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Open Salaries: Outcomes

blog.lunarlogic.io

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Re: Open Salaries: Outcomes

#201

Post by smsm42 »

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.

That suggests either a very like-minded company (with 25 people very likely, with larger sizes less so) or tremendous amount of peer pressure. After all, if out of 25 people 24 decide to share, and 25th wants to work in this company, they don't really have a choice, do they? That person has to work with all these people after it.

Re: Open Salaries: Outcomes

#202

Post by sgift »

exclusiv wrote: post #196
mathattack wrote: post #178

Earlier quoted context omitted.

Anytime two people compare salaries, at least one person gets angry. Sometimes two.

So true. Most people can't handle it. It's all relative to them and it's not usually logical. 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. Tha…

> 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.

Is that an argument? If yes, I don't see it. If people believe that they couldn't earn more they are probably "perfectly fine" due to this missing information. Then they learn what their peers make and think - rightfully* - "just a moment, I do the same job, to the same quality, why is my peer earning more than I am?" which in itself is already a compelling reason (so, your next point usually does not apply).

> 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.

And open-salary makes this easier and harder to screw people over using information-asymmetry.

* Yes, there are some people who just don't work as good as their peers and that's the reason they don't earn as much. From all I've seen over the years I am absolutely sure that this doesn't count for a significant part of the workforce compared to the part of the workforce that does a job comparable to their peers but still earns less income.

Re: Open Salaries: Outcomes

#204

Post by pawelbrodzinski »

hardwaresofton wrote: post #195

While this sounds awesome in theory, I don't think I'd find it fun to have everyone deciding on what everyone in the company should be paid. It seems like weird office politics, jealousy, and unrelated things would get involved. This is all just my opinion, but I feel like even though this idea is good in theory, it will be ruined by people, just like valve's org structure model. The truth is, no one knows what anyon…

Similar systems built around transparent salaries work for companies bigger than 500. Look for stories from Morning Star or Semco for example. Obviously, with a few thousand people you need at least a bit more structure, but in principle the model is the same: people collectively set their own salaries with respect to economical constraints of an organization.

Re: Open Salaries: Outcomes

#205

Post by sheepmullet »

ryandrake wrote: post #168
sheepmullet wrote: post #156

Earlier quoted context omitted.

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 a…

Ideally, we could have a magical box that you could feed the sum of all of an employee's achievements and out would pop their objectively-determined market-competitive title and salary. Things like negotiation and seniority and popularity contests and office politics and whether your manager likes you would have nothing to do with it. I'll concede we don't have such a box, so companies have to make due with a combina…

> unless your job role actually involves negotiation.

Every job involves some level of negotiation.

Even as a junior you have to negotiate with senior devs to give you time of day. Even as a junior you have to negotiate on features and estimates.

As you move up the chain it becomes more and more important.

Re: Open Salaries: Outcomes

#206

Post by IshKebab »

hx87 wrote: post #82
news_to_me wrote: post #78

Earlier quoted context omitted.

> You could say the takeaway is don't work for companies out to screw their workers, but that's most of them. Seems like this is something transparent salary policies might change.

Exactly--open salaries might cause some companies to crash and burn, but these are companies that /should/ crash and burn.

Which is exactly why it won't catch on.

Re: Open Salaries: Outcomes

#207

Post by eloisant »

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.

Well, we're lucky enough to be in an industry where there are more jobs than qualified candidate. So if you know your market value, make clear what you want when interviewing, you can find a job that will pay you what you're worth.

Re: Open Salaries: Outcomes

#208

Post by eloisant »

jjnoakes wrote: post #132
hx87 wrote: post #82

Earlier quoted context omitted.

Exactly--open salaries might cause some companies to crash and burn, but these are companies that /should/ crash and burn.

I'm not arguing one way or the other about open salaries, but should a company really crash and burn for hiring someone who was willing to work for some price $X, even if it is lower than their peer? I mean the person did accept the job knowing $X, right?

That's a bad move on the part of the company, because an underpaid person is a time-bomb.

From what I've seen, the problem often arise not with people hired at a low pay because they didn't know better, but hired at a low pay because that was the market price at the time. They end up having less pay than people with the same experience (or even less) who were hired later when the market salary was higher.

Re: Open Salaries: Outcomes

#209

Post by cmdkeen »

jjnoakes wrote: post #132
hx87 wrote: post #82

Earlier quoted context omitted.

Exactly--open salaries might cause some companies to crash and burn, but these are companies that /should/ crash and burn.

I'm not arguing one way or the other about open salaries, but should a company really crash and burn for hiring someone who was willing to work for some price $X, even if it is lower than their peer? I mean the person did accept the job knowing $X, right?

From some of the management training I've sat through money is a poor motivator but a really powerful demotivator. If I give you a pay rise you very quickly come to see yourself as "worth" that amount of money and so any boost is short lived. If you feel that you are underpaid that leads to a long running and very powerful effect as described above.

There are plenty of other things that are much more powerful motivators than money, and a good company to work for is probably not the one paying you the most. Otherwise everyone would be in finance working 100 hour weeks and loving it. The issue isn't that someone was paid $X is that they felt they were worth $Y and the other incentives and motivators weren't sufficient to overcome that. If they were paid less than they could command elsewhere but doing work that mattered to them and challenged them, felt valued by the company, were part of a good team, had flexibility in work life balance, were given opportunities to develop and learn, had prospects for advancement and the myriad other things that different people value (and sometimes value very differently) then the situation may have been very different.

Re: Open Salaries: Outcomes

#210

Post by jjnoakes »

eloisant wrote: post #208
jjnoakes wrote: post #132

Earlier quoted context omitted.

I'm not arguing one way or the other about open salaries, but should a company really crash and burn for hiring someone who was willing to work for some price $X, even if it is lower than their peer? I mean the person did accept the job knowing $X, right?

That's a bad move on the part of the company, because an underpaid person is a time-bomb. From what I've seen, the problem often arise not with people hired at a low pay because they didn't know better, but hired at a low pay because that was the market price at the time. They end up having less pay than people with the same experience (or even less) who were hired later when the market salary was higher.

> an underpaid person is a time-bomb

I disagree. There may be some instances of this, but there are also instances of people who love their job and would not change it for more money.

Money isn't the only motivator.

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