The one-salary experiment, ten years in • Hacker News Board

Re: The one-salary experiment, ten years in

#271

Post by virgilp » Mon, Apr 01, 2019, 5:20 PM UTC

fsloth wrote: post #221

virgilp wrote: post #152

Earlier quoted context omitted.

A former manager - and friend - of mine told me that, when switching jobs, former employer made a handsome counter-offer, I think basically doubling his compensation; it was more than he got at the new gig. His reaction? "Now I also feel insulted. So that's how much I was worth to you, but you waited for me to leave before adjusting my pay?" It strikes me as a reasonable attitude, and one that I've adopted too. I don…

Um, I don't think it's a good idea to take it that personally. As a talented professional, you are constantly in the market. What sets the market price? Market. Your compensation is not about how much revenue you make to your employer, but what is the market price for the resource (you) and is the employer ready to pay the market price. When you get an offer that is way above your current rate, your explicit market p…

>When you get an offer to leave your boss gets more leverage as well to offer you more comp.

That's a good indicator of sub-par company that you're better served if you avoid it, in the long run.

Re: The one-salary experiment, ten years in

#272

Post by virgilp » Mon, Apr 01, 2019, 5:27 PM UTC

sverhagen wrote: post #181

tuesdayrain wrote: post #169

Earlier quoted context omitted.

>"Now I also feel insulted. So that's how much I was worth to you, but you waited for me to leave before adjusting my pay?" I mean yeah, it's a business. If they paid him exactly what he was worth then he would make them a net profit of $0.

I think market worth as perceived by the employer is shortened to "worth to you" in that sentence and then confused with how much the employee is making for the company. Every employee should create more value than they cost, for some relevant definitions of "value" and "cost". That doesn't mean they should get paid less (money, total benefits and whatever other vague upsides to coming to work) than what's reasonable…

That is exactly the point. I'm not constantly optimizing my salary, so if I do get a significantly better offer, it'd better be because you couldn't afford to make me one that was competitive. Otherwise, screw you, I no longer want to work for you anyway.

Re: The one-salary experiment, ten years in

#273

Post by humblebee » Mon, Apr 01, 2019, 6:00 PM UTC

ntsplnkv2 wrote: post #102

humblebee wrote: post #96

Earlier quoted context omitted.

That is basically the same thing the poster you replied to said, except from the perspective of the current company and not the new one. The current company knows his performance. The hiring company is making an educated guess from maybe 10 hours of interaction and a resume.

> The current company knows his performance. This is a huge assumption that often times, probably more often than not, isn't true.

I don't doubt that the hiring company may be able to get more value from the individual, hence offering a higher salary. Market rate is highly dependent on the market, and "Software Engineer" is not a market. The current employer is in a better position to understand the employees current value to the company. They may not be tracking it, but they are in a position that they could probably understand the value of the individual, and determine if an increase in compensation is worth the current value or future value they are getting from them.

Re: The one-salary experiment, ten years in

#274

Post by jdreyfuss » Mon, Apr 01, 2019, 6:05 PM UTC

Spooky23 wrote: post #248

issa wrote: post #84

I've always found it strange that companies don't give raises to current employees. A team I am on just lost a good engineer to another company offering him a $30k+ raise. He would have stayed if our company had even given him half of that. Instead, they let him go, and how will have to hire someone else, probably at that higher salary. So weird, and seems to happen a lot.

It’s just smart business. When word gets out that the guy got a raise or he shows up in a new car, you’ll have a line of people with hat in hand. Comfort is valuable to people. About 30% of my people are making significantly less than their market value. Myself included. But, non-cash benefits are powerful as well.

It's not smart business. It's often much more damaging to a company's bottom line to lose a strong performer and have to replace them than it is to pay them what they're worth. It's also damaging to culture when people just start disappearing because they got market-rate offers.

It is worth calling out that compensation is more than just salary however. But if strong performers are consistently leaving your company due to compensation, then you're doing something wrong.

The former head of talent at Netflix wrote a great article on hiring and compensation that touches on these points: https://hbr.org/2018/01/how-to-hire

Re: The one-salary experiment, ten years in

#275

Post by jdreyfuss » Mon, Apr 01, 2019, 6:11 PM UTC

JamesBarney wrote: post #164

issa wrote: post #84

I've always found it strange that companies don't give raises to current employees. A team I am on just lost a good engineer to another company offering him a $30k+ raise. He would have stayed if our company had even given him half of that. Instead, they let him go, and how will have to hire someone else, probably at that higher salary. So weird, and seems to happen a lot.

The company's thinking works like this. Your good engineer might have been worth a $15k raise. But once it gets out you can get a 15k raise by just getting a new offer then another 3-4 people will go get offers and asks for raises. This ends up costing the company an extra $60k-$70k to retain your good engineer, and he might not be worth that to the company.

But on the other hand, churn sparks more churn. So you don't pay your "good engineer" and she leaves. Other engineers start wondering why, and start looking around the market. Another one leaves, and then all of a sudden you have a ripple effect where several people follow suit and leave in a short time.

Re: The one-salary experiment, ten years in

#276

Post by intelliderp » Mon, Apr 01, 2019, 6:14 PM UTC

jdreyfuss wrote: post #274

Spooky23 wrote: post #248

Earlier quoted context omitted.

It’s just smart business. When word gets out that the guy got a raise or he shows up in a new car, you’ll have a line of people with hat in hand. Comfort is valuable to people. About 30% of my people are making significantly less than their market value. Myself included. But, non-cash benefits are powerful as well.

It's not smart business. It's often much more damaging to a company's bottom line to lose a strong performer and have to replace them than it is to pay them what they're worth. It's also damaging to culture when people just start disappearing because they got market-rate offers. It is worth calling out that compensation is more than just salary however. But if strong performers are consistently leaving your company d…

One quote says it all:

> We decided we didn’t want a system in which people had to leave to be paid what they were worth.

