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> If employers and employees trade vale-for-value, then what is there to hide? Doesn't it make sense to compensate people relative to the relative value of th

> If employers and employees trade vale-for-value, then what is there to hide? Doesn't it make sense to compensate people relative to the relative value of their productive achievements and capabilities? If it does make sense, then why distort the relative scale through secretive compensation practices cloaked behind a veil of low integrity? Ego and morale. For instance, I overpaid a contractor once to take on a role at my company that was killing me. I overpaid by like 50-70%, but I got him to drop everything he was doing and turn out amazing results for me. If one of my long term staff knew what I was paying, it would've destroyed morale. "You pay him what? I'm here all the time, and you pay him for 10 hours of work half what I make all month?" So yeah, people with me always got pretty good compensation and a hell of an enjoyable work environment, but I didn't make a habit of posting everyone's salary and expenses publicly. Also, people tend to be uncomfortable with that. I think sometimes people who have never managed people have an idea that could be easily tested or talked about with someone, but they advance their idea before doing so. There's a reason most companies don't talk pay with people - if somebody else makes more, it's going to bruise feelings and ruffle feathers and screw up morale.

leertaylor 17y ago
> There's a reason most companies don't talk pay with people - if somebody else makes more, it's going to bruise feelings and ruffle feathers and screw up morale. I don't think thats quite right... The reason most companies don't talk pay with people is because most companies fall into the "pay as little as we can get away with" category. In that category, some people are bound to be getting paid unfairly when compared to others, so its not surprising that feelings would be hurt and feathers would be ruffled if the truth came out. If everyone is paid fairly to begin with (regardless of whether or not pay is usually public), then by definition no-one should get upset if they do find out the pay of others since it would be fair. The real difficulty is getting everyone to agree with the same idea of "fair." For example, software engineers should be able to fairly evaluate their relative pay against other software engineers doing similar work, but they may have a difficult time fairly evaluating their pay relative to sales people.
- gnaritas 17y ago
  You won't even get developers agreeing, most people think they're worth more than they are and better than they are. Pay could be perfectly fair and people will still be insulted because they don't believe developer X is really better than they are even if everyone else believes so. The only thing I've ever seen that makes people not feel this way is an objective ranking system and pay scale, such as the military. You pass text X and have Y years in service you get Z dollars, with the test generally meaning more than years in service so as not to prevent stars from rising but still allowing lesser talent to earn rank with time in service. Such an atmosphere ends up divorcing pay from the job in such a way that people tend to do work for pride rather than money.
- lionhearted 17y ago
  > The reason most companies don't talk pay with people is because most companies fall into the "pay as little as we can get away with" category. You're right to some extent, but it's not that cut and dry. Lots of companies want to pay their stars, to retain them and set a good example, it's just a little harder to evaluate talent and consistency of talent than you could imagine. Even if a guy is stellar, if you give him a huge raise, is he going to keep up his production? For instance, an acquaintance of mine had an estimator who was absolutely brilliant, but an alcoholic. Whenever he got too much money, he'd get into hard drinking and flame out and disappear for a while, then come back later and apologize. His boss was careful not to give him too much overtime or the guy would get extra cash and flame out. (It was quite a blue collar business) So there's considerations like that. This was one of their best estimators though, when he was sober. Lots of talent. > If everyone is paid fairly to begin with (regardless of whether or not pay is usually public), then by definition no-one should get upset if they do find out the pay of others since it would be fair. You think a 10 year veteran is going to feel happy that some brilliant young college dropout is making the same money as him, because they're objectively producing the same amount? This is just simply not the case. > The real difficulty is getting everyone to agree with the same idea of "fair." For example, software engineers should be able to fairly evaluate their relative pay against other software engineers doing similar work A truism from project management - when a project is worked on by multiple people, if you ask a person what percent of the project they completed, the total is always greater than 100%. Everyone thinks they're more important than they are. Unfortunately, less talented people actually think they're better than they are. And on top of it, lots of elite brilliant people have huge ego and chips on their shoulder, so you'd see lots of jockeying to be "the highest paid" and so on. It's not at all that simple. "More transparency" sounds good in theory, but if it really did work better, companies would switch to it. And yes, everyone wants to pay what they can, but truly, remotely smart managers want to pay and reward and take care of their stars and reward production and pay people. You keep your best people by paying them. Figuring out exactly what they're contributing is by no means easy, though, and people are never objective about the quality of their own work. Hence, ego and morale concerns.
mmt 17y ago
I agree with leertaylor's comment, and I think it further generalizes to other aspects of transparency in the workplace. "You pay him what? I'm here all the time, and you pay him for 10 hours of work half what I make all month?" What strikes me is, "I'm here all the time." Why is someone who puts such a high value on merely showing up even still employed? OTOH, this touches the original article's point, that paying well above market is an excellent away to retain employees. (Whether they're worth retaining is another matter).
- pbhjpbhj 17y ago
  >What strikes me is, "I'm here all the time." Why is someone who puts such a high value on merely showing up even still employed? Because employers put such a high value on just showing up.

