20 ms·
Open Salaries: Outcomes
- davidgrenier 10y agoI'd like to get push-back to the idea of everyone earning the same salary. Why wouldn't it work from some people who seem to have some experience like you have?
- existencebox 10y agoShipping, delivery of a product/useful labor, is my definition of value far more than experience. If you're a nobody but I can trust you to Get Shit Done (tm), you are more valuable to me than a greater number of "Steve Jobs" who I can't rely on as much. As such, the last thing I want to do is remove a hugely meaningful incentive someone has to push hard and differentiate themselves. Now this certainly has moral pitfalls, if you use it as a carrot to get people to keep upping the ante on each other, but at some point we have to trust the autonomy of our workers to be able to say no. (I believe that management can help with this as well concurrent with keeping salary-based differentiation, by things such as enforcing not working outside of work hours, mandated vacation time, salary transparency and clear metrics for what achieving more/success means, etc)
- lucaspiller 10y agoDo you mean everyone in the same role, or everyone in the company? I guess you could argue that everyone contributes equally in their own way, but it sounds like it would be hard to deal with market rates. For example, if the market rate for a support agent is $30k and the market rate for a developer is $70k what do you do?
- crdoconnor 10y agoPay market rate and be honest about it? I don't understand the problem here. Support agents are unlikely to demand a developer's salary.
- gwbas1c 10y agoThere is no objective definition of what "market rate" is once you get into skilled labor. This is, in part, because every job will value someone slightly differently depending on the unique situation.
- crdoconnor 10y agoAnd? That's still not a reason to be secretive. In fact it was cited by the article as one of the great positives of salary openness: you got much more accurate feedback much more quickly which made it easier to make those tricker decisions.
- dominotw 10y ago> everyone contributes equally in their own way In my experience, this has never been true. People have different motivations, skills etc. Although if we can assume that its true, it would be easier to implement govt mandates like Paycheck fairness act.
- sokoloff 10y agoImagine that there is a distribution of valuable output from employees. That not every employee contributes an equal amount to the bottom line, when you measure everything that you can possibly think of, every externality and intangible. If you believe that there are those differences, that you can judge those correctly (but elect to not act on it), and that other employers can also judge that well enough to offer differentiated higher salaries to the most valuable employees, then you will be left holding an adversely selected set of employees. (Other employers will cream off the most valuable by being able to offer higher compensation, and you will see more of the left side of the distribution applying to your company once it becomes known that "everyone is paid the same".) Not in every case (maybe a high-value-creating individual believes in your company and mission enough to forgo a higher salary they could command elsewhere), but in aggregate, I believe you signal to the highest performers that they should look elsewhere and your lowest performers should stay, because you are more interested in equality than fairness.
- dilemma 10y agoMediocrity can be mitigated by making expectations clear for advancing to the next level in the organization, and the compensation increase one gets. For example, master these 5 skills at level I, and we then meet to set up a process for learning the next 5 skills needed to advance to level II. Once you advance, you get +20% salary. I think that seems like a good way of incentivizing performance and continued learning.
- shados 10y agoand then you have no way to compensate someone who has a 6th, incredibly valuable skill, but not the other 5 you wanted. Or you can start doing super complicated things like "have 5 out of those 10 skills", but are they as valuable? Yeah, that's a pain. And then another company may value the skill differently, and you then have to just lose your employee to them because they'll pay them more but you won't because of your rigid structure. There's so many variables, uniformity here won't get you the best teams.
- michaelt 10y agoIf a company has removed its own ability to reward me for putting in extra effort, busting my ass to produce extra value would make me kind of a sucker, don't you think? Every scheme I've heard of to get around that has had had some major flaw or other. Usually by failing to capture some important area of endeavour; or by relying on some combination of easily gamed metrics (like tickets closed or evaluations by co-workers); or requiring employees to capture excruciatingly detailed metrics; or by having incentives too small to be worth pursuing; or by including a large management fudge factor that makes the rest of the system pointless.
- user5994461 10y agoBusting your ass WHILE expecting a reward, is a sucker. The reward usually never materializes. You shouldn't do overwork in the first place.
