8 ms·

As someone in recruiting and hiring, I love the concept of salary transparency on many levels, and I hope more companies at least make attempts like this to pro

by fecak 10y ago

As someone in recruiting and hiring, I love the concept of salary transparency on many levels, and I hope more companies at least make attempts like this to provide insight. That said, salary ranges and transparency can create two obvious issues. 1. Negotiations - I can tell you from vast past experience that when you tell an applicant "the salary range for this position is 80-100K", in almost every case any offer below 100K is considered a slight regardless of the experience of the candidate. "...but I thought you said the position paid 100K?" is a common thing to hear. Candidates hear the top of the range, and apply/interview with that expectation. This is only an issue when a candidate's true market rate is at the bottom of a range. A minimally qualified candidate doesn't typically see himself/herself as 'minimally qualified'. So even if 80K is true fair market rate for this candidate, and 80K is offered, the offer still has a good chance of being rejected simply because of the emotional attachment to the higher number and the feeling of "leaving money on the table". 2. Internal employees - Stack Overflow said this has been available internally for a bit, but when employees find out what others are making they are inclined to compare their own efforts/abilities vs others. It can lead to people either asking for raises to match their co-workers, or perhaps feeling slighted and seeking other employers. Being that it's not easy to truly measure productivity in most environments - other than perhaps consulting (billable hours) this is likely to cause issues. The next step is being prepared for how to handle those issues when they arise.

