Earlier quoted context omitted.
The performance review process has a small impact on salary. The promo process is not based on value or difficulty, but on the size of the organization that one is running. This is also true for higher level ICs, except they do not manage people, but rather manage/lead projects (which then have a certain amount of people involved). Here's a rough breakdown: - L4 -> 1 person - L5 -> 1-3 people - L6 -> ~7 people - L7 -…
Perf feeds into promotions, which are the real way to raise your long-term salary (both inside and outside of Google).
But this is not just a Google specific issue, and it is quite widespread in the industry. Google however suffered from this especially due to its obsessive culture of pay-for-perf and by ignoring simple facts:
- inflation means that your salaries should raise regardless of performance. if you only tail the market by adjusting salaries only if the market changes, then you are 1 year late(at least). This isn't a problem in an economy with low inflation, but is a huge problem in one with much higher inflation.
- there is a significant number of people needed to maintain projects that won't show large impact. Those people need to be at the very least recognized and compensated.
- making new products is great, but it requires huge amounts of ressources to do at Google scale from the get-go. A wider strategy is much needed, which Google obviously lacked for almost a decade.