is no upper bound
This is essentially saying that you're not happy unless you're being paid the maximum the company is willing to pay, now and in the future rather than choosing to be happy with an amount that fits your own needs. This means your happiness changes based on the circumstances of an external entity, rather than changing based on your own circumstances, which seems strange.
This is essentially saying that you're not happy unless you're being paid the maximum the company is willing to pay, now and in the future rather than choosing to be happy with an amount that fits your own needs. This means your happiness changes based on the circumstances of an external entity, rather than changing based on your own circumstances, which seems strange.
I am happy if I am paid what my labor is worth. I accept being paid slightly less, because the entity purchasing my labor needs to make a profit.
I am not happy if I am paid significantly less — essentially this means that my employer has found a way to arbitrage my labor, and instead of sharing this information (and the value I create) they've decided to simply pocket the difference.
I am not happy if I am paid significantly less — essentially this means that my employer has found a way to arbitrage my labor, and instead of sharing this information (and the value I create) they've decided to simply pocket the difference.
Yes, this is more in line with what I meant in my original comment. Thanks!
But you could continue to be happy: you're being paid what you were happy being pad, and now you have information that you are worth even more, which you can now leverage.
Most people have an innate sense of fairness. If two people are doing the same thing, and one is getting compensated more for it, unless that person is deliberately kept ignorant of this fact, they are likely to feel that it is unfair.
Even if they were happy with the amount they were making before, that unfairness is likely to make them feel unhappy: not just because they could be making more, but because this says "we value this other person more than we value you, for reasons we're unlikely to ever tell you."
If, instead, this whole scenario started out with full pay transparency, it is vastly less likely that the company would be willing to allow this level of disparity in the first place, thus avoiding any party feeling unhappy.
Even if they were happy with the amount they were making before, that unfairness is likely to make them feel unhappy: not just because they could be making more, but because this says "we value this other person more than we value you, for reasons we're unlikely to ever tell you."
If, instead, this whole scenario started out with full pay transparency, it is vastly less likely that the company would be willing to allow this level of disparity in the first place, thus avoiding any party feeling unhappy.
> I've got people with the same job title with almost a magnitude of difference in actual output. Sure, on paper, they're "doing the same thing", but if someone forced me to shoehorn them into categories, that would mostly serve to punish top performes with little credentials and push them somewhere else.
Why is transparency a problem here?
The person doing orders of magnitude more work is probably only getting paid 10% more.
Transparency could possibly make this better for both the workers and the employers, or it could make them worse for both - better for one and worse for the other - better for one and no difference for the other - or no difference for either. There's lots of possibilities.
But It doesn't seem like there's reason to believe transparency is surely bad.
Why is transparency a problem here?
The person doing orders of magnitude more work is probably only getting paid 10% more.
Transparency could possibly make this better for both the workers and the employers, or it could make them worse for both - better for one and worse for the other - better for one and no difference for the other - or no difference for either. There's lots of possibilities.
But It doesn't seem like there's reason to believe transparency is surely bad.
The full comment you are replying to does not disagree with your comment, so your comment appears a non sequitur.
> Transparency could possibly make this better for both the workers and the employers,
How exactly? I don’t see any obvious path to this.
How exactly? I don’t see any obvious path to this.
I'm not saying this is the case - but it is possible to imagine a world in which transparency leads to higher pay for more productive employees - which causes them to become even more productive for even more pay.
Imagine you're a business and your employees bake pies.
Imagine the costs are fixed beside the pie. Imagine the pie costs $1 in ingredients.
Imagine the average worker bakes 10 pies per hour, and your marginal profit per pie is $9, and you pay workers $10 per hour.
That is the labor cost and supplies for a pie costs $8.
Each worker, generates $80 in revenue per hour after inputs and wages.
However, you have one worker that bakes 30 pies per hour for $20 per hour. This worker is happy to earn double the average worker. And you, as a business owner, are very happy to make $300-30-20 = $250 per hour in revenue after inputs and wages (3x).
However, If the worker is aware of how much more s/he makes - it is possible to imagine the worker becomes even more productive.
Maybe the worker can bake 45 pies for $30 per hour (3x). You're paying more per hour per pie, but you're making much more profit per hour = $450 - 45 - 30 = $375 (4.5x).
Imagine you're a business and your employees bake pies.
Imagine the costs are fixed beside the pie. Imagine the pie costs $1 in ingredients.
Imagine the average worker bakes 10 pies per hour, and your marginal profit per pie is $9, and you pay workers $10 per hour.
That is the labor cost and supplies for a pie costs $8.
Each worker, generates $80 in revenue per hour after inputs and wages.
However, you have one worker that bakes 30 pies per hour for $20 per hour. This worker is happy to earn double the average worker. And you, as a business owner, are very happy to make $300-30-20 = $250 per hour in revenue after inputs and wages (3x).
However, If the worker is aware of how much more s/he makes - it is possible to imagine the worker becomes even more productive.
Maybe the worker can bake 45 pies for $30 per hour (3x). You're paying more per hour per pie, but you're making much more profit per hour = $450 - 45 - 30 = $375 (4.5x).
Ok, so in low wage situations where workers do repetitive work independently, I agree that this could work, however even in your scenario it’s hard to see how the employer would justify taking more profit for the excess performance.
In any case, this piecework example doesn’t seem to be relevant to this forum.
Can you describe an example that would apply to programmers or other knowledge workers? What about people who work in teams?
In any case, this piecework example doesn’t seem to be relevant to this forum.
Can you describe an example that would apply to programmers or other knowledge workers? What about people who work in teams?
The agency model is really not that much different from baking pies.
If one of your developers is consistently able to finish projects substantially faster than other developers - you as a company are supposed to accurately estimate project difficulty and thus pricing (of course this is very hard to do accurately).
Your input costs are just wages, and your revenues are how much you charge for projects.
If one of your developers is consistently able to finish projects substantially faster than other developers - you as a company are supposed to accurately estimate project difficulty and thus pricing (of course this is very hard to do accurately).
Your input costs are just wages, and your revenues are how much you charge for projects.
That's not how piece work, works in reality.
A fast worker will slow down when measured to game the system - it's one of the reasons why those Amazon workers piss in bottles.
There are a lot of "industrial practices" that most HN commentators will not have come across.
A fast worker will slow down when measured to game the system - it's one of the reasons why those Amazon workers piss in bottles.
There are a lot of "industrial practices" that most HN commentators will not have come across.
The flip side to this, is that workers who bake 1 pie per hour will demand the same pay as those who bake 10 per hour. Lest their "rights to equal pay" be under threat.
Put another way, it will be very ... very difficult to reward good people with higher pay, without consequences. The onus would be on the business to articulate in legal terms, why X should get more than Y. This would open businesses up to lawsuits.
I suspect that the net effect of this will be that businesses are going to work much harder at vetting people, and more rapidly letting go staff members who are on the wrong side of the bell curve (say 1 or more sigma below peak) in productivity. I'm not sure this is a good thing, for workers, or for businesses.
As they say, the road to hell is paved with good intentions.
Put another way, it will be very ... very difficult to reward good people with higher pay, without consequences. The onus would be on the business to articulate in legal terms, why X should get more than Y. This would open businesses up to lawsuits.
I suspect that the net effect of this will be that businesses are going to work much harder at vetting people, and more rapidly letting go staff members who are on the wrong side of the bell curve (say 1 or more sigma below peak) in productivity. I'm not sure this is a good thing, for workers, or for businesses.
As they say, the road to hell is paved with good intentions.
The parent comment is about adjusting pay for productivity, what is the reasoning behind "in a world where you compensate for productivity, you'll have to pay more employees that are less productive"?
The main reason is that people are petty, lawsuits are a very risky roll of the dice, and bad PR can cost a lot more than a bad employee.
The other reason is that pay transparency is often anchored to specific credentials and characteristics, and it's often the case that credentials can be orthogonal to work performance. You might have a PhD who can't code who demands higher pay than a HS dropout who designed your entire infrastructure, and the HR department (or lawsuits, or etc) would force you to comply.
The other reason is that pay transparency is often anchored to specific credentials and characteristics, and it's often the case that credentials can be orthogonal to work performance. You might have a PhD who can't code who demands higher pay than a HS dropout who designed your entire infrastructure, and the HR department (or lawsuits, or etc) would force you to comply.
Equal pay for "equal work". Two people have the same job. One is 2x as productive as the other. But they would be paid the same, due to a drive for pay equality.
Such concepts punish high achievers.
Such concepts punish high achievers.
This is one possible outcome. But it is also possible to not be the outcome [=
If I'm understanding your example here, you're basically arguing in favor of per-piece pay rather than fixed. This has its own set of challenges, for example imagine if developers got paid by the line of code rather than by the quality/efficacy of their code. Outside of physical item production jobs it gets tricky to make per-piece systems work without getting gamed to hell.
Possibly.
You could also pay a salary and adjust it based on productivity. In theory, that's something like how raises and bonuses are supposed to work.
You could also pay a salary and adjust it based on productivity. In theory, that's something like how raises and bonuses are supposed to work.
Can you think of a transparent way to measure developer productivity?
One possible option is to make ratings and pay public.
If you think your rating doesn't make sense, or your rating does make sense, but your pay is lower than people with much lower ratings - then you have a case to argue.
Of course - this could be just as nepotistic as the current system. But I think transparency is bad for nepotism long-term. Usually the most corrupt governments and organizations are the most opaque.
Developers aren't really that different from bakers.
You could bake 45 pies in 1 hour, and they could all be terrible pies that can't be sold, and you could burn down half the bakery in the process.
In the same way, a developer could ship a bunch of features, but they could all be "half-baked" and a nightmare to maintain.
You could also try to define metrics for what quality and productivity are. But people will just game that. Ratings can also easily be gamed or nepotistic.
If you think your rating doesn't make sense, or your rating does make sense, but your pay is lower than people with much lower ratings - then you have a case to argue.
Of course - this could be just as nepotistic as the current system. But I think transparency is bad for nepotism long-term. Usually the most corrupt governments and organizations are the most opaque.
Developers aren't really that different from bakers.
You could bake 45 pies in 1 hour, and they could all be terrible pies that can't be sold, and you could burn down half the bakery in the process.
In the same way, a developer could ship a bunch of features, but they could all be "half-baked" and a nightmare to maintain.
You could also try to define metrics for what quality and productivity are. But people will just game that. Ratings can also easily be gamed or nepotistic.
You could bake 45 pies in 1 hour, and they could all be terrible pies that can't be sold, and you could burn down half the bakery in the process.
In the same way, a developer could ship a bunch of features, but they could all be "half-baked" and a nightmare to maintain.
You can inspect the pies made by your staff. Terrible pies that can’t be sold either look bad (misshapen, burnt, leaking) or taste bad (too sweet, not sweet enough, salty, over/undercooked). It’s not difficult to figure out.
On the other hand, evaluating a developer’s productivity and quality of work would require a lot of code review which takes time and skill and also may require the developer to be present, wasting their time and lowering productivity. Push the review and eval process far enough and you really risk bringing down that developer to an unacceptably low level of productivity.
In the same way, a developer could ship a bunch of features, but they could all be "half-baked" and a nightmare to maintain.
You can inspect the pies made by your staff. Terrible pies that can’t be sold either look bad (misshapen, burnt, leaking) or taste bad (too sweet, not sweet enough, salty, over/undercooked). It’s not difficult to figure out.
On the other hand, evaluating a developer’s productivity and quality of work would require a lot of code review which takes time and skill and also may require the developer to be present, wasting their time and lowering productivity. Push the review and eval process far enough and you really risk bringing down that developer to an unacceptably low level of productivity.
I don’t see you answering the question. You don’t propose any mechanism for rating productivity, and you come up with some potential problems.
> Developers aren’t really that different from bakers.
I suspect very few people would agree with this.
Only with an answer to this question does what you have argued so far apply to knowledge work.
> Developers aren’t really that different from bakers.
I suspect very few people would agree with this.
Only with an answer to this question does what you have argued so far apply to knowledge work.
The only thing different about knowledge work is that you're not producing a commodity.
In this way - you can't just simply count how many pies a SWE coded.
But you still get paid to produce "something". Is it even relevant what that is?
