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Work it in the compensation structure. Show engineers how much costs influence the profitability and value of their stocks and directly reward initiatives that
by 908B64B197 6y ago
Work it in the compensation structure.
Show engineers how much costs influence the profitability and value of their stocks and directly reward initiatives that can lower costs through bonus or promotions.
- toomuchtodo 6y agoAbsolutely. It’s about aligning incentives. If you don’t both empower and incentivize practitioners to make cost efficient decisions, rarely will it happen out of the goodness of someone’s heart. Top tier talent will, because they’re top tier, but they’re also getting compensated at the requisite rate for their skills and experience.
- 908B64B197 6y agoThere's always that manager that wants to get away with no equity in the compensation. "But it's not the norm in our -regional- market" I was expecting the downvotes.
- viig99 6y agoExactly, dont think its that complicated.
- maest 6y agoWhat if the engineers, like most other employees, don't receive stock comp?
- 908B64B197 6y agoYou are doing it wrong then.
- maest 6y agoCan you expand on that? Are you saying everyone should receive stock options? Or are you saying engineers are somehow special and should receive different treatment from other emloyees?
- 908B64B197 6y agoThat really depends on the type of talent your business needs. If you are ok with not having top talent, then sure, don't waste money with stock options.
- maest 6y agoBy definition, most companies can't afford the top talent. Your advice boils down to "pay people more", which, I mean, might seem like it works in the individual case, but it's clear why most won't be able to follow it.
- 908B64B197 6y agoMost companies can't afford to be market leaders either. No stock comp sends a strong signal to top talent. And about the company in general.
- gumby 6y agoWho wants to work at a place like that? At the first company I sold even the receptionist made enough to pay off her mortgage and all other debt. It doesn't always work that way of course but when things go well, it should.
- maest 6y ago> Who wants to work at a place like that? Most people, it seems, seeing as, outside of a small part of the world, equity comp is uncommon.
- 908B64B197 6y agoThere's wanting and there's being able to. There are a lot more folks who want to be NFL players than there are actual NFL players!
- gumby 6y agoI agree, but the hard part is that not everybody has agency over the cost structure (this is why I've always wondered if "profit sharing" provides any incentive at all).