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I've seen team chemistry dissolve when pay information was released. The problem is with egos, Employee A might view themselves as more valuable to the company

I've seen team chemistry dissolve when pay information was released. The problem is with egos, Employee A might view themselves as more valuable to the company than Employee B and vice versa. If Employee B gets a raise, Employee A will want one too, or a higher one. A spiral of trying to get a higher salary relative to other team members can begin. Also, Employee A and Employee B might have private salaries that meet or exceed their expectations and everyone is happy. When salary information is public, unhealthy comparing can begin. Even though they're grateful for what they have, they see that more might be available if they ask for it.

kaosjester 9y ago
It seems like this could be fairly easily resolved by the management having a rigid "we pay everyone the same, deal with it" position, perhaps up and and including a formula for salary computations.
- phil21 9y ago
  Which is the precise reason I fled union work when I was younger. I got sick of being compensated the same (typically worse) as the worst employee on the floor, while doing 5-10x the productive output. All these policies do over time is ensure you lose top-tier talent and eventually get stuck with a lot of middling folks who are content with the status quo. This can be a good or a bad thing, depending on who you are.
- mattnewton 9y ago
  Get ready to see a) people gaming the formula and b) talent leaving because they feel like they are paid the same as people who contribute less. Edit: Not that it isn’t currently gamed and not that this doesn’t already happen: I’m pro pay transparency but there aren’t any magic fixes here, this is a really complicated social issue.
  - trowawee 9y ago
    Something like Buffer's formula (https://open.buffer.com/transparent-salaries/ https://open.buffer.com/transparent-salaries/) isn't really "gameable", as far as I can tell. And the counter argument might be that you'd attract talent that appreciates the transparency.
    - phil21 9y ago
      I'm curious what talent would appreciate the transparency? The only thing I can come up with is "average" talent. The high performers will view it has a hard cap on compensation and look elsewhere, in my experience at least. Obviously this cannot be entirely correct, but it's hard for me to get into the mental space of someone who wants to be paid exactly as much as their peer sitting next to them. In my career I've always wanted to outperform the next guy - and be compensated accordingly. I say this as having been both a high performer and an under performer. In the hard personal years where I am underperforming I would love transparency and know what to expect. In the years I was "crushing it" I'd have set myself back financially by a decade+ had I simply been okay with the average compensation for my position.
      - trowawee 9y ago
        I mean, as long as we're trading unverifiable anecdata, I've known high performers who were being underpaid because they were recently out of school or came out of non-traditional backgrounds. I suspect they would have appreciated this kind of system. And the only people I can think of who would prefer the existing opague system would be those who benefit from it: management and people receiving outsized salaries for some anti-merofratic reason.
        phil21 9y ago
        > or came out of non-traditional backgrounds. That was me! I can say without a doubt I quickly learned to only work for small companies where I reported to the owner directly. This enabled me to get 50% raises YoY when starting out - where my corporate job was limited to the typical "well, that wouldn't be fair to the rest of the group" style politics. I would say it's vastly more important to the hypothetical vulnerable high-performer than the guy graduating MIT or Harvard working for Google. They start at an extremely high salary and will do fine no matter what. The high performing high school dropout needs rapid massive raises just to eventually get to par with the other group - assuming similar performance. I can almost guarantee you that if salaries were transparent it would have been a huge scandal in a few of the companies I worked at since I was making 2-3x the wages of those next to me. It would have been untenable for those managers to pay me that, even though/if I were worth it - they'd have done nothing but deal with politics and fallout from it. I still believe I was underpaid in most of those positions compared to the folks they had working there. Egos are easily bruised. When that 19 year old high school dropout is making more than the 45 year old with a degree people start to complain. Loudly. They don't even look at work output or performance - it's utterly irrelevant to most. I see both sides to this, but I'm relatively certain salary opaqueness helped me through the start of my career. Now? Maybe not as much. It's much harder to stand out at an exceptional level once you reach a certain point.
  - walshemj 9y ago
    And it will lead to pay inflation as publishing CEO's salary proves
- deleted 9y ago
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- kgwgk 9y ago
