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Making a big mistake as a manager can cost the company a lot more than a big mistake as an individual Engineer, Architect or Developer, especially if you consid

Making a big mistake as a manager can cost the company a lot more than a big mistake as an individual Engineer, Architect or Developer, especially if you consider that the latter roles will catch many of each others' mistakes. The manager level can result in entire teams quitting, failing to support each other or an atmosphere where catching each others' mistakes is discouraged. Some jobs are paid based (roughly) on the value they bring and others are paid based on the threat/cost of large mistakes.

CivBase 6y ago
Why does potential for costly mistakes result in greater perceived value and higher pay?
- ironmagma 6y ago
  Higher risk begets higher premiums.
  - CivBase 6y ago
    Why? The relationship between contribution and compensation is obvious. If you bring more value to the company, the company compensates you directly with a portion of that value. But why does a position with greater risk necessitate greater compensation? EDIT: Everything below here was in the original post. However, I re-read it and realized it had little to do with the relationship between risk and compensation. I don't buy the idea that managers are liable for the mistakes of their reports. That would cause a snowball effect in large organizations, resulting in extremely high turnover for leadership positions. Managers share some liability for their reports' mistakes, but they also share some reward for their reports' successes. Those liabilities and rewards are split across all of their reports, resulting in what are usually relatively stable positions within a company. A lazy manager can get along by just regularly pruning reports who produce more liability than reward.
    - ben509 6y ago
      > But why does a position with greater risk necessitate greater compensation? There are various methods to address risk: 1. Avoid the risk 2. Reduce the risk 3. Transfer the risk 4. Accept the risk When you buy insurance, you're doing #3. If you self-insure, you're doing #4. Either strategy requires putting some money towards premiums, the expected possible cost of the risk. It's much cheaper to pursue #1 or #2. You're then saving an amount exactly equal to the premiums don't have to pay under #3 or #4. Thus, you can pay a person to do #1/#2 a fraction of the equivalent cost of #3/#4 and still come out ahead. > A lazy manager can get along by just regularly pruning reports who produce more liability than reward. Yup, and the books will balance.
    - ironmagma 6y ago
      It’s a generally accepted principle in economics/finance that the more risk you take on, the more up-front compensation you can expect. This is less about the risk the reports pose to the manager and more about the risk of the manager position itself and the high opportunity for spectacular failure.
mtberatwork 6y ago
> Making a big mistake as a manager can cost the company a lot more than a big mistake as an individual Engineer, Architect or Developer, especially if you consider that the latter roles will catch many of each others' mistakes. Of course anything is possible, but there is often a chain of managerial command (managers of managers) to catch mistakes. It's pretty hard for a single, middling manager to inflict costly mistakes anymore than an individual engineer. Also, I've seen management levels that are 0 - 1 subordinates deep (managers of none).
100011_100001 6y ago
This is factually not true. Developers can make big mistakes to bring entire companies down with them. Of course it depends on the definition of "mistake". However I can claim that a single defect caused by a developer can cost the company money and downtime, if nothing else a bad user experience. Managers don't generate defects. Developers do. Not to mention that a lot of the times it's much harder to reverse an engineering decision vs a managerial one. Most outages are caused by developers and IT, not managers. This perception that there is higher risk as a manager is false. As a developer I make multiple decisions daily, interpret vague requirements, make judgement calls, request new technologies etc. My manager understands about 20% of the decisions I make. Here is the kicker since I work in DevOps, with a super heavy emphasis on the Dev side. 70% of my decisions have wide ranging effect, much wider than my manager's eight person team. Finally note that no one really talks about 10x Managers, but people talk about 10x Developers. Why is that? Managers are glorified cheerleaders. Most managers are average, their value is vague but they are controlled by managers so its an endless loop till you hit the worker layer that get things done.
- jedberg 6y ago
  You sound like someone who has never been a manager or has no idea what a manager does. Yes, you're right that defects are made by developers. But you'd be hard pressed to find an example of a software defect that destroyed a company. Even if you as a DevOps engineer cause your company to be down for a day, it probably would have little effect on your company's bottom line. I was in charge of Reliability for Netflix. Our whole site was down for Christmas Day one year. No one was fired, and it barely affected anything. That was a pretty major defect. However, the way that management handled that outage had a huge effect on the company surviving that incident. Making sure we focused on the right problems to solve to prevent it from happening again. Creating entire new groups of engineers and then hiring them to solve specific problems of moving traffic between regions. So yeah, management is really important, and a good manager is definitely more effective than a single engineer. And management decisions can destroy a company, but I doubt you can find even one example of a single engineer's decision that took down a company.
  - 6y ago

