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Open Salaries: Outcomes

blog.lunarlogic.io

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Re: Open Salaries: Outcomes

#151

Post by throw2016 »

brianwawok wrote: post #36
aantix wrote: post #32

If you're any good at your job, you should avoid these open companies like the plague. Don't piss away your leverage..

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)

As long as there is a legitimate way to measure this '50% better' and the resultant value, and everyone else has an opportunity to perform at this level, reject it or concede they are unable I suspect few will have an issue.

On the other hand if its an arbitary, political or a self appointed measure I can imagine collegues could have a problem.

Sales is one area where measures are somewhat possible. For instance if a salesperson is consistently doing 2 million while collegues do 1 he or she is better in that quarter and is automatically compensated better because of commissions. Collegues far from having have a problem celebrate the achievements and aspire themselves. Similarly if someone closes a deal in half the time of the typical deal cycle then they could be considered to be better. They will close more revenue and get more commissions.

But it is important to point out its not the people but the performance being measured that is better and if you can do this as clinically in other fields compensation can be designed to automatically reward performance.

Re: Open Salaries: Outcomes

#152

Post by reledi »

szynszyliszys wrote: post #61
dominotw wrote: post #55

Earlier quoted context omitted.

>but we decided to go for open salaries anyway What happened to the people who didn't want to reveal their compensation. Was is it revealed anyways?

There was a choice and these people would just not see the salaries list and participate in salary raise process. But we went all in, everyone was ok with revealing their salaries.

These people may not have access to the document, but surely in a small company they would figure out some of the salaries either through the grapevine or shoulder surfing?

Re: Open Salaries: Outcomes

#153

Post by sheepmullet »

morgante wrote: post #144
sheepmullet wrote: post #141

Earlier quoted context omitted.

> but not the transparency part. I think most people in finance have a good idea of what their peers are being paid and a good idea of what they need to do if they want to earn more. People are paid fairly objectively and managers are upfront about what they value (at least within a firm). That doesn't mean employees know exact percentages or bonuses and it certainly doesn't mean they know total comp in $. When I mov…

I agree with your anecdotes, but I think it's not because tech is less transparent but because most developers have no mind for career or salary optimization and treat their jobs like games rather than business propositions.

I totally agree. I think we are just using the term transparent differently.

Telling people to go on a random walk for a few years and maybe they will move from mid to senior is the kind of transparency you get in tech.

Real transparency would be: If you deliver project X and can demonstrate you got Joe and Raj up to speed on Y then we will promote you/increase your salary/give you a big bonus/put you on the project you really want etc.

Re: Open Salaries: Outcomes

#154

Post by stale2002 »

obstacle1 wrote: post #127
marme wrote: post #86

Earlier quoted context omitted.

no two employees with the exact same job title should have more than 10% difference in pay. If someone is making 40% more than others with same title then they should be promoted to higher title and if they dont deserve that title then why is the company paying them so much. It is one thing to want to minimize salary costs but another to disrespect employees with absurdly low salary.

A job title is not an accurate reflection of an individual employee's value to the company. It would be insane to require that a 10x developer gets paid the same as colleagues just because they shared a job title.

He is arguing that this 10x developer should get promoted to "senior principal engineer" or something like that.

Re: Open Salaries: Outcomes

#155

Post by roel_v »

pcsanwald wrote: post #121
scarmig wrote: post #75

Hmm. My experience tells me that a lot of this depends on the details of the team, and that there isn't a right-for-everyone policy. My story: I worked for a company that paid a bit below market salaries, for the SF Bay Area. I was on a team with two more junior engineers. At one point one disclosed to me that they felt underpaid. That led to a salary discussion where I explained that the company habitually underpaid…

As a manager, I've always felt that I have zero incentive to pay anyone under a fair market rate. I also have always managed salaries in such a way so that if we had open salaries, there wouldn't be any surprises and no one would feel they weren't being paid fairly. Most people I know in similar roles to mine act in a similar way. So I'm not so sure that most companies are really out there trying to underpay their em…

"As a manager, I've always felt that I have zero incentive to pay anyone under a fair market rate."

But are you a line manager or is part of your performance KPI's the profit of your unit? Or are you an owner in a small business whose own income is directly influenced by salary expenditure, like when you're running a (small) body shop or sell hours? Those are all very different situations to be in.

Re: Open Salaries: Outcomes

#156

Post by sheepmullet »

ryandrake wrote: post #137
morgante wrote: post #130

Earlier quoted context omitted.

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 go…

In practice people who are good at negotiating will just negotiate a different title. It happens all the time in tech.

Think of all the useless architects on much higher salaries.

As an ex-manager if I wanted to hire a mid level dev who was too expensive I would just hire them as a senior dev.

Edit: or even worse you lock people in based upon a rigid system like years of experience and end up like teaching where an amazing teacher who gets great results will get paid far less than a shitty teacher who has stopped trying simply because the shitty teacher has been around longer.

Re: Open Salaries: Outcomes

#157

Post by dilemma »

sokoloff wrote: post #33
davidgrenier wrote: post #2

I'd like to get push-back to the idea of everyone earning the same salary. Why wouldn't it work from some people who seem to have some experience like you have?

Imagine that there is a distribution of valuable output from employees. That not every employee contributes an equal amount to the bottom line, when you measure everything that you can possibly think of, every externality and intangible. If you believe that there are those differences, that you can judge those correctly (but elect to not act on it), and that other employers can also judge that well enough to offer di…

Mediocrity can be mitigated by making expectations clear for advancing to the next level in the organization, and the compensation increase one gets.

For example, master these 5 skills at level I, and we then meet to set up a process for learning the next 5 skills needed to advance to level II. Once you advance, you get +20% salary.

I think that seems like a good way of incentivizing performance and continued learning.

Re: Open Salaries: Outcomes

#158

Post by chinese_dan »

Companies love open salaries. Why? They can now pay a developer with 5 years of experience and the developer with one year experience the same low salary for the same position.

Salary should be based on the individual (relevant experience and education) not just a job title.

Why would an employee give away one of the only bargaining chips they have to get a higher salary? When I was working a regular job, I was regularly able to negotiate a 20-30% higher salary than co-workers with the same title.

Re: Open Salaries: Outcomes

#159

Post by don_draper »

aantix wrote: post #32

If you're any good at your job, you should avoid these open companies like the plague. Don't piss away your leverage..

I'd argue it's not even how good you are but how good you negotiate. If you negotiate well transparency is not in your interest.

Re: Open Salaries: Outcomes

#160

Post by moduspwnens14 »

jsprogrammer wrote: post #142
moduspwnens14 wrote: post #94

Earlier quoted context omitted.

> I didn't down vote, but the comment would be better if it were expanded with some details about why he thinks people who are good at their jobs should avoid open salary workplaces. I've tried a handful of different ways to explain this (before backspacing out this comment box and trying again), but here's the best I can come up with: You always have the ability to negotiate for higher pay. If you've spent much of y…

According to the article, anyone can negotiate for a raise at any time. All you have to do is execute the negotiation process.

My response was relating to an open salary company in general, but the process in the article takes it even further by having the employees themselves play a significant role in the decision-making.

If I consider myself a high performer, I don't want to have to justify my request relative to others at the company, or what they received, or what they used to win over other people to vote to give them more money that isn't theirs. That's going to put me in a position where I need to win a popularity contest, be around a while (to comment positively on others' raises), or wait a few more months so I don't look pushy and selfish to the entire company.

...because none of that matters if I just do an interview elsewhere and get what I want!

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