  Paying everyone the same is the right policy if everyone is equally productive. That equilibrium might be reached by the “overpaid” ones getting better (or leaving) or by the “underpaid” ones getting worse (or leaving). One can fairly easily predict which of those scenarios is more likely.
- rjzzleep 9y ago
  A lot of German institutions work this way. There are a lot of problems with this. But one of the biggest is the following: When you notice that someone that brings zero value to the company gets the same salary as you one of two things happens: 1. you either loose any incentive to do anything 2. or you quit. In time all what you're left with is the people you don't want.
  - trowawee 9y ago
    Ok, but that's not really my problem. That's bad management, because they're apparently carrying around a bunch of dead weight and not doing anything to correct that problem.
    - dmitrygr 9y ago
      firing someone in EU isn't easy, no matter how useless they are.
      - Pyxl101 9y ago
        Yes ... and this is a major drain on EU companies that make them less competitive than companies with "at will" employment. They can't fire low-performers easily, and they can't afford to take a gamble on people since firing them is so difficult if they don't work out.
      - yorwba 9y ago
        I'm not sure why you think that. At least in Germany, if an employee can't do the work they are obligated to do by their employment contract, they are in violation. After they have been notified of the violation (or if it is obvious, e.g. because they didn't even go to work), it is their duty to correct that. If the employee is unable to satisfy the requirements, they can be terminated with an appropriate notice period. (Termination protection does not apply if the behavior of the employee is the reason: http://www.gesetze-im-internet.de/kschg/__1.html http://www.gesetze-im-internet.de/kschg/__1.html) The process may not be fast, but for a useless employee, it would be difficult to claim that the termination was unjustified, so the outcome is essentially guaranteed. I would call that easy (as opposed to simple).
- maxxxxx 9y ago
  You don't have to pay everyone the same. Just be ready to justify why one gets paid more than other. CEOs have pay transparency but somehow the world doesn't go under.
  - jimbobimbo 9y ago
    CEO salary is public in public companies, because they work for shareholders (who are the general public).
    - maxxxxx 9y ago
      I work for shareholders too and I am not even allowed to publish my salary.
      - jimbobimbo 9y ago
        I highly doubt that your paygrade/position is anywhere near the level, where public shareholders would care.
        maxxxxx 9y ago
        Where is the cutoff? If shareholders care about the CEO salary they also should care how much 20000 people like me make.
        jimbobimbo 9y ago
        Shareholders hire CxO level people to deal with day-to-day minutiae of running the company. There're other metrics (see SEC filings) that help shareholders gauge whether CxO people are doing their job.
        JumpCrisscross 9y ago
        > Where is the cutoff? Where the Board stops hiring and delegates to management.
      - 9y ago
- deleted 9y ago
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- gozur88 9y ago
  It seems like you'd lose your highest performers that way. People who put in a lot of extra hours expect to be compensated for it. Also, do you really want to set up your incentives such that the smart thing to do is work just hard enough to avoid getting fired?
maxxxxx 9y ago
Salaries are a dysfunctional market like health care. No market can function properly without all parties having the same information. All arguments against salary transparency seem to be that people will be unhappy when they find out that the company has screwed them over and therefore it's better for these people to be ignorant.
- ythn 9y ago
  > All arguments against salary transparency seem to be that people will be unhappy when they find out that the company has screwed them over and therefore it's better for these people to be ignorant. Why do you assume someone making less is being "screwed over"? Imagine employees A and B. B greatly outperforms A and therefore rightly makes more. However, A is delusional about his skills and thinks he is as good as B. Pay information is made transparent and A sees he is making less. This makes him mad because by all rights he ought to be making as much as B! This type of comparison/resentment might make A want to quit or ask for a raise, whereas before he was both content and fairly paid at his performance level.
  - trowawee 9y ago
    Sure, that might happen. But you're invoking a potential problem that might happen, when we have problems (gender and racial pay gaps) that are A. more severe than the potential problem you're invoking, B. already demonstrably occurring, and C. potentially correctable via salary transparency. If we can make a step towards correcting existing problems, and the best argument against it is "this might create a less-severe problem at some point in the future", we should probably take that step.
  - argv_empty 9y ago
