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There might however be a huge advantage for 'underpaid' employee's to know they are not paid well. if pay equates to skill, or productivity, which in America i
by jdavid 16y ago
There might however be a huge advantage for 'underpaid' employee's to know they are not paid well.
if pay equates to skill, or productivity, which in America is the general idea, then underpaid employees are under performing ones.
Companies like GE will fire the bottom 10% annually. This is expensive and requires an administrative and legal cost. Underperforming workers are also usually unaware of there skill deficit. http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect Releasing salaries might make performance acknowledgement more visible.
As a result of measured ( not actual ) performance being more visible underperforming employees might seek a new job before getting fired or getting frustrated. It might also encourage employees to seek out better mentor-ship relationships.
I have even heard that on some scrum teams, there is a base salary for each employee and then a team bonus that get's distributed by your other team members, entirely in the open. The idea is that as a team you want the strongest team members to stay on your team so that all of you can look better. a sort of 'gamification' and 'collective bargening'.
i've always thought that keeping pay secret was lame. plenty of people in a company can social engineer a way to figure it out, and in a startup it means you have to do a ton more work to hide your financials from others.
i'm all for transparency and flatness.
- cosgroveb 16y agoCan you please elucidate the reasoning behind your assumption that underpaid employees are the underperforming ones? At least for CEOs the opposite appears to be true: http://finance.fortune.cnn.com/2010/10/12/revenge-of-the-overpaid-ceos/ http://finance.fortune.cnn.com/2010/10/12/revenge-of-the-ove...
- jdavid 16y agothis is pricing to the market versus within the company. I guess i should have specified that employees should only price against others in a company. also salaries above $200k are silly. there are much better ways to fiscally reward a someone above $250k that are not so tax inefficient. @cosgroveb, way to pick the edge case. in general CEOs should make enough that their incentives align with investors. everyone is in a different boat.
- cosgroveb 16y agothanks for the clarification... hope i didn't come across as snarky. i think i did on re-reading.
- philwelch 16y agoif pay equates to skill, or productivity, which in America is the general idea, then underpaid employees are under performing ones If you're hired and paid by honest people, yes. If you're hired and paid by the moral equivalent of a car salesman[1], your pay is probably based more on what they think they can get away with paying you. I have even heard that on some scrum teams, there is a base salary for each employee and then a team bonus that get's distributed by your other team members, entirely in the open. The idea is that as a team you want the strongest team members to stay on your team so that all of you can look better. a sort of 'gamification' and 'collective bargening'. How on earth do you do that without making the entire process a political nightmare? [1] It's actually much worse than this. Your boss doesn't have to be a cynical car salesman trying to screw you out of salary to save money for the company. He could just be susceptible to the same old "the squeaky wheel gets the grease" treatment where people who ask for raises more often get raises more often.
- wheaties 16y ago_If you're hired and paid by honest people, yes. If you're hired and paid by the moral equivalent of a car salesman[1], your pay is probably based more on what they think they can get away with paying you._ Or they lack the ability to accurately judge people on their individual merits and/or abilities as a contributor. That is, a sales guy has a very clear cut idea of how much he's contributed. However, a guy who writes a lot of crappy code and causes problems for people that come after him would look stellar next to the schmuck who's got the untangle the mess he leaves behind. If management isn't technical...
- jdavid 16y agoi try not to work for car salesmen and in such a case it would be hard for such a person to fit into the company. @philwelch, it falls into the category of anti-patterns. the idea is that because it's open and part of the process, its not hidden and so the politics of it are not hidden. additionally only those that want to work in such a pay scale would accept the job. so you are basically agreeing to get rated by your peers before you accept the job. if you were to take an existing company and transition into this pay model you would probably see excessive attrition. it also means that your peers are responsible for your raise, rather than someone who does not understand your work. if you feel undercut, you will leave, and if your work is valuable then the team will miss you, as you will effect their productivity. again this is an anti-pattern is meant to disrupt normal strategies.
- anonymousDan 16y agoYup. It's kind of like getting picking for a football team. If you're not good enough you sit on the bench. You can either try and improve your game enough to get back on the team, or leave to find another team that either appreciates your talents or operates at a lower level.