Should you get paid less at Google if you work on a new product and you absolutely crush your job vs you work on optimizing ads and aren't very good at your job - but regardless are able to generate a lot more profits?
Maybe?
I don't have a good answer for this.
I'm assuming "productivity" is somehow tied to "profit". No one cares if you work really hard and get nothing done. But if you work really hard and do your job well, but your boss told you to work on something unproductive - what should happen? You and your boss are considered unproductive? Just you? Just your boss? I don't know.
I think the easiest fairest system would be a mix of levels like FAANG has along with ratings (which FAANG also has) along with transparent pay (which almost no one has).
From a business perspective - you're currently paid the least possible amount it costs to employ you or replace you. If you have a valuable and rare skill set, you'll get paid a lot more, even if you aren't particularly good at your job.
I don't see this ever going away.
In this way - you can't just simply count how many pies a SWE coded.
But you still get paid to produce "something". Is it even relevant what that is?
Should you get paid less at Google if you work on a new product and you absolutely crush your job vs you work on optimizing ads and aren't very good at your job - but regardless are able to generate a lot more profits?
Maybe?
I don't have a good answer for this.
I'm assuming "productivity" is somehow tied to "profit". No one cares if you work really hard and get nothing done. But if you work really hard and do your job well, but your boss told you to work on something unproductive - what should happen? You and your boss are considered unproductive? Just you? Just your boss? I don't know.
I think the easiest fairest system would be a mix of levels like FAANG has along with ratings (which FAANG also has) along with transparent pay (which almost no one has).
From a business perspective - you're currently paid the least possible amount it costs to employ you or replace you. If you have a valuable and rare skill set, you'll get paid a lot more, even if you aren't particularly good at your job.
I don't see this ever going away.
> The only thing different about knowledge work is that you're not producing a commodity.
That’s a categorical difference. Not some minor detail.
It’s also not the only difference. Knowledge workers contributions are necessarily much more interdependent than the contributions of people who make commodities.
But see that if you think of knowledge work as little different from manufacturing commodities, your arguments and conclusions makes sense.
I just think your assumptions about the similarities are not correct.
That’s a categorical difference. Not some minor detail.
It’s also not the only difference. Knowledge workers contributions are necessarily much more interdependent than the contributions of people who make commodities.
But see that if you think of knowledge work as little different from manufacturing commodities, your arguments and conclusions makes sense.
I just think your assumptions about the similarities are not correct.
> I don’t see you answering the question. You don’t propose any mechanism for rating productivity, and you come up with some potential problems.
They don't need to. As long as the system is transparent and everyone agrees to it, what it is doesn't matter.
Performance based on lines of code? Based on peer evaluations? Based on users acquired? Based on meeting arbitrary goals your director sets that year? It doesn't matter as long as the evaluation criteria are predefined and available. Companies don't even need to use the same criteria, you can choose a company whose process you vibe with.
They don't need to. As long as the system is transparent and everyone agrees to it, what it is doesn't matter.
Performance based on lines of code? Based on peer evaluations? Based on users acquired? Based on meeting arbitrary goals your director sets that year? It doesn't matter as long as the evaluation criteria are predefined and available. Companies don't even need to use the same criteria, you can choose a company whose process you vibe with.
The rating system matters because if it affects pay then it sets the incentives.
If you use lines of code, you incentivize inefficient boilerplate.
If you use peer evaluations, you incentivize positive social behaviors and favors, but not necessarily productivity or good engineering.
What you measure becomes the goal.
Being predefined and available only amplifies the effect.
If you use lines of code, you incentivize inefficient boilerplate.
If you use peer evaluations, you incentivize positive social behaviors and favors, but not necessarily productivity or good engineering.
What you measure becomes the goal.
Being predefined and available only amplifies the effect.
Yes exactly. With transparency and predefined incentives, you can now make informed rational decisions about what company you want to work for based on how you feel their values (and yes, what you're describing are essentially values) align with your own and with where you feel you'll be successful.
If you think about this over a long enough timescale, and believe in something like the efficient market hypothesis, companies will converge on near-optimal structures that pay for the performance that is valued in their niche, and individual will be able to make informed decisions to work with companies that will pay them based on their strengths.
Note that I'm not saying that a company can't ever change its compensation and performance evaluation, so if LoC is a bad metric, over time I'd expect companies to move away from it as they find it to be gamed. But like, I'm not going to stop a company from picking a bad metric, or claim that transparency is bad because companies can make bad decisions. Companies can make equally bad decisions today, and you won't know.
If you think about this over a long enough timescale, and believe in something like the efficient market hypothesis, companies will converge on near-optimal structures that pay for the performance that is valued in their niche, and individual will be able to make informed decisions to work with companies that will pay them based on their strengths.
Note that I'm not saying that a company can't ever change its compensation and performance evaluation, so if LoC is a bad metric, over time I'd expect companies to move away from it as they find it to be gamed. But like, I'm not going to stop a company from picking a bad metric, or claim that transparency is bad because companies can make bad decisions. Companies can make equally bad decisions today, and you won't know.
I don't think you need metrics like lines of code.
> Based on peer evaluations?
Based on their interpretation of how you hit metrics? Why not just look at the metrics directly?
I think it's okay if ratings are subjective based on loosely defined job responsibilities. That's how it works at FAANG.
Nothing is going to be fair. But I think it's better than just counting how many bugs you fix or how many lines of code you review or how many users your code acquires (which should be mostly determined by your product and design team's decisions).
> Based on peer evaluations?
Based on their interpretation of how you hit metrics? Why not just look at the metrics directly?
I think it's okay if ratings are subjective based on loosely defined job responsibilities. That's how it works at FAANG.
Nothing is going to be fair. But I think it's better than just counting how many bugs you fix or how many lines of code you review or how many users your code acquires (which should be mostly determined by your product and design team's decisions).
I'm making a slightly higher level point: If some companies choose to make things strictly LoC based, that's fine (even though I think its a dumb measure). If they're transparent about that, and you prefer a FAANG-like "subjective peer eval based on loosely defined job responsibilities" approach, you can avoid the LoC based companies.
There doesn't need to an objective, or even a best subjective, measure of productivity, as long as the company's chosen measure is transparent and preregistered.
There doesn't need to an objective, or even a best subjective, measure of productivity, as long as the company's chosen measure is transparent and preregistered.
When the in cases where the productivity measurement scheme is this straightforward, you'll find a lot of positions offer bonuses or incentives for hitting metrics. Or maybe just quotas that serve to inform the worker that any addition work is unnecessary. After all, you pointed out all the obvious reasons that this makes sense.
The reason the vast majority of jobs don't work this way is because productivity is rarely: A) so easily measured B) so easily mapped to revenue. A 0.1x person whose maintenance work generates real revenue contributes more to the bottom line than a 100x worker in the same position whose project is scrapped for whatever reason.
The reason the vast majority of jobs don't work this way is because productivity is rarely: A) so easily measured B) so easily mapped to revenue. A 0.1x person whose maintenance work generates real revenue contributes more to the bottom line than a 100x worker in the same position whose project is scrapped for whatever reason.
> Why is transparency a problem here?
> The person doing orders of magnitude more work is probably only getting paid 10% more.
You've answered your own question. Transparency is undesirable from an employer's perspective because it encourages a closer alignment between compensation and productivity, and the mismatch between these currently serves as a significant profit advantage to the employer.
If I can get 1000% more work from someone, and pay them 10% or 100% more, I am highly incentivized to prevent them from becoming aware of the value of their efforts, because they might realize their (relative) exploitation.
At the same time, the less-productive worker also benefits from this lack of transparency because they get ~90% of the pay for 10% of the work. Disrupting the status quo would not be economically rational for them either.
Thus, only the small fraction of underpaid, overworked people benefit from increased transparency, and it is not surprising to find that the majority would resist its implementation.
> The person doing orders of magnitude more work is probably only getting paid 10% more.
You've answered your own question. Transparency is undesirable from an employer's perspective because it encourages a closer alignment between compensation and productivity, and the mismatch between these currently serves as a significant profit advantage to the employer.
If I can get 1000% more work from someone, and pay them 10% or 100% more, I am highly incentivized to prevent them from becoming aware of the value of their efforts, because they might realize their (relative) exploitation.
At the same time, the less-productive worker also benefits from this lack of transparency because they get ~90% of the pay for 10% of the work. Disrupting the status quo would not be economically rational for them either.
Thus, only the small fraction of underpaid, overworked people benefit from increased transparency, and it is not surprising to find that the majority would resist its implementation.
> Thus, only the small fraction of underpaid, overworked people benefit from increased transparency
I’m not sure I agree with the basic premise that the majority of people are either paid fairly or overpaid.
I suspect the vast majority of people are overworked and underpaid. The lack of real world wage increases, especially when compared to every increasing productivity, strongly suggests that being underpaid is far more likely than being overpaid.
I’m not sure I agree with the basic premise that the majority of people are either paid fairly or overpaid.
I suspect the vast majority of people are overworked and underpaid. The lack of real world wage increases, especially when compared to every increasing productivity, strongly suggests that being underpaid is far more likely than being overpaid.
> Thus, only the small fraction of underpaid, overworked people benefit from increased transparency, and it is not surprising to find that the majority would resist its implementation.
According to your own logic, only a much smaller fraction of business get any significant advantage.
What entitles business owners to all the benefits of highly productive workers?
According to your own logic, only a much smaller fraction of business get any significant advantage.
What entitles business owners to all the benefits of highly productive workers?
> What entitles business owners to all the benefits of highly productive workers?
This is exactly why many of those workers go on to start their own businesses, to redirect those benefits to themselves.
This is exactly why many of those workers go on to start their own businesses, to redirect those benefits to themselves.
Why is transparency a problem here?
Transparency in pay or transparency in value to the company?
The issue GP had was with disparities in pay and value. If you start being transparent on value, that gets into privacy issues.
Transparency in pay or transparency in value to the company?
The issue GP had was with disparities in pay and value. If you start being transparent on value, that gets into privacy issues.
What would actually happen is 10X you would negotiate to be paid double what your slacker coworkers made. Then they would look at the pay spreadsheet and dedicate the bulk of their time thereafter to complaining to anybody who would listen about how unfair that was.
Eventually you’d have to leave or the boss would have to ditch pay transparency.
There is no world where 10X people will agree to a 50-75% pay cut, so the only people that will be left in these transparent shops will be the bottom half of the talent pool.
Eventually you’d have to leave or the boss would have to ditch pay transparency.
There is no world where 10X people will agree to a 50-75% pay cut, so the only people that will be left in these transparent shops will be the bottom half of the talent pool.
Based on how disclosing CEO pay went it will have an inflationary effect.
I've seen pay become transparent (usually by accident) a few times and I've never once seen your scenario happen. If it even did I'm not sure why it would matter.
The most normal "outrage" response I've seen is "Bob makes more than Alice even though Bob is less productive".
Usually with pay secrecy the employer is covering for the fact that Bob had more leverage when negotiating salary and even though Bob is a profitable employee that they want to keep, Alice is a very profitable employee because she's cheap.
If Alice is no longer kept in the dark, she has both additional leverage and an incentive to leave in a fit of pique, neither of which you want for your most profitable employees.
The most normal "outrage" response I've seen is "Bob makes more than Alice even though Bob is less productive".
Usually with pay secrecy the employer is covering for the fact that Bob had more leverage when negotiating salary and even though Bob is a profitable employee that they want to keep, Alice is a very profitable employee because she's cheap.
If Alice is no longer kept in the dark, she has both additional leverage and an incentive to leave in a fit of pique, neither of which you want for your most profitable employees.
> Because the most important attributes are very hard to gauge and almost impossible to prove — Grit, dedication, responsibility, excellence and loyalty.
Devils advocate- isn't this a bit like arguing peanut butter shouldn't be uniformly priced, but you ought to negotiate the price of every jar based on various attributes of the farm where the peanuts were grown: soil acidity, use of pesticides, as well as farmers grit and dedication? A jar is a jar, and ideally, a job is a job. An employee can either do the job, and be paid what it says on the can, or they cannot do the job and have to be transitioned out.
Sure, jars come in different sizes and brands, but we should stop pretending each job is bespoke when employee organizations function on the basis of them being similar, empirically workers are replaceable.