    Then A is free to do so, but if he's not actually worth more, then he's likely to find out in his job search that he can't command B's salary. WSJ seems oddly unwilling to let the free market resolve this issue.
    - scaryclam 9y ago
lend000 9y ago
It only seems weird because it isn't the norm -- like one of the other commenters mentioned, we tend to know the approximate net worth / salaries of family/friends and yet society, on average, continues to run. And in large companies with salary ladders, we know the range of all our coworkers.
vilmosi 9y ago
You have some truth to it but maybe we'll get used to it. Same how we get used to X being taller/more attractive than us. We all know it's true, we just don't care that much anymore. It's just life.
michaelchisari 9y ago
Seems like a pandora problem to me. You have the problem because that box has never been opened. Had that been the way salaries were handled from the beginning, you wouldn't have the issue. But opening up salary information mid-stream can cause a lot of conflicts (some justified, some not). The question is, when going from private to public information, how best to handle it so that it isn't a source of chaos.
- brm 9y ago
  One part of this I've never seen discussed is that they reveal the salaries but they almost never reveal what the company believes it can afford to pay everyone involved and how the salaries influence the health of the company. It becomes employee vs employee vs company then instead of people seeing how it all fits together. I often think its that the transparency is only halfway that causes many of these peer to peer problems. It also doesn't help that most white collar work these days isn't directly translatable to revenue. Its easier to tell a salesman what he's worth than a designer etc...
  - powvans 9y ago
    Another thing that is often forgotten is that everyone has different opportunities in the market for jobs. Two people may contribute equally to a project, but one of those people might be paid more because the company had to outbid a competitor. This goes to your point about the health of the company. It might not be fair, but the company might not have the resources to offer a raise for the sake of fairness.
    - BoiledCabbage 9y ago
      > It might not be fair, but the company might not have the resources to offer a raise for the sake of fairness They definitely have the option of not offering the raise and the employee choosing to leave. If the employee isn't worth X dollars more then the company should be ok with them walking without that bump. In the end the issue being discussed is asymmetrical info, and positions. If an employ is producing less than their cost they don't get to keep that "surplus". They get written up / fired. But if an employee is producing more than their cost, the employer gets to keep that surplus. It's an imbalance. Asymmetrical info on salaries produces this situation. I'm not saying it's right or wrong, but it is imbalanced.
greedo 9y ago
While opaque companies might not release raise figures, everyone generally knows that a promotion involves a raise, in addition to any status bump (assuming no real increase in responsibilities). So promotions can serve as a proxy for raises, causing the same ego issue.
- alayek 9y ago
  You'd be surprised. I have a friend, whose team had this policy - no raise with promotion. He got a promotion with no raise. When asked, his manager said, "you shouldn't work for money. You should work for the learning experience." He resigned in a month. And this was not some random fringe start-up - one of the biggest companies in the world, with over $100B in market cap.
johnwalker 9y ago
I can definitely understand why a team could dissolve. But there are really only upsides for employees to understand why they're being paid X and to be able to model their behavior after the person that gets paid Y.
- shaftoe 9y ago
  That would work if people were Vulcans.
  - anonacct37 9y ago
    If someone was making 100k more than me, do you really think I'd have to be a Vulcan to want to close that gap? Seems like a bit of an extreme statement.
    - sidlls 9y ago
      The point is that what a person is paid isn't entirely determined by their behavior at work. Much of it is, in fact, determined by their charm, network, prior history and negotiating skills: none of which necessarily have anything to do with their day to day.
- save_ferris 9y ago
  Not necessarily. I once found out how much one of my team members made that started on the same day in the same role as I with the same amount of experience (the HR manager left his most recent offer letter open on her screen about a year and a half after we started). He was making about 66% more than I was (not an exaggeration) and our output was pretty comparable. Needless to say, modifying my behavior to be more like him wasn't the first (or 100th) thing that came to mind. Was it fair? Who knows, it's not really possible to debate that because it all depends on your definition of "fair". But in my experience, it's not very realistic to assume that employee A sees what employee B makes and objectively understands how they need to improve to make what employee B makes. Especially since that's not really how pay is negotiated anyway.
- walshemj 9y ago
kromem 9y ago
