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How Much Should You Pay Your Engineers to Ensure They Stick Around?

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Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#261

Post by amznthrowaway5 »

yboris wrote: post #199
vbtemp wrote: post #62

I just want a straight answer from someone who knows more than me. How come every time I switch jobs I get a 30-40% raise, but at any one company I never get more than a 1-3% raise each year, no matter the growth of productivity and responsibility. There's obviously some kind of prisoner's dilemma-like iterated game that reaches that Nash equilibrium, and I'm trying to figure out what it is exactly. I would have love…

One helpful perspective: a company hiring an individual has a specific problem they want to solve. If they hire you, you are the best candidate out of many they interview. You will bring a lot of value to them immediately.

Not true in large companies. Managers are often just empire building, but new hires still get top of band. Real morale killer, makes tenured employees want to look for a new job.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#262

Post by RussianCow »

bumby wrote: post #250
cpascal wrote: post #215

Earlier quoted context omitted.

Yes that’s a solution to the problem but it shouldn’t be the solution. Why should I have to give up my coworkers, my domain specific knowledge, my job just to get paid what I’m worth?

I think the issue is that there isn’t an agreement on your worth. If you’re willing to leave, your employer would pay you that higher salary if they truly believe that’s your worth. I also think it’s not correct to frame it in terms of what it’s worth to you ( my coworkers, my knowledge, my job). That isn’t particularly relevant. What matters is how well you solve a particular set of problems and how important those…

Because nobody knows how to quantify the benefit that an engineer brings to a company. It is, in most cases, impossible (or at least excruciatingly difficult) to put even a rough dollar amount on the worth of a knowledge worker. Because of this, companies tend to use very vague strategies for coming up with offers, like "the lowest they'll accept", or "X% below the maximum we can afford". In those cases, the numbers will vary wildly depending on the company's budget, the subjective "value" that they put on knowledge work, and the negotiation skill of the candidate.

The reason most companies don't pay FAANG salaries is largely some combination of: 1) they don't have the money; 2) they objectively get less value from those skills; 3) they subjectively don't put as much weight on the skill set (think "sticker shock"); 4) they low-balled their first few engineers and nobody asked for more. I'd bet that last one is more common than you'd expect, especially with junior devs who don't know how much they could be making elsewhere.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#263

Post by amznthrowaway5 »

phreeza wrote: post #189
tidepod12 wrote: post #51

Earlier quoted context omitted.

This is demonstrably incorrect if you look at some of the highest paying companies in SV. FAANG are of course well known for paying way way above what is necessary to satisfy "everyone's material needs and desires", and yet they are well known for still being ruthless political cultures and backstabbing. Execs might be congenial because at that level, congenial is just how you play the game. It's still cutthroat, but…

This idea of FAANGs having a culture of ruthless political backstabbing is new to me, is it really the case? I have heard about things like misaligned incentives (eg launching a chat app to get people promoted and then discontinuing it a year later) but that actually seems like the opposite of ruthless to me (complacent?)

Yes, those misaligned incentives mean rewarding the cutthroat psychopaths who are obsessed with claiming credit for others work, instead of genuine team players who care about delivering a quality product. There is lots of cronyism, like all Indian or Chinese teams who protect and promote each other while only hiring others to fill their PIP quota. The higher you go in the org chart the worse it gets.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#264

Post by Kinrany »

thanatropism wrote: post #124
Kinrany wrote: post #43

Earlier quoted context omitted.

Consistent quality requires accurate measurement. If you can't accurately measure quality and there's only external motivation, you get Goodhart's law.

But Goodhart's law applies to anything that's measured at all (it originates from the world monetary policy), even if it can be measured vey accurately. https://en.wikipedia.org/wiki/Goodhart%27s_law OTOH maybe quality exists as a qualitative concept but can't be measured -- then you just do pass/fail (like colleges have dropped letter-grades during the Zoomdemic). What I'm saying is that "shallower" coders, who are…

Goodhart's law doesn't apply when your measurement is perfectly aligned with your goal.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#265

Post by Reedx »

jonahhorowitz wrote: post #160
Reedx wrote: post #74

Earlier quoted context omitted.