My biggest problem is information asymmetry: even if I were to accept your argument at face value (that important attributes are hard to gauge); the employee has much less knowledge on how much they ought to be paid for their skill-level, but the employer will have that information up the wazoo (both internally, and through industry surveys and back-channels)
Devils advocate- isn't this a bit like arguing peanut butter shouldn't be uniformly priced, but you ought to negotiate the price of every jar based on various attributes of the farm where the peanuts were grown: soil acidity, use of pesticides, as well as farmers grit and dedication? A jar is a jar, and ideally, a job is a job. An employee can either do the job, and be paid what it says on the can, or they cannot do the job and have to be transitioned out.
Sure, jars come in different sizes and brands, but we should stop pretending each job is bespoke when employee organizations function on the basis of them being similar, empirically workers are replaceable.
My biggest problem is information asymmetry: even if I were to accept your argument at face value (that important attributes are hard to gauge); the employee has much less knowledge on how much they ought to be paid for their skill-level, but the employer will have that information up the wazoo (both internally, and through industry surveys and back-channels)
If peanut butter was $200k a jar and not $2 a jar, then I would imagine there would be a lot of talk about the soil and pesticides.
Hand-assembled hypercars can go for much more than $200k, but are not priced according to the years of experience, grit, or expertise of the craftsmen who sew the leather seats or molded the carbon-fiber elements. One doesn't have to haggle with Koenigsegg over the provenance of their steel.
Such cars are all roughly interchangeable between themselves (& sometimes between competitors), hence an average price. In certain fields, employees are not similarly interchangeable for a given position.
> In certain fields, employees are not similarly interchangeable for a given position.
In most fields, they are. I'd hazard 99.9% of all workers are interchangeable, albeit with some variance in productivity. If a worker dies today, the vacancy will be up by the next Monday and the position filled within a few weeks.
Speaking of individual productivity, most comments here are overestimating its importance: if you are able to crank out a feature in 2 weeks that your colleagues can manage in 4, how much higher should your salary be? You have double their productivity (sometimes), but if this doesn't move the needle on the release date - it rarely does - how much more valuable are you? The release date is still 2 fiscal quarters away, others will need to integrate your work and make it usable.
In most fields, they are. I'd hazard 99.9% of all workers are interchangeable, albeit with some variance in productivity. If a worker dies today, the vacancy will be up by the next Monday and the position filled within a few weeks.
Speaking of individual productivity, most comments here are overestimating its importance: if you are able to crank out a feature in 2 weeks that your colleagues can manage in 4, how much higher should your salary be? You have double their productivity (sometimes), but if this doesn't move the needle on the release date - it rarely does - how much more valuable are you? The release date is still 2 fiscal quarters away, others will need to integrate your work and make it usable.
I'm not sure what point you're trying to make. There are salary bands precisely because of this. Also productivity isn't the only metric. A person may get a higher salary for the same position because they bring in more experience or relevant skill set. A good chunk of more senior development work is figuring out which problems are worth solving in the first place. A junior engineer with that talent is far more valuable & senior engineers can differentiate themselves in that way as well.
As for replacements, for more senior positions its not a 2 week process. You typically have someone more interim step in if there's nobody existing on the team that can step in.
As for replacements, for more senior positions its not a 2 week process. You typically have someone more interim step in if there's nobody existing on the team that can step in.
That's because you buy a Koenigsegg to show off how rich you are. You don't haggle over things you are buying for the sake of spending money.
And you over look the Ferrari components that come from the FIAT parts bin.
Like you hire from Harvard to show how rich your law firm is :)
I mean, wine ranges in price from $4 to no real ceiling based on exactly those sorts of factors...
And yet in most cases the price of each bottle is still clearly marked.
Right, but there are still differences in prices between different makes of the same type of wine. For example a bottle of Charles Shaw Cabernet (ie. two buck chuck) vs. a Robert Mondavi Cabernet. So to put that in employee terms Alice makes $X and Bob makes $Y. They are both front end developers. Alice makes significantly more because she produces more and higher quality work. So what is gained by making these "prices" transparent?
I'm not quite sure what your point is. Your analogy is to two difference bottles of the same type of wine that have clearly marked prices that are very different. No one is questioning whether it sometimes makes sense for different bottles of wine to have different prices, or whether there are sometimes legitimate differences between employees in the same type of role that justify different salaries. What we're questioning is whether the salaries ought to be transparent, as the prices are for the bottles of wine.
>Devils advocate- isn't this a bit like arguing peanut butter shouldn't be uniformly priced, but you ought to negotiate the price of every jar based on various attributes of the farm where the peanuts were grown
Unlike the peanut butter example, the economic value provided to the business by skilled employees varies not just by orders of magnitude but can even go negative.
If you ate $100k worth of peanut butter each year, and some of the jars were only 10% full (or worse, contained horrible peanut-butter guzzling insects that ate parts of your good jars), you'd definitely start negotiating with the peanut butter industry.
Unlike the peanut butter example, the economic value provided to the business by skilled employees varies not just by orders of magnitude but can even go negative.
If you ate $100k worth of peanut butter each year, and some of the jars were only 10% full (or worse, contained horrible peanut-butter guzzling insects that ate parts of your good jars), you'd definitely start negotiating with the peanut butter industry.
I always want to negotiate when buying a car, but I still want at least the MSRP as a reference point, and more information is better.
In Econ 101 you learn there's different pricing models.
Goods on a shelf, like peanut butter, are called commodities and will obey a commodity pricing model.
Anything else? Won't. They will have different pricing models often better fitting an auction model, of which there are several. For example, rare art. Second-hand or used goods. Employee salaries.
For any skilled employee, there is no such thing as a single fair price for their salary because there's such a right-place-at-the-right-time effect. You can look up Timofey Mozgov, a bad NBA player who lucked into a ridiculous $64 million overpay contract he worked less than 50% of, because he happened to become a free agent during a summer the budgets went up and everybody was getting overpaid.
Goods on a shelf, like peanut butter, are called commodities and will obey a commodity pricing model.
Anything else? Won't. They will have different pricing models often better fitting an auction model, of which there are several. For example, rare art. Second-hand or used goods. Employee salaries.
For any skilled employee, there is no such thing as a single fair price for their salary because there's such a right-place-at-the-right-time effect. You can look up Timofey Mozgov, a bad NBA player who lucked into a ridiculous $64 million overpay contract he worked less than 50% of, because he happened to become a free agent during a summer the budgets went up and everybody was getting overpaid.
Labor is a commodity and it obeys market forces (given adequate information); employees get paid salaries because they are selling their time. Employees are replaceable - when one leaves, they are replaced by an equivalent, and the show goes on.
I think the current (labor) sellers-market that's happening in tech sector gives the illusion that this is not the case, and that we are auctioning high-value, rare skills and not sellers of commodified labor, which has congealed around standardized tech stacks that make sure you're the right type of cog.
I think the current (labor) sellers-market that's happening in tech sector gives the illusion that this is not the case, and that we are auctioning high-value, rare skills and not sellers of commodified labor, which has congealed around standardized tech stacks that make sure you're the right type of cog.
I agree that the information asymmetry is unfair, and that jobs should advertise a minimum starting point. It communicates ball park what they are willing to pay to get the quality of candidates they are looking for.
But I'm strongly against any law that makes _my_ actual pay public.
I think they are two separate issues.
But I'm strongly against any law that makes _my_ actual pay public.
I think they are two separate issues.
I'm not arguing for individual's salaries to be made public, however the minimum and maximum should be published - the minimum alone is not adequate.
Are you really comparing people to a thing ?
Time is being bought from employers. Years of life that can never be taken back or used to something else.
We are not products.
As social being the price our time is being compensated define a part of our intrinsic value. Otherwise everyone would be paid the same right ?
So if our value is publicly displayed in the eyes of everyone to see, a new door opens.
Will I be judged by others based on that ?
Will I be able to change company with no leverage because they know my actual worth and won’t pay me from what they are ready to pay someone ?
Will other people in the company or society treat me differently based on this public « worth » ?
Transparency could also reveal inequalities and fix them.
Of course we are interchangeable in jobs, but what about a junior developer and senior one with the exact same job. Should the junior have a senior pay or the senior being stuck at a junior pay until the next carrer change ?
maybe part of the solution is that companies should be transparent from the start. What their envelope is and no more bargaining. Everyone the same amount.
Of course we are interchangeable in jobs, but what about a junior developer and senior one with the exact same job. Should the junior have a senior pay or the senior being stuck at a junior pay until the next carrer change ?
maybe part of the solution is that companies should be transparent from the start. What their envelope is and no more bargaining. Everyone the same amount.
> but you ought to negotiate the price of every jar based on various attributes of the farm where the peanuts were grown
Not comparable because while peanut butter brands may have very different characteristics, every jar from a given product line is the same. Brand X and Brand Y do have different prices, but every jar of Brand Y is identical (jar was filled from the same giant vat) and thus the same price.
People though, are all individual. Even more granular, the exact same person can be 10X to negative, depending on job environment.
Not comparable because while peanut butter brands may have very different characteristics, every jar from a given product line is the same. Brand X and Brand Y do have different prices, but every jar of Brand Y is identical (jar was filled from the same giant vat) and thus the same price.
People though, are all individual. Even more granular, the exact same person can be 10X to negative, depending on job environment.
Your employer doesn't want you to discuss pay with your fellow workers, because if you did you would realize how badly you are being ripped off. This is why in many countries pay transparency is protected by law. The Wall Street Journal will naturally tell you otherwise, because they are your enemy.
Can confirm. We once found out a lazy developer was getting paid almost twice what me and others on my team were, for who knows what reason. It made everyone feel like shit.
The reasonable response to that is not "so we shouldn't let anyone find out what other people are making." It's "so we should go to management, demand to know why this crappy employee is making more, and if they don't have a very good answer and won't remedy the situation, consider leaving to some place where they reward excellence."
Devils advocate: why does it matter? Does them making more than you affect you in any way except emotionally? Are management going to say "Oh! Thanks for pointing it out, here you go, have a portion of their salary!", or are they just going to stop paying that employee as much?
I believe my other comment here [0] answers that question.
However, it also speaks to what is valued at that workplace. This matters not just for the "emotional" purposes, but for the implications it has for how the workplace will evolve over time due to those values.
If you are someone for whom personal relationships, negotiating skills, and networking matter more than skill at the job, perhaps you think that a place where a lazy but well-connected developer is paid significantly more, and management refuses to change this, is ideal.
If, on the other hand, you are someone for whom competence, productivity, and ability to do the job assigned is most important...then perhaps you will find that such a workplace will become less and less friendly to you over time.
[0] https://news.ycombinator.com/item?id=28543162
However, it also speaks to what is valued at that workplace. This matters not just for the "emotional" purposes, but for the implications it has for how the workplace will evolve over time due to those values.
If you are someone for whom personal relationships, negotiating skills, and networking matter more than skill at the job, perhaps you think that a place where a lazy but well-connected developer is paid significantly more, and management refuses to change this, is ideal.
If, on the other hand, you are someone for whom competence, productivity, and ability to do the job assigned is most important...then perhaps you will find that such a workplace will become less and less friendly to you over time.
[0] https://news.ycombinator.com/item?id=28543162
Because you can use it to negotiate higher pay. I would say that’s a pretty significant affect on your life.
Having more data in a negotiation is never a bad thing, having less always is.
Having more data in a negotiation is never a bad thing, having less always is.
You're making an assumption that they will negotiate your pay up, and not correct the under performers down, or do neither. More data is useful yes, but not on a per-employee basis. If the average for your position is higher, then yes, you can use that, but if it's an individual you're unlikely to get any difference for yourself, but could negatively impact them.
Yet what if the best developer on the team was paid 3x more than everyone else, would you not also feel like shit? Unless everyone is paid exactly the same, then everyone feels like shit, which will motivate everyone to no longer care, and then your job will go away as your employer winds up as shit.
That's pretty much your fault, you go to your manager and negotiate better compensation, or leave. That have happened to me as well, and I left, never looked back. If you have 7 kids, 2 mortgages, etc... and can't afford to leave, then, maybe, that's why your employer is paying you less, because they have leverage on you. My aim is not to feel bad about somebody else's salary being higher than mine, I always aim to get as much as possible. Also,it seems the "lazy" developer, is not that lazy, as he/she/{x} at least can negotiate better compensation.