- aomurphy 10y agoThe situation for salarymen of the same year in big corps. at Japan is kind of similar. Wages are only from tenure, so two people who have been at the a corp. for 10 years have the same salary, even if one's a total duffer and the other is super important for the company. The reasons for this are historical, but don't really matter to this discussion. Almost everyone at these big co.s are hired right out of college in yearly "classes" and then stay their until retirement (ideally, obviously things are more complicated). The system isn't as strong today, so I'm describing something that existed more in the '80s. What end's up happening is people in the same year are sorted by many other things. Better more interesting tasks are given to higher status workers, they avoid more grunt work, get nice perks (at top levels, things like a company car, etc.), and more respect. It's hard to separate the effects of this on the company from all the other things Japanese companies do which are different from USA/Europe. But you might look into that.
- coldcode 10y agoThis might work for a company of 25, but what a disaster it would be for a company of 100,000+
- gizmo 10y agoAnd yet small companies often try to adopt "best practices" from megacorps 1000 times their size! One of the huge advantages of working in a small companies is that you can do all these things that don't scale.
- drinchev 10y agoDon't companies with that size have budget-salaries which are equal for all employees on the same rank / position / experience level? I doubt that BMW has an engineer that earns more than his / her colleague at the same position.
- maxxxxx 10y agoUsually the pay for a job is within a range. This range can be quite large so you will have people with the same job making different money.
- germanier 10y agoLet's take the BMW example. Most of their engineers in Germany are paid according to a collective agreement where the salary is determined by looking at a table based on your actual position, your background, and seniority. There is an additional salary based on some specified performance metrics but that usually accounts for a difference of 5% maximum. Only few engineers in leading position and with larger responsibilty are paid based on an individually negotiated contract.
- maxxxxx 10y agoI have worked at German companies with union pay (IG Metall, same as BMW). You are right that there is a table, but where you are on the table is still very negotiable. Maybe people think this can't be negotiated but in reality it is. I got bumped up several levels after I complained that my colleagues were much higher while doing the same work.
- sytse 10y agoAfter you define salary ranges for positions the only variables left are promotions and experience within the role. I don't think it makes sense to have people that are not working with a person decide that. I think the direct boss of the person should decide after getting input from others and subject to approval by the boss' boss.
- RodericDay 10y agoIf there's a need for approval from the boss' boss, why not also an approval from the employee's peers (and employees)? Doesn't it make sense that disgruntled employees should be able to bar a manager giving themselves raises, purely as a matter of symmetry?
- sokoloff 10y agoThat gives managers an additional incentive to fire those disgruntled employees, and contributes to a mono-culture of thought, which can be worse off for everyone.
- sytse 10y agoThe boss' boss approval is there to prevent people playing favorites. Asking the whole team for approval doesn't make sense to me, it is the task of the boss to be aware what everyone is contributing. The rest of the team should primarily be concerned with their own contributions, not those of others. Nobody can give themselves a raise. This is always proposed by a boss and checked by the boss's boss. If I want to set a salary for one of my reports I have to consult with the board. The board also determines my compensation.
- PeterisP 10y agoA manager may easily be given a goal which will result in profit for the company but in worse conditions/more work/downsizing/whatever for that team; and delaying or avoiding that goal would likely be easier for the team but worse for the rest of the company. It would be appropriate to have the manager's pay depend on how they're executing according to the goals of the company and not the goals of the employees - thus, the boss' boss should get a say in that and the employees should not get a vote as their interests may easily be completely opposite e.g. in achieving cost savings for labor-dominated tasks.
- ransom1538 10y ago@author Can you please post the names and all current salaries on your website? Since you don't care about your employees privacy, I would like to use this along with LinkedIn to easily pick off your better employees. Thanks! Edit: Also! Any plans to open health care information?
- maxaf 10y agoYou don't need to be an asshole.
- ransom1538 10y agoFirst, I apologize for the reddit style. I deserve the down votes, which I will happily pay. Using a position of power to force employees to divulge personal information really pisses me off.