The problem is not with egos, the problem is that they have a preconceived notion that they are equal with their coworkers, and then suddenly find out they are not. Had the designation been clear from day one and each individual pay scale evolved over time publicly, I seriously doubt there'd be the same issues. In essence, a reveal all at once is the equivalent of a massive swath of promotions to one's co-workers and not to yourself (for the lower paid), all in one day - yeah, of COURSE it's going to harm team dynamics. That doesn't mean we should only promote people in secret though, right? Transparent compensation is simply a more granular hierarchy of representative productivity and value to a company, and the respective compensation, than a simple job title. We don't lose our minds at the idea that some employees are junior, others senior, etc. So what's substantially different with a more granular system to what already exists? Any employee should be able to ask "Why is Bob making more than me?" the same way they might ask "Why was Bob promoted to XYZ position instead of me?" And a healthy company should be able to answer the question with the reasons why for the former, just as a healthy company can answer the latter. If an employee is lagging in salary over time because upper management isn't seeing the same value as their equally experienced co-workers, this should be made clear to that employee so that they can find out why their efforts aren't having as much value, and either adapt accordingly, or find an environment where their efforts will be better valued. Imagine a classroom where each student can see their own grade as a number out of 100, but has no idea what the average is, spread, etc. You could have a C student who thinks they are doing as well as an A student, because they have no context for how they are being graded. Yes, there will be drama with each student knowing the other's grade, but they'll better know their own relative performances. At very least, we should have anonymous compensation transparency, where employees can know where their own salary stands in the company compared to tokenized other salaries, so the conversation can at least be "Why is #335 making more than me?" instead of "Why is Bob making more than me?". In small firms/upper management levels this won't be all that anonymous, but it could mitigate the drama in larger employment pools while still providing the contextual benefit.
- deleted 9y ago
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- ryandrake 9y ago
ThrustVectoring 9y ago
It's less about ego, and more that the removal of ambiguity in the workplace hierarchy is itself a social attack. If Alice is considered "better" than Bob, then Bob cannot act as if he were "better" without getting smacked down for being uppity or putting on airs or the like. It's not about the money. It's not even the fact that you ranked them. It's that you ranked them publicly, and from a place of authority to boot. And worse still, on a one-dimensional scale.
dx034 9y ago
The problem is that everyone thinks they can have individual salary levels. For many industries it was/is common that salaries are equal across groups. Good performance can lead to a higher bonus and make you move up the ranks but there was no discrimination for people in the same position. Unions enforced that and everyone could see their potential salary. Maybe introducing those salaries would be a benefit for both employees and employers.
- scaryclam 9y ago
  Though this would mean, if I'm trying to hire a developer and their salary requirement is 1000 more than the set band, I either have to employ them at a level too high and pay them more than I budgeted, or not hire them at all even though I could afford the additional 1000 and they were a good fit. I really dislike inflexibility like that. Do some employees get a bit on an unfair deal if they don't negotiate? Yes, they do, but who really cares, as long as they are happy? I much prefer being in the dark about others pay and being able to negotiate terms of employment than shoehorning everyone into the same mold.
crdoconnor 9y ago
>The problem is with egos, Employee A might view themselves as more valuable to the company than Employee B and vice versa. In which case after finding out they leave and if it turns out they're not all that valuable they mainly just end up screwing themselves. I'm not sure why any employer would consider this a problem. An underpaid employee leaving and getting a better job though - sure, that's a problem.
astura 9y ago
>The problem is with egos, Employee A might view themselves as more valuable to the company than Employee B and vice versa. If Employee B gets a raise, Employee A will want one too, or a higher one. A spiral of trying to get a higher salary relative to other team members can begin The same exact thing happens with promotions and titles, so should they be secret too? If it's such a problem then how about getting rid of positions altogether and just say "everyone's equal?" The second point is exactly why salaries are hidden - to drive down wages. There's a damn good reason why American professional athletes players union make sure salaries are published. You only thought your salary was fair based on the information your employer gave, which was "it's fair, trust us."

