4 ms·
Think of it more as supply/demand and marginal revenue. To simplify - a company should hire more/pay more until the marginal value of that employee < the margi
by jtsiskin 4y ago
Think of it more as supply/demand and marginal revenue.
To simplify - a company should hire more/pay more until the marginal value of that employee < the marginal employee cost.
If the 2nd best option for CEO would result in increased revenue by 1%, and the best option by 3%, then it makes sense to pay up to 2% of revenue to get that better CEO.
Compare that with the best SWE option (in terms of marginal cost vs marginal gain) vs the 2nd best candidate.
Compared to the CEO, the SWE may be far more intelligent, more hardworking, and directly improve the product more. But pay is unfortunately not based on that or any notion of “fairness”
- joshstrange 4y ago> But pay is unfortunately not based on that or any notion of “fairness” That’s somewhat the entire purpose of this HN post though. I understand how we got here, I think it’s stupid and silly. Furthermore I don’t for a second believe that the information exists to actually make the calculations you list. There is literally no way to determine those percentages, it’s all a guess and often a bad guess IMHO.
- whitesilhouette 4y agoThe fundamental reason why sales people are paid more than the Devs and the CEO more than Sales simply comes out of the difference in the knowledge of how much they know of the product's worth. The Dev never knows that the product would fetch 2000x of how much he is getting paid for creating it, whereas the Sales guy has a better picture. That's why the Dev never asks for that money in return for creating that product and hence he never gets paid that much. The CEO on the other hand, has the complete picture of the cost, profits as well as any changes in market forces that might impact the product, hence taking out 200x the Dev's remuneration, still sparing for the handouts to the other guys.