8 ms·

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

by zepto 5y ago

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 [=
- mdorazio 5y ago
  If I'm understanding your example here, you're basically arguing in favor of per-piece pay rather than fixed. This has its own set of challenges, for example imagine if developers got paid by the line of code rather than by the quality/efficacy of their code. Outside of physical item production jobs it gets tricky to make per-piece systems work without getting gamed to hell.
  - onlyrealcuzzo 5y ago
    Possibly. You could also pay a salary and adjust it based on productivity. In theory, that's something like how raises and bonuses are supposed to work.
    - zepto 5y ago
      Can you think of a transparent way to measure developer productivity?
      - onlyrealcuzzo 5y ago
        One possible option is to make ratings and pay public. If you think your rating doesn't make sense, or your rating does make sense, but your pay is lower than people with much lower ratings - then you have a case to argue. Of course - this could be just as nepotistic as the current system. But I think transparency is bad for nepotism long-term. Usually the most corrupt governments and organizations are the most opaque. Developers aren't really that different from bakers. You could bake 45 pies in 1 hour, and they could all be terrible pies that can't be sold, and you could burn down half the bakery in the process. In the same way, a developer could ship a bunch of features, but they could all be "half-baked" and a nightmare to maintain. You could also try to define metrics for what quality and productivity are. But people will just game that. Ratings can also easily be gamed or nepotistic.
        zepto 5y ago
        I don’t see you answering the question. You don’t propose any mechanism for rating productivity, and you come up with some potential problems. > Developers aren’t really that different from bakers. I suspect very few people would agree with this. Only with an answer to this question does what you have argued so far apply to knowledge work.
- zepto 5y ago
  Ok, so in low wage situations where workers do repetitive work independently, I agree that this could work, however even in your scenario it’s hard to see how the employer would justify taking more profit for the excess performance. In any case, this piecework example doesn’t seem to be relevant to this forum. Can you describe an example that would apply to programmers or other knowledge workers? What about people who work in teams?
  - onlyrealcuzzo 5y ago
    The agency model is really not that much different from baking pies. If one of your developers is consistently able to finish projects substantially faster than other developers - you as a company are supposed to accurately estimate project difficulty and thus pricing (of course this is very hard to do accurately). Your input costs are just wages, and your revenues are how much you charge for projects.
- mywittyname 5y ago
  When the in cases where the productivity measurement scheme is this straightforward, you'll find a lot of positions offer bonuses or incentives for hitting metrics. Or maybe just quotas that serve to inform the worker that any addition work is unnecessary. After all, you pointed out all the obvious reasons that this makes sense. The reason the vast majority of jobs don't work this way is because productivity is rarely: A) so easily measured B) so easily mapped to revenue. A 0.1x person whose maintenance work generates real revenue contributes more to the bottom line than a 100x worker in the same position whose project is scrapped for whatever reason.
- walshemj 5y ago
  That's not how piece work, works in reality. A fast worker will slow down when measured to game the system - it's one of the reasons why those Amazon workers piss in bottles. There are a lot of "industrial practices" that most HN commentators will not have come across.

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

by 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 [=
mdorazio 5y ago
If I'm understanding your example here, you're basically arguing in favor of per-piece pay rather than fixed. This has its own set of challenges, for example imagine if developers got paid by the line of code rather than by the quality/efficacy of their code. Outside of physical item production jobs it gets tricky to make per-piece systems work without getting gamed to hell.
- onlyrealcuzzo 5y ago
  Possibly. You could also pay a salary and adjust it based on productivity. In theory, that's something like how raises and bonuses are supposed to work.
  - zepto 5y ago
    Can you think of a transparent way to measure developer productivity?
    - onlyrealcuzzo 5y ago
      One possible option is to make ratings and pay public. If you think your rating doesn't make sense, or your rating does make sense, but your pay is lower than people with much lower ratings - then you have a case to argue. Of course - this could be just as nepotistic as the current system. But I think transparency is bad for nepotism long-term. Usually the most corrupt governments and organizations are the most opaque. Developers aren't really that different from bakers. You could bake 45 pies in 1 hour, and they could all be terrible pies that can't be sold, and you could burn down half the bakery in the process. In the same way, a developer could ship a bunch of features, but they could all be "half-baked" and a nightmare to maintain. You could also try to define metrics for what quality and productivity are. But people will just game that. Ratings can also easily be gamed or nepotistic.
      - zepto 5y ago
        I don’t see you answering the question. You don’t propose any mechanism for rating productivity, and you come up with some potential problems. > Developers aren’t really that different from bakers. I suspect very few people would agree with this. Only with an answer to this question does what you have argued so far apply to knowledge work.
zepto 5y ago
Ok, so in low wage situations where workers do repetitive work independently, I agree that this could work, however even in your scenario it’s hard to see how the employer would justify taking more profit for the excess performance. In any case, this piecework example doesn’t seem to be relevant to this forum. Can you describe an example that would apply to programmers or other knowledge workers? What about people who work in teams?
- onlyrealcuzzo 5y ago
  The agency model is really not that much different from baking pies. If one of your developers is consistently able to finish projects substantially faster than other developers - you as a company are supposed to accurately estimate project difficulty and thus pricing (of course this is very hard to do accurately). Your input costs are just wages, and your revenues are how much you charge for projects.
mywittyname 5y ago
When the in cases where the productivity measurement scheme is this straightforward, you'll find a lot of positions offer bonuses or incentives for hitting metrics. Or maybe just quotas that serve to inform the worker that any addition work is unnecessary. After all, you pointed out all the obvious reasons that this makes sense. The reason the vast majority of jobs don't work this way is because productivity is rarely: A) so easily measured B) so easily mapped to revenue. A 0.1x person whose maintenance work generates real revenue contributes more to the bottom line than a 100x worker in the same position whose project is scrapped for whatever reason.
walshemj 5y ago
That's not how piece work, works in reality. A fast worker will slow down when measured to game the system - it's one of the reasons why those Amazon workers piss in bottles. There are a lot of "industrial practices" that most HN commentators will not have come across.