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I read about this idea once as a case study. I think it was first tried at a manufacturing company[0] in Brazil where everyone from the CEO down to the packers in the dispatch shed has their salary decided by a consensus employees. It's a 3000 person company with a revenue of $160m now. [0] https://en.wikipedia.org/wiki/Ricardo_Semler http://www.freibergs.com/resources/articles/leadership/semco... https://hbr.org/198…
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> You could say the takeaway is don't work for companies out to screw their workers, but that's most of them. By definition, if most companies are underpaying their workers, they're actually paying market rate.
Not necessarily. Employees aren't always aware of how much other companies pay. I define underpaying as "other companies in the market would gladly poach these employees". But just because there are tons of companies willing to poach them, doesn't mean that the employees know this information.
I know one of my senior engineers could get more but I know he'd 1) work more hours, 2) have less freedom, 3) have less flexibility.
I can't pay him what others would pay because it's a consulting business and it's getting harder and harder to get the high rates for the work we usually close.
I'm not screwing him. I make it up in other areas which is why he's still with me.
But he's suggested his market rate is like 30% more when I know the hours he'd have to put in for that are at least 30% more.
So other companies would gladly poach him but it's not apples to apples, and I'm not going to play the game of "high salary" and then squeeze my people to make it make sense.
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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.
Are titles really that meaningful? I've never worked at a place that cared much about them. Also, on a practical note, that would require 17 different titles for the same type of job if you have a 5x variation in compensation. That seems kinda crazy.
I really don't care that much about them myself. I do use a few different titles depending on the client however.
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 regul…
Companies hate public salaries, and there is ample evidence everywhere to look, including efforts to legally prohibit employees from disclosing their salaries and unenforceable claims in employee handbooks.
More information can never make a market more inefficient.
The truth is, no one knows what anyone should be paid, really. The market decides it. I feel like this kind of policy just creates a powderkeg of opinion and emotion. Maybe it works for a team of 25 (at least as far as we can see), but definitely not for a company of 500.
Please everyone just put your salaries in Glassdoor and call it a day. Everyone make sure they get paid market or above, be a responsible adult and look out for yourself.
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…
Anytime two people compare salaries, at least one person gets angry. Sometimes two.
I worked for a small startup some time ago where the owner was paying me more than she paid herself but eventually we only had 2 employees left and everything became transparent. My friend (in sales) became all upset about his salary in relation to mine and they gave him a bump. I was eventually the last one left though.
That was my first professional job and it's ironic my buddy in sales couldn't negotiate a rate he thought was fair. He's actually quite good.
People are perfectly fine working for YEARS with their own valuation and then all of a sudden they think they're worth more because someone else is making more.
And then they don't even offer a compelling reason for why they think they are worth more, which is really why they weren't being paid what they think they should have gotten in the first place.
It's every employee's responsibility to know their value and to be able to articulate it. That's a very important dynamic of the workforce whether people like it or not.
My favorite collegiate course of all time had only one agenda - to teach us to think differently in a way to be compelling and persuade. Every project was related to that premise. We don't have enough of these types of courses and that shifts more power to the employers.
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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.
So there was the implicit threat that if you didn't join, you wouldn't be eligible for raises? Also, how could you enforce them not seeing the list? It's illegal for an employer to deter the discussion of compensation amongst employees.
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Decreasing variance while increasing median pay is obviously a pretty big downside for everyone who is paid above median.
Your post reads like a very bleak argument against the minimum wage. Increasing the median should mean that those above the median also see an increase through economics. If the price something is $X then the price of a premium something is still going to be greater than $X.
Personally, I'd never want to work somewhere where my salary is set by a formula of my "experience" level.
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…
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.
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>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.