CivBase 6y ago

Why does potential for costly mistakes result in greater perceived value and higher pay?

ironmagma 6y ago
Higher risk begets higher premiums.
- CivBase 6y ago
  Why? The relationship between contribution and compensation is obvious. If you bring more value to the company, the company compensates you directly with a portion of that value. But why does a position with greater risk necessitate greater compensation? EDIT: Everything below here was in the original post. However, I re-read it and realized it had little to do with the relationship between risk and compensation. I don't buy the idea that managers are liable for the mistakes of their reports. That would cause a snowball effect in large organizations, resulting in extremely high turnover for leadership positions. Managers share some liability for their reports' mistakes, but they also share some reward for their reports' successes. Those liabilities and rewards are split across all of their reports, resulting in what are usually relatively stable positions within a company. A lazy manager can get along by just regularly pruning reports who produce more liability than reward.
  - ben509 6y ago
    > But why does a position with greater risk necessitate greater compensation? There are various methods to address risk: 1. Avoid the risk 2. Reduce the risk 3. Transfer the risk 4. Accept the risk When you buy insurance, you're doing #3. If you self-insure, you're doing #4. Either strategy requires putting some money towards premiums, the expected possible cost of the risk. It's much cheaper to pursue #1 or #2. You're then saving an amount exactly equal to the premiums don't have to pay under #3 or #4. Thus, you can pay a person to do #1/#2 a fraction of the equivalent cost of #3/#4 and still come out ahead. > A lazy manager can get along by just regularly pruning reports who produce more liability than reward. Yup, and the books will balance.
  - ironmagma 6y ago
    It’s a generally accepted principle in economics/finance that the more risk you take on, the more up-front compensation you can expect. This is less about the risk the reports pose to the manager and more about the risk of the manager position itself and the high opportunity for spectacular failure.

mtberatwork 6y ago

> Making a big mistake as a manager can cost the company a lot more than a big mistake as an individual Engineer, Architect or Developer, especially if you consider that the latter roles will catch many of each others' mistakes. Of course anything is possible, but there is often a chain of managerial command (managers of managers) to catch mistakes. It's pretty hard for a single, middling manager to inflict costly mistakes anymore than an individual engineer. Also, I've seen management levels that are 0 - 1 subordinates deep (managers of none).

100011_100001 6y ago

This is factually not true. Developers can make big mistakes to bring entire companies down with them. Of course it depends on the definition of "mistake". However I can claim that a single defect caused by a developer can cost the company money and downtime, if nothing else a bad user experience. Managers don't generate defects. Developers do. Not to mention that a lot of the times it's much harder to reverse an engineering decision vs a managerial one. Most outages are caused by developers and IT, not managers. This perception that there is higher risk as a manager is false. As a developer I make multiple decisions daily, interpret vague requirements, make judgement calls, request new technologies etc. My manager understands about 20% of the decisions I make. Here is the kicker since I work in DevOps, with a super heavy emphasis on the Dev side. 70% of my decisions have wide ranging effect, much wider than my manager's eight person team. Finally note that no one really talks about 10x Managers, but people talk about 10x Developers. Why is that? Managers are glorified cheerleaders. Most managers are average, their value is vague but they are controlled by managers so its an endless loop till you hit the worker layer that get things done.

jedberg 6y ago
You sound like someone who has never been a manager or has no idea what a manager does. Yes, you're right that defects are made by developers. But you'd be hard pressed to find an example of a software defect that destroyed a company. Even if you as a DevOps engineer cause your company to be down for a day, it probably would have little effect on your company's bottom line. I was in charge of Reliability for Netflix. Our whole site was down for Christmas Day one year. No one was fired, and it barely affected anything. That was a pretty major defect. However, the way that management handled that outage had a huge effect on the company surviving that incident. Making sure we focused on the right problems to solve to prevent it from happening again. Creating entire new groups of engineers and then hiring them to solve specific problems of moving traffic between regions. So yeah, management is really important, and a good manager is definitely more effective than a single engineer. And management decisions can destroy a company, but I doubt you can find even one example of a single engineer's decision that took down a company.
- 6y ago