9 ms·

If you're any good at your job, you should avoid these open companies like the plague. Don't piss away your leverage..

by aantix 10y ago

brianwawok 10y ago
This 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 ago
  I 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 ago
    In 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 ago
      If you're a top performer, you can also see that the company is not paying you at the top of people they're paying.
      - brianwawok 10y ago
        But I am not sure you need transparency for this? Can usually get close to ranges if you ask a few coworker friends and/or interview around.
        hx87 10y ago
        > Can usually get close to ranges if you ask a few coworker friends and/or interview around. Isn't that transparency, although in a very biased and limited form? Why would having more transparency reduce your leverage? It's easier to play the right cards when you know what cards are in play.
        brianwawok 10y ago
        > Why would having more transparency reduce your leverage? Because of jealousy. There have to be a good 10-20 software companies with this Open Salary thing. From them, find one where for two people with the same # of years of experience, person A makes 2x what person B makes. From what I see, they all more or less settle on a (base pay) + (# of years * multiplier) + (maybe a location bonus) = Salary. I don't see variables in there for (he is awesome) For a counter example, I can point you to wallstreet or finance in Chicago, and show you 100s of people where people at the same level make as much as a 2x pay difference.
        ryandrake 10y ago
        I'd argue that in companies where salaries are not transparent, there is also not a (he is awesome) variable. Salaries among the same title/level are dependent more on how good of a negotiator you are or how good your relationship is with your manager, than whether or not you are awesome. EDIT: In theory they should be based on what the employee could get elsewhere in the market, but if that were always true there would be no job hopping.
  - moduspwnens14 10y ago
    > I 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've tried a handful of different ways to explain this (before backspacing out this comment box and trying again), but here's the best I can come up with: You always have the ability to negotiate for higher pay. If you've spent much of your life in different workplaces, you'll probably know that people (generally) think they deserve raises for reasons other than those that make sense. Those can include: * Poor personal money management * Poor life decisions leading to more money needed * Number of years spent with the company * Number of hours worked each week * How busy they appear to be * How much they think they get done * How much more work they think they do than they did last year * How much more work they think they do than their peers * and more None of those things really matter, though. Factors that actually matter include: * How much other employers will pay for your skillset * How likely you are to leave * How much it would cost to replace you This is important because the people actually running the business have to understand this, but the rest of the employees don't. As a high performer, you'll be negotiating a raise based on those factors that actually matter and your boss (hopefully) understands that. You don't want to put him in a situation where he can (or has to) fall back on how the rest of the company will feel about your pay, because they don't necessarily weigh the correct factors in deciding whether or not you "deserve" it.
    - jsprogrammer 10y ago
      According to the article, anyone can negotiate for a raise at any time. All you have to do is execute the negotiation process.
      - moduspwnens14 10y ago
        My response was relating to an open salary company in general, but the process in the article takes it even further by having the employees themselves play a significant role in the decision-making. If I consider myself a high performer, I don't want to have to justify my request relative to others at the company, or what they received, or what they used to win over other people to vote to give them more money that isn't theirs. That's going to put me in a position where I need to win a popularity contest, be around a while (to comment positively on others' raises), or wait a few more months so I don't look pushy and selfish to the entire company. ...because none of that matters if I just do an interview elsewhere and get what I want!
  - morgante 10y ago
    Perhaps the people you think are dopes are actually high performers? I certainly don't want my salary dictated by the personal prejudices of my coworkers, especially when so many of them have no real idea of how much market value they're creating. I'm sure many of them think I'm a "dope" but my results manage to convince employers that my demands are worth paying.
- eyelidlessness 10y ago
  While union workers often have less salary disparity, their salaries also tend to be higher overall. The only downside to this is if the "best performers" derive value from their "worse performer" peers being paid less than them.
  - st3v3r 10y ago
    Sadly, this appears to be half of it. People are more interested in looking in other people's bowl to make sure they're being paid more, rather than seeing that others are making enough.
  - moduspwnens14 10y ago
    > While union workers often have less salary disparity, their salaries also tend to be higher overall. The only downside to this is if the "best performers" derive value from their "worse performer" peers being paid less than them. Or if you're in your twenties or thirties and pretty good at something and want to be paid based on how valuable you are in the market instead of based on your number of years clocking in.
  - morgante 10y ago
    Decreasing variance while increasing median pay is obviously a pretty big downside for everyone who is paid above median.
    - Tsagadai 10y ago
      Your post reads like a very bleak argument against the minimum wage. Increasing the median should mean that those above the median also see an increase through economics. If the price something is $X then the price of a premium something is still going to be greater than $X.