edwhitesell 10y ago
I don't mean this to sound like a negative argument against your points, but here's a positive spin on both of them: 1. This generally means it's easy to filter out candidates who aren't a fit for your organization. In my experience, most employers would love to have employees where the salary is not the first (or even top 3) factors in their decision to take a job. (Rare, I know.) 2a. That seems like a good tail into #1. The employees who aren't in it for the team/company/career filter themselves out. 2b. Or, it's used as a comparison for employees to better themselves. "I want Job xyz because I can make an additional $20k/year. How do I improve myself to get it?"
- fecak 10y ago
  Companies that filter out candidates that prioritize money as a high criteria are potentially doing themselves a disservice by not hiring on ability. An excellent coder who wants to maximize their compensation shouldn't be penalized for that. If "fit" for an organization means not caring (as much) about money, that almost always indicates the organization is paying below market rate. I have clients that pay below market rate, and candidates who value money above other things will filter themselves out when they discover the ranges being paid. Not sure I follow the second point. My example would be if Jane sees herself as a top contributor and earns 100K and she learns that Joe (who she feels is not a top contributor) earns 120K, Jane won't be happy. I don't think Jane will think "what can I do to earn what Joe does?", because she already feels she's doing more than Joe. I might have misunderstood your point, but wanted to clarify my post.
  - edwhitesell 10y ago
    I don't disagree with how things are most of the time, though I personally disagree with it in terms of how I try to operate. Regarding the second point, I guess my point was: if the argument is that employees “value” is shown by salary and Jane is unhappy based on her perception of contribution, isn’t that a fault with management for not recognizing that and fixing accordingly?
    - fecak 10y ago
      >if the argument is that employees “value” is shown by salary and Jane is unhappy based on her perception of contribution, isn’t that a fault with management for not recognizing that and fixing accordingly? I think we're assuming Jane to be a rational actor with perfect information. Jane makes less than Joe and feels she does more than Joe. Management feels Joe does more. Theoretically, management can tell Jane that Joe is paid more because his contribution is valued more, but Jane's unhappiness only exists because she disagrees with this valuation. Either Jane convinces management that her self-evaluation is accurate, management convinces Jane she is being paid what she's worth, or Jane updates her resume.
- maxxxxx 10y ago
RodericDay 10y ago
> 2. Internal employees - Stack Overflow said this has been available internally for a bit, but when employees find out what others are making they are inclined to compare their own efforts/abilities vs others. It can lead to people either asking for raises to match their co-workers, or perhaps feeling slighted and seeking other employers. Why is this wrong? The labor market should strive to be efficient, no?
- fecak 10y ago
  I didn't say it was "wrong" - it could be a good thing for the labor market, as you say. I said it may cause some issues for the employer. Some of those issues will be related to things like confidence, willingness to speak out, and the ability to honestly recognize your ability. When asked in this context (as it relates to pay), most people may think they are at least above average. Obviously that can't be true. It's not easy to determine contributions in most cases, so value (and relative worth) can be ambiguous.
  - RodericDay 10y ago
    Lack of confidence and willingness to speak out are usually used by the employer to get more out of their employees, even if it's slightly worse for the employer it seems like straightforwardly positive for society. As for people being unable to judge and compare the price value of their contribution, because of the lack of public salary data, they've had no practice at the exercise. After a short adjustment period I'm sure people would develop the tools and attitudes to navigate a marketplace where they have way more information available.
    - fecak 10y ago
      I agree there are lots of positives. But with increased transparency, what we won't likely see is someone saying "Joe is a better employee than me and I unfairly make more than him. Please reduce my salary." The adjustment requests are only going to go in one direction, and be requested by those who feel (wrongly or not) that they are contributing more than others. I wasn't referring to the inability to compare price value of contribution as related to public salary data, but rather for internal comparisons. Not market rate across the entire market, but value compared directly with a co-worker. These should be related, but transparency within one organization is easier to assess. If we have two programmers working on the same code base building the same product, how easy or difficult is it to determine who is contributing more and therefore worth more to the company? There are several factors at play, not to mention intangibles (catalysts, morale, leadership), and it's incredibly complex to say EMPLOYEE1 is 'more valuable' than EMPLOYEE2.
dworin 10y ago
"2. Internal employees - Stack Overflow said this has been available internally for a bit, but when employees find out what others are making they are inclined to compare their own efforts/abilities vs others. It can lead to people either asking for raises to match their co-workers, or perhaps feeling slighted and seeking other employers." One nice thing about being transparent and consistent with salaries is that you can have an objective conversation with someone about the reasons that they're making less, versus having to rely on vague, irrelevant, or harmful explanations like "he was making more at another company," or "he negotiated harder." If someone thinks they should be making what another developer is being paid, they need to make the case based on clearly laid out criteria. There's no compensation system that makes everyone happy, and there shouldn't be. You want a system that leaves people knowing where they stand, what it takes for them to make more, and management that encourages them to grow into that amount.
