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Why I Never Let Employees Negotiate a Raise

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Re: Why I Never Let Employees Negotiate a Raise

#41

Post by jerf »

_delirium wrote: post #31
jerf wrote: post #11

Earlier quoted context omitted.

Capitalism is a series of centralized entities embedded in a larger sea of freedom with no (theoretically) overarching order imposed. Fog Creek is free to compensate people in this manner. You are free to seek employment elsewhere if this is a problem. It would not be a free market if either A: the government mandated this approach (or worse, mandated the pay scale) or B: an oligarchy formed where everybody determine…

It might be worth noting that there's a decent amount of debate in free-market-capitalist circles over just how natural it is that these centralized entities emerge, versus how much they're encouraged/enabled by the government. A lot of the structure of the modern corporation is basically state-created: the limited-liability corporate status to begin with, the centralized form of management with a board of directors,…

Heh, one can only stuff so much in one comment.

At the limit, I still see some large stuff coming together unless you rip out the legal system well beyond what I think is optimal. My father works for Chrysler, and I have observed that even as they outsource everything they can, the remaining core is intrinsically huge, as there really has to be an entity that is finally responsible for the car. That means that entity has to have a huge testing component. That further means it needs to do its own design. It also really needs to be the one doing the manufacturing, too, even if that is only a "final assembly" step.

Structuring things so that this wouldn't be necessary anywhere in the economy is probably not currently practical. But ask me again in 20-30 years; technology is rapidly shifting from encouraging centralization to the opposite.

Re: Why I Never Let Employees Negotiate a Raise

#42

Post by wallflower »

roschdal wrote: post #37

"Because salary information is viewed as particularly sensitive, employers often go to great lengths to keep it under wraps." In Norway, salary information is viewed as public information. Each year the government releases the income, assets and amount of payed tax of every citizen, so that the media can make it public. It is then made searchable online, for example here: http://skattelister.no/

In the U.S., companies that want to use H-1 visa programs must release specific salaries for specific titles.

Warning: Look at these databases at your own risk. You may be shocked at what others at your company are probably earning. Google H1-B salary database.

Re: Why I Never Let Employees Negotiate a Raise

#43

Post by brc »

The main thing here is that Fog Creek has plenty of margin to use. When there's plenty of profit to go around, of course you can come up with money for everyone.

The key question, then, when applying to a company for a job, is do they have the profit to throw my way?

Re: Why I Never Let Employees Negotiate a Raise

#44

Post by billswift »

_delirium wrote: post #31
jerf wrote: post #11

Earlier quoted context omitted.

Capitalism is a series of centralized entities embedded in a larger sea of freedom with no (theoretically) overarching order imposed. Fog Creek is free to compensate people in this manner. You are free to seek employment elsewhere if this is a problem. It would not be a free market if either A: the government mandated this approach (or worse, mandated the pay scale) or B: an oligarchy formed where everybody determine…

It might be worth noting that there's a decent amount of debate in free-market-capitalist circles over just how natural it is that these centralized entities emerge, versus how much they're encouraged/enabled by the government. A lot of the structure of the modern corporation is basically state-created: the limited-liability corporate status to begin with, the centralized form of management with a board of directors,…

Companies exist because they reduce the transaction costs of getting things done relative to doing everythig with independent contractors for example (http://en.wikipedia.org/wiki/Transaction_cost).

The libertarian argument is about how much government regulation influences the size of companies, that is how large companies would be absent regulation, the vast majority of which impacts smaller companies more per dollar of income than it does larger one.

Limited-liability is a natural, almost inevitable, requirement for joint-stock companies, such as corporations, to exist. It does NOT limit criminal or tortious liability of the company; all it does is limit the financial liability of investors to what they have invested in that company, so if your retirement account bought stock in a company that went bankrupt, it is only out what it invested, it does not have to contribute toward paying off the company's secured debt.

Re: Why I Never Let Employees Negotiate a Raise

#47

Post by helwr »

wallflower wrote: post #42
roschdal wrote: post #37

"Because salary information is viewed as particularly sensitive, employers often go to great lengths to keep it under wraps." In Norway, salary information is viewed as public information. Each year the government releases the income, assets and amount of payed tax of every citizen, so that the media can make it public. It is then made searchable online, for example here: http://skattelister.no/

In the U.S., companies that want to use H-1 visa programs must release specific salaries for specific titles. Warning: Look at these databases at your own risk. You may be shocked at what others at your company are probably earning. Google H1-B salary database.

thanks, i even found my own case there

Re: Why I Never Let Employees Negotiate a Raise

#49

Post by wlievens »

gaius wrote: post #15
portman wrote: post #13

I'll make the same comment I made when this was posted last year: Fog Creek has secret profit-sharing plans. All Joel has done is move a portion of employees' compensation from the "salary" column to the "profit-sharing" column. If Joel were to begin posting the annual profit sharing of all employees, including Michael and Joel, then this article would make sense. But until then, it's just flair.

Profit in this context is whatever your accountant says it is. You can easily shuffle expenses backwards and forwards between quarters if you want to tweak the figures slightly (so, for example, your profit for this quarter is 99.9% of what it would need to be to pay bonuses). Cynical, moi?

Yes, but if this information is public, in a small corporation, it'll probably mean a riot and a significant motivation killer.

Re: Why I Never Let Employees Negotiate a Raise

#50

Post by wlievens »

billswift wrote: post #44
_delirium wrote: post #31

Earlier quoted context omitted.

It might be worth noting that there's a decent amount of debate in free-market-capitalist circles over just how natural it is that these centralized entities emerge, versus how much they're encouraged/enabled by the government. A lot of the structure of the modern corporation is basically state-created: the limited-liability corporate status to begin with, the centralized form of management with a board of directors,…

Companies exist because they reduce the transaction costs of getting things done relative to doing everythig with independent contractors for example ( http://en.wikipedia.org/wiki/Transaction_cost ). The libertarian argument is about how much government regulation influences the size of companies, that is how large companies would be absent regulation, the vast majority of which impacts smaller companies more per do…

The libertarian argument (not sure from your post if you hold it) is pretty simplistic.

What kind of government regulation is keeping Microsoft at near-monopoly level? (if you disagree it's a monopoly, pretend we're a decade back in time)

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