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Open Salaries: Outcomes

blog.lunarlogic.io

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131–140 of 225 posts

Re: Open Salaries: Outcomes

#131

Post by morgante »

eyelidlessness wrote: post #45
brianwawok wrote: post #36

Earlier quoted context omitted.

This got downvoted, and the tone is a bit harsh.. but it does speak a bit of truth. What happens to the guy in open salary co who is legit 50% better than everyone else? Do his peers vote to give him 50% more money? Or does it settle on sort of a union style pay scale, where everyone with the same # of years of work makes the same money (which is great for the worst performances, and terrible for the best performers)

While union workers often have less salary disparity, their salaries also tend to be higher overall. The only downside to this is if the "best performers" derive value from their "worse performer" peers being paid less than them.

Decreasing variance while increasing median pay is obviously a pretty big downside for everyone who is paid above median.

Re: Open Salaries: Outcomes

#132

Post by jjnoakes »

hx87 wrote: post #82
news_to_me wrote: post #78

Earlier quoted context omitted.

> You could say the takeaway is don't work for companies out to screw their workers, but that's most of them. Seems like this is something transparent salary policies might change.

Exactly--open salaries might cause some companies to crash and burn, but these are companies that /should/ crash and burn.

I'm not arguing one way or the other about open salaries, but should a company really crash and burn for hiring someone who was willing to work for some price $X, even if it is lower than their peer? I mean the person did accept the job knowing $X, right?

Re: Open Salaries: Outcomes

#134

Post by edoceo »

jjnoakes wrote: post #132
hx87 wrote: post #82

Earlier quoted context omitted.

Exactly--open salaries might cause some companies to crash and burn, but these are companies that /should/ crash and burn.

I'm not arguing one way or the other about open salaries, but should a company really crash and burn for hiring someone who was willing to work for some price $X, even if it is lower than their peer? I mean the person did accept the job knowing $X, right?

Yes. And then more data becomes available, which changes perspective. Then employees leave for better opportunity

Re: Open Salaries: Outcomes

#135

Post by sytse »

RodericDay wrote: post #17
sytse wrote: post #9

After you define salary ranges for positions the only variables left are promotions and experience within the role. I don't think it makes sense to have people that are not working with a person decide that. I think the direct boss of the person should decide after getting input from others and subject to approval by the boss' boss.

If there's a need for approval from the boss' boss, why not also an approval from the employee's peers (and employees)? Doesn't it make sense that disgruntled employees should be able to bar a manager giving themselves raises, purely as a matter of symmetry?

The boss' boss approval is there to prevent people playing favorites. Asking the whole team for approval doesn't make sense to me, it is the task of the boss to be aware what everyone is contributing. The rest of the team should primarily be concerned with their own contributions, not those of others.

Nobody can give themselves a raise. This is always proposed by a boss and checked by the boss's boss. If I want to set a salary for one of my reports I have to consult with the board. The board also determines my compensation.

Re: Open Salaries: Outcomes

#136

Post by jjnoakes »

edoceo wrote: post #134
jjnoakes wrote: post #132

Earlier quoted context omitted.

I'm not arguing one way or the other about open salaries, but should a company really crash and burn for hiring someone who was willing to work for some price $X, even if it is lower than their peer? I mean the person did accept the job knowing $X, right?

Yes. And then more data becomes available, which changes perspective. Then employees leave for better opportunity

No disagreement here; I just don't know how "companies might crash and burn because they pay their employees lower than market rate" equates to "companies that pay their employees lower than market rate should crash and burn".

One doesn't follow from the other, and I don't agree that there's inherent evil just because the salary was lower than elsewhere.

Re: Open Salaries: Outcomes

#137

Post by ryandrake »

morgante wrote: post #130
sheepmullet wrote: post #118

Earlier quoted context omitted.

> For a counter example, I can point you to wallstreet or finance in Chicago, and show you 100s of people where people at the same level make as much as a 2x pay difference. If you think people in finance don't know what their peers are getting paid you are fooling yourself. They are overall much more mature and transparent about pay than we are.

I agree with the maturity part, but not the transparency part. If you told a trader their salary was going to be posted publicly, decided by the rest of the employees (including junior employees), and that they couldn't negotiate it then they'd laugh in your face. Giving up the ability to negotiate your salary is giving up your whole leverage. It's a ruse played by smart entrepreneurs to sucker engineers into taking…

Currently "salary negotiation skill" is one of the primary drivers of one's salary, whether or not negotiation is a necessary skill for the actual job. In other words, you end up rewarding people who are good negotiators, not necessarily people who are good at their job. Of course you may coincidentally reward people good at their jobs if they happen to also be good at negotiating.

Give that up, and people who are good at their jobs but bad negotiators will tend to do better, and people who are not good at their jobs but good negotiators will tend to do worse. I'd be fine with that trade-off.

Re: Open Salaries: Outcomes

#138

Post by hx87 »

jjnoakes wrote: post #132
hx87 wrote: post #82

Earlier quoted context omitted.

Exactly--open salaries might cause some companies to crash and burn, but these are companies that /should/ crash and burn.

I'm not arguing one way or the other about open salaries, but should a company really crash and burn for hiring someone who was willing to work for some price $X, even if it is lower than their peer? I mean the person did accept the job knowing $X, right?

If the "willing to work for $X" was based on flawed or incomplete information, and X would be higher if more complete information was accessible, then yes, I would say they should crash and burn. OTOH, if two people with access to the same information were willing to work for different salaries, that would be fine. IMO, information asymmetry that is enforced and not the result of research costs is a form of rent-seeking and should be abolished.

Re: Open Salaries: Outcomes

#139

Post by jsprogrammer »

ellisv wrote: post #91
mason55 wrote: post #89

Earlier quoted context omitted.

Doesn't the Peter Principle come into play here? What if we do the same job but I do it twice as fast? That doesn't mean I'd be a good fit for the next level up, it might just mean I'm really good at doing this specific job very quickly.

In my mind this is one of the cases where "Jr" and "Sr" titles can be useful.

Or a 20 hour work-week with full salary.

Re: Open Salaries: Outcomes

#140

Post by hx87 »

brianwawok wrote: post #77
hx87 wrote: post #76

Earlier quoted context omitted.

> Can usually get close to ranges if you ask a few coworker friends and/or interview around. Isn't that transparency, although in a very biased and limited form? Why would having more transparency reduce your leverage? It's easier to play the right cards when you know what cards are in play.

> Why would having more transparency reduce your leverage? Because of jealousy. There have to be a good 10-20 software companies with this Open Salary thing. From them, find one where for two people with the same # of years of experience, person A makes 2x what person B makes. From what I see, they all more or less settle on a (base pay) + (# of years * multiplier) + (maybe a location bonus) = Salary. I don't see var…

The simplest explanation of your finding is that salary differentials are endogenous to industry, not to salary transparency. Did you sample software companies without salary transparency? Did you differentiate between finance companies with and without salary transparency?
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