5 ms·

> You can't fix the problem of your employer unfairly paying you less Are people good judges of how much value they bring a company? You may think you deserve

by umvi 6y ago

> You can't fix the problem of your employer unfairly paying you less Are people good judges of how much value they bring a company? You may think you deserve more pay, but you may also have a high opinion of yourself or over-estimate your skill/contributions/merit. I think making salaries public information is a double-edged sword. On the one hand it reduces information asymmetry and gives you more negotiating power, but on the other it could probably lead to sour grapes and/or hurt feelings among employees where there was none before.

enriquto 6y ago
> it could probably lead to sour grapes and/or hurt feelings among employees where there was none before. When that is the case, it means that the ambient is so toxic that a peaceful coexistence is only possible due to a ridiculous amount of taboo and secrecy (this is social manipulation 101). I say, to hell with these workplaces; they'd better collapse sooner than later.
gumby 6y ago
> on the other it could probably lead to sour grapes and/or hurt feelings among employees where there was none before. Then that’s the problem to fix.
protonimitate 6y ago
> Are people good judges of how much value they bring a company? IME skils/merit/value contributions have very little to do with salary. It's mostly negotiation tactics. Having public data on salaries would help potential employees make more informed decisions about working for companies in the first place. "Sour grapes" is only really a concern if there is a huge discrepancy between pay when job roles/responsibilities are similar. I've yet to be convinced that hiding salary information is in any way beneficial to employees, only to employers (at the expense of the employee).
- umvi 6y ago
  > Having public data on salaries would help potential employees make more informed decisions about working for companies in the first place. Translation: "if a company doesn't pay well, talented people won't want to work there" - why would a company that doesn't pay well release information that would disadvantage them like that? Unless you are suggesting they be forced by law to make all salaries public. But you can already get an idea of the salary bell curve at a given company with things like Glassdoor.
  - michaelmrose 6y ago
    Employers are legally enjoined from stopping their employees from sharing this info with each other and once this info is floating around keeping it off the internet ought to reasonable become challenging.
- m0zg 6y ago
  Your experience does not match mine as a manager. At any given moment a manager worth his/her pay is acutely aware who does what they said they'd do, who is capable of more than others, who solves more problems, who causes less fallout, who deserves that promo and raise and so on. There are always one or two people out of a dozen who, if they were to disengage, would doom the productivity of the team. So you want to keep your A players happy. The rest, you divide into two buckets essentially: B players aspiring to be A players, and everybody else. You keep the former happy. You don't really care about the latter and give them whatever is the default they'd normally get. A lot of A players suck at negotiations, IMO. If they didn't, their career would advance much faster. It's much easier to negotiate if you have the goods, and very few people have the goods.
  - freeman478 6y ago
    So you are basically in agreement with the gp by saying that your A players get shortchanged because they suck at negotiating...
    - m0zg 6y ago
      "So" is a tell for cognitive dissonance: whenever someone starts their response with a "so", in 100% of the cases what follows is the opposite of what the person they're responding to said. A deliberate misinterpretation. I'm saying that your ability to deliver is of foremost importance to your comp, more so than negotiation skills (which help, but not replace the ability to deliver). Why? See the first part of my post that you've deliberately misinterpreted. It may seem to you that you can fool your manager, but that's not the case, if they're paying attention.
      - alrs 6y ago
        So you're saying that any reply that starts with "so" is willfully dense, and never exists to point out a logical flaw or unintended consequence of the written argument?
        6y ago
pgt 6y ago
Yes.
guptaneil 6y ago
A sudden release of numbers might cause that, but ideally the culture is built around transparency and salary gaps are actually an opportunity to have discussions with your manager like "what can I do to close the performance gap and make the same amount as X?" It ensures that salary distributions can be justified, and that employees have goals they can strive towards rather than the current variable reward system where you work as hard as you can and hope your employer decides to reward you this year.
vlovich123 6y ago
Why isn't this a concern for publishing CEO salaries? Arguably this is a huge reason CEO salaries have skyrocketed in comparison to non-executive comp. I think everyone should be on the same level playing field in terms of access to information. So if CEOs have their salaries published, then publish those for workers. If workers don't have their salaries published then CEOs shouldn't either.
- vonmoltke 6y ago