I think its a persons own responsibility job to shop around and work out what the market value is for their labor.
If a company tells you how much they pay, they are also telling every other company how much they will pay. It's basically colluding to keep wages low.
You are worth what somebody will pay you.
If a company tells you how much they pay, they are also telling every other company how much they will pay. It's basically colluding to keep wages low.
You are worth what somebody will pay you.
Conversely, also very easy for a company to attract more talented labor by advertising higher compensation than their competitors.
I don't get the "it's a person's own responsibility" bit. Why should it be someone's responsibility to divine their true value via time-consuming interviews, rather than simply comparing what companies are willing to pay?
I don't get the "it's a person's own responsibility" bit. Why should it be someone's responsibility to divine their true value via time-consuming interviews, rather than simply comparing what companies are willing to pay?
Because companies are willing to pay _any amount_ to get the right person for the job. CEOs are payed millions. Engineers can be payed anything from a minimum wage though to the same as the CEO.
But yes, I don't understand why a company would not at least advertise a minimum of what they are willing to pay to get a candidate to apply. Perhaps they are happy with the candidates they are getting.
But yes, I don't understand why a company would not at least advertise a minimum of what they are willing to pay to get a candidate to apply. Perhaps they are happy with the candidates they are getting.
That is not colluding at all.
https://en.wikipedia.org/wiki/Collusion
Just because Walmart says on their website that they sell an item at $5, does not imply they have made an agreement with other sellers to also sell at $5. Nor does Carvana saying they will buy a car at $20k imply an agreement with other buyers to also buy at $20k.
https://en.wikipedia.org/wiki/Collusion
Just because Walmart says on their website that they sell an item at $5, does not imply they have made an agreement with other sellers to also sell at $5. Nor does Carvana saying they will buy a car at $20k imply an agreement with other buyers to also buy at $20k.
No, they are deceitfully agreeing to be transparent in wages. The deception is that it's secretly to not allow people to leverage their offers or ask for more.
Where is the proof?
Is the claim also that at an auction, when people bid on something and yell out a number, they are “secretly” telling other bidders to not bid more?
Markets all over the world for thousands of years work on the basis of buyers telling sellers what they are willing to pay, and sellers telling buyers what they are willing to sell for. The whole process of a buyer and seller coming to an agreement on price is central to determining movements of supply and demand curves.
If either buyers or sellers have sufficient control to dictate prices, then that is a separate issue of there not being sufficient buyers and sellers.
But price transparency always results in a better allocation of resources and a healthier marketplace.
Is the claim also that at an auction, when people bid on something and yell out a number, they are “secretly” telling other bidders to not bid more?
Markets all over the world for thousands of years work on the basis of buyers telling sellers what they are willing to pay, and sellers telling buyers what they are willing to sell for. The whole process of a buyer and seller coming to an agreement on price is central to determining movements of supply and demand curves.
If either buyers or sellers have sufficient control to dictate prices, then that is a separate issue of there not being sufficient buyers and sellers.
But price transparency always results in a better allocation of resources and a healthier marketplace.
I never said what you implied. There is no agreement other than the law. I was just describing the likely outcome of the law in my opinion. AKA the deception of the law itself.
I think you are talking about "maxim" price though right. A car has a sticker price of 10K on the showroom floor, but nobody pays that. You negotiate down from there.
I think it would fine for companies to advertise a sticker price for a job, but nobody expects to actually earn that, you negotiate up from there.
I think it would fine for companies to advertise a sticker price for a job, but nobody expects to actually earn that, you negotiate up from there.
Everything is always up for negotiation.
I know a few people who paid more than sticker price for a car in the last year.
Companies can advertise min, max, whatever. The person accepting is going to be deciding based on how good the total offer is versus somewhere else. But if a company knows which way prices are moving since they do a lot more buying of labor than an individual does of selling of labor, then the company has an advantage. Reducing this advantage helps level the playing field.
I know a few people who paid more than sticker price for a car in the last year.
Companies can advertise min, max, whatever. The person accepting is going to be deciding based on how good the total offer is versus somewhere else. But if a company knows which way prices are moving since they do a lot more buying of labor than an individual does of selling of labor, then the company has an advantage. Reducing this advantage helps level the playing field.
To be fair, workers are not interchangeable pieces. If you're paid less, it's not necessarily because your employer is ripping you, there are many factors: performance, commitment, disposition, ambition, networking, etc.
I don't think it's a good idea to dictate fixed salaries, but it's a great idea to make them transparent. It would be nice seeing how much the best employee earns, so you could use them as a role model. It would also be nice to see if the slacker brother of your boss is earning accordingly to his performance.
I don't think it's a good idea to dictate fixed salaries, but it's a great idea to make them transparent. It would be nice seeing how much the best employee earns, so you could use them as a role model. It would also be nice to see if the slacker brother of your boss is earning accordingly to his performance.
> To be fair, workers are not interchangeable pieces.
This is absolutely true.
However, in practice, while there are certainly workplaces where differences in pay are primarily due to differences in actual productive output and value to the team/company, there are also many, many workplaces where the differences in pay are entirely due to either better negotiation skills (which have absolutely nothing to do with the work in question), or how much the people deciding on the pay like the workers in question....including how much the workers in question toe the party line and are willing to sacrifice and abuse themselves for the sake of the company.
In a case like this, what is responsible is to acknowledge the good-faith cases, and put rules in place (like pay transparency) to help fight against the bad-faith and abusive cases. "We should allow companies the freedom to continue to abuse their employees, because some companies instead use that freedom to reward good employees" is not a particularly compelling argument, at least to me.
This is absolutely true.
However, in practice, while there are certainly workplaces where differences in pay are primarily due to differences in actual productive output and value to the team/company, there are also many, many workplaces where the differences in pay are entirely due to either better negotiation skills (which have absolutely nothing to do with the work in question), or how much the people deciding on the pay like the workers in question....including how much the workers in question toe the party line and are willing to sacrifice and abuse themselves for the sake of the company.
In a case like this, what is responsible is to acknowledge the good-faith cases, and put rules in place (like pay transparency) to help fight against the bad-faith and abusive cases. "We should allow companies the freedom to continue to abuse their employees, because some companies instead use that freedom to reward good employees" is not a particularly compelling argument, at least to me.
"We should allow companies the freedom to continue to abuse their employees, because some companies instead use that freedom to reward good employees" is not a particularly compelling argument, at least to me.
That really depends on the magnitude of the two problems. "Don't throw the baby out with the bathwater," "The cure is worse than the disease," etc.
That really depends on the magnitude of the two problems. "Don't throw the baby out with the bathwater," "The cure is worse than the disease," etc.
This is certainly true, and a fair criticism in the general case.
However, at least from my perspective, the harm caused by allowing employers to continue to abuse the information asymmetry is significant and real, while the idea that keeping people in the dark makes it somehow more likely that good employers will reward good employees seems to have no rational basis in fact. (It is, I believe, much more likely that good employers will reward good employees regardless of whether they are required to disclose employee compensation.)
Thus, unless you wish to claim an ideological argument of some sort (which I would say should always be superseded by evidence of actual harm to actual people on the other side), the only remaining argument I've personally seen against pay transparency always appears to boil down to "I assume I must be paid better than the people around me, because of my obviously better skills at $JOB and/or negotiation, and I'm afraid that if everyone knew they would be jealous of me."
However, at least from my perspective, the harm caused by allowing employers to continue to abuse the information asymmetry is significant and real, while the idea that keeping people in the dark makes it somehow more likely that good employers will reward good employees seems to have no rational basis in fact. (It is, I believe, much more likely that good employers will reward good employees regardless of whether they are required to disclose employee compensation.)
Thus, unless you wish to claim an ideological argument of some sort (which I would say should always be superseded by evidence of actual harm to actual people on the other side), the only remaining argument I've personally seen against pay transparency always appears to boil down to "I assume I must be paid better than the people around me, because of my obviously better skills at $JOB and/or negotiation, and I'm afraid that if everyone knew they would be jealous of me."
Or they're paid more, because their neighbour is a good worker, and too nice to ask for anything. Meanwhile Mr. Jerkface next door is a very mediocre, unreliable character, and is still difficult to let go, so he gets paid more, because he always asks for more more money.
Dynamic pay doesn't always reward the very best, and certainly not proportionally. It also rewards the person the boss likes, well connected people, and people that are just more skilled at gaming the system.
Dynamic pay doesn't always reward the very best, and certainly not proportionally. It also rewards the person the boss likes, well connected people, and people that are just more skilled at gaming the system.
Dictating fixed salaries and wage transparency are vastly different things, and only one of those things is being discussed here.
Wage transparency does not lead to fixed salaries, it just removes the information asymmetry between employer and worker, making it easier for workers to negotiate a better wage. Employers can still refuse to introduce pay parity, and many employees probably won’t care that much.
Wage transparency does not lead to fixed salaries, it just removes the information asymmetry between employer and worker, making it easier for workers to negotiate a better wage. Employers can still refuse to introduce pay parity, and many employees probably won’t care that much.
I tend to agree. No two candidates are exactly the same. Just like there's no pay transparency, there is no candidate transparency. With things I buy off the Web, I have option of returning if they were misrepresented or do not perform. With job applicants, you can't do that.
> To be fair, workers are not interchangeable pieces.
True - but job posts can be occupied by interchangeable pieces; some are overachievers, but all meet a minimum requirement. "Software Engineer I" in department A can be filled by any suitable candidate, and the budget maxes out at $XXX,000. If you're being paid less than this, the employer should tell you why (commitment,disposition, ambition, networking, etc).
True - but job posts can be occupied by interchangeable pieces; some are overachievers, but all meet a minimum requirement. "Software Engineer I" in department A can be filled by any suitable candidate, and the budget maxes out at $XXX,000. If you're being paid less than this, the employer should tell you why (commitment,disposition, ambition, networking, etc).
Isn't it more likely that some people would realize they are being ripped off, and some people would realize they're getting paid more than their peers?
> Your employer doesn't want you to discuss pay with your fellow workers, because if you did you would realize how badly you are being ripped off.
Strangely, the US tends to pay more than any other country for the work, which is why those who live in other countries would rather move to the US and its non-transparent pay system.
Pay transparency creates commodization of jobs which will only lead to the pay dropping rather than rising. Opaque pricing is great for sellers and the sellers in every market. In the job market the sellers are employees, not employers.
Strangely, the US tends to pay more than any other country for the work, which is why those who live in other countries would rather move to the US and its non-transparent pay system.
Pay transparency creates commodization of jobs which will only lead to the pay dropping rather than rising. Opaque pricing is great for sellers and the sellers in every market. In the job market the sellers are employees, not employers.
Please point me towards all these countries with transparent pay systems you seem to think exist.
That was an assertion of @thescriptkiddie
This assumes that the market is actually opaque for both parties. The information asymmetry between employer and employee regarding wages is pretty well documented. There are other pressures on wages in particular: not filling a position for 6 months usually hurts an employer less than an employee not having a job for that same amount of time.
The "lazy PhD" bit there really undermines your entire point. Have you seen what it takes to get a PhD? I'm sure there are some who somehow skated through, but they are the exception, and not the rule.
For the same reasons you cite, equal pay is important. Some employees are better than others, and this is very hard to qualify, and the effect is that those who have less skill at negotiation, are underpaid, completely independent of skill, while those who are better at negotiation are paid more, completely independent of skill.
If skill is not going to be a factor in how people are paid, then pay for the role and not the person.
Any given person can and will grow in their role, potentially earning more (but not getting paid more) than they did a month prior; even moreso if they don't have to stress about money all of the time, and can just have all of those concerns alleviated even a little by higher pay.
Most people want to be better at their career, and are bogged down by the myriad of troubles that tight budgets generally cause. Remove these impediments for those who have reached a point in their career where they've earned the right to be without these troubles, and you will see your people take off, like how plants bloom when they haven't seen water in 10 days.
For the same reasons you cite, equal pay is important. Some employees are better than others, and this is very hard to qualify, and the effect is that those who have less skill at negotiation, are underpaid, completely independent of skill, while those who are better at negotiation are paid more, completely independent of skill.