kaosjester 9y ago

It seems like this could be fairly easily resolved by the management having a rigid "we pay everyone the same, deal with it" position, perhaps up and and including a formula for salary computations.

phil21 9y ago
Which is the precise reason I fled union work when I was younger. I got sick of being compensated the same (typically worse) as the worst employee on the floor, while doing 5-10x the productive output. All these policies do over time is ensure you lose top-tier talent and eventually get stuck with a lot of middling folks who are content with the status quo. This can be a good or a bad thing, depending on who you are.
mattnewton 9y ago
Get ready to see a) people gaming the formula and b) talent leaving because they feel like they are paid the same as people who contribute less. Edit: Not that it isn’t currently gamed and not that this doesn’t already happen: I’m pro pay transparency but there aren’t any magic fixes here, this is a really complicated social issue.
- trowawee 9y ago
  Something like Buffer's formula (https://open.buffer.com/transparent-salaries/ https://open.buffer.com/transparent-salaries/) isn't really "gameable", as far as I can tell. And the counter argument might be that you'd attract talent that appreciates the transparency.
  - phil21 9y ago
    I'm curious what talent would appreciate the transparency? The only thing I can come up with is "average" talent. The high performers will view it has a hard cap on compensation and look elsewhere, in my experience at least. Obviously this cannot be entirely correct, but it's hard for me to get into the mental space of someone who wants to be paid exactly as much as their peer sitting next to them. In my career I've always wanted to outperform the next guy - and be compensated accordingly. I say this as having been both a high performer and an under performer. In the hard personal years where I am underperforming I would love transparency and know what to expect. In the years I was "crushing it" I'd have set myself back financially by a decade+ had I simply been okay with the average compensation for my position.
    - trowawee 9y ago
      I mean, as long as we're trading unverifiable anecdata, I've known high performers who were being underpaid because they were recently out of school or came out of non-traditional backgrounds. I suspect they would have appreciated this kind of system. And the only people I can think of who would prefer the existing opague system would be those who benefit from it: management and people receiving outsized salaries for some anti-merofratic reason.
      - phil21 9y ago
        > or came out of non-traditional backgrounds. That was me! I can say without a doubt I quickly learned to only work for small companies where I reported to the owner directly. This enabled me to get 50% raises YoY when starting out - where my corporate job was limited to the typical "well, that wouldn't be fair to the rest of the group" style politics. I would say it's vastly more important to the hypothetical vulnerable high-performer than the guy graduating MIT or Harvard working for Google. They start at an extremely high salary and will do fine no matter what. The high performing high school dropout needs rapid massive raises just to eventually get to par with the other group - assuming similar performance. I can almost guarantee you that if salaries were transparent it would have been a huge scandal in a few of the companies I worked at since I was making 2-3x the wages of those next to me. It would have been untenable for those managers to pay me that, even though/if I were worth it - they'd have done nothing but deal with politics and fallout from it. I still believe I was underpaid in most of those positions compared to the folks they had working there. Egos are easily bruised. When that 19 year old high school dropout is making more than the 45 year old with a degree people start to complain. Loudly. They don't even look at work output or performance - it's utterly irrelevant to most. I see both sides to this, but I'm relatively certain salary opaqueness helped me through the start of my career. Now? Maybe not as much. It's much harder to stand out at an exceptional level once you reach a certain point.
- walshemj 9y ago
  And it will lead to pay inflation as publishing CEO's salary proves
deleted 9y ago
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kgwgk 9y ago
Paying everyone the same is the right policy if everyone is equally productive. That equilibrium might be reached by the “overpaid” ones getting better (or leaving) or by the “underpaid” ones getting worse (or leaving). One can fairly easily predict which of those scenarios is more likely.
rjzzleep 9y ago
A lot of German institutions work this way. There are a lot of problems with this. But one of the biggest is the following: When you notice that someone that brings zero value to the company gets the same salary as you one of two things happens: 1. you either loose any incentive to do anything 2. or you quit. In time all what you're left with is the people you don't want.
- trowawee 9y ago
  Ok, but that's not really my problem. That's bad management, because they're apparently carrying around a bunch of dead weight and not doing anything to correct that problem.
  - dmitrygr 9y ago
    firing someone in EU isn't easy, no matter how useless they are.
    - Pyxl101 9y ago
      Yes ... and this is a major drain on EU companies that make them less competitive than companies with "at will" employment. They can't fire low-performers easily, and they can't afford to take a gamble on people since firing them is so difficult if they don't work out.
    - yorwba 9y ago
      I'm not sure why you think that. At least in Germany, if an employee can't do the work they are obligated to do by their employment contract, they are in violation. After they have been notified of the violation (or if it is obvious, e.g. because they didn't even go to work), it is their duty to correct that. If the employee is unable to satisfy the requirements, they can be terminated with an appropriate notice period. (Termination protection does not apply if the behavior of the employee is the reason: http://www.gesetze-im-internet.de/kschg/__1.html http://www.gesetze-im-internet.de/kschg/__1.html) The process may not be fast, but for a useless employee, it would be difficult to claim that the termination was unjustified, so the outcome is essentially guaranteed. I would call that easy (as opposed to simple).
maxxxxx 9y ago
You don't have to pay everyone the same. Just be ready to justify why one gets paid more than other. CEOs have pay transparency but somehow the world doesn't go under.
- jimbobimbo 9y ago
  CEO salary is public in public companies, because they work for shareholders (who are the general public).
  - maxxxxx 9y ago
    I work for shareholders too and I am not even allowed to publish my salary.
    - jimbobimbo 9y ago
      I highly doubt that your paygrade/position is anywhere near the level, where public shareholders would care.
      - maxxxxx 9y ago
        Where is the cutoff? If shareholders care about the CEO salary they also should care how much 20000 people like me make.
        jimbobimbo 9y ago
        Shareholders hire CxO level people to deal with day-to-day minutiae of running the company. There're other metrics (see SEC filings) that help shareholders gauge whether CxO people are doing their job.
        JumpCrisscross 9y ago
        > Where is the cutoff? Where the Board stops hiring and delegates to management.
    - 9y ago
deleted 9y ago
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gozur88 9y ago
It seems like you'd lose your highest performers that way. People who put in a lot of extra hours expect to be compensated for it. Also, do you really want to set up your incentives such that the smart thing to do is work just hard enough to avoid getting fired?

