4 ms·

> 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 for

by 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.
- sharemywin 10y ago
  I would think that if your writing code I can't maintain, but if you leave I have to maintain it or get fired, I have a strong incentive to pay you well. Remember all of these have a feedback component too. What I think it will help with is Bullshit. If person A takes a lot of credit has better access to higher ups and they're in the spotlight a lot, maybe that kind of opportunity should be spread around.
  - RHSeeger 10y ago
    > I would think that if your writing code I can't maintain, but if you leave I have to maintain it or get fired, I have a strong incentive to pay you well. If you're writing code I can't maintain, my preference is to pay you less. Writing code that is easier to maintain is one sign of a good developer. I don't want to pay you more because its too painful to lose you. I want to pay you more because its wonderful to have you.
    - sharemywin 10y ago
      I assume the people making 2x everyone else are maintaining complex financial models no one else understands.
- sheepmullet 10y ago
  > 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. If you think people in finance don't know what their peers are getting paid you are fooling yourself. They are overall much more mature and transparent about pay than we are.
  - morgante 10y ago
    I agree with the maturity part, but not the transparency part. If you told a trader their salary was going to be posted publicly, decided by the rest of the employees (including junior employees), and that they couldn't negotiate it then they'd laugh in your face. Giving up the ability to negotiate your salary is giving up your whole leverage. It's a ruse played by smart entrepreneurs to sucker engineers into taking lower salaries and feeling good about it.
    - ryandrake 10y ago
      Currently "salary negotiation skill" is one of the primary drivers of one's salary, whether or not negotiation is a necessary skill for the actual job. In other words, you end up rewarding people who are good negotiators, not necessarily people who are good at their job. Of course you may coincidentally reward people good at their jobs if they happen to also be good at negotiating. Give that up, and people who are good at their jobs but bad negotiators will tend to do better, and people who are not good at their jobs but good negotiators will tend to do worse. I'd be fine with that trade-off.
      - sheepmullet 10y ago
        In practice people who are good at negotiating will just negotiate a different title. It happens all the time in tech. Think of all the useless architects on much higher salaries. As an ex-manager if I wanted to hire a mid level dev who was too expensive I would just hire them as a senior dev. Edit: or even worse you lock people in based upon a rigid system like years of experience and end up like teaching where an amazing teacher who gets great results will get paid far less than a shitty teacher who has stopped trying simply because the shitty teacher has been around longer.
- hx87 10y ago
  The simplest explanation of your finding is that salary differentials are endogenous to industry, not to salary transparency. Did you sample software companies without salary transparency? Did you differentiate between finance companies with and without salary transparency?
- st3v3r 10y ago
  Basically, you're arguing that it's fine for companies to undercut their employees?
michaelt 10y ago
Why would having more transparency reduce your leverage? You: "I've gone above and beyond, and produced $X of value. I'd like a raise of $0.1X please" Boss: "If I did that, I'd have to give your 20 peers the same raise. You'll need to produce at least $20X value if you want a raise of $0.1X. I can give you a raise of $0.005X if you like"
- ryandrake 10y ago
  I think a few people in this thread seem to be confusing salary transparency with "everyone makes the same salary". Don't think anyone is arguing for the latter.

by hx87 10y ago

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.
sharemywin 10y ago
I would think that if your writing code I can't maintain, but if you leave I have to maintain it or get fired, I have a strong incentive to pay you well. Remember all of these have a feedback component too. What I think it will help with is Bullshit. If person A takes a lot of credit has better access to higher ups and they're in the spotlight a lot, maybe that kind of opportunity should be spread around.
- RHSeeger 10y ago
  > I would think that if your writing code I can't maintain, but if you leave I have to maintain it or get fired, I have a strong incentive to pay you well. If you're writing code I can't maintain, my preference is to pay you less. Writing code that is easier to maintain is one sign of a good developer. I don't want to pay you more because its too painful to lose you. I want to pay you more because its wonderful to have you.
  - sharemywin 10y ago
    I assume the people making 2x everyone else are maintaining complex financial models no one else understands.
sheepmullet 10y ago
> 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. If you think people in finance don't know what their peers are getting paid you are fooling yourself. They are overall much more mature and transparent about pay than we are.
- morgante 10y ago
  I agree with the maturity part, but not the transparency part. If you told a trader their salary was going to be posted publicly, decided by the rest of the employees (including junior employees), and that they couldn't negotiate it then they'd laugh in your face. Giving up the ability to negotiate your salary is giving up your whole leverage. It's a ruse played by smart entrepreneurs to sucker engineers into taking lower salaries and feeling good about it.
  - ryandrake 10y ago
    Currently "salary negotiation skill" is one of the primary drivers of one's salary, whether or not negotiation is a necessary skill for the actual job. In other words, you end up rewarding people who are good negotiators, not necessarily people who are good at their job. Of course you may coincidentally reward people good at their jobs if they happen to also be good at negotiating. Give that up, and people who are good at their jobs but bad negotiators will tend to do better, and people who are not good at their jobs but good negotiators will tend to do worse. I'd be fine with that trade-off.
    - sheepmullet 10y ago
      In practice people who are good at negotiating will just negotiate a different title. It happens all the time in tech. Think of all the useless architects on much higher salaries. As an ex-manager if I wanted to hire a mid level dev who was too expensive I would just hire them as a senior dev. Edit: or even worse you lock people in based upon a rigid system like years of experience and end up like teaching where an amazing teacher who gets great results will get paid far less than a shitty teacher who has stopped trying simply because the shitty teacher has been around longer.
hx87 10y ago
The simplest explanation of your finding is that salary differentials are endogenous to industry, not to salary transparency. Did you sample software companies without salary transparency? Did you differentiate between finance companies with and without salary transparency?
st3v3r 10y ago
Basically, you're arguing that it's fine for companies to undercut their employees?

michaelt 10y ago

Why would having more transparency reduce your leverage? You: "I've gone above and beyond, and produced $X of value. I'd like a raise of $0.1X please" Boss: "If I did that, I'd have to give your 20 peers the same raise. You'll need to produce at least $20X value if you want a raise of $0.1X. I can give you a raise of $0.005X if you like"

ryandrake 10y ago
I think a few people in this thread seem to be confusing salary transparency with "everyone makes the same salary". Don't think anyone is arguing for the latter.