If skill is not going to be a factor in how people are paid, then pay for the role and not the person.
Any given person can and will grow in their role, potentially earning more (but not getting paid more) than they did a month prior; even moreso if they don't have to stress about money all of the time, and can just have all of those concerns alleviated even a little by higher pay.
Most people want to be better at their career, and are bogged down by the myriad of troubles that tight budgets generally cause. Remove these impediments for those who have reached a point in their career where they've earned the right to be without these troubles, and you will see your people take off, like how plants bloom when they haven't seen water in 10 days.
> The "lazy PhD" bit there really undermines your entire point. Have you seen what it takes to get a PhD?
It depends on the field, but however much effort it takes to get a PhD it's at best a weak proxy for how much value a particular employee provides to the business.
> and you will see your people take off
Yes, you'll see your best employees take off to an employer where they are paid better than their time-serving colleagues.
It depends on the field, but however much effort it takes to get a PhD it's at best a weak proxy for how much value a particular employee provides to the business.
> and you will see your people take off
Yes, you'll see your best employees take off to an employer where they are paid better than their time-serving colleagues.
> PhD it's at best a weak proxy for how much value a particular employee provides to the business.
Compensation is almost never based on what value employees provide to the business but what the market will pay for them. If PhDs get paid more it’s likely because the market is willing to pay more for people with those skills.
Fwiw: I don’t have a PhD. But I do find the lazy PhD bit pretty tiring too.
Compensation is almost never based on what value employees provide to the business but what the market will pay for them. If PhDs get paid more it’s likely because the market is willing to pay more for people with those skills.
Fwiw: I don’t have a PhD. But I do find the lazy PhD bit pretty tiring too.
With PhD thing is the supply is relatively low. At least compared to number of Masters and Bachelors available. Thus just alone that they can cost more to hire. Demand is much more murky question however.
> Have you seen what it takes to get a PhD?
In the worst case, the extreme willingness and patience to waste years of your life on writing a thick paper that has a high chance of never being read by more than a handful of people and then pile on dust in the closet — and choosing that path over creating tangible real-world solutions in the same time.
Not discounting the hard work that goes into a PhD thesis at the slightest and the fact that I know brilliant PhDs with game-changing papers that went on to excel in their jobs, this framing might still give a clue on why, after having hired over a hundred engineers and seeing them develop, I have yet to see a positive correlation between academic performance and job performance.
Same goes for removing impediments. Having gone greater lengths to remove impediments for employees early in my career than any other manager I know, I can attest that even that doesn't motivate certain personality types to "flower". If anything, it motivates them to find more impediments. All the while the employees who just removed the first few impediments themselves are already crushing the next task.
"Whoever wants something finds ways, whoever doesn't want something finds reasons." - Götz Werner
In the worst case, the extreme willingness and patience to waste years of your life on writing a thick paper that has a high chance of never being read by more than a handful of people and then pile on dust in the closet — and choosing that path over creating tangible real-world solutions in the same time.
Not discounting the hard work that goes into a PhD thesis at the slightest and the fact that I know brilliant PhDs with game-changing papers that went on to excel in their jobs, this framing might still give a clue on why, after having hired over a hundred engineers and seeing them develop, I have yet to see a positive correlation between academic performance and job performance.
Same goes for removing impediments. Having gone greater lengths to remove impediments for employees early in my career than any other manager I know, I can attest that even that doesn't motivate certain personality types to "flower". If anything, it motivates them to find more impediments. All the while the employees who just removed the first few impediments themselves are already crushing the next task.
"Whoever wants something finds ways, whoever doesn't want something finds reasons." - Götz Werner
Having lived with 4 PHD students while doing my masters it seems easier than having a job and generally suits people who are scared to enter the “real world”. These are people who are insecure about their intelligence and can suck up to their professors.
That's been my experience as well. I see zero value for phd's in my field. I'd rather train up a high school graduate: the high school graduate will take as long to train in most cases.
People who excel in academia can often be horrid professionally
I don't see the word "lazy" in the post you're responding to. They describe a lazy compensation scheme, though - a PhD apparently automatically gets more comp, regardless of on the job performance.
I was the first engineering hire at a start up. I built the start-up from greenfield to multi-million dollar revenue and 50+ employees.
I was doing ALL of the DevOps and security work, while also contributing to back-end development. I knew the system in and out and was working my ASS off.
When the time for yearly reviews came, I was excited to get a big raise ( to bring me in line with the median for my job title ), and a pat on the back.
Instead they announced some "point-based pay scale" and told me I was technically already over-paid for my position. No raise, no promotion.
The thing is, the point system was based on reviews from my peers. Who all did their own back-end and front-end work and were never really collaborating with me. I was just loudly as possible running things on the back-end and trying to keep my users happy.
ALL of us ended up around the middle of the chart "with expectations we will move up." "Oh, you built the company? Well uh... you're still just a senior engineer."
A week later I had accepted an offer making +50% and they were out one of their foundational engineers. Most of the other devs followed suit. So the pennies they saved lost them pounds of engineers they now had to recruit and re-hire for. What a bonehead move.
So I definitely hear you here: basing pay off of arbitrary points allocated by your peers instead of actually measuring performance is bad in my experience.
I was doing ALL of the DevOps and security work, while also contributing to back-end development. I knew the system in and out and was working my ASS off.
When the time for yearly reviews came, I was excited to get a big raise ( to bring me in line with the median for my job title ), and a pat on the back.
Instead they announced some "point-based pay scale" and told me I was technically already over-paid for my position. No raise, no promotion.
The thing is, the point system was based on reviews from my peers. Who all did their own back-end and front-end work and were never really collaborating with me. I was just loudly as possible running things on the back-end and trying to keep my users happy.
ALL of us ended up around the middle of the chart "with expectations we will move up." "Oh, you built the company? Well uh... you're still just a senior engineer."
A week later I had accepted an offer making +50% and they were out one of their foundational engineers. Most of the other devs followed suit. So the pennies they saved lost them pounds of engineers they now had to recruit and re-hire for. What a bonehead move.
So I definitely hear you here: basing pay off of arbitrary points allocated by your peers instead of actually measuring performance is bad in my experience.
> "Oh, you built the company? Well uh... you're still just a senior engineer."
This is a key message. Unless you have a contract that says something else in writing, don't expect anything else from sacrificing at an early startup.
This is a key message. Unless you have a contract that says something else in writing, don't expect anything else from sacrificing at an early startup.
Absolutely. I will never work that hard again unless it is for myself.
I agree with this, I've been doing the job search thing for the last 3 months and I've spoken with a few companies that have this equality based pay model (DuckDuckGo is a good example), where everyone with the same job title makes exactly the same amount. The pay offered by these places is lower than what I have been able to get at places without the policy, and they have been unwilling to make any exceptions. This one-size-fits-all pay bracket thing really sucks IMO. Also basing pay off of YoE or education level also strike me as old, stodgy ways of paying your workers, like something IBM would do.
You're worth exactly what you can convince someone to pay you, nothing more or less than that.
You're worth exactly what you can convince someone to pay you, nothing more or less than that.
I think they should show pay minimums, not absolutes. The real issue isn't that Janet in Accounting makes $10k/yr more than you do, its that new hires for your same job make $10k/yr more than you.
I think those are two different issues though.
You can have pay transparency without enforcing strict pay levels per role.
The natural outcome is just that thise who make less than their coworkers will feel undervalued and look for other jobs, which is probably not a big problem.
You can have pay transparency without enforcing strict pay levels per role.
The natural outcome is just that thise who make less than their coworkers will feel undervalued and look for other jobs, which is probably not a big problem.
The problem in doing that is you generate metric tons of resentment and politicking among people in the same role. If my title is the same as someone else's but I'm making 20% less than they are, even if I can bring myself to admit to myself that they're better at the job, I'm still going to feel we're "doing the same job" and I'm getting screwed. Those people don't immediately and quietly
just look for a new job. They complain and moan and poison the well and generally destroy the social atmosphere of the company.
Studies of workplace motivation and performance often find that one of the worst things you can do is get everyone obsessing about salary all of the time instead of focusing on the work. (Notably, this isn't just bad for the company, it's bad for the workers' quality of life.) I think it's fair to say that sometimes companies are trying to screw the workers, but I also think some of the norms around discretion on this topic were an informal evolved mechanism to dampen the natural status competition people fall into and get them to work more as a unit focused on a goal. While I appreciate the aim behind transparency laws, I'd prefer it if certain things like choosing to talk about salary were protected. Publishing all of the salaries by default seems like a blunt mechanism and strikes me as very libertarian or Marxist thinking where you're either assuming a) a free and transparent market always produces the best result, or b) people fall into broad "classes" in which all individuals share the same interests and will work together. I generally think both of those modes of thought are simplistic and, despite some underlying truth, fail to account for many important complications and unintended side effects.
Studies of workplace motivation and performance often find that one of the worst things you can do is get everyone obsessing about salary all of the time instead of focusing on the work. (Notably, this isn't just bad for the company, it's bad for the workers' quality of life.) I think it's fair to say that sometimes companies are trying to screw the workers, but I also think some of the norms around discretion on this topic were an informal evolved mechanism to dampen the natural status competition people fall into and get them to work more as a unit focused on a goal. While I appreciate the aim behind transparency laws, I'd prefer it if certain things like choosing to talk about salary were protected. Publishing all of the salaries by default seems like a blunt mechanism and strikes me as very libertarian or Marxist thinking where you're either assuming a) a free and transparent market always produces the best result, or b) people fall into broad "classes" in which all individuals share the same interests and will work together. I generally think both of those modes of thought are simplistic and, despite some underlying truth, fail to account for many important complications and unintended side effects.
I'd be interested to see those studies.
I did a quick search for the article "How to Ruin Motivation With Pay" but it's behind a paywall. The book "Punished By Rewards" has a lot of references if you're interested.
I can see it now, there a bunch of tasks in Trello to do, and all the shit jobs go to the guy that's getting 10k more than than his manager. They guy getting paid the least gets all the easy jobs so his productivity looks better so he can ask for the pay rise at the end of the yet.
Meanwhile, Everybody else is doing the bare minimum to close the ticket so they can look good when it comes to pay review time.
Meanwhile, Everybody else is doing the bare minimum to close the ticket so they can look good when it comes to pay review time.
> I feel strongly about this, mostly because it happened to myself: After being sold, the first company that employed me introduced a "completely fair and transparent" compensation scheme. After I saw the scheme projected to the wall in the big All-Hands, I realized that without any degree I'd have to wait 10 years for stock options while the PhDs would be in almost immediately.
I also am a tech worker with no tech degree (no math, CS, eng, etc).
Pay transparency would be run by administrators inside businesses that would likely implement something as you describe: "So-and-so just graduated cum laude from X with a degree in Y therefore they're at pay band Z."
It will be horrible for people who had to self-educate.
I also am a tech worker with no tech degree (no math, CS, eng, etc).
Pay transparency would be run by administrators inside businesses that would likely implement something as you describe: "So-and-so just graduated cum laude from X with a degree in Y therefore they're at pay band Z."
It will be horrible for people who had to self-educate.
It doesn't matter. The degrees are just signifiers to denote a class of people you aren't in. If it weren't for the titles you would be excluded on some other grounds.
I mean, there are modern professions still using medieval terms for this (esquire?)
I mean, there are modern professions still using medieval terms for this (esquire?)
I've been seeing this posted in a few threads and in my experience it's plain wrong. When I'm interviewing candidates I don't care about the degree at all.
RCNTX: Either you interview and make hiring decisions, and the behavior you're describing is in fact your own, or you have never actually hired anyone and are speculating. Which is it?
RCNTX: Either you interview and make hiring decisions, and the behavior you're describing is in fact your own, or you have never actually hired anyone and are speculating. Which is it?
Who's to say they're not doing that already and just not telling you? At least this way there's no denying the company one's working for doesn't value them more than they value empty credentials. You can find another employer who doesn't play those games.
So once you see that (WHICH IS WHAT IS ALREADY GOING ON) then you can shop somewhere else.
Its really weird to see this offered as a negative of transparency, when it is an example of transparency working.
Its really weird to see this offered as a negative of transparency, when it is an example of transparency working.