- eyelidlessness 10y agoDoes it change your mind knowing that it was not imposed from a position of power? https://news.ycombinator.com/item?id=12806739 https://news.ycombinator.com/item?id=12806739
- ransom1538 10y agoReally? Or were some scared of being singled out? I have managed teams, asking 40 people a question will get you 40 different answers. But in this case they were all for it? Lies.
- civilian 10y agoYou'd make a good conspiracy theorist. You question & disbelieve everything even when faced with reasonable evidence. Yes, maybe we don't actually know all the intricacies of what's going on, but you're just being a crank.
- deleted 10y ago
- jjordan 10y agoI'd like to get the perspective and opinion of an employee in the open salary system, rather than just a recount from the top.
- szynszyliszys 10y agoHi, I can give it to you since I work for Lunar Logic. How it looked: everyone felt a bit anxious and not 100% sure if it will be the good decision, but we decided to go for open salaries anyway (it was a collective decision after a series of long discussions of a whole company, not a decision at the top). When the salaries list was released, everyone took a look and there was no disaster. Most of the salaries felt just fine and we fixed ones that were bit too low soon after the list was released. We all treat it as a normal part of our job now and I think no one regrets that we went for it. Being transparent about it makes everything easier to be honest and we treat it as one of the coolest things we did last year.
- dominotw 10y ago>but we decided to go for open salaries anyway What happened to the people who didn't want to reveal their compensation. Was is it revealed anyways?
- noddingham 10y agoThere are three companion articles to this one which answer questions like this. The answer to your question from the "how" article: "Not joining would mean that others won’t know about that person’s salary and that person wouldn’t have access to the salary list."
- szynszyliszys 10y agoThere was a choice and these people would just not see the salaries list and participate in salary raise process. But we went all in, everyone was ok with revealing their salaries.
- 10y ago
- partycoder 10y agoSome people prefer a compensation model with a base pay + bonuses. Others to have a peer review process like this one. The problem is that those processes work only when there is certain level of mutual trust, selflessness and honesty. If you have really selfish people this thing can start being gamed... e.g: I refer 100 friends in exchange and have them recommend me for a promotion, raise and bonus every quarter.
- 0xmohit 10y agos/selfish/asshole/ please. Assholes can game any system.
- aantix 10y agoIf you're any good at your job, you should avoid these open companies like the plague. Don't piss away your leverage..
- brianwawok 10y agoThis got downvoted, and the tone is a bit harsh.. but it does speak a bit of truth. What happens to the guy in open salary co who is legit 50% better than everyone else? Do his peers vote to give him 50% more money? Or does it settle on sort of a union style pay scale, where everyone with the same # of years of work makes the same money (which is great for the worst performances, and terrible for the best performers)
- ryandrake 10y agoI didn't down vote, but the comment would be better if it were expanded with some details about why he thinks people who are good at their jobs should avoid open salary workplaces. I would think nearly all employees benefit from open salaries. For most companies, the salary information asymmetry is an effective way to keep the salaries of high performers DOWN. If you don't know that the mediocre guy who sits next to you makes $40K more than you, you're less likely to complain or look elsewhere. The people who have the most to lose from open salaries are the dopes who somehow are making top-of-market salaries.
- brianwawok 10y agoIn theory if you are a top performer, you can go walk down the street for a raise. and keep going it until you can't get more raises. Not that all top performers do this. Being good at a job has little relation to being good at getting paid a lot. But you can be both a top performer AND top paid, if you play the right cards.
- st3v3r 10y agoIf you're a top performer, you can also see that the company is not paying you at the top of people they're paying.
- dustinmoris 10y agoIf these 25 employees would be clever then you'd get 25 massive pay rises in a very short amount of time by everyone quickly realizing that if you all praise yourself endlessly in those discussions then it is difficult for 1 single boss to push back on 25 people's amazingly positive feedback. Not trying to plant an idea though. Just saying.
- szynszyliszys 10y agoUnless you care for the company and you are a decent person that doesn't only care about money. We care about the organization, we care about our financials and we are just nice people. Money is less valuable to us than a nice environment and autonomy. We don't want to destroy this.