      - thedufer 10y ago
        > the price of a premium something is still going to be greater than $X Yes, but how much greater than $X is the question. If median salary goes up, high performers have to come down a lot in order to not run out of money.
- lumberjack 10y ago
  >What happens to the guy in open salary co who is legit 50% better than everyone else? The GP is right in that, that person doesn't have much choice but to move on. I don't have experience with open salaries but I do have experience with collective agreements and seniority. They aren't meant to take into consideration the "super stars". That's not what they are meant to do. Seniority and collective agreements do suck if you're a "super star". I don't think there's a system where everyone is a winner.
  - andrei_says_ 10y ago
    Is that "50 better than everyone else" measurable? If it is, then the higher salary along with the criteria and specific performance measures could be a good incentive for the rest of the employees to improve.
  - rustynails 10y ago
    It depends on how you define winner. Does it really matter how much someone else earns as long as you're happy with your pay? I have taken a lower paying job because of my preference for that job and workplace. Money is not my principal driver (nor is it most people's). I also agree that an open pay system could encourage super stars to leave. I once hired a woman who earned almost 50% more than her peers because she was amazing (it's the one time I recall paying a premium for anyone). If her peers knew, it would have been a shit storm, especially her male boss (who earned well less than she did). We are too obsessed about comparing ourselves to others. I would most probably pick a culture where there wasn't transparency because I don't think someone else's income is anyone else's business and the emphasis on money is unhealthy.
- hx87 10y ago
  > 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? Presumably, that's how it works.
- nickez 10y ago
  Why should the guy that is the best negotiator get the highest salary? Does that actually have any correlation to performance?
  - notahacker 10y ago
    Generally if you're not a good performer you don't have any ability to negotiate irrespective of negotiation skill, and if you are a top performer, you don't need any negotiation acumen to get a raise if people actually think you might not stay.
- givinguflac 10y ago
  Transparent doesn't have to mean homogeneous.
  - brianwawok 10y ago
    Okay so show me a company with both transparency and big differences in salary between workers at the same job.
- kasey_junk 10y ago
  It's a false dichotomy. The reason is "legit 50% better" is not something we currently know how to measure. So yes, it trends towards more coarse grained measures (years of work doesn't have to be one) at the expense of the "best" performers. If you see lots of your best performers leaving for more money elsewhere you have 2 options, raise everyone up, or come up with better coarse grained measures. I'm of the opinion that if you can come up with good objective measures for performance of software devs, you should immediately stop doing whatever made up business problem you are currently working on, and switch to judging software devs. You could literally charge whatever you want.
  - dennisgorelik 10y ago
    Good point: "objective measures for performance of software devs" is a hard problem that is in a high demand.
- throw2016 10y ago
  As long as there is a legitimate way to measure this '50% better' and the resultant value, and everyone else has an opportunity to perform at this level, reject it or concede they are unable I suspect few will have an issue. On the other hand if its an arbitary, political or a self appointed measure I can imagine collegues could have a problem. Sales is one area where measures are somewhat possible. For instance if a salesperson is consistently doing 2 million while collegues do 1 he or she is better in that quarter and is automatically compensated better because of commissions. Collegues far from having have a problem celebrate the achievements and aspire themselves. Similarly if someone closes a deal in half the time of the typical deal cycle then they could be considered to be better. They will close more revenue and get more commissions. But it is important to point out its not the people but the performance being measured that is better and if you can do this as clinically in other fields compensation can be designed to automatically reward performance.
lumberjack 10y ago
Yeah but 80% of the employees aren't in the top 20% and yet everyone is so arrogant as to believe they are. And that's really great, if you're the employer.
vkou 10y ago
So, when a couple of thousand engineers at Google put their salaries in a spreadsheet, all the good people should have jumped ship? You're also implying that salary is a function of performance. This is an incredible claim to make.
rifung 10y ago
> If you're any good at your job, you should avoid these open companies like the plague I think you mean if you're any good at negotiating salary since doing a good job does not equate with higher pay in most companies. Also, even if that were true, there shouldn't be any issues because you would just get promoted to a higher position, in which case you'd be paid more anyway. It seems like there's only an issue if you think you're that much better than everyone else but nobody else feels the same way.
baddox 10y ago
I don't see why avoiding open companies would be the smartest move. I'd say just avoid all companies except the one that gives you the best deal (balancing salary, benefits, quality of life, enjoyment of the work, etc.). If that company has open salaries, fine, and if not, fine.
morgante 10y ago
Seriously. Every time I see an open salary list, their most senior developers make less than I do. In my view, these are mostly the latest technique to try to sell employees on subpar compensation through "culture." Except they're even more dangerous than ping pong tables.
don_draper 10y ago
I'd argue it's not even how good you are but how good you negotiate. If you negotiate well transparency is not in your interest.