I'm pretty sympathetic. More transparency means that class based lobbying will be easier, so we should expect the more powerful classes, like the credentialists, to win out and get themselves higher pay.
If it causes the "lower classes" to leave though you can wind up with a pile of PhDs that don't have practical knowledge and don't know how to produce anything actually useful.
You are blaming pay transparency for a related but different policy of having a public compensation formula. Pay transparency does not require that every employee in a given role needs to be compensated the same. More productive employees can still be compensated more. The less productive employees can leave if they have a problem with that. Pay transparency is simply about empowering employees by giving them the same information that employers have.
It sounds like just a bad deal. You don't have to do it based on credentials. They could have grandfathered in everyone, a subset of top performers, or made it based on role; the role USUALLY hires grads, but not always. You see this in manufacturing where machine operators occasionally work as engineers. The flip side is maybe you WERE being overpaid, able to trick your way to some kind of advantage, and got caught.
It does make it more challenging to reward top performers, who might be better off just sitting back and taking it easy, since number of years dictate pay... this is a problem anyway in my industry. People do notice if you're especially lazy or ambitious, but it often all looks the same, and doesn't matter unless you have eyes on management. You wind up being a necessary evil almost no matter what.
I do agree about being too focused on credentials. I could see how this system could do this, but it doesn't have to be that way.
It does make it more challenging to reward top performers, who might be better off just sitting back and taking it easy, since number of years dictate pay... this is a problem anyway in my industry. People do notice if you're especially lazy or ambitious, but it often all looks the same, and doesn't matter unless you have eyes on management. You wind up being a necessary evil almost no matter what.
I do agree about being too focused on credentials. I could see how this system could do this, but it doesn't have to be that way.
> After I saw the scheme projected to the wall in the big All-Hands, I realized that without any degree I'd have to wait 10 years for stock options while the PhDs would be in almost immediately. I called a recruiter the next day and was out a few months after.
So it worked.
Company valued PhD's most over anything else, and now you had that information and made an informed choice. They made theirs.
So it worked.
Company valued PhD's most over anything else, and now you had that information and made an informed choice. They made theirs.
You could go the other way as well, without knowing the limits to your future compensation, you were still hanging on to your position. You had expectations of a bigger pay day but it sounds like that was not formally offered to you.
When you knew your true pay and future pay you were able to move up to a better compensated position. To me that sounds like things working correctly. Companies will suffer when employees look around and see what their neighbors at other businesses are making and what they could be making elsewhere. But employees will benefit.
In many Asian cultures everyone knows what everyone else makes. In many cases it shakes out that the most deserving end up being the highest paid. Companies can’t benefit from employees keeping their pay from one another. There’s probably a game theory explanation as to how western and eastern cultures could both land on these two different states.
When you knew your true pay and future pay you were able to move up to a better compensated position. To me that sounds like things working correctly. Companies will suffer when employees look around and see what their neighbors at other businesses are making and what they could be making elsewhere. But employees will benefit.
In many Asian cultures everyone knows what everyone else makes. In many cases it shakes out that the most deserving end up being the highest paid. Companies can’t benefit from employees keeping their pay from one another. There’s probably a game theory explanation as to how western and eastern cultures could both land on these two different states.
You seem to have exactly the wrong takeaway? The business introducing pay transparency was a boon for you! It told you they won't pay you fairly, and so you left to get the raise you deserved.
Would you rather be lied to in manager 1-on-1s how you just need to work more collaboratively to get that promotion? What a scam!
Would you rather be lied to in manager 1-on-1s how you just need to work more collaboratively to get that promotion? What a scam!
It sounds like just a bad deal. You don't have to do it based on credentials. The flip side is maybe you WERE being overpaid, able to trick your way to some kind of advantage, and got caught.
It does make it more challenging to reward top performers, who might be better off just sitting back and taking it easy, since number of years dictate pay... this is a problem anyway in my industry. People do notice if you're especially lazy or ambitious, but it often all looks the same, and doesn't matter unless you have eyes on management.
I do agree about being too focused on
It does make it more challenging to reward top performers, who might be better off just sitting back and taking it easy, since number of years dictate pay... this is a problem anyway in my industry. People do notice if you're especially lazy or ambitious, but it often all looks the same, and doesn't matter unless you have eyes on management.
I do agree about being too focused on
Seems like one upside for tech workers is that this could finally inspire more companies to create decent tech tracks. It seems that many of the problems people have with transparency are related to people doing different/more/less work but who have the same job title when maybe they shouldn't. If 2 people contribute different orders of magnitude to a company they probably shouldn't have the same title. Different titles could then exist in different pay brackets (with different progression tracks, etc).
Isn't that the whole point of levels? You're an X and they're an X, but if they're going to get paid 50% more, then make them a Level 6 X and you a level 5 X. Then you post that level sixes get paid $XXX,XXX-$XXX,XXX while level fives only get some other amount and then internally people will push for transparency around what the promotion criteria are. I would expect (in the long run) to end up with the exact same pay and just more transparency.
> Despite the question being rhethorical, the answer is everything that's wrong about this proposal: Because the most important attributes are very hard to gauge and almost impossible to prove — Grit, dedication, responsibility, excellence and loyalty.
And you can indeed choose those things over higher pay. This does not prevent people from choosing something they love doing for less money; it just makes the opportunity cost more plain. I see nothing wrong with this. At all.
And you can indeed choose those things over higher pay. This does not prevent people from choosing something they love doing for less money; it just makes the opportunity cost more plain. I see nothing wrong with this. At all.
Another way to interpret this is to look at the relationship between power/influence and relative benefit of transparency. If the highest performers are incentivized to keep their pay secret to avoid getting placed into common denominator buckets, surely that will translate into systems that favor pay secrecy.
So if we look at pay secrecy as a "natural" phenomenon given workplace dynamics, one then needs to ask what one stands to gain from disturbing those dynamics. Anecdotally, the argument I hear is that this causes high performers to leave, causing the company to lose competitiveness. If so, it seems kinda counterproductive to pursue the goal of pay equality, since this entails that there's no incentive to increase company competitiveness (e.g. "eh, someone else can do the work, it's not my job" mentality), but the subsequent lower bottom line gets distributed evenly, meaning that any individual gains are constrained to some local maximum.
That... doesn't sound like an appealing conclusion. I'd love to hear different takes on why pay transparency might make sense, in a global environment where other companies are naturally incentivized to tie hustling to pay secrecy.
So if we look at pay secrecy as a "natural" phenomenon given workplace dynamics, one then needs to ask what one stands to gain from disturbing those dynamics. Anecdotally, the argument I hear is that this causes high performers to leave, causing the company to lose competitiveness. If so, it seems kinda counterproductive to pursue the goal of pay equality, since this entails that there's no incentive to increase company competitiveness (e.g. "eh, someone else can do the work, it's not my job" mentality), but the subsequent lower bottom line gets distributed evenly, meaning that any individual gains are constrained to some local maximum.
That... doesn't sound like an appealing conclusion. I'd love to hear different takes on why pay transparency might make sense, in a global environment where other companies are naturally incentivized to tie hustling to pay secrecy.
> I realized that without any degree I'd have to wait 10 years for stock options while the PhDs would be in almost immediately
I don't see anything in the OP about gating pay-tiers behind arbitrary requirements like having a PhD? Why would a company be forced to do that under this kind of law? You can establish tiers with publicized compensation and still hire the best person for each job; those are independent axes.
I don't see anything in the OP about gating pay-tiers behind arbitrary requirements like having a PhD? Why would a company be forced to do that under this kind of law? You can establish tiers with publicized compensation and still hire the best person for each job; those are independent axes.
> > Think about it: Every business, from tiny boutiques to online giants like Amazon, tell you exactly how much each of their items costs. Why shouldn't it be the same when we're shopping for a job?
I think even the rhetorical question is flawed. Retailers will always display prices, but almost never give you enough information to calculate the actual cost of owning the asset (ie, depreciation).
Will the product break after 2 years of typical use or 20? Can it be serviced? How much does the service cost? How much will the service extend the life of the product by? What is the resale value of the product? How often do I need to replace consumables? What is the running cost of the product (to be fair, large appliances do display this and cars will advertise mileage data)?
If anything, being transparent in terms of purchase price but failing to provide a whole picture of the economics of owning a product has lead to a reduction in the durability of consumer goods. I know my business (online video games store) has started selling lower quality products in response to consumer demand.
I think even the rhetorical question is flawed. Retailers will always display prices, but almost never give you enough information to calculate the actual cost of owning the asset (ie, depreciation).
Will the product break after 2 years of typical use or 20? Can it be serviced? How much does the service cost? How much will the service extend the life of the product by? What is the resale value of the product? How often do I need to replace consumables? What is the running cost of the product (to be fair, large appliances do display this and cars will advertise mileage data)?
If anything, being transparent in terms of purchase price but failing to provide a whole picture of the economics of owning a product has lead to a reduction in the durability of consumer goods. I know my business (online video games store) has started selling lower quality products in response to consumer demand.
I’d say the same of companies - the same role at two similar companies can be drastically different pay and there’s usually a good reason (which the candidate won’t know) - culture, complexity, bureaucracy, hours, workload, etc.
>Think about it: Every business, from tiny boutiques to online giants like Amazon, tell you exactly how much each of their items costs. Why shouldn't it be the same when we're shopping for a job?
That's backwards. The employer is shopping for the candidate, not the other way around. You are the product and they are the one handing over whatever your price is in cash. That's why they ask how much you cost ("what's your salary expectation?") It's the product, the candidate, that typically dodges this transparency.
That's backwards. The employer is shopping for the candidate, not the other way around. You are the product and they are the one handing over whatever your price is in cash. That's why they ask how much you cost ("what's your salary expectation?") It's the product, the candidate, that typically dodges this transparency.
Isn't it also pretty hard to know the quality, reliability, etc. of most products you buy, and thus how satisfied you will be with that product?
Do you pay orders of magnitude differently for the order of magnitude difference in performance? If so, the salary range that you publish for a role will simply get wider.
I think this will turn into a trivial game: every offered job positon will have a comp range of $1 to $1mm annually and between 0 and 5mm RSUs. And sold as pay equity.
Knowing who the overpaid slackers in an org are will help adjust the culture.
I think this will turn into a trivial game: every offered job positon will have a comp range of $1 to $1mm annually and between 0 and 5mm RSUs. And sold as pay equity.
Knowing who the overpaid slackers in an org are will help adjust the culture.
We also need performance review transparency if we're going to share pay.
Doing the same job title is not the same as doing the same job.
Doing the same job title is not the same as doing the same job.
Yes and is yet another attempt to frame individuals as replaceable cogs in a machine. Each person will have widely different set of skills and experience that will affect their job performance regardless of job title. It is impossible to prove that people "are doing the same job" and will just discourage top performers.
Bad analogy. This would be more akin to businesses telling consumers exactly how much a product costs to produce. And even that isn't a perfect analogy. Bottom line, my salary is the business of me, the company I work for, and my wife. No one else needs to know how much (or little) I make.
It sounds like just a bad deal. You don't have to do it based on credentials. The flip side is maybe you WERE being overpaid, able to trick your way to some kind of advantage, and got caught.
It does make it more challenging to reward top performers, who might be better off just sitting back
It does make it more challenging to reward top performers, who might be better off just sitting back
Despite the question being rhethorical
Furthermore, in many situations they don't tell you what it costs. In many cases you have to 'interview' with a sales team whose whole job is to find out how much you are willing to pay before telling you a price.
Furthermore, in many situations they don't tell you what it costs. In many cases you have to 'interview' with a sales team whose whole job is to find out how much you are willing to pay before telling you a price.
Ah so your employer admits it descriminates against those from atypical backgrounds that's disability, race and quite likely sex discrimination.
"I am shocked shocked" I tell you"
"I am shocked shocked" I tell you"
Maybe job titles are equally to blame. At the very least, disrupting the current system would force a re thinking of how titles are awarded.
With so many people around and remote work, they shouldn't be.
Someone will always do the same work at the same quality for less.
And with transparency, employers can look up exactly how much everyone is paying elsewhere. Didn't think it only works one way, did you?
Bar experienced specialists, it's probably the employees who should be worried.
Someone will always do the same work at the same quality for less.