Re: The one-salary experiment, ten years in

#277

Post by icelancer » Mon, Apr 01, 2019, 6:43 PM UTC

k__ wrote: post #209

icelancer wrote: post #132

Earlier quoted context omitted.

Negotiating raises via counteroffers is a very dangerous practice. The employee will tell everyone how they got their raise (and it will get out), and suddenly you have a much larger problem on your hands rather than a single engineer leaving. Set up a fair, proactive, and objective way to obtain more money, and never deviate.

I know this problem well, but what can one employee do? If one company tries to poach me, should I simply keep it to myself that there is someone who is willing to pay me much more?

If money is more important to you than the culture/non-monetary things the current job offers, then leave. You can try bringing it up to your manager and get into a higher position, where a raise would be appropriate, but when people try to leverage other positions against our business for higher salary, I deny them 100% of the time unless we are talking about a promotion that makes sense.

Re: The one-salary experiment, ten years in

#278

Post by the_bear » Mon, Apr 01, 2019, 6:45 PM UTC

dcosson wrote: post #151

the_bear wrote: post #119

Earlier quoted context omitted.

I believe that this is not possible in America. I'm a founder and we just started offering health benefits earlier this year. I tried really hard to figure out a way to let employees effectively pay 100% of their premium (either by paying them more if they opt out or just having the company share be 0%). I talked to a number of people, looked into different types of plans (HRAs, etc) and at the end of the day, I coul…

Why did you want to not pay for health insurance? Even if you had found a legal loophole to do this, just about everybody is going to want health insurance and I’m pretty sure if the company pays then it’s not taxed, plus you can get better rates that way as you get bigger. So it’s more expensive overall for the same plans if you make employees pay.

The tax benefits and better rates (which I think is a myth btw, but it shouldn't effect the argument either way) would be there regardless of who pays. It's still a group plan, the question is just about who is paying for it.

So given that, the difference between "we offer free health insurance" and "we pay you extra and let you opt in to health insurance" is purely academic for someone who wants to be on the group plan. Both the company and the employee end up with the same amount of money in the end, and the insurance is the same.

The reason I'd prefer letting people opt in is because it gives employees more choice. Maybe they want to use a different carrier. Or they get free insurance through their spouse's work. Or they're on Medicare. At the end of the day, it seems really paternalistic for a company to say to its employees "here are the things we want you to have, and instead of letting you choose, we're just going to buy it for you." All else being equal, I prefer a world where employees get money and spend it how they want.

Having said that, since there's no way to do that while also getting the convenience and tax benefits of a group plan, we decided to compromise and go with the employer-subsidized group plan rather than giving employees total freedom.

Re: The one-salary experiment, ten years in

#279

Post by eesmith » Mon, Apr 01, 2019, 6:57 PM UTC

RHSeeger wrote: post #241

eesmith wrote: post #162

Earlier quoted context omitted.

If you want, the MTA is hiring. Or, you can start a union at push for pay raises for your industry. Putting that aside, https://en.wikipedia.org/wiki/2017_New_York_City_transit_cri... points out that worker salaries are only one of many costs for the MTA, and not the predominate problem: > On November 18, 2017, The New York Times published its investigation into the crisis, with over 1,000 readers having submitted st…

I fail to see how any of that has any impact on the fact that the workers get a 6% raise per year as cost of living. That's higher than how much cost of living increases per year in NYC. While what you said is interesting to read, none of it speaks to that point.

I have not been able to verify the 6% raise per year. What I have been able to find is that the raises from 2010 to 2017 have been in 2-4% range. Here are my sources:

1) This article from 2017 at https://www.metro.us/new-york/nyc-transit-workers-aim-for-sa... says:

> The contract for thousands of New York City transit workers expires in a few days, and union officials negotiating a new deal with the MTA are seeking salaries on par with other divisions the agency operates.

> The 44,000 transit workers affected by the collective bargaining agreement that expires Jan. 15 are hoping to receive more than the existing 2 percent pay increase,

2) This article from 2014 at https://nypost.com/2014/04/17/mta-workers-get-raises-under-n... says:

> A deal reached between the MTA and the Transport Workers Union will give unionized subway and bus employees 8 percent raises over five years — while sparing riders fare hikes.

> “We have a fair wage settlement but most importantly, no impact on fares,” said MTA boss Thomas Prendergast.

> Transit workers will get retroactive pay hikes of 1 percent for 2012 and 2013, followed by 2 percent increases in 2014, 2015 and 2016.

3) This article from 2010 at http://www.transitblogger.com/mta-finances/transit-workers-p... says:

> Despite recent fare hikes and the punishing recession, transit union officials argued that they deserve a 12% hike over three years, partly because city employees have received similar increases.

What is your source for a 6% raise per year? Is it for one year, or over a period of multiple years? Does it include a retrospective raise for a year where there was no salary increase? Does it include an increase in employee contributions to, for example, retirement or health care?

In any case, if it is 6% increase per year then it sounds like the union did a great job in negotiating, compared to previous years where they only managed to get 2-4% increases.

Wouldn't you want to have union representation which is that effective for your job? I would.

Re: The one-salary experiment, ten years in

#280

Post by mrguyorama » Mon, Apr 01, 2019, 7:06 PM UTC

a_imho wrote: post #167

protomyth wrote: post #57

Earlier quoted context omitted.

One of the most important findings is that pay generally will never motivate employees Grow up poor, and see how much pay motivates you. I think never is too strong a word.

This myth is perpetuated by people who never tried to motivate people with money.

Worse, they've tried to motivate people with pathetically small amounts of money

>I gave you a 25 cent raise over minimum wage! Why aren't you happy!