- optforfon 10y ago
  it sounds a bit too idealistic. How about if someone is hired at a hire rate because "well we needed someone with his skill set ASAP, so we agreed to pay him a premium" (but we can't afford to pay everyone at that rate) or "We desperately needed someone quickly with skill set X and he was the only person available" And sometimes comparing people and their skill sets is really apples to oranges. If one guy is an expert on some very specific top, and thats important for your business (and is therefore an expensive hire) - it doesn't mean you should create an incentive for other employees to learn his skill set (maybe you only need one statistician or expert in COBOL or whatever) "There's no compensation system that makes everyone happy" Sure, pay people way above market rate and don't allow them to compare wages. They will not feel ripped off and they don't develop a sense on inadequacy
  - softawre 10y ago
    > Sure, pay people way above market rate and don't allow them to compare wages That sounds illegal. Can you really not allow your employees to compare wages?
    - 10y ago
sklivvz1971 10y ago
Stack Overflow employee here, here's some answers (or at least, my take). Regarding point 1, remember that there are no salary negotiations at Stack Overflow. No one gets a raise because they ask. People get raises because they demonstrate skills, increase experience, etc... A candidate will have an initial skill evaluation they might not like, but they are pretty much guaranteed to have a much better one after one year, and if it is a big positive correction, then be it! There are no negative corrections btw - previous years salaries are at least maintained. Secondly, I sincerely doubt we'd make an offer to a candidate that assumes their skills are all at the top of the range. "Fives" are extraordinarily rare, most employees have no fives, and the ones that do have one five. Regarding point 2, as an employee I am not concerned with the salary of others per se. I know that they have the salary which corresponds to their perceived skills. It's likely that I would object to some evaluations of skills if I saw them, but that's an order of magnitude healthier than having salary envy. In fact, keeping evaluations fair and in check is a very good thing for the company.
- fecak 10y ago
  Thanks for sharing, and I hope employees keep us updated on this experiment (because transparency). My reference to negotiations was mostly for a negotiation upon hire. A job is advertised at a certain range, and the applicant expects the top of that range. I know that Stack Overflow's process might be a bit more evolved, but most companies that advertise a range probably leave a little wiggle room at the top and don't expect to be negotiating with candidates asking the minimum. >Secondly, I sincerely doubt we'd make an offer to a candidate that assumes their skills are all at the top of the range. This comes across more like assessing candidates for hire based on ego or confidence rather than actual skills. Of course, companies don't want to hire people with inflated beliefs about their own abilities - those who "don't know what they don't know". If you would object to the skills evaluations, and if we assume some of those people are earning more than you, how is that different than "salary envy"? I'm not disagreeing with you, I'm just not sure I understand the thought process.
  - sklivvz1971 10y ago
    > This comes across more like assessing candidates for hire based on ego or confidence rather than actual skills. Our hire/no-hire policy is only based on competence, however true competence includes the capacity for realistic self-assessment. Keep in mind that our skill scale, especially for core skills, goes from "I could be better" to "I am world famous for this skill", so it's fairly easy to prove or disprove whether someone is at the top of the ladder. > If you would object to the skills evaluations, and if we assume some of those people are earning more than you, how is that different than "salary envy"? Big caveat: this works for us, but of course each company is different. Our skills are based on measurable stuff and generally do not represent a "career achievement". An employee can't say "I'm better than Marco, so I should be paid more". An employee might say "This year I've done better than Marco at SQL, but Marco has a better score in it, can you review mine?". In most cases, we simply look at the evidence: has the employee actually been better than Marco in the last year in doing SQL? Also keep in mind that there's a huge gap between categories. We've four, B, A, A+, A+++. They start at "B" which means that someone did not do much on that skill in the past year. For example, I've got a B in sysadmin stuff which I never need to do. In order to get an "A" one needs to be completely proficient in the skill, no obvious gaps, so for example I've (IIRC) an A in SQL, which means I can do SQL as well as anyone else in the team. In order to be "A+" one needs to be really good at the skill, someone that is recognized in the team for it, if I were to get it for SQL I'd need to go above and beyond the average. Patrol SQL for misbehaving query plans. Perform DBA tasks. Et cetera. An A+++ means that one is actually famous for the skill, for example a Microsoft MVP, or a famous blogger, etc. A guru level of skill is needed in SQL. Probably something which would take me 10 years to achieve.

