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If an employee's impact is more valuable, why shouldn't that employee demand to be paid more? If a job or position is less valuable, why shouldn't that positio

If an employee's impact is more valuable, why shouldn't that employee demand to be paid more? If a job or position is less valuable, why shouldn't that position be paid less?

acegopher 6y ago
How do you measure impact?
smasher164 6y ago
The question could be flipped around as "why should they be paid more/less?" The goal is to treat the salary as a necessary (evil?) for "what you need to feed your family, buy a house, etc..." and not as the primary motive for work. An employee who makes a valuable impact does so because they want to see the company/product succeed.
- Jtsummers 6y ago
  > An employee who makes a valuable impact does so because they want to see the company/product succeed. With most companies, this is a comical assertion only applicable to 20-somethings who haven't realized that their employer will betray their trust one day. At least in the US. Until companies start rewarding longevity and favoring employees over executive bonuses when budget crises occur, employees will also be mercenary and seek out better compensation if they have the opportunity. US companies, by and large, will slash staffing or employee bonuses before cutting management or executive positions and/or bonuses during difficult times, even when they have the capital to avoid those cuts if the so-called leaders would be willing to make a personal sacrifice. Now in the case of the posted article, the compensation is already good. So that changes the calculus ($180k/year may not be the best SV salary out there, but it's very good across most of the US, even for developers). And by leveling the pay at an already good salary it can further change the motivation of employees. But try fixing the salaries at, say, the median household income of central GA (depending on which county somewhere between $30k and $45k). Sure, the boss can say, "I'm suffering with you." But the employee is still going to seek out better pay.
- majormajor 6y ago
  > The goal is to treat the salary as a necessary (evil?) for "what you need to feed your family, buy a house, etc..." and not as the primary motive for work. This seems shortsighted. Even after your immediate needs are covered, you can be a long way away from being comfortably able to feed your family next year, in ten years, in twenty years, even if things change. An employee who demands as high a salary as they can get for the work they do may just be thinking more long-term.
  - sokoloff 6y ago
    Presumably at Oxide’s stage, the equity is the towards financial independence vehicle and the salary is covering the bills until that lottery ticket is scratched off and its value determined. In this case, you are being paid $15K per month to work to make that ticket pay off.
    - NovemberWhiskey 6y ago
      Does everyone have equity? Does everyone have the same amount? Does everyone have the same terms? If not, then the differentiation in compensation just moved to whatever liquidity event.
      - sokoloff 6y ago
        Bryan hinted pretty strongly in the article that the answer was “yes” to the first and “no” to the second. Why should it be the same? If I join a year after you, I sure as hell hope you have more, all else being equal. If we join the same day and you are twice as critical to the success, I hope you have more, because your incentive pulls my outcomes higher.
        NovemberWhiskey 6y ago
        OK, sure, but you can make versions of those exact same arguments for salary as well. The point is that the Oxide team has made a point of not making them, or even making the counterarguments. However, amount of and terms around equity are part of the overall compensation package, and if the principles espoused in the document are relevant to salary, then they should also be relevant to the equity component of compensation as well, no?
- darkr 6y ago
  If you’re paying salary based on financial needs of the employee rather than value added, then this is also something that varies massively - the debt-free happy-go-lucky 24 year old who lives in a house share, who had college paid for by her parents has wildly different income needs to the 35 year old still paying off college debts, whilst supporting a mortgage and a family of 6.
jimbokun 6y ago
> If an employee's impact is more valuable, why shouldn't that employee demand to be paid more? Because the valuation of an employee's contribution to an organization, as assessed by management, is usually bullshit. If the product succeeds, all the employees benefit, and if the product fails, all employees suffer together. Now, for a large organization, the ability for individual employees to influence revenue or profit at the organization level is negligible, so you need different strategies for compensating your employees. And the article concedes their approach won't scale past a certain company size.

If an employee's impact is more valuable, why shouldn't that employee demand to be paid more? If a job or position is less valuable, why shouldn't that position be paid less?

acegopher 6y ago

How do you measure impact?

smasher164 6y ago

The question could be flipped around as "why should they be paid more/less?" The goal is to treat the salary as a necessary (evil?) for "what you need to feed your family, buy a house, etc..." and not as the primary motive for work. An employee who makes a valuable impact does so because they want to see the company/product succeed.

Jtsummers 6y ago
> An employee who makes a valuable impact does so because they want to see the company/product succeed. With most companies, this is a comical assertion only applicable to 20-somethings who haven't realized that their employer will betray their trust one day. At least in the US. Until companies start rewarding longevity and favoring employees over executive bonuses when budget crises occur, employees will also be mercenary and seek out better compensation if they have the opportunity. US companies, by and large, will slash staffing or employee bonuses before cutting management or executive positions and/or bonuses during difficult times, even when they have the capital to avoid those cuts if the so-called leaders would be willing to make a personal sacrifice. Now in the case of the posted article, the compensation is already good. So that changes the calculus ($180k/year may not be the best SV salary out there, but it's very good across most of the US, even for developers). And by leveling the pay at an already good salary it can further change the motivation of employees. But try fixing the salaries at, say, the median household income of central GA (depending on which county somewhere between $30k and $45k). Sure, the boss can say, "I'm suffering with you." But the employee is still going to seek out better pay.
majormajor 6y ago
> The goal is to treat the salary as a necessary (evil?) for "what you need to feed your family, buy a house, etc..." and not as the primary motive for work. This seems shortsighted. Even after your immediate needs are covered, you can be a long way away from being comfortably able to feed your family next year, in ten years, in twenty years, even if things change. An employee who demands as high a salary as they can get for the work they do may just be thinking more long-term.
- sokoloff 6y ago
  Presumably at Oxide’s stage, the equity is the towards financial independence vehicle and the salary is covering the bills until that lottery ticket is scratched off and its value determined. In this case, you are being paid $15K per month to work to make that ticket pay off.
  - NovemberWhiskey 6y ago
    Does everyone have equity? Does everyone have the same amount? Does everyone have the same terms? If not, then the differentiation in compensation just moved to whatever liquidity event.
    - sokoloff 6y ago
      Bryan hinted pretty strongly in the article that the answer was “yes” to the first and “no” to the second. Why should it be the same? If I join a year after you, I sure as hell hope you have more, all else being equal. If we join the same day and you are twice as critical to the success, I hope you have more, because your incentive pulls my outcomes higher.
      - NovemberWhiskey 6y ago
        OK, sure, but you can make versions of those exact same arguments for salary as well. The point is that the Oxide team has made a point of not making them, or even making the counterarguments. However, amount of and terms around equity are part of the overall compensation package, and if the principles espoused in the document are relevant to salary, then they should also be relevant to the equity component of compensation as well, no?
darkr 6y ago
If you’re paying salary based on financial needs of the employee rather than value added, then this is also something that varies massively - the debt-free happy-go-lucky 24 year old who lives in a house share, who had college paid for by her parents has wildly different income needs to the 35 year old still paying off college debts, whilst supporting a mortgage and a family of 6.

jimbokun 6y ago

> If an employee's impact is more valuable, why shouldn't that employee demand to be paid more? Because the valuation of an employee's contribution to an organization, as assessed by management, is usually bullshit. If the product succeeds, all the employees benefit, and if the product fails, all employees suffer together. Now, for a large organization, the ability for individual employees to influence revenue or profit at the organization level is negligible, so you need different strategies for compensating your employees. And the article concedes their approach won't scale past a certain company size.