Which is part of why it's not that uncommon to see people who bounce from job to job every year or two in the Bay Area. It rapidly boosts salary. I've also seen where people leave for a top paying company, which sends their compensation right to the moon, then come back after a short stint. Netflix seems to be a rare example of a company that is proactive enough with pay raises to counter this (any Netflix folks here…

The guidance given to managers at Netflix is to calibrate each employee's compensation to "what they (the manager) thinks they could make if they went elsewhere." It's an extremely time-consuming exercise that every manager goes through every year. They even encourage engineers to interview elsewhere and see what the offer is if they feel they are miscalibrated, and they will adjust appropriately. Finally, a question…

Interesting, that's quite a bit more bold than I thought. Thanks for the insight!

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#266

Post by jacques_chester »

_57jb wrote: post #196
vbtemp wrote: post #62

I just want a straight answer from someone who knows more than me. How come every time I switch jobs I get a 30-40% raise, but at any one company I never get more than a 1-3% raise each year, no matter the growth of productivity and responsibility. There's obviously some kind of prisoner's dilemma-like iterated game that reaches that Nash equilibrium, and I'm trying to figure out what it is exactly. I would have love…

It's for the same reason that large financial institutions hire entry level engineers as "VP's" There are internal systems, some significantly older than others....they are trying to adapt the real world to their internal representation of the perceived world. The value you truly provide vs. the value they believe you provide is lost on them....so you must find/show it. Many enterprises assume 3% bumps for all employ…

There's a fair amount of theory work around institutional economics, behavioural economics, information economics ... basically, a lot of economics deals with non-market as well as market systems of human activity. A good textbook is * Economic Approaches to Organization* by Douma and Schreuder.

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#267

Post by jacques_chester »

vbtemp wrote: post #203
_57jb wrote: post #196

Earlier quoted context omitted.

It's for the same reason that large financial institutions hire entry level engineers as "VP's" There are internal systems, some significantly older than others....they are trying to adapt the real world to their internal representation of the perceived world. The value you truly provide vs. the value they believe you provide is lost on them....so you must find/show it. Many enterprises assume 3% bumps for all employ…

Yeah, for a side project I want to try to model this in an agent based sim and to see if it can recreate some of these dynamics.

ABM for economic / social systems is a rich field: https://en.wikipedia.org/wiki/Computer_simulation_and_organi...

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#268

Post by [deleted] »

vbtemp wrote: post #62

I just want a straight answer from someone who knows more than me. How come every time I switch jobs I get a 30-40% raise, but at any one company I never get more than a 1-3% raise each year, no matter the growth of productivity and responsibility. There's obviously some kind of prisoner's dilemma-like iterated game that reaches that Nash equilibrium, and I'm trying to figure out what it is exactly. I would have love…

[deleted]

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#269

Post by bumby »

RussianCow wrote: post #262
bumby wrote: post #250

Earlier quoted context omitted.

I think the issue is that there isn’t an agreement on your worth. If you’re willing to leave, your employer would pay you that higher salary if they truly believe that’s your worth. I also think it’s not correct to frame it in terms of what it’s worth to you ( my coworkers, my knowledge, my job). That isn’t particularly relevant. What matters is how well you solve a particular set of problems and how important those…

Because nobody knows how to quantify the benefit that an engineer brings to a company. It is, in most cases, impossible (or at least excruciatingly difficult) to put even a rough dollar amount on the worth of a knowledge worker. Because of this, companies tend to use very vague strategies for coming up with offers, like "the lowest they'll accept", or "X% below the maximum we can afford". In those cases, the numbers…

Do you feel like this problem is unique to engineers?

I can see how other positions like sales can be more quantitatively measured in terms of contribution but my hunch is that many positions fall into this area of nebulous value estimation.

Or perhaps is more pronounced in software because of the amount of margins these companies work with

Re: How Much Should You Pay Your Engineers to Ensure They Stick Around?

#270

Post by foldr »

tuesdayrain wrote: post #242
foldr wrote: post #100

Earlier quoted context omitted.

Refactoring a large JS codebase is like painting the proverbial Forth Bridge. By the time you've finished, fashions have changed and it's time to rewrite it all again. You don't sound fun to work with.

Async/await isn't exactly a fad that is going away anytime soon. If refusing to refactor outdated pieces of code is your idea of "fun" then I feel sorry for your coworkers.

What does 'outdated' actually mean here? It's a sign of lazy or fashion-driven thinking. If there's a good reason for refactoring a pice of code, it should be possible to articulate that reason without reference to the date it was written.
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