  A company generally only has one CEO. There are hundreds, in some cases thousands, of employees with the same job function and salary grade at MS. The problem comes when those people start comparing their salaries to each other, not to other companies.
  - Master_Odin 6y ago
    And then they can have frank discussions with their employers on why the diversity of salaries for similar levels of work.
    - filoleg 6y ago
      > And then they can have frank discussions with their employers on why the diversity of salaries for similar levels of work. I mean, that's pretty much the whole issue as the company sees it, a frank discussion about a company like that only hurts the company. Because there isn't really a good way to rephrase "well, the gap here between you and Jim here is not because you produce less value or deserve getting paid less, but because we can just get away with paying you less". And no, I am not dismissing that some engineers produce more value than others and hence they get paid more. This happens quite often. However, in a lot of cases, that's not the reason for why some are getting paid less. And those who produce little value and get paid less are typically very aware of that fact, so they don't tend to raise fuss over the compensation.
  - r00fus 6y ago
    I see this as a way to identify bad management and corruption actually. So a C-class employee has an A-level salary? Either that person is a master negotiator or has dirt.
dalbasal 6y ago
> Are people good judges of how much value they bring a company? People are average judges, by definition :) I don't think that's very important though. There are two ways of looking at this, IMO. In the Hayekian sense, information flow... especially price information makes markets work. This is one of the of the reasons literal markets exist(ed). Markets "clear." All the metal, meat, etc. that needs to be sold gets sold. Even in modern times, you can get great deals on closing days (often sunday) in a literal meat market. Prices move fluidly, and if market conditions dictate that lamb cutlets are 75% off.. that price travels like the market quickly. The other major factor besides information flow is number of participants, fwiw. The other way of looking at it is as power gaps. Employers have relatively more power in negotiations because they have more price information.
- bumby 6y ago
  >People are average judges, by definition People may be, but individual persons are not. It’s the individual who is negotiating. I remember a psychology study about the nature of impromptu pay raises. For the initial weeks they were extremely grateful. After six weeks or so IIRC they felt like they were entitled to that extra money all along. We are incredibly adept at rationalizing the outcome we want. Who wants to admit they don’t deserve a raise when handed to them? People in aggregate may be good judges of value, but I don’t think too many individuals are. How many people do you know who will say they are insufficiently paid vs. paid too much? I think the best way to gauge your worth is to periodically put your resume out and interview. If you get a lot of offers that dwarf your current pay you’re probably under paid. If not, you may just be a bad judge of your economic worth
- adolph 6y ago
  In the field of psychology, the Dunning–Kruger effect is a cognitive bias in which people with low ability at a task overestimate their ability. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability. Without the self-awareness of metacognition, people cannot objectively evaluate their competence or incompetence. https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
alain94040 6y ago
There already is a sub-set of people whose salary is public: top executives of public companies (their compensation is listed in the public disclosures). It had a very interesting effect: no one wants to be paid in the bottom 50%, so every job offer (at the executive level) claims to pay in the top 75% or so. Which led to salary inflation. I'm very curious to see if the same would happen here (and I think it started to happen somewhat with sites such as level.fyi sharing salary info). If you see (in aggregate) what others get for similar positions, you are more likely to get an offer above that average. Which over time, leads to everyone getting raises.
GoodJokes 6y ago
Are people good judges of how much value they bring to a company. No, and neither are persons that are not you. That is why pay should be way less subjective and based on humanistic principles.
fakedang 6y ago
Crowds are certainly better judgements of value than individual people are. If it does lead to sour grapes, it's a benefit for the employee - she realizes that either the company is not one worth working for and she ought to leave, or that he is not worth it for the company and must improve performance or look elsewhere.
C1sc0cat 6y ago
It also reduces employee bargaining power - having a proper anonymous audit of all employees however will be a good thing as it will expose problems. BTW before I get flamed I have seen the anonymised data for a big UK tech company >175k employees and there where obvious pay problems based on Sex, Race and Disability.
47477r737eu 6y ago
It actually gives you less negotiating power because even if you're a good negociator the company will be penalized if you're not a fashionable person to be giving extra pay. The push for transparency is a result of the equity inquisition wanting to remove roadblocks that impede attacking competency based systems.