And with transparency, employers can look up exactly how much everyone is paying elsewhere. Didn't think it only works one way, did you?
Bar experienced specialists, it's probably the employees who should be worried.
> And with transparency, employers can look up exactly how much everyone is paying elsewhere. Didn't think it only works one way, did you?
Large employers already trade salary range with each other, it's just not detailed to employees. You'll see this when it's survey time for best company to work for and they pitch you the slide that says their pay is good.
Large employers already trade salary range with each other, it's just not detailed to employees. You'll see this when it's survey time for best company to work for and they pitch you the slide that says their pay is good.
https://theworknumber.com/
It is ridiculous for anyone to argue workers by and large would be disadvantaged by having the same information about the market employers have.
I guess everyone likes to think they are above average. But if you truly are, then with or without pay transparency, you should be able to sell yourself into a better paying position.
It is ridiculous for anyone to argue workers by and large would be disadvantaged by having the same information about the market employers have.
I guess everyone likes to think they are above average. But if you truly are, then with or without pay transparency, you should be able to sell yourself into a better paying position.
That's been the norm for union jobs, government jobs, and military jobs for a century or so in the US. Plus, in the US you have the right to disclose your pay, regardless of whether the employer likes it.
Employers also have the right to fire you at any time for any reason in many states, making all other employee rights moot
> in the US you have the right to disclose your pay
This is the real solution. Lower & Middle class people are being crushed financially in part because they don't talk about money. Lots of rich people keep score, middle class people are too "classy" to do it.
ftr Glassdoor data is 100% bullshit. I make about 4-5x what they claim I'm worth.
Levels.fyi is a much better resource. You have to take into account the value of offered equity (not realized equity at time of vest!). For many engineers equity is 50% or more of compensation.
This is the real solution. Lower & Middle class people are being crushed financially in part because they don't talk about money. Lots of rich people keep score, middle class people are too "classy" to do it.
ftr Glassdoor data is 100% bullshit. I make about 4-5x what they claim I'm worth.
Levels.fyi is a much better resource. You have to take into account the value of offered equity (not realized equity at time of vest!). For many engineers equity is 50% or more of compensation.
Having the same job title and having the same job performance are two very different things. If one person is grossly outperforming another do you have to write them a new job title to compensate them for it?
Yes, that would be preferred, I think. Write a new job title with defined expectations, so that other people in the organization would know and understand why this person is paid more, and what it is that they should strive for if they want to reach the same level.
Otherwise it just reeks of favoritism.
Otherwise it just reeks of favoritism.
How does this work exactly? People have different skill levels. It's not a step function either, it's a pretty smooth distribution in terms of ability to create systems that are robust.
I'd need 20 different names for an engineer. That's silly.
I guarantee you that if you look at the job title "Vice President" at, say, JP Morgan's Corporate and Investment Bank you're going to see total compensation that ranges over an order of magnitude.
Isn’t the reason for this regulation? My understanding is that there are some actions that a bank employee can only take if they hold a “Vice President” title, leading to the title structure being organized in a way such that many people end up with that title.
Virtually everyone past early-mid career at a bank is a Vice President and the vast majority will never promote to Managing Director.
No.
If someone outperforms another person, you have to be able to prove that with numbers. Being upfront about pay does mean that you are upfront about pay differences. For example: Alex has a higher degree or more experience, Robin tends to be finished before the last minute.
Things like job performance are harder to measure unless folks are put in very similar situations. For example, if you measure a cashier's performance by the number of customers they serve, the overnight cashier is almost always going to perform badly simply because there are fewer customers at night.
If someone outperforms another person, you have to be able to prove that with numbers. Being upfront about pay does mean that you are upfront about pay differences. For example: Alex has a higher degree or more experience, Robin tends to be finished before the last minute.
Things like job performance are harder to measure unless folks are put in very similar situations. For example, if you measure a cashier's performance by the number of customers they serve, the overnight cashier is almost always going to perform badly simply because there are fewer customers at night.
How do you measure better soft skills which are crucial at any kind of a leadership role? Almost no jobs are easily measurable by output, we are not working assembly lines.
It feels like the Government pay system.
Opening up salary information means that everything about salary needs to be equal, fair and objective. Basically the review system will become pass fail.
Reviews will become bland and meaningless, raises will be standard based on the job classification, anything else wouldn’t be objective. If everyone isn’t treated exactly the same there will lawsuits galore.
Bonuses will also go away, because it’s impossible to give each person unique goals and expectations and fairly assess each person and their custom goals, against everyone else at that same level. Lawyers will have a field day.
Time in level determines promotions, not skill, not knowledge, time in level. Time in level is used because it’s the only objective system that works, anything else is too subjective and will open employers to lawsuits
If you you can’t move up the ranks based on skills and effort why bother trying to exceed?
This salary transparency system will be used by corporate America to suppress wages even further.
Opening up salary information means that everything about salary needs to be equal, fair and objective. Basically the review system will become pass fail.
Reviews will become bland and meaningless, raises will be standard based on the job classification, anything else wouldn’t be objective. If everyone isn’t treated exactly the same there will lawsuits galore.
Bonuses will also go away, because it’s impossible to give each person unique goals and expectations and fairly assess each person and their custom goals, against everyone else at that same level. Lawyers will have a field day.
Time in level determines promotions, not skill, not knowledge, time in level. Time in level is used because it’s the only objective system that works, anything else is too subjective and will open employers to lawsuits
If you you can’t move up the ranks based on skills and effort why bother trying to exceed?
This salary transparency system will be used by corporate America to suppress wages even further.
Yeah or the rungs can still be there. You'll see unworthy people pass you to levels they don't deserve, but the point is that you'll see it. When I don't make principal engineer, but someone else much less skilled and experienced does, I'll know what the score is, versus them keeping this as a guarded secret.
Transparent pay doesn't guarantee the type of "equal, fair, objective" pay concept you mention. There seems to be a bit of a false dichotomy in these threads.
Transparent pay doesn't guarantee the type of "equal, fair, objective" pay concept you mention. There seems to be a bit of a false dichotomy in these threads.
> It feels like the Government pay system.
Government employee here.
> Basically the review system will become pass fail.
Not if you want to advance.
> If everyone isn’t treated exactly the same there will lawsuits galore.
Um, no.
> Bonuses will also go away...
We get bonuses.
> Time in level determines promotions, not skill, not knowledge, time in level. Time in level is used because it’s the only objective system that works, anything else is too subjective and will open employers to lawsuits
Time in level results in an increase in level steps, not promotions (pay chart is a grid: level x steps). If it did, then everybody would be promoted at the same time, which can't happen because there are only so many openings. If you want to be promoted (i.e. increase in pay level), requirements are laid out very clearly. They do not happen automatically.
Government employee here.
> Basically the review system will become pass fail.
Not if you want to advance.
> If everyone isn’t treated exactly the same there will lawsuits galore.
Um, no.
> Bonuses will also go away...
We get bonuses.
> Time in level determines promotions, not skill, not knowledge, time in level. Time in level is used because it’s the only objective system that works, anything else is too subjective and will open employers to lawsuits
Time in level results in an increase in level steps, not promotions (pay chart is a grid: level x steps). If it did, then everybody would be promoted at the same time, which can't happen because there are only so many openings. If you want to be promoted (i.e. increase in pay level), requirements are laid out very clearly. They do not happen automatically.
> Time in level determines promotions, not skill, not knowledge, time in level. Time in level is used because it’s the only objective system that works, anything else is too subjective and will open employers to lawsuits
This seems like a pretty pessimistic take. Employees won’t be bringing lawsuits without merit; if a person has been coasting it will be quite difficult for them to prove that they should be compensated similarly to someone else that did not before a jury. If the differences in contributions are not that significant then differences in compensation do seem unjustified don’t they?
This seems like a pretty pessimistic take. Employees won’t be bringing lawsuits without merit; if a person has been coasting it will be quite difficult for them to prove that they should be compensated similarly to someone else that did not before a jury. If the differences in contributions are not that significant then differences in compensation do seem unjustified don’t they?
That's exactly what happens, though. Many countries in Europe enforce collective contracts with very little wiggle room, and the main complaint here is how everyone is paid the same.
Of course it's hard to quantify skill, and of course meritocracy is not perfect. But when you take meritocracy out of the equation, you're left with seniority.
I guess the grass is always greener on the other side.
Of course it's hard to quantify skill, and of course meritocracy is not perfect. But when you take meritocracy out of the equation, you're left with seniority.
I guess the grass is always greener on the other side.
Even in many of these countries employers are entirely free to pay more than minimum stated in collective contract. And offer more perks. This is specially true with IT where real wages are often much higher than those negotiated.
Ofc. This doesn't solve the problem that different employees have different pay for same job.
Ofc. This doesn't solve the problem that different employees have different pay for same job.
Germany is the example I know. The individual performance aspect in compensation is very small. High performers tend to go freelance where they can make multiples of what they'd make as employees, because they don't want to provide three times as much value as the average employee for 10% more money.
Companies understand the game, and hire them as contractors. I've seen that play out multiple times: quit your job, come back as a contractor, make twice as much after taxes. I've seen the reverse as well: when freelancers want to "retire" but want to earn money for a few more years, they seek regular employment and coast by.
Companies understand the game, and hire them as contractors. I've seen that play out multiple times: quit your job, come back as a contractor, make twice as much after taxes. I've seen the reverse as well: when freelancers want to "retire" but want to earn money for a few more years, they seek regular employment and coast by.
Honestly, I think the pay policies in many industries needs a major overhaul. I have seen companies spend endless time working out compensation each cycle trying to balance like hundred different factors and they come out with this overly contrived and comprehensive compensation framework that nobody seems to comprehend. The outcome is this huge spread in pay with even minute differences across same groups of people that only cause more frustration and anxiety for everyone.
I feel these efforts are largely misguided. Companies think optimising rewards is the best way to extract "output" from employees. I can't speak for all industries but at least for those that employ creative skill, this couldn't be further from the truth. People in creative work are more motivated by intrinsic causes like a desire to create something, than by extrinsic factors like pay. Of course, pay is always important but it is something people do not want to think about all the time. Opaque and contrived pay policies create an environment which makes people think and mull over pay all the time which doesn't help anyone.
I feel these efforts are largely misguided. Companies think optimising rewards is the best way to extract "output" from employees. I can't speak for all industries but at least for those that employ creative skill, this couldn't be further from the truth. People in creative work are more motivated by intrinsic causes like a desire to create something, than by extrinsic factors like pay. Of course, pay is always important but it is something people do not want to think about all the time. Opaque and contrived pay policies create an environment which makes people think and mull over pay all the time which doesn't help anyone.
I'm not sure that your conclusion follows. Google has levels and pay bands per level (you can see sampled data of it on levels.fyi). There are many problems with the promotion process at Google, but the malaise you describe isn't one of them.
[deleted]
I think pay transparency requirements should be limited to below some compensation threshold. I can't put a number on it myself (maybe somewhere $100k-500k), but after some point, it becomes impossible to compare the compensation of one employee to another. High compensation is probably a reasonable proxy for this.
As a bonus, this might provide some upward pressure on lower salaries. If a company doesn't want to tell the world they pay you $THRESHOLD - $10k, maybe they'll just bump you up to $THRESHOLD. In fact, if it were up to me, I'd probably choose this threshold in a way that this upward pressure affects the most people possible (so, closer to $100k than $500k).
The problem with this is that different industries will hit this threshold at different points in their cost structures. FAANG might hit it for entry level software engineers while other industries might never hit the threshold for any employees. I don't know how to resolve this, but I definitely think transparency above some limit will cause more problems than it solves.
As a bonus, this might provide some upward pressure on lower salaries. If a company doesn't want to tell the world they pay you $THRESHOLD - $10k, maybe they'll just bump you up to $THRESHOLD. In fact, if it were up to me, I'd probably choose this threshold in a way that this upward pressure affects the most people possible (so, closer to $100k than $500k).
The problem with this is that different industries will hit this threshold at different points in their cost structures. FAANG might hit it for entry level software engineers while other industries might never hit the threshold for any employees. I don't know how to resolve this, but I definitely think transparency above some limit will cause more problems than it solves.
Transparent pay and WFH will give power and freedom back to the people.