- parennoob 10y agoThis requires a large amount of co-ordination, teamwork, and communication – exactly the qualities that 25 employees together are often most required to have in order to work efficiently. I'd think the raise would be warranted :)
- ci5er 10y agoAnd then the company runs out of operating capital and you're all looking for jobs somewhere else?
- willyt 10y agoI read about this idea once as a case study. I think it was first tried at a manufacturing company[0] in Brazil where everyone from the CEO down to the packers in the dispatch shed has their salary decided by a consensus employees. It's a 3000 person company with a revenue of $160m now. [0] https://en.wikipedia.org/wiki/Ricardo_Semler https://en.wikipedia.org/wiki/Ricardo_Semler http://www.freibergs.com/resources/articles/leadership/semco-insanity-that-works/ http://www.freibergs.com/resources/articles/leadership/semco... https://hbr.org/1989/09/managing-without-managers https://hbr.org/1989/09/managing-without-managers
- nickpsecurity 10y agoThat's incredible. Thanks a million for those links as I try to collect these to get something close to significant data on them for analysis.
- earljwagner 10y agoYou might also be interested in books that profile other companies experimenting with this kind of transparency: "Reinventing Organizations" by Frederic Laloux "An Everyone Culture: Becoming a Deliberately Developmental Organization" by Kegan and Lahey The latter profiles Bridgewater, a hedge fund in which every meeting is recorded and available to anyone in the company via the intranet.
- maverick_iceman 10y agoThat's eerily similar to a scene from Atlas Shrugged.
- 0xmohit 10y agoAlso worthwhile reading: Buffer's transparency dashboard: Public salaries, equity and more [0]. The original post: Open salaries at Buffer [1]. [0] https://buffer.com/transparency https://buffer.com/transparency [1] https://open.buffer.com/introducing-open-salaries-at-buffer-including-our-transparent-formula-and-all-individual-salaries/ https://open.buffer.com/introducing-open-salaries-at-buffer-...
- ellisv 10y agoReminds me of 360-degree feedback -- which may not lead directly to a raise but provide the employee with frequent feedback and build social support for the reviewee.
- scarmig 10y agoHmm. My experience tells me that a lot of this depends on the details of the team, and that there isn't a right-for-everyone policy. My story: I worked for a company that paid a bit below market salaries, for the SF Bay Area. I was on a team with two more junior engineers. At one point one disclosed to me that they felt underpaid. That led to a salary discussion where I explained that the company habitually underpaid people, and I was happy to share my salary with them so they would know they're not the only ones underpaid (and also, implicitly, so they'd know if they were getting taken advantage of, since I'm all about employees looking out for each other). As it turned out, however, I was making around 40% more than both of them. Some of that was due to more experience, but it was more a matter of me being underpaid versus them being outright screwed. Naturally they went and asked for a well-deserved raise, and the company, of course, said no. This changed the team dynamics in a fundamental, toxic way. It engendered bitterness from them not only toward the company but to me as well, which ultimately led to all of us leaving the company for greener pastures but with lots of bad feelings all around. You could say the takeaway is don't work for companies out to screw their workers, but that's most of them.
- news_to_me 10y ago> You could say the takeaway is don't work for companies out to screw their workers, but that's most of them. Seems like this is something transparent salary policies might change.
- hx87 10y agoExactly--open salaries might cause some companies to crash and burn, but these are companies that /should/ crash and burn.
- jjnoakes 10y agoI'm not arguing one way or the other about open salaries, but should a company really crash and burn for hiring someone who was willing to work for some price $X, even if it is lower than their peer? I mean the person did accept the job knowing $X, right?
- brightball 10y agoI wonder how many of these open salary companies are just doing LLC payments to people for additional compensation so they can still say they disclose all of the "salary" information?
- stana 10y agoNo mention of share allocations at the company which could affect salaries?