by umvi 6y ago

enriquto 6y ago

> it could probably lead to sour grapes and/or hurt feelings among employees where there was none before. When that is the case, it means that the ambient is so toxic that a peaceful coexistence is only possible due to a ridiculous amount of taboo and secrecy (this is social manipulation 101). I say, to hell with these workplaces; they'd better collapse sooner than later.

gumby 6y ago

> on the other it could probably lead to sour grapes and/or hurt feelings among employees where there was none before. Then that’s the problem to fix.

protonimitate 6y ago

> Are people good judges of how much value they bring a company? IME skils/merit/value contributions have very little to do with salary. It's mostly negotiation tactics. Having public data on salaries would help potential employees make more informed decisions about working for companies in the first place. "Sour grapes" is only really a concern if there is a huge discrepancy between pay when job roles/responsibilities are similar. I've yet to be convinced that hiding salary information is in any way beneficial to employees, only to employers (at the expense of the employee).

umvi 6y ago
> Having public data on salaries would help potential employees make more informed decisions about working for companies in the first place. Translation: "if a company doesn't pay well, talented people won't want to work there" - why would a company that doesn't pay well release information that would disadvantage them like that? Unless you are suggesting they be forced by law to make all salaries public. But you can already get an idea of the salary bell curve at a given company with things like Glassdoor.
- michaelmrose 6y ago
  Employers are legally enjoined from stopping their employees from sharing this info with each other and once this info is floating around keeping it off the internet ought to reasonable become challenging.
m0zg 6y ago
Your experience does not match mine as a manager. At any given moment a manager worth his/her pay is acutely aware who does what they said they'd do, who is capable of more than others, who solves more problems, who causes less fallout, who deserves that promo and raise and so on. There are always one or two people out of a dozen who, if they were to disengage, would doom the productivity of the team. So you want to keep your A players happy. The rest, you divide into two buckets essentially: B players aspiring to be A players, and everybody else. You keep the former happy. You don't really care about the latter and give them whatever is the default they'd normally get. A lot of A players suck at negotiations, IMO. If they didn't, their career would advance much faster. It's much easier to negotiate if you have the goods, and very few people have the goods.
- freeman478 6y ago
  So you are basically in agreement with the gp by saying that your A players get shortchanged because they suck at negotiating...
  - m0zg 6y ago
    "So" is a tell for cognitive dissonance: whenever someone starts their response with a "so", in 100% of the cases what follows is the opposite of what the person they're responding to said. A deliberate misinterpretation. I'm saying that your ability to deliver is of foremost importance to your comp, more so than negotiation skills (which help, but not replace the ability to deliver). Why? See the first part of my post that you've deliberately misinterpreted. It may seem to you that you can fool your manager, but that's not the case, if they're paying attention.
    - alrs 6y ago
      So you're saying that any reply that starts with "so" is willfully dense, and never exists to point out a logical flaw or unintended consequence of the written argument?
      - 6y ago

pgt 6y ago

Yes.

guptaneil 6y ago

A sudden release of numbers might cause that, but ideally the culture is built around transparency and salary gaps are actually an opportunity to have discussions with your manager like "what can I do to close the performance gap and make the same amount as X?" It ensures that salary distributions can be justified, and that employees have goals they can strive towards rather than the current variable reward system where you work as hard as you can and hope your employer decides to reward you this year.

vlovich123 6y ago

Why isn't this a concern for publishing CEO salaries? Arguably this is a huge reason CEO salaries have skyrocketed in comparison to non-executive comp. I think everyone should be on the same level playing field in terms of access to information. So if CEOs have their salaries published, then publish those for workers. If workers don't have their salaries published then CEOs shouldn't either.