If you're any good at your job, you should avoid these open companies like the plague. Don't piss away your leverage..

by aantix 10y ago

If you're any good at your job, you should avoid these open companies like the plague. Don't piss away your leverage..

This 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 ago
I 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 ago
  In 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 ago
    If you're a top performer, you can also see that the company is not paying you at the top of people they're paying.
    - brianwawok 10y ago
      But I am not sure you need transparency for this? Can usually get close to ranges if you ask a few coworker friends and/or interview around.
      - hx87 10y ago
        > Can usually get close to ranges if you ask a few coworker friends and/or interview around. Isn't that transparency, although in a very biased and limited form? Why would having more transparency reduce your leverage? It's easier to play the right cards when you know what cards are in play.
        brianwawok 10y ago
        > Why would having more transparency reduce your leverage? Because of jealousy. There have to be a good 10-20 software companies with this Open Salary thing. From them, find one where for two people with the same # of years of experience, person A makes 2x what person B makes. From what I see, they all more or less settle on a (base pay) + (# of years * multiplier) + (maybe a location bonus) = Salary. I don't see variables in there for (he is awesome) For a counter example, I can point you to wallstreet or finance in Chicago, and show you 100s of people where people at the same level make as much as a 2x pay difference.
        ryandrake 10y ago
        I'd argue that in companies where salaries are not transparent, there is also not a (he is awesome) variable. Salaries among the same title/level are dependent more on how good of a negotiator you are or how good your relationship is with your manager, than whether or not you are awesome. EDIT: In theory they should be based on what the employee could get elsewhere in the market, but if that were always true there would be no job hopping.
- moduspwnens14 10y ago
  > I 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've tried a handful of different ways to explain this (before backspacing out this comment box and trying again), but here's the best I can come up with: You always have the ability to negotiate for higher pay. If you've spent much of your life in different workplaces, you'll probably know that people (generally) think they deserve raises for reasons other than those that make sense. Those can include: * Poor personal money management * Poor life decisions leading to more money needed * Number of years spent with the company * Number of hours worked each week * How busy they appear to be * How much they think they get done * How much more work they think they do than they did last year * How much more work they think they do than their peers * and more None of those things really matter, though. Factors that actually matter include: * How much other employers will pay for your skillset * How likely you are to leave * How much it would cost to replace you This is important because the people actually running the business have to understand this, but the rest of the employees don't. As a high performer, you'll be negotiating a raise based on those factors that actually matter and your boss (hopefully) understands that. You don't want to put him in a situation where he can (or has to) fall back on how the rest of the company will feel about your pay, because they don't necessarily weigh the correct factors in deciding whether or not you "deserve" it.
  - jsprogrammer 10y ago
    According to the article, anyone can negotiate for a raise at any time. All you have to do is execute the negotiation process.
    - moduspwnens14 10y ago
      My response was relating to an open salary company in general, but the process in the article takes it even further by having the employees themselves play a significant role in the decision-making. If I consider myself a high performer, I don't want to have to justify my request relative to others at the company, or what they received, or what they used to win over other people to vote to give them more money that isn't theirs. That's going to put me in a position where I need to win a popularity contest, be around a while (to comment positively on others' raises), or wait a few more months so I don't look pushy and selfish to the entire company. ...because none of that matters if I just do an interview elsewhere and get what I want!
- morgante 10y ago
  Perhaps the people you think are dopes are actually high performers? I certainly don't want my salary dictated by the personal prejudices of my coworkers, especially when so many of them have no real idea of how much market value they're creating. I'm sure many of them think I'm a "dope" but my results manage to convince employers that my demands are worth paying.
eyelidlessness 10y ago
While union workers often have less salary disparity, their salaries also tend to be higher overall. The only downside to this is if the "best performers" derive value from their "worse performer" peers being paid less than them.
- st3v3r 10y ago
  Sadly, this appears to be half of it. People are more interested in looking in other people's bowl to make sure they're being paid more, rather than seeing that others are making enough.
- moduspwnens14 10y ago
  > While union workers often have less salary disparity, their salaries also tend to be higher overall. The only downside to this is if the "best performers" derive value from their "worse performer" peers being paid less than them. Or if you're in your twenties or thirties and pretty good at something and want to be paid based on how valuable you are in the market instead of based on your number of years clocking in.
- morgante 10y ago
  Decreasing variance while increasing median pay is obviously a pretty big downside for everyone who is paid above median.
  - Tsagadai 10y ago
    Your post reads like a very bleak argument against the minimum wage. Increasing the median should mean that those above the median also see an increase through economics. If the price something is $X then the price of a premium something is still going to be greater than $X.
    - thedufer 10y ago
      > the price of a premium something is still going to be greater than $X Yes, but how much greater than $X is the question. If median salary goes up, high performers have to come down a lot in order to not run out of money.
lumberjack 10y ago
>What happens to the guy in open salary co who is legit 50% better than everyone else? The GP is right in that, that person doesn't have much choice but to move on. I don't have experience with open salaries but I do have experience with collective agreements and seniority. They aren't meant to take into consideration the "super stars". That's not what they are meant to do. Seniority and collective agreements do suck if you're a "super star". I don't think there's a system where everyone is a winner.
- andrei_says_ 10y ago
  Is that "50 better than everyone else" measurable? If it is, then the higher salary along with the criteria and specific performance measures could be a good incentive for the rest of the employees to improve.
- rustynails 10y ago
  It depends on how you define winner. Does it really matter how much someone else earns as long as you're happy with your pay? I have taken a lower paying job because of my preference for that job and workplace. Money is not my principal driver (nor is it most people's). I also agree that an open pay system could encourage super stars to leave. I once hired a woman who earned almost 50% more than her peers because she was amazing (it's the one time I recall paying a premium for anyone). If her peers knew, it would have been a shit storm, especially her male boss (who earned well less than she did). We are too obsessed about comparing ourselves to others. I would most probably pick a culture where there wasn't transparency because I don't think someone else's income is anyone else's business and the emphasis on money is unhealthy.
hx87 10y ago
> 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? Presumably, that's how it works.
nickez 10y ago
Why should the guy that is the best negotiator get the highest salary? Does that actually have any correlation to performance?
- notahacker 10y ago
  Generally if you're not a good performer you don't have any ability to negotiate irrespective of negotiation skill, and if you are a top performer, you don't need any negotiation acumen to get a raise if people actually think you might not stay.
givinguflac 10y ago
Transparent doesn't have to mean homogeneous.
- brianwawok 10y ago
  Okay so show me a company with both transparency and big differences in salary between workers at the same job.
kasey_junk 10y ago
It's a false dichotomy. The reason is "legit 50% better" is not something we currently know how to measure. So yes, it trends towards more coarse grained measures (years of work doesn't have to be one) at the expense of the "best" performers. If you see lots of your best performers leaving for more money elsewhere you have 2 options, raise everyone up, or come up with better coarse grained measures. I'm of the opinion that if you can come up with good objective measures for performance of software devs, you should immediately stop doing whatever made up business problem you are currently working on, and switch to judging software devs. You could literally charge whatever you want.
- dennisgorelik 10y ago
  Good point: "objective measures for performance of software devs" is a hard problem that is in a high demand.
throw2016 10y ago
As long as there is a legitimate way to measure this '50% better' and the resultant value, and everyone else has an opportunity to perform at this level, reject it or concede they are unable I suspect few will have an issue. On the other hand if its an arbitary, political or a self appointed measure I can imagine collegues could have a problem. Sales is one area where measures are somewhat possible. For instance if a salesperson is consistently doing 2 million while collegues do 1 he or she is better in that quarter and is automatically compensated better because of commissions. Collegues far from having have a problem celebrate the achievements and aspire themselves. Similarly if someone closes a deal in half the time of the typical deal cycle then they could be considered to be better. They will close more revenue and get more commissions. But it is important to point out its not the people but the performance being measured that is better and if you can do this as clinically in other fields compensation can be designed to automatically reward performance.