maxxxxx 9y ago

Salaries are a dysfunctional market like health care. No market can function properly without all parties having the same information. All arguments against salary transparency seem to be that people will be unhappy when they find out that the company has screwed them over and therefore it's better for these people to be ignorant.

ythn 9y ago
> All arguments against salary transparency seem to be that people will be unhappy when they find out that the company has screwed them over and therefore it's better for these people to be ignorant. Why do you assume someone making less is being "screwed over"? Imagine employees A and B. B greatly outperforms A and therefore rightly makes more. However, A is delusional about his skills and thinks he is as good as B. Pay information is made transparent and A sees he is making less. This makes him mad because by all rights he ought to be making as much as B! This type of comparison/resentment might make A want to quit or ask for a raise, whereas before he was both content and fairly paid at his performance level.
- trowawee 9y ago
  Sure, that might happen. But you're invoking a potential problem that might happen, when we have problems (gender and racial pay gaps) that are A. more severe than the potential problem you're invoking, B. already demonstrably occurring, and C. potentially correctable via salary transparency. If we can make a step towards correcting existing problems, and the best argument against it is "this might create a less-severe problem at some point in the future", we should probably take that step.
- argv_empty 9y ago
  Then A is free to do so, but if he's not actually worth more, then he's likely to find out in his job search that he can't command B's salary. WSJ seems oddly unwilling to let the free market resolve this issue.
  - scaryclam 9y ago

lend000 9y ago

It only seems weird because it isn't the norm -- like one of the other commenters mentioned, we tend to know the approximate net worth / salaries of family/friends and yet society, on average, continues to run. And in large companies with salary ladders, we know the range of all our coworkers.