vonmoltke 6y ago
A company generally only has one CEO. There are hundreds, in some cases thousands, of employees with the same job function and salary grade at MS. The problem comes when those people start comparing their salaries to each other, not to other companies.
- Master_Odin 6y ago
  And then they can have frank discussions with their employers on why the diversity of salaries for similar levels of work.
  - filoleg 6y ago
    > And then they can have frank discussions with their employers on why the diversity of salaries for similar levels of work. I mean, that's pretty much the whole issue as the company sees it, a frank discussion about a company like that only hurts the company. Because there isn't really a good way to rephrase "well, the gap here between you and Jim here is not because you produce less value or deserve getting paid less, but because we can just get away with paying you less". And no, I am not dismissing that some engineers produce more value than others and hence they get paid more. This happens quite often. However, in a lot of cases, that's not the reason for why some are getting paid less. And those who produce little value and get paid less are typically very aware of that fact, so they don't tend to raise fuss over the compensation.
- r00fus 6y ago
  I see this as a way to identify bad management and corruption actually. So a C-class employee has an A-level salary? Either that person is a master negotiator or has dirt.

dalbasal 6y ago

> Are people good judges of how much value they bring a company? People are average judges, by definition :) I don't think that's very important though. There are two ways of looking at this, IMO. In the Hayekian sense, information flow... especially price information makes markets work. This is one of the of the reasons literal markets exist(ed). Markets "clear." All the metal, meat, etc. that needs to be sold gets sold. Even in modern times, you can get great deals on closing days (often sunday) in a literal meat market. Prices move fluidly, and if market conditions dictate that lamb cutlets are 75% off.. that price travels like the market quickly. The other major factor besides information flow is number of participants, fwiw. The other way of looking at it is as power gaps. Employers have relatively more power in negotiations because they have more price information.

bumby 6y ago
>People are average judges, by definition People may be, but individual persons are not. It’s the individual who is negotiating. I remember a psychology study about the nature of impromptu pay raises. For the initial weeks they were extremely grateful. After six weeks or so IIRC they felt like they were entitled to that extra money all along. We are incredibly adept at rationalizing the outcome we want. Who wants to admit they don’t deserve a raise when handed to them? People in aggregate may be good judges of value, but I don’t think too many individuals are. How many people do you know who will say they are insufficiently paid vs. paid too much? I think the best way to gauge your worth is to periodically put your resume out and interview. If you get a lot of offers that dwarf your current pay you’re probably under paid. If not, you may just be a bad judge of your economic worth
adolph 6y ago
In the field of psychology, the Dunning–Kruger effect is a cognitive bias in which people with low ability at a task overestimate their ability. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability. Without the self-awareness of metacognition, people cannot objectively evaluate their competence or incompetence. https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect

alain94040 6y ago

There already is a sub-set of people whose salary is public: top executives of public companies (their compensation is listed in the public disclosures). It had a very interesting effect: no one wants to be paid in the bottom 50%, so every job offer (at the executive level) claims to pay in the top 75% or so. Which led to salary inflation. I'm very curious to see if the same would happen here (and I think it started to happen somewhat with sites such as level.fyi sharing salary info). If you see (in aggregate) what others get for similar positions, you are more likely to get an offer above that average. Which over time, leads to everyone getting raises.

GoodJokes 6y ago

Are people good judges of how much value they bring to a company. No, and neither are persons that are not you. That is why pay should be way less subjective and based on humanistic principles.

fakedang 6y ago

Crowds are certainly better judgements of value than individual people are. If it does lead to sour grapes, it's a benefit for the employee - she realizes that either the company is not one worth working for and she ought to leave, or that he is not worth it for the company and must improve performance or look elsewhere.

C1sc0cat 6y ago

It also reduces employee bargaining power - having a proper anonymous audit of all employees however will be a good thing as it will expose problems. BTW before I get flamed I have seen the anonymised data for a big UK tech company >175k employees and there where obvious pay problems based on Sex, Race and Disability.

47477r737eu 6y ago

It actually gives you less negotiating power because even if you're a good negociator the company will be penalized if you're not a fashionable person to be giving extra pay. The push for transparency is a result of the equity inquisition wanting to remove roadblocks that impede attacking competency based systems.