by fecak 10y ago

edwhitesell 10y ago

I don't mean this to sound like a negative argument against your points, but here's a positive spin on both of them: 1. This generally means it's easy to filter out candidates who aren't a fit for your organization. In my experience, most employers would love to have employees where the salary is not the first (or even top 3) factors in their decision to take a job. (Rare, I know.) 2a. That seems like a good tail into #1. The employees who aren't in it for the team/company/career filter themselves out. 2b. Or, it's used as a comparison for employees to better themselves. "I want Job xyz because I can make an additional $20k/year. How do I improve myself to get it?"

fecak 10y ago
Companies that filter out candidates that prioritize money as a high criteria are potentially doing themselves a disservice by not hiring on ability. An excellent coder who wants to maximize their compensation shouldn't be penalized for that. If "fit" for an organization means not caring (as much) about money, that almost always indicates the organization is paying below market rate. I have clients that pay below market rate, and candidates who value money above other things will filter themselves out when they discover the ranges being paid. Not sure I follow the second point. My example would be if Jane sees herself as a top contributor and earns 100K and she learns that Joe (who she feels is not a top contributor) earns 120K, Jane won't be happy. I don't think Jane will think "what can I do to earn what Joe does?", because she already feels she's doing more than Joe. I might have misunderstood your point, but wanted to clarify my post.
- edwhitesell 10y ago
  I don't disagree with how things are most of the time, though I personally disagree with it in terms of how I try to operate. Regarding the second point, I guess my point was: if the argument is that employees “value” is shown by salary and Jane is unhappy based on her perception of contribution, isn’t that a fault with management for not recognizing that and fixing accordingly?
  - fecak 10y ago
    >if the argument is that employees “value” is shown by salary and Jane is unhappy based on her perception of contribution, isn’t that a fault with management for not recognizing that and fixing accordingly? I think we're assuming Jane to be a rational actor with perfect information. Jane makes less than Joe and feels she does more than Joe. Management feels Joe does more. Theoretically, management can tell Jane that Joe is paid more because his contribution is valued more, but Jane's unhappiness only exists because she disagrees with this valuation. Either Jane convinces management that her self-evaluation is accurate, management convinces Jane she is being paid what she's worth, or Jane updates her resume.
maxxxxx 10y ago

RodericDay 10y ago

> 2. Internal employees - Stack Overflow said this has been available internally for a bit, but when employees find out what others are making they are inclined to compare their own efforts/abilities vs others. It can lead to people either asking for raises to match their co-workers, or perhaps feeling slighted and seeking other employers. Why is this wrong? The labor market should strive to be efficient, no?

fecak 10y ago
I didn't say it was "wrong" - it could be a good thing for the labor market, as you say. I said it may cause some issues for the employer. Some of those issues will be related to things like confidence, willingness to speak out, and the ability to honestly recognize your ability. When asked in this context (as it relates to pay), most people may think they are at least above average. Obviously that can't be true. It's not easy to determine contributions in most cases, so value (and relative worth) can be ambiguous.
- RodericDay 10y ago
  Lack of confidence and willingness to speak out are usually used by the employer to get more out of their employees, even if it's slightly worse for the employer it seems like straightforwardly positive for society. As for people being unable to judge and compare the price value of their contribution, because of the lack of public salary data, they've had no practice at the exercise. After a short adjustment period I'm sure people would develop the tools and attitudes to navigate a marketplace where they have way more information available.
  - fecak 10y ago
    I agree there are lots of positives. But with increased transparency, what we won't likely see is someone saying "Joe is a better employee than me and I unfairly make more than him. Please reduce my salary." The adjustment requests are only going to go in one direction, and be requested by those who feel (wrongly or not) that they are contributing more than others. I wasn't referring to the inability to compare price value of contribution as related to public salary data, but rather for internal comparisons. Not market rate across the entire market, but value compared directly with a co-worker. These should be related, but transparency within one organization is easier to assess. If we have two programmers working on the same code base building the same product, how easy or difficult is it to determine who is contributing more and therefore worth more to the company? There are several factors at play, not to mention intangibles (catalysts, morale, leadership), and it's incredibly complex to say EMPLOYEE1 is 'more valuable' than EMPLOYEE2.

dworin 10y ago

"2. Internal employees - Stack Overflow said this has been available internally for a bit, but when employees find out what others are making they are inclined to compare their own efforts/abilities vs others. It can lead to people either asking for raises to match their co-workers, or perhaps feeling slighted and seeking other employers." One nice thing about being transparent and consistent with salaries is that you can have an objective conversation with someone about the reasons that they're making less, versus having to rely on vague, irrelevant, or harmful explanations like "he was making more at another company," or "he negotiated harder." If someone thinks they should be making what another developer is being paid, they need to make the case based on clearly laid out criteria. There's no compensation system that makes everyone happy, and there shouldn't be. You want a system that leaves people knowing where they stand, what it takes for them to make more, and management that encourages them to grow into that amount.

