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Why? If they knew about the program and potential, then they might have felt the same way. They games management plays are the real issue.
Edit: Why downvote? The article even says the way the program worked caused issues.
When I worked at eBay, we had a bonus program based on company revenue. It was around 6% of your salary max and managers got around 25% max based on the same formula. For the first few years, you could count on getting a max bonus every quarter. To the point where most everyone who worked there had always gotten one. And the one quarter, we didn't get the max bonus. In fact, I don't think we got it all. People scream…
I actually think bonuses and equity grants are terrible for comapany morale. I've seen it many times, and heard many more stories. On top of the issue in this story, there are others too. For example, if someone wants to leave, but the bonus or vesting is coming up, they will stay, and you don't want people on a project who don't want to be there. As another example I know people who work at companies that are going…
Incentives happen because they are empirically effective. I would contend that the issue is less the content of the incentives but rather the perception of fairness. If everyone is aware how the bonuses work and feels their 'fair' share is obtained, then it just becomes another part of the calculus. I speculate as a non-manager that bonuses are a good way (in the federal contracting realm, from the company perspectiv…
Only for the people who haven't been screwed by the system.
Earlier quoted context omitted.
Incentives happen because they are empirically effective. I would contend that the issue is less the content of the incentives but rather the perception of fairness. If everyone is aware how the bonuses work and feels their 'fair' share is obtained, then it just becomes another part of the calculus. I speculate as a non-manager that bonuses are a good way (in the federal contracting realm, from the company perspectiv…
> If everyone is aware how the bonuses work and feels their 'fair' share is obtained, then it just becomes another part of the calculus. If everyone is not aware of how a bonus works, lots of people assume it's just smoke and mirrors and disregard (the correct strategy). You're not incentivized to care about your "incentives", so you don't.
When I worked at eBay, we had a bonus program based on company revenue. It was around 6% of your salary max and managers got around 25% max based on the same formula. For the first few years, you could count on getting a max bonus every quarter. To the point where most everyone who worked there had always gotten one. And the one quarter, we didn't get the max bonus. In fact, I don't think we got it all. People scream…
But, yeah, you have people making less money for whom the expected quarterly bonus was factored into paying their mortgage.
A grad school officemate had previously worked at Thinking Machines, but, to do the number-crunching for his doctoral dissertation, he instead had a slightly-old Alpha workstation/server under his desk.
He was big on efficiency (e.g., out of the lab by 5pm, but intensely focused while there), and I'm sure that him coding his models in C for a 64-bit dedicated Alpha box was more productive than getting supercomputer time.
> "$25,000 was not enough money to retire on for sure, even in 1996." $25,000 in 1996 is $42,000 in 2021. Seems like a modest incentive for top tech talent, even back then. * To respond to the comment below, the author had been working as a hardware systems engineer at headquarters for 10 years by 1996.
That started to change in the dotcom frenzy but that was still a couple of years away at that point.
Nice post. 366 MHz office hardware in 1996...yeah that would have been pretty awesome. The story also made me wonder about bonuses in European countries where private employee salary numbers are publicly available (or so I've heard). Is the same true for bonuses, if they are offered?
In Germany you have laws to ensure equal treatment in the workplace. So you are allowed to go to your HR and ask what up to i think 6 other people in a similar position & experience level as you are in earn. HR will of course not disclose the names.
I also felt they killed creativity and intellectual freedom completely. You were not able anymore to work on something else that you'd consider more important because the targets for the bonus were set. I found some fraudulent users who were using our product but instead of doing something about it I decided to just keep in line with what was expected from me after talking about it and having discussions about it with my manager.
So instead of acting on the values and mission of the company, the culture was to chase the money, and you could see it and feel it everywhere.
Worth noticing, at the beginning there were no bonuses but management wanted us to have some 'skin on the game'. I think they blew it by making it such a big percentage.
I think the place where big companies go wrong is by having teams that are too specialized. If you're the Signal Integrity team, the only thing you care about is signal integrity. You should just say no to anything but the most conservative arrangement possible; you're responsible for Signal Integrity, not profit or time to market! Block the project until the signal integrity is as good as it can be, that's your one and only job.
The even bigger problem is that the existence of the signal integrity team means that signal integrity experts aren't embedded on the product team. The product team can happily say "they're handling that", and cut whatever corners are necessary to get their $25,000 bonus, not caring at all about the tickets the Customer Service Team will have to handle as a result of poor signal integrity, the weird bugs the Software Engineering Team will have to work around, and the terrible reviews caused by a computer that randomly flips bits in memory.
Engineering is a discipline about balance, and I think the balance has to be done inside the team. You need to make a conscious decision to trade off a lower BOM cost for more customer service tickets, and the team needs to own that decision and plan for the future under the constraints of that decision. (Instead of sending out an order for capacitors, send out a req for more customer service.) If there is someone in the "out group" that you can pass your concerns off to (i.e. that makes the cost of your balance decision cost 0 for you), then you'll never make the right balance for the product and company as a whole. You'll just maximize for your own gain. From there, you ship your org chart, the company becomes entirely about politics, and you're out of business... just like DEC apparently.
(I guess I also want to comment on the article as a whole -- being bitter about too small a bonus. Something similar happened to me and I sure was bitter about it. I actually quit over it. It all sounds very rational to me, knowing how humans work, and I can't believe management would do something so stupid. It's the kind of thing that kills your company, and yup! it killed them! If there is one constant in the field of engineering, it's that we forget the mistakes of the past much too quickly. Except Therac-25, everyone remembers that one, but integer overflows are still killing people to this day. Sigh!)