lumberjack 10y ago

Yeah but 80% of the employees aren't in the top 20% and yet everyone is so arrogant as to believe they are. And that's really great, if you're the employer.

vkou 10y ago

So, when a couple of thousand engineers at Google put their salaries in a spreadsheet, all the good people should have jumped ship? You're also implying that salary is a function of performance. This is an incredible claim to make.

rifung 10y ago

> If you're any good at your job, you should avoid these open companies like the plague I think you mean if you're any good at negotiating salary since doing a good job does not equate with higher pay in most companies. Also, even if that were true, there shouldn't be any issues because you would just get promoted to a higher position, in which case you'd be paid more anyway. It seems like there's only an issue if you think you're that much better than everyone else but nobody else feels the same way.

baddox 10y ago

I don't see why avoiding open companies would be the smartest move. I'd say just avoid all companies except the one that gives you the best deal (balancing salary, benefits, quality of life, enjoyment of the work, etc.). If that company has open salaries, fine, and if not, fine.

morgante 10y ago

Seriously. Every time I see an open salary list, their most senior developers make less than I do. In my view, these are mostly the latest technique to try to sell employees on subpar compensation through "culture." Except they're even more dangerous than ping pong tables.

don_draper 10y ago

I'd argue it's not even how good you are but how good you negotiate. If you negotiate well transparency is not in your interest.