- swissoak 10y agoWe can see from this article (50% raises happening after implementation) that even in the most cognizant companies wanting as much fairness as possible in salaries, you have huge discrepancies and hugely underpaid people because they can get away with it. They only time it was fixed was when they were essentially shamed into doing it, even if that shaming was self-inflicted. Why did it take implementing this program to give those people a 50% raise? Was it not obvious prior to this that they were below market rate? Did Lunar do the traditional salary negotiation discussion with new hires prior to open salaries?
- SamUK96 10y agoI work for a tech company in london. The wage inequality between senior and non-senior staff is disgusting, and as you can tell, it does indeed induce bitterness in me. Heck, i'm on 15k/y and most of the seniors get atleast 100k/y + perks. All that wage inequality does is create warring factions within the company that will eventually tear it apart, from my own recent experience.
- chinese_dan 10y agoCompanies love open salaries. Why? They can now pay a developer with 5 years of experience and the developer with one year experience the same low salary for the same position. Salary should be based on the individual (relevant experience and education) not just a job title. Why would an employee give away one of the only bargaining chips they have to get a higher salary? When I was working a regular job, I was regularly able to negotiate a 20-30% higher salary than co-workers with the same title.
- RodericDay 10y agoWhere are these rancid lies coming from? Companies hate public salaries, and there is ample evidence everywhere to look, including efforts to legally prohibit employees from disclosing their salaries and unenforceable claims in employee handbooks. More information can never make a market more inefficient.
- matthewowen 10y agoWhen I've seen companies make their salaries publicly transparent, they've been below market rate (eg Buffer). I wonder if the same tendency exists for companies that become internally transparently?
- hardwaresofton 10y agoWhile this sounds awesome in theory, I don't think I'd find it fun to have everyone deciding on what everyone in the company should be paid. It seems like weird office politics, jealousy, and unrelated things would get involved. This is all just my opinion, but I feel like even though this idea is good in theory, it will be ruined by people, just like valve's org structure model. The truth is, no one knows what anyone should be paid, really. The market decides it. I feel like this kind of policy just creates a powderkeg of opinion and emotion. Maybe it works for a team of 25 (at least as far as we can see), but definitely not for a company of 500. Please everyone just put your salaries in Glassdoor and call it a day. Everyone make sure they get paid market or above, be a responsible adult and look out for yourself.
- pawelbrodzinski 10y agoSimilar systems built around transparent salaries work for companies bigger than 500. Look for stories from Morning Star or Semco for example. Obviously, with a few thousand people you need at least a bit more structure, but in principle the model is the same: people collectively set their own salaries with respect to economical constraints of an organization.
- hardwaresofton 10y agoI was wrong to generalize so much and say it wouldn't work for companies bigger than 500, but my problem with it is this -- I don't care about the economical constraints of any individual organization. I care about which organization is able to pay me the most, for my labor. I also have near-zero faith in my peers to determine what I am worth, to any given company. People have to somehow pick "reasonable" salaries for themselves, and it seems like a thin layer of bullshit. If I could set my own salary, I'd set it way higher than any company is willing to pay me, because I'd rather make tons of money then NOT work anymore. Obviously, that's not a thing that is sustainable, and it's up to me to find a business that pays me as close to that impossible number as possible. This whole like "let's work together and make reasonable salaries for everyone" smells like bullshit to me because no one knows what a reasonable salary is. In the extreme (not so extreme in bubbles) case, if the market moves and all of a sudden your position is worth 30% more than it was a year or two before, will everyone in the company be fine with you getting a 30% raise? Maybe not. I don't ever want to deal with the situation that someone who either doesn't value or understand (completely) tries to value my work. What do developers know about how much project managers should be paid? or vice versa? A good project manager will make or break an entire initiative at times, but I bet most developers can't properly understand their value (and vice versa). Openness in salaries is one thing. I'm all for knowing what people are worth to a give company, and knowing what the market rate for your position is. This lets-all-decide-everyones-salaries-together system is definitely an idea that grows in parallel, and is very closely related, but I think they're separate things. Or maybe the reasonable solution to such a mismatch in perceived value is that good employees who can make more money elsewhere just leave (at the risk of maybe entering a less open and enjoyable atmosphere)?
- behnamoh 10y agoI read it Open Solaris (RIP)!