optforfon 10y ago
it sounds a bit too idealistic. How about if someone is hired at a hire rate because "well we needed someone with his skill set ASAP, so we agreed to pay him a premium" (but we can't afford to pay everyone at that rate) or "We desperately needed someone quickly with skill set X and he was the only person available" And sometimes comparing people and their skill sets is really apples to oranges. If one guy is an expert on some very specific top, and thats important for your business (and is therefore an expensive hire) - it doesn't mean you should create an incentive for other employees to learn his skill set (maybe you only need one statistician or expert in COBOL or whatever) "There's no compensation system that makes everyone happy" Sure, pay people way above market rate and don't allow them to compare wages. They will not feel ripped off and they don't develop a sense on inadequacy
- softawre 10y ago
  > Sure, pay people way above market rate and don't allow them to compare wages That sounds illegal. Can you really not allow your employees to compare wages?
  - 10y ago

sklivvz1971 10y ago

Stack Overflow employee here, here's some answers (or at least, my take). Regarding point 1, remember that there are no salary negotiations at Stack Overflow. No one gets a raise because they ask. People get raises because they demonstrate skills, increase experience, etc... A candidate will have an initial skill evaluation they might not like, but they are pretty much guaranteed to have a much better one after one year, and if it is a big positive correction, then be it! There are no negative corrections btw - previous years salaries are at least maintained. Secondly, I sincerely doubt we'd make an offer to a candidate that assumes their skills are all at the top of the range. "Fives" are extraordinarily rare, most employees have no fives, and the ones that do have one five. Regarding point 2, as an employee I am not concerned with the salary of others per se. I know that they have the salary which corresponds to their perceived skills. It's likely that I would object to some evaluations of skills if I saw them, but that's an order of magnitude healthier than having salary envy. In fact, keeping evaluations fair and in check is a very good thing for the company.

fecak 10y ago
Thanks for sharing, and I hope employees keep us updated on this experiment (because transparency). My reference to negotiations was mostly for a negotiation upon hire. A job is advertised at a certain range, and the applicant expects the top of that range. I know that Stack Overflow's process might be a bit more evolved, but most companies that advertise a range probably leave a little wiggle room at the top and don't expect to be negotiating with candidates asking the minimum. >Secondly, I sincerely doubt we'd make an offer to a candidate that assumes their skills are all at the top of the range. This comes across more like assessing candidates for hire based on ego or confidence rather than actual skills. Of course, companies don't want to hire people with inflated beliefs about their own abilities - those who "don't know what they don't know". If you would object to the skills evaluations, and if we assume some of those people are earning more than you, how is that different than "salary envy"? I'm not disagreeing with you, I'm just not sure I understand the thought process.
- sklivvz1971 10y ago
  > This comes across more like assessing candidates for hire based on ego or confidence rather than actual skills. Our hire/no-hire policy is only based on competence, however true competence includes the capacity for realistic self-assessment. Keep in mind that our skill scale, especially for core skills, goes from "I could be better" to "I am world famous for this skill", so it's fairly easy to prove or disprove whether someone is at the top of the ladder. > If you would object to the skills evaluations, and if we assume some of those people are earning more than you, how is that different than "salary envy"? Big caveat: this works for us, but of course each company is different. Our skills are based on measurable stuff and generally do not represent a "career achievement". An employee can't say "I'm better than Marco, so I should be paid more". An employee might say "This year I've done better than Marco at SQL, but Marco has a better score in it, can you review mine?". In most cases, we simply look at the evidence: has the employee actually been better than Marco in the last year in doing SQL? Also keep in mind that there's a huge gap between categories. We've four, B, A, A+, A+++. They start at "B" which means that someone did not do much on that skill in the past year. For example, I've got a B in sysadmin stuff which I never need to do. In order to get an "A" one needs to be completely proficient in the skill, no obvious gaps, so for example I've (IIRC) an A in SQL, which means I can do SQL as well as anyone else in the team. In order to be "A+" one needs to be really good at the skill, someone that is recognized in the team for it, if I were to get it for SQL I'd need to go above and beyond the average. Patrol SQL for misbehaving query plans. Perform DBA tasks. Et cetera. An A+++ means that one is actually famous for the skill, for example a Microsoft MVP, or a famous blogger, etc. A guru level of skill is needed in SQL. Probably something which would take me 10 years to achieve.