vilmosi 9y ago

You have some truth to it but maybe we'll get used to it. Same how we get used to X being taller/more attractive than us. We all know it's true, we just don't care that much anymore. It's just life.

michaelchisari 9y ago

Seems like a pandora problem to me. You have the problem because that box has never been opened. Had that been the way salaries were handled from the beginning, you wouldn't have the issue. But opening up salary information mid-stream can cause a lot of conflicts (some justified, some not). The question is, when going from private to public information, how best to handle it so that it isn't a source of chaos.

brm 9y ago
One part of this I've never seen discussed is that they reveal the salaries but they almost never reveal what the company believes it can afford to pay everyone involved and how the salaries influence the health of the company. It becomes employee vs employee vs company then instead of people seeing how it all fits together. I often think its that the transparency is only halfway that causes many of these peer to peer problems. It also doesn't help that most white collar work these days isn't directly translatable to revenue. Its easier to tell a salesman what he's worth than a designer etc...
- powvans 9y ago
  Another thing that is often forgotten is that everyone has different opportunities in the market for jobs. Two people may contribute equally to a project, but one of those people might be paid more because the company had to outbid a competitor. This goes to your point about the health of the company. It might not be fair, but the company might not have the resources to offer a raise for the sake of fairness.
  - BoiledCabbage 9y ago
    > It might not be fair, but the company might not have the resources to offer a raise for the sake of fairness They definitely have the option of not offering the raise and the employee choosing to leave. If the employee isn't worth X dollars more then the company should be ok with them walking without that bump. In the end the issue being discussed is asymmetrical info, and positions. If an employ is producing less than their cost they don't get to keep that "surplus". They get written up / fired. But if an employee is producing more than their cost, the employer gets to keep that surplus. It's an imbalance. Asymmetrical info on salaries produces this situation. I'm not saying it's right or wrong, but it is imbalanced.

greedo 9y ago

While opaque companies might not release raise figures, everyone generally knows that a promotion involves a raise, in addition to any status bump (assuming no real increase in responsibilities). So promotions can serve as a proxy for raises, causing the same ego issue.

alayek 9y ago
You'd be surprised. I have a friend, whose team had this policy - no raise with promotion. He got a promotion with no raise. When asked, his manager said, "you shouldn't work for money. You should work for the learning experience." He resigned in a month. And this was not some random fringe start-up - one of the biggest companies in the world, with over $100B in market cap.

johnwalker 9y ago

I can definitely understand why a team could dissolve. But there are really only upsides for employees to understand why they're being paid X and to be able to model their behavior after the person that gets paid Y.

shaftoe 9y ago
That would work if people were Vulcans.
- anonacct37 9y ago
  If someone was making 100k more than me, do you really think I'd have to be a Vulcan to want to close that gap? Seems like a bit of an extreme statement.
  - sidlls 9y ago
    The point is that what a person is paid isn't entirely determined by their behavior at work. Much of it is, in fact, determined by their charm, network, prior history and negotiating skills: none of which necessarily have anything to do with their day to day.
save_ferris 9y ago
Not necessarily. I once found out how much one of my team members made that started on the same day in the same role as I with the same amount of experience (the HR manager left his most recent offer letter open on her screen about a year and a half after we started). He was making about 66% more than I was (not an exaggeration) and our output was pretty comparable. Needless to say, modifying my behavior to be more like him wasn't the first (or 100th) thing that came to mind. Was it fair? Who knows, it's not really possible to debate that because it all depends on your definition of "fair". But in my experience, it's not very realistic to assume that employee A sees what employee B makes and objectively understands how they need to improve to make what employee B makes. Especially since that's not really how pay is negotiated anyway.
walshemj 9y ago

