Open Salaries: Outcomes • Hacker News Board

Re: Open Salaries: Outcomes

#181

Post by ozzy6009 » Fri, Oct 28, 2016, 2:21 AM UTC

jjnoakes wrote: post #136

edoceo wrote: post #134

Earlier quoted context omitted.

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.

It doesn't, what he is saying is that the companies that do crash and burn after revealing salary information to their employees are the ones that should crash and burn. There is not an inherent evil in paying a lower salary. On the other hand,if the only reason they are able to pay a lower salary is because their employees do not know any better, they are more likely to be negatively affected by opening their salary information.

Re: Open Salaries: Outcomes

#182

Post by ajepst » Fri, Oct 28, 2016, 2:25 AM UTC

jjordan wrote: post #29

I'd like to get the perspective and opinion of an employee in the open salary system, rather than just a recount from the top.

I too work at an open salary company. One great thing that happened was that other people noticed I was being underpaid compared to my actual duties before I did and spoke up for me (I just didn't bother to look at it much) Minorities can keep tabs and see that all is well... Or that adjustments need to be made before it becomes a bigger issue. We have a superstar or two, and everybody knows who they are, and they make more. People are fine with that. One thing that really makes all this work is that we hire not only for technical skill, but especially for low jealousy and defensiveness. This helps from client meetings to code reviews, and of course, to honest discussions about open salaries.

Re: Open Salaries: Outcomes

#183

Post by bpowell » Fri, Oct 28, 2016, 2:32 AM UTC

jjordan wrote: post #29

I'd like to get the perspective and opinion of an employee in the open salary system, rather than just a recount from the top.

I work at a public university in Michigan as a Java developer. All of our salaries are open to the public. It has actually caused more friction that what I expected. Maybe it is just the people I work with, but once raises were announced people got very upset. It was mostly why is person A paid THAT much, they don't do anything.

Re: Open Salaries: Outcomes

#184

Post by shados » Fri, Oct 28, 2016, 2:36 AM UTC

dilemma wrote: post #157

sokoloff wrote: post #33

Earlier quoted context omitted.

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 learnin…

and then you have no way to compensate someone who has a 6th, incredibly valuable skill, but not the other 5 you wanted.

Or you can start doing super complicated things like "have 5 out of those 10 skills", but are they as valuable?

Yeah, that's a pain. And then another company may value the skill differently, and you then have to just lose your employee to them because they'll pay them more but you won't because of your rigid structure.

There's so many variables, uniformity here won't get you the best teams.

Re: Open Salaries: Outcomes

#185

Post by ci5er » Fri, Oct 28, 2016, 2:40 AM UTC

dustinmoris wrote: post #46

If these 25 employees would be clever then you'd get 25 massive pay rises in a very short amount of time by everyone quickly realizing that if you all praise yourself endlessly in those discussions then it is difficult for 1 single boss to push back on 25 people's amazingly positive feedback. Not trying to plant an idea though. Just saying.

And then the company runs out of operating capital and you're all looking for jobs somewhere else?

Re: Open Salaries: Outcomes

#186

Post by matthewowen » Fri, Oct 28, 2016, 3:47 AM UTC

When I've seen companies make their salaries publicly transparent, they've been below market rate (eg Buffer).

I wonder if the same tendency exists for companies that become internally transparently?

Re: Open Salaries: Outcomes

#187

Post by earljwagner » Fri, Oct 28, 2016, 4:02 AM UTC

nickpsecurity wrote: post #180

willyt wrote: post #63

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…

That's incredible. Thanks a million for those links as I try to collect these to get something close to significant data on them for analysis.

You might also be interested in books that profile other companies experimenting with this kind of transparency:

"Reinventing Organizations" by Frederic Laloux

"An Everyone Culture: Becoming a Deliberately Developmental Organization" by Kegan and Lahey

The latter profiles Bridgewater, a hedge fund in which every meeting is recorded and available to anyone in the company via the intranet.

Re: Open Salaries: Outcomes

#188

Post by emodendroket » Fri, Oct 28, 2016, 4:06 AM UTC

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…

It seems to me like this was a positive outcome for those two people you spoke to.

Re: Open Salaries: Outcomes

#189

Post by emodendroket » Fri, Oct 28, 2016, 4:07 AM UTC

rlpb wrote: post #123

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…

> 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.

Great, but he's talking about fairness and not "market rate," which are two distinct concepts.

Re: Open Salaries: Outcomes

#190

Post by kbutler » Fri, Oct 28, 2016, 4:08 AM UTC

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…

Throwaway4job wrote:

> open salaries would be problematic for me, because I've made some bad bets on new hires who are overpaid compared to what they deliver, but where it's not reasonable to fire them either.

Open salaries would give you precisely the leverage you need to reduce those employees' salaries. "Your initial salary was X, expecting better-than-average performance. Your performance has been comparable to Amy and Ben, so your salary now matches theirs." They would either accept the reduction or would leave, without you having to fire them.

The bigger problem would be it would tend to reduce the variance in salaries (why does Carl get 50% more than I do?), which may result in under-paying top performers, reducing their incentive to stay.