Corporations left uncontested will selfishly take as much as they can.
Corporations left uncontested will selfishly take as much as they can.
There has been an attitude through the entire duration of my career in IT that it is taboo to share the details of how much you are making with your fellow coworkers. I have been unabashed in sharing that information though because keeping it to yourself only benefits your employers not your coworkers.
Salary is a negotiation and companies will low ball you as much as they can. I don’t see how this helps productive people.
I'm surprised by the counter arguments here to publishing pay bands. It seems most folks are assuming transparency would mean Norway-style "here is each person's compensation" rather than a salary / compensation band (as Colorado does).
The per-level data from levels.fyi being publicly available has been great for workers. Expanding that data to more roles and more companies would be strictly better (for employees) than the current system.
The per-level data from levels.fyi being publicly available has been great for workers. Expanding that data to more roles and more companies would be strictly better (for employees) than the current system.
One issue is if you believe yourself an outlier and you'll get forced into a tighter band. Lower performance employees will become resentful of lower compensation for perceived same task, cue the chimp study w/ cucumber & grapes...
those who fail to bargain well (for whatever reason) will likely get better salaries due to information of starting points. Those who were doing well to maximize their compensation likely will get worse salaries because of strained budgets with lower priced employees coming up...
those who fail to bargain well (for whatever reason) will likely get better salaries due to information of starting points. Those who were doing well to maximize their compensation likely will get worse salaries because of strained budgets with lower priced employees coming up...
Any sort of bureaucratically enforced 'fairness' is going to be good for a certain type of person, and bad for another type of person.
It will disincentivize high performance, for better or worse.
Under communist regimes the salaries are dictated by the government, and are publicly known. The idea was to be "fair, and equal".
That is how it supposed to be. Alas, that is not how it ever turns out.
Employees would race to the bottom with performance. Why work hard, when I will get paid the same if I do little? Result is high rises that sink and collapse, cars that fall apart, medicine that is tainted, etc.
So how would things get done right? Bribery. Bribery became the differentiator. Officials will only perform their duties if they are bribed. Workers will only do the job right if they are bribed.
Most post-communist/socialist countries struggle with bribery for generations.
(source: first hands, both hands)
That is how it supposed to be. Alas, that is not how it ever turns out.
Employees would race to the bottom with performance. Why work hard, when I will get paid the same if I do little? Result is high rises that sink and collapse, cars that fall apart, medicine that is tainted, etc.
So how would things get done right? Bribery. Bribery became the differentiator. Officials will only perform their duties if they are bribed. Workers will only do the job right if they are bribed.
Most post-communist/socialist countries struggle with bribery for generations.
(source: first hands, both hands)
I have friends who have worked at some rather large tech companies. They created shared documents where everyone could share their compensation along with what they do and their past experience. I thought it was interesting.
Now make location pay discrimination a crime. Want to hire a dev in India? You must offer the same as if they lived in NY or San Francisco.
Or better, offer the person in San Francisco the same as if they lived in India. If it doesn't work for them, they can just move somewhere cheaper.
I think it's very optimistic to assume this would result in the salaries all being pushed up to the upper limit and not the lower one.
Yay! Free money for everyone!
Pay based on location is idiotic, if your pool is the entire world then your pay scale should reflect that market and average out. This means developers outside America get more purchasing power than San Fran devs, but that's the market you've entered.
It is simply artificial price fixing to pay based off location.
It is simply artificial price fixing to pay based off location.
Sometimes there are reasons why the world acts like it does.
When you disagree with the world, sometimes it is because of your own naïveté: maybe open your mind a bit more? Your comment doesn’t reflect well upon you IMHO.
This is commonly called Chesterton’s fence https://www.google.co.nz/search?q=chesterton%27s+fence
When you disagree with the world, sometimes it is because of your own naïveté: maybe open your mind a bit more? Your comment doesn’t reflect well upon you IMHO.
This is commonly called Chesterton’s fence https://www.google.co.nz/search?q=chesterton%27s+fence
Averaging out means that SV developers won't be accepting offers for those jobs because they will feel they are underpaid.
Then they won't work. I hear SF has great social programs, so... yeah.
It's the opposite of artificial price fixing. It's natural markt forces of supply and demand.
If you want people to be fairly compensated for the work they do, forget salaries, look at the companies growth and profits. I think all employees should get a taste of any dispersal of profit, divided evenly, based on time served since the last payout. (Annually?)
Should employees also forego income to enjoy their share in a company’s losses?
That's what most of us in silicon valley with stock based compensation experience. If your company goes from $1 earnings per share to -$1 earnings per share, then your total comp can be cut in half as your vesting stock becomes worth less.
[deleted]
Investors risk losing money and should be rewarded for the risk. But its only money.
Employees risk something far more valuable, their time. You can never get that back.
Employees would forgo _some_ money (their bonuses) and they would have wasted all that time working for an unprofitable business.
Employees risk something far more valuable, their time. You can never get that back.
Employees would forgo _some_ money (their bonuses) and they would have wasted all that time working for an unprofitable business.
Divided evenly?
Even if there's an order a magnitude difference in productivity between workers?
Even if there's an order a magnitude difference in productivity between workers?
It's why standard base pay plus 'incentive/commission' tends to work the best.
Let me expand. Everyone gets paid the same base rate. Then you give an incentive based on KPIs that AREN'T easily manipulated by an employee. For example, a good KPI might be on Time delivery of a project or ticket. Bad KPIs would be things like lines of code or number of tickets closed.
Let me expand. Everyone gets paid the same base rate. Then you give an incentive based on KPIs that AREN'T easily manipulated by an employee. For example, a good KPI might be on Time delivery of a project or ticket. Bad KPIs would be things like lines of code or number of tickets closed.
Since we are talking fantasy land, why not?
The base compensation could be the skill / productivity part of the reward.
But who is to say the 8 hours of life risked by the kid in the mail room is worth less that then 8 of life risked by the CEO. We all only live about 80years. We only work for about 40 of them. If you show up and do your best every day to make the company successful, then that's good enough for me.
The base compensation could be the skill / productivity part of the reward.
But who is to say the 8 hours of life risked by the kid in the mail room is worth less that then 8 of life risked by the CEO. We all only live about 80years. We only work for about 40 of them. If you show up and do your best every day to make the company successful, then that's good enough for me.
We make our finances 100% transparent, including pay, at https://bank.hackclub.com/hq/. I think other nonprofits should do the same. We also open source almost everything we do at https://github.com/hackclub.
For Washington and Toledo, OH it says you have to tell salary "Upon request after job offer". Do people get jobs offers without knowing the salary? How is that even possible? Is it a accept the job and we will tell you the pay situation?
I suspect that once they make the offer, you can then ask them for the salary before accepting the job, unless I misread that phrase.
Yeah, I agree, but why does this need to be a law? Are there people who would accept a job without knowing the salary?
The idea we should share our salary information presumes that work and value are fungible, a premise which is absurd.
Why not just run a website where people can report their company, role, and salaries? (e.g. glassdoor) And if you can't solve that effectively, I guarantee regulating it into existence isn't going to be any better or have fewer perverse incentives.
Why not just run a website where people can report their company, role, and salaries? (e.g. glassdoor) And if you can't solve that effectively, I guarantee regulating it into existence isn't going to be any better or have fewer perverse incentives.
As usual, the details are lacking.
What does "pay scale" mean? Does it mean that the employer has to provide an exact salary for every person at the company who has the title the prospective employee is applying? Does it mean a min-max scale? What if it is a new position?
In the extreme and assuming the min-max scale, employers will now be incentivized to give everyone either totally unique titles or exactly the same titles, such that it will remove any disadvantage.
In the more likely scenario, this will probably raise the bottom payouts, while incentivizing more aggressive negotiating on the part of the employers. One can imagine many more take-it or leave-it scenarios, as the higher pay for the lower end has to come from somewhere.
Good? Bad? Blend of both?
What does "pay scale" mean? Does it mean that the employer has to provide an exact salary for every person at the company who has the title the prospective employee is applying? Does it mean a min-max scale? What if it is a new position?
In the extreme and assuming the min-max scale, employers will now be incentivized to give everyone either totally unique titles or exactly the same titles, such that it will remove any disadvantage.
In the more likely scenario, this will probably raise the bottom payouts, while incentivizing more aggressive negotiating on the part of the employers. One can imagine many more take-it or leave-it scenarios, as the higher pay for the lower end has to come from somewhere.
Good? Bad? Blend of both?
I used to work for a company from Colorado. Internally they were sharing Salary range and Target Bonus for your position for as long as I remember (~10 years?). You will get this information in Workday or on paper once a year.
From what I can tell from their current job postings they make this range public and include in the job description. It is not super helpful though. The range for a mid-level SWE is something like $100K-$150K. Almost as useful as Glassdoor.
From what I can tell from their current job postings they make this range public and include in the job description. It is not super helpful though. The range for a mid-level SWE is something like $100K-$150K. Almost as useful as Glassdoor.
It means that on a job posting they have to post a range of salaries for that job. And the range can't be so broad as to avoid the spirit of the law, so no '$1/yr to $1M/yr'.
I like how it works at big tech companies nowadays.
Publicly, you know what level you and other employees are, and the bands for the levels are mostly known (at levels.fyi). This means you have an idea of where your salary relates to others, but not a perfect idea. You can coherently talk about when you should be earning more, and have a direct conversation about how your ability compares to employees at other levels, but you don't know the pay amounts so precisely that you can be disgruntled by a single other person, or worried that someone else will be secretly annoyed with you.
I think it's a healthy level of transparency.
Publicly, you know what level you and other employees are, and the bands for the levels are mostly known (at levels.fyi). This means you have an idea of where your salary relates to others, but not a perfect idea. You can coherently talk about when you should be earning more, and have a direct conversation about how your ability compares to employees at other levels, but you don't know the pay amounts so precisely that you can be disgruntled by a single other person, or worried that someone else will be secretly annoyed with you.
I think it's a healthy level of transparency.
> Every business, from tiny boutiques to online giants like Amazon, tell you exactly how much each of their items costs. Why shouldn't it be the same when we're shopping for a job?
This is the opposite to how a job should be thought about. Shopping for a job seems to imply a business already owns my time, skills, etc. when they are really the ones searching. And transparency would further exacerbate that idea, as the job candidate is now bounded without even being able to show what they are capable of.
On the flip side, my employer is fully transparent about salaries from the c-suite all the way down and nobody seems to mind.
This is the opposite to how a job should be thought about. Shopping for a job seems to imply a business already owns my time, skills, etc. when they are really the ones searching. And transparency would further exacerbate that idea, as the job candidate is now bounded without even being able to show what they are capable of.
On the flip side, my employer is fully transparent about salaries from the c-suite all the way down and nobody seems to mind.
Pay transparency isn’t just useful for people currently in their careers, it is useful for young adults getting started.
So many kids get degrees or pursue careers that they are then shocked to discover don’t support their lifestyle desires/needs.
Imagine if kids could look at job postings and see salary ranges and add that data point into consideration.
So many kids get degrees or pursue careers that they are then shocked to discover don’t support their lifestyle desires/needs.
Imagine if kids could look at job postings and see salary ranges and add that data point into consideration.
The reality is that coders are systematically underpaid and mostly fungible. The cliche is that you get a raise when you switch jobs (and your new employer knows the least about you). Not that you get a raise when you stay at your old job and differentiate yourself more and more from those other, less competent people who have the same title and qualifications as you, but are somehow worth less to the company.
Coders will never voluntarily allow their salaries to become public. Every coder thinks that he is better than average, and that the salary that he is paid uniquely reflects his superior technical and negotiating abilities. In a misanthropic industry, coders feel that the other employees are their enemy, out to prevent them from being secret ninja superstars.
Coders will never voluntarily allow their salaries to become public. Every coder thinks that he is better than average, and that the salary that he is paid uniquely reflects his superior technical and negotiating abilities. In a misanthropic industry, coders feel that the other employees are their enemy, out to prevent them from being secret ninja superstars.
Companies disclosing employee salaries is a major thing, but for me the first step for companies is to provide transparency for *salary bands* for each role, internally and externally. Funnily enough I wrote about this earlier this week
https://headey.net/salary-roulette/
https://headey.net/salary-roulette/