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> I've got people with the same job title with almost a magnitude of difference in actual output. Sure, on paper, they're "doing the same thing", but if someone

> I've got people with the same job title with almost a magnitude of difference in actual output. Sure, on paper, they're "doing the same thing", but if someone forced me to shoehorn them into categories, that would mostly serve to punish top performes with little credentials and push them somewhere else. Why is transparency a problem here? The person doing orders of magnitude more work is probably only getting paid 10% more. Transparency could possibly make this better for both the workers and the employers, or it could make them worse for both - better for one and worse for the other - better for one and no difference for the other - or no difference for either. There's lots of possibilities. But It doesn't seem like there's reason to believe transparency is surely bad.

gkop 5y ago
The full comment you are replying to does not disagree with your comment, so your comment appears a non sequitur.
zepto 5y ago
> Transparency could possibly make this better for both the workers and the employers, How exactly? I don’t see any obvious path to this.
- onlyrealcuzzo 5y ago
  I'm not saying this is the case - but it is possible to imagine a world in which transparency leads to higher pay for more productive employees - which causes them to become even more productive for even more pay. Imagine you're a business and your employees bake pies. Imagine the costs are fixed beside the pie. Imagine the pie costs $1 in ingredients. Imagine the average worker bakes 10 pies per hour, and your marginal profit per pie is $9, and you pay workers $10 per hour. That is the labor cost and supplies for a pie costs $8. Each worker, generates $80 in revenue per hour after inputs and wages. However, you have one worker that bakes 30 pies per hour for $20 per hour. This worker is happy to earn double the average worker. And you, as a business owner, are very happy to make $300-30-20 = $250 per hour in revenue after inputs and wages (3x). However, If the worker is aware of how much more s/he makes - it is possible to imagine the worker becomes even more productive. Maybe the worker can bake 45 pies for $30 per hour (3x). You're paying more per hour per pie, but you're making much more profit per hour = $450 - 45 - 30 = $375 (4.5x).
  - hpcjoe 5y ago
    The flip side to this, is that workers who bake 1 pie per hour will demand the same pay as those who bake 10 per hour. Lest their "rights to equal pay" be under threat. Put another way, it will be very ... very difficult to reward good people with higher pay, without consequences. The onus would be on the business to articulate in legal terms, why X should get more than Y. This would open businesses up to lawsuits. I suspect that the net effect of this will be that businesses are going to work much harder at vetting people, and more rapidly letting go staff members who are on the wrong side of the bell curve (say 1 or more sigma below peak) in productivity. I'm not sure this is a good thing, for workers, or for businesses. As they say, the road to hell is paved with good intentions.
    - nathanappere 5y ago
      The parent comment is about adjusting pay for productivity, what is the reasoning behind "in a world where you compensate for productivity, you'll have to pay more employees that are less productive"?
      - nitrogen 5y ago
        The main reason is that people are petty, lawsuits are a very risky roll of the dice, and bad PR can cost a lot more than a bad employee. The other reason is that pay transparency is often anchored to specific credentials and characteristics, and it's often the case that credentials can be orthogonal to work performance. You might have a PhD who can't code who demands higher pay than a HS dropout who designed your entire infrastructure, and the HR department (or lawsuits, or etc) would force you to comply.
      - hpcjoe 5y ago
        Equal pay for "equal work". Two people have the same job. One is 2x as productive as the other. But they would be paid the same, due to a drive for pay equality. Such concepts punish high achievers.
    - onlyrealcuzzo 5y ago
      This is one possible outcome. But it is also possible to not be the outcome [=
hwbehrens 5y ago
> Why is transparency a problem here? > The person doing orders of magnitude more work is probably only getting paid 10% more. You've answered your own question. Transparency is undesirable from an employer's perspective because it encourages a closer alignment between compensation and productivity, and the mismatch between these currently serves as a significant profit advantage to the employer. If I can get 1000% more work from someone, and pay them 10% or 100% more, I am highly incentivized to prevent them from becoming aware of the value of their efforts, because they might realize their (relative) exploitation. At the same time, the less-productive worker also benefits from this lack of transparency because they get ~90% of the pay for 10% of the work. Disrupting the status quo would not be economically rational for them either. Thus, only the small fraction of underpaid, overworked people benefit from increased transparency, and it is not surprising to find that the majority would resist its implementation.
- onlyrealcuzzo 5y ago
  > Thus, only the small fraction of underpaid, overworked people benefit from increased transparency, and it is not surprising to find that the majority would resist its implementation. According to your own logic, only a much smaller fraction of business get any significant advantage. What entitles business owners to all the benefits of highly productive workers?
  - echion 5y ago
    > What entitles business owners to all the benefits of highly productive workers? This is exactly why many of those workers go on to start their own businesses, to redirect those benefits to themselves.
- avianlyric 5y ago
  > Thus, only the small fraction of underpaid, overworked people benefit from increased transparency I’m not sure I agree with the basic premise that the majority of people are either paid fairly or overpaid. I suspect the vast majority of people are overworked and underpaid. The lack of real world wage increases, especially when compared to every increasing productivity, strongly suggests that being underpaid is far more likely than being overpaid.
e40 5y ago
Why is transparency a problem here? Transparency in pay or transparency in value to the company? The issue GP had was with disparities in pay and value. If you start being transparent on value, that gets into privacy issues.
jasonkester 5y ago
What would actually happen is 10X you would negotiate to be paid double what your slacker coworkers made. Then they would look at the pay spreadsheet and dedicate the bulk of their time thereafter to complaining to anybody who would listen about how unfair that was. Eventually you’d have to leave or the boss would have to ditch pay transparency. There is no world where 10X people will agree to a 50-75% pay cut, so the only people that will be left in these transparent shops will be the bottom half of the talent pool.
- walshemj 5y ago
  Based on how disclosing CEO pay went it will have an inflationary effect.
- pydry 5y ago
  I've seen pay become transparent (usually by accident) a few times and I've never once seen your scenario happen. If it even did I'm not sure why it would matter. The most normal "outrage" response I've seen is "Bob makes more than Alice even though Bob is less productive". Usually with pay secrecy the employer is covering for the fact that Bob had more leverage when negotiating salary and even though Bob is a profitable employee that they want to keep, Alice is a very profitable employee because she's cheap. If Alice is no longer kept in the dark, she has both additional leverage and an incentive to leave in a fit of pique, neither of which you want for your most profitable employees.