leertaylor 17y ago

> There's a reason most companies don't talk pay with people - if somebody else makes more, it's going to bruise feelings and ruffle feathers and screw up morale. I don't think thats quite right... The reason most companies don't talk pay with people is because most companies fall into the "pay as little as we can get away with" category. In that category, some people are bound to be getting paid unfairly when compared to others, so its not surprising that feelings would be hurt and feathers would be ruffled if the truth came out. If everyone is paid fairly to begin with (regardless of whether or not pay is usually public), then by definition no-one should get upset if they do find out the pay of others since it would be fair. The real difficulty is getting everyone to agree with the same idea of "fair." For example, software engineers should be able to fairly evaluate their relative pay against other software engineers doing similar work, but they may have a difficult time fairly evaluating their pay relative to sales people.

gnaritas 17y ago
You won't even get developers agreeing, most people think they're worth more than they are and better than they are. Pay could be perfectly fair and people will still be insulted because they don't believe developer X is really better than they are even if everyone else believes so. The only thing I've ever seen that makes people not feel this way is an objective ranking system and pay scale, such as the military. You pass text X and have Y years in service you get Z dollars, with the test generally meaning more than years in service so as not to prevent stars from rising but still allowing lesser talent to earn rank with time in service. Such an atmosphere ends up divorcing pay from the job in such a way that people tend to do work for pride rather than money.
lionhearted 17y ago
> The reason most companies don't talk pay with people is because most companies fall into the "pay as little as we can get away with" category. You're right to some extent, but it's not that cut and dry. Lots of companies want to pay their stars, to retain them and set a good example, it's just a little harder to evaluate talent and consistency of talent than you could imagine. Even if a guy is stellar, if you give him a huge raise, is he going to keep up his production? For instance, an acquaintance of mine had an estimator who was absolutely brilliant, but an alcoholic. Whenever he got too much money, he'd get into hard drinking and flame out and disappear for a while, then come back later and apologize. His boss was careful not to give him too much overtime or the guy would get extra cash and flame out. (It was quite a blue collar business) So there's considerations like that. This was one of their best estimators though, when he was sober. Lots of talent. > If everyone is paid fairly to begin with (regardless of whether or not pay is usually public), then by definition no-one should get upset if they do find out the pay of others since it would be fair. You think a 10 year veteran is going to feel happy that some brilliant young college dropout is making the same money as him, because they're objectively producing the same amount? This is just simply not the case. > The real difficulty is getting everyone to agree with the same idea of "fair." For example, software engineers should be able to fairly evaluate their relative pay against other software engineers doing similar work A truism from project management - when a project is worked on by multiple people, if you ask a person what percent of the project they completed, the total is always greater than 100%. Everyone thinks they're more important than they are. Unfortunately, less talented people actually think they're better than they are. And on top of it, lots of elite brilliant people have huge ego and chips on their shoulder, so you'd see lots of jockeying to be "the highest paid" and so on. It's not at all that simple. "More transparency" sounds good in theory, but if it really did work better, companies would switch to it. And yes, everyone wants to pay what they can, but truly, remotely smart managers want to pay and reward and take care of their stars and reward production and pay people. You keep your best people by paying them. Figuring out exactly what they're contributing is by no means easy, though, and people are never objective about the quality of their own work. Hence, ego and morale concerns.

mmt 17y ago

I agree with leertaylor's comment, and I think it further generalizes to other aspects of transparency in the workplace. "You pay him what? I'm here all the time, and you pay him for 10 hours of work half what I make all month?" What strikes me is, "I'm here all the time." Why is someone who puts such a high value on merely showing up even still employed? OTOH, this touches the original article's point, that paying well above market is an excellent away to retain employees. (Whether they're worth retaining is another matter).

pbhjpbhj 17y ago
>What strikes me is, "I'm here all the time." Why is someone who puts such a high value on merely showing up even still employed? Because employers put such a high value on just showing up.