kromem 9y ago

The problem is not with egos, the problem is that they have a preconceived notion that they are equal with their coworkers, and then suddenly find out they are not. Had the designation been clear from day one and each individual pay scale evolved over time publicly, I seriously doubt there'd be the same issues. In essence, a reveal all at once is the equivalent of a massive swath of promotions to one's co-workers and not to yourself (for the lower paid), all in one day - yeah, of COURSE it's going to harm team dynamics. That doesn't mean we should only promote people in secret though, right? Transparent compensation is simply a more granular hierarchy of representative productivity and value to a company, and the respective compensation, than a simple job title. We don't lose our minds at the idea that some employees are junior, others senior, etc. So what's substantially different with a more granular system to what already exists? Any employee should be able to ask "Why is Bob making more than me?" the same way they might ask "Why was Bob promoted to XYZ position instead of me?" And a healthy company should be able to answer the question with the reasons why for the former, just as a healthy company can answer the latter. If an employee is lagging in salary over time because upper management isn't seeing the same value as their equally experienced co-workers, this should be made clear to that employee so that they can find out why their efforts aren't having as much value, and either adapt accordingly, or find an environment where their efforts will be better valued. Imagine a classroom where each student can see their own grade as a number out of 100, but has no idea what the average is, spread, etc. You could have a C student who thinks they are doing as well as an A student, because they have no context for how they are being graded. Yes, there will be drama with each student knowing the other's grade, but they'll better know their own relative performances. At very least, we should have anonymous compensation transparency, where employees can know where their own salary stands in the company compared to tokenized other salaries, so the conversation can at least be "Why is #335 making more than me?" instead of "Why is Bob making more than me?". In small firms/upper management levels this won't be all that anonymous, but it could mitigate the drama in larger employment pools while still providing the contextual benefit.

deleted 9y ago
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ryandrake 9y ago

ThrustVectoring 9y ago

It's less about ego, and more that the removal of ambiguity in the workplace hierarchy is itself a social attack. If Alice is considered "better" than Bob, then Bob cannot act as if he were "better" without getting smacked down for being uppity or putting on airs or the like. It's not about the money. It's not even the fact that you ranked them. It's that you ranked them publicly, and from a place of authority to boot. And worse still, on a one-dimensional scale.

dx034 9y ago

The problem is that everyone thinks they can have individual salary levels. For many industries it was/is common that salaries are equal across groups. Good performance can lead to a higher bonus and make you move up the ranks but there was no discrimination for people in the same position. Unions enforced that and everyone could see their potential salary. Maybe introducing those salaries would be a benefit for both employees and employers.

scaryclam 9y ago
Though this would mean, if I'm trying to hire a developer and their salary requirement is 1000 more than the set band, I either have to employ them at a level too high and pay them more than I budgeted, or not hire them at all even though I could afford the additional 1000 and they were a good fit. I really dislike inflexibility like that. Do some employees get a bit on an unfair deal if they don't negotiate? Yes, they do, but who really cares, as long as they are happy? I much prefer being in the dark about others pay and being able to negotiate terms of employment than shoehorning everyone into the same mold.

crdoconnor 9y ago

>The problem is with egos, Employee A might view themselves as more valuable to the company than Employee B and vice versa. In which case after finding out they leave and if it turns out they're not all that valuable they mainly just end up screwing themselves. I'm not sure why any employer would consider this a problem. An underpaid employee leaving and getting a better job though - sure, that's a problem.

astura 9y ago

>The problem is with egos, Employee A might view themselves as more valuable to the company than Employee B and vice versa. If Employee B gets a raise, Employee A will want one too, or a higher one. A spiral of trying to get a higher salary relative to other team members can begin The same exact thing happens with promotions and titles, so should they be secret too? If it's such a problem then how about getting rid of positions altogether and just say "everyone's equal?" The second point is exactly why salaries are hidden - to drive down wages. There's a damn good reason why American professional athletes players union make sure salaries are published. You only thought your salary was fair based on the information your employer gave, which was "it's fair, trust us."