gkop 5y ago

The full comment you are replying to does not disagree with your comment, so your comment appears a non sequitur.

zepto 5y ago

> Transparency could possibly make this better for both the workers and the employers, How exactly? I don’t see any obvious path to this.

onlyrealcuzzo 5y ago
I'm not saying this is the case - but it is possible to imagine a world in which transparency leads to higher pay for more productive employees - which causes them to become even more productive for even more pay. Imagine you're a business and your employees bake pies. Imagine the costs are fixed beside the pie. Imagine the pie costs $1 in ingredients. Imagine the average worker bakes 10 pies per hour, and your marginal profit per pie is $9, and you pay workers $10 per hour. That is the labor cost and supplies for a pie costs $8. Each worker, generates $80 in revenue per hour after inputs and wages. However, you have one worker that bakes 30 pies per hour for $20 per hour. This worker is happy to earn double the average worker. And you, as a business owner, are very happy to make $300-30-20 = $250 per hour in revenue after inputs and wages (3x). However, If the worker is aware of how much more s/he makes - it is possible to imagine the worker becomes even more productive. Maybe the worker can bake 45 pies for $30 per hour (3x). You're paying more per hour per pie, but you're making much more profit per hour = $450 - 45 - 30 = $375 (4.5x).
- hpcjoe 5y ago
  The flip side to this, is that workers who bake 1 pie per hour will demand the same pay as those who bake 10 per hour. Lest their "rights to equal pay" be under threat. Put another way, it will be very ... very difficult to reward good people with higher pay, without consequences. The onus would be on the business to articulate in legal terms, why X should get more than Y. This would open businesses up to lawsuits. I suspect that the net effect of this will be that businesses are going to work much harder at vetting people, and more rapidly letting go staff members who are on the wrong side of the bell curve (say 1 or more sigma below peak) in productivity. I'm not sure this is a good thing, for workers, or for businesses. As they say, the road to hell is paved with good intentions.
  - nathanappere 5y ago
    The parent comment is about adjusting pay for productivity, what is the reasoning behind "in a world where you compensate for productivity, you'll have to pay more employees that are less productive"?
    - nitrogen 5y ago
      The main reason is that people are petty, lawsuits are a very risky roll of the dice, and bad PR can cost a lot more than a bad employee. The other reason is that pay transparency is often anchored to specific credentials and characteristics, and it's often the case that credentials can be orthogonal to work performance. You might have a PhD who can't code who demands higher pay than a HS dropout who designed your entire infrastructure, and the HR department (or lawsuits, or etc) would force you to comply.
    - hpcjoe 5y ago
      Equal pay for "equal work". Two people have the same job. One is 2x as productive as the other. But they would be paid the same, due to a drive for pay equality. Such concepts punish high achievers.
  - onlyrealcuzzo 5y ago
    This is one possible outcome. But it is also possible to not be the outcome [=

hwbehrens 5y ago

> Why is transparency a problem here? > The person doing orders of magnitude more work is probably only getting paid 10% more. You've answered your own question. Transparency is undesirable from an employer's perspective because it encourages a closer alignment between compensation and productivity, and the mismatch between these currently serves as a significant profit advantage to the employer. If I can get 1000% more work from someone, and pay them 10% or 100% more, I am highly incentivized to prevent them from becoming aware of the value of their efforts, because they might realize their (relative) exploitation. At the same time, the less-productive worker also benefits from this lack of transparency because they get ~90% of the pay for 10% of the work. Disrupting the status quo would not be economically rational for them either. Thus, only the small fraction of underpaid, overworked people benefit from increased transparency, and it is not surprising to find that the majority would resist its implementation.

onlyrealcuzzo 5y ago
> Thus, only the small fraction of underpaid, overworked people benefit from increased transparency, and it is not surprising to find that the majority would resist its implementation. According to your own logic, only a much smaller fraction of business get any significant advantage. What entitles business owners to all the benefits of highly productive workers?
- echion 5y ago
  > What entitles business owners to all the benefits of highly productive workers? This is exactly why many of those workers go on to start their own businesses, to redirect those benefits to themselves.
avianlyric 5y ago
> Thus, only the small fraction of underpaid, overworked people benefit from increased transparency I’m not sure I agree with the basic premise that the majority of people are either paid fairly or overpaid. I suspect the vast majority of people are overworked and underpaid. The lack of real world wage increases, especially when compared to every increasing productivity, strongly suggests that being underpaid is far more likely than being overpaid.

e40 5y ago

Why is transparency a problem here? Transparency in pay or transparency in value to the company? The issue GP had was with disparities in pay and value. If you start being transparent on value, that gets into privacy issues.

jasonkester 5y ago

What would actually happen is 10X you would negotiate to be paid double what your slacker coworkers made. Then they would look at the pay spreadsheet and dedicate the bulk of their time thereafter to complaining to anybody who would listen about how unfair that was. Eventually you’d have to leave or the boss would have to ditch pay transparency. There is no world where 10X people will agree to a 50-75% pay cut, so the only people that will be left in these transparent shops will be the bottom half of the talent pool.

walshemj 5y ago
Based on how disclosing CEO pay went it will have an inflationary effect.
pydry 5y ago
I've seen pay become transparent (usually by accident) a few times and I've never once seen your scenario happen. If it even did I'm not sure why it would matter. The most normal "outrage" response I've seen is "Bob makes more than Alice even though Bob is less productive". Usually with pay secrecy the employer is covering for the fact that Bob had more leverage when negotiating salary and even though Bob is a profitable employee that they want to keep, Alice is a very profitable employee because she's cheap. If Alice is no longer kept in the dark, she has both additional leverage and an incentive to leave in a fit of pique, neither of which you want for your most profitable employees.