5 ms·

> high performing employees are now effectively taking a massive pay cut due to the salary freeze and inflation? If any “high-performing employee” feels like t

by csa 3y ago

> high performing employees are now effectively taking a massive pay cut due to the salary freeze and inflation? If any “high-performing employee” feels like they are taking a “massive pay cut” merely due to inflation, then something is wrong. Either they were grossly underpaid to begin with (change jobs, it can be done if you’re that good and that low paid), they aren’t actually that good (so total comp package, including RSUs and refreshers, is relatively weak), or they have a warped perception of the value of money. If a dev is pulling in 300k+ (standard, especially the +, at places like MS), and the cost of eggs, rent, or restaurant food is something they actually notice and impacts their day-to-day life, then I wish them the best of luck — they will need it.

fzeroracer 3y ago
A paycut is a paycut no matter how you try to spin it. If someone's earning 150k a year with 5% inflation and doesn't get a raise the next year matching inflation, they are quite literally taking a 5% pay cut in comparison to changing jobs which likely offers salaries starting at the post-inflation level. In this case it's worse because not only are their salaries not going up, but the things nominally used to get around raising salaries (bonuses, stock) is also not going up. You trying to spin it by saying 'well they're earning 300k+ a year anyways' is not helping your point when there are plenty of junior and mid-level engineers earning far below that which are going to be most impacted.
- csa 3y ago
  My thesis is that many of them, especially at places that grew a lot during covid like MS, were/are overpaid relative to their skill set / ability to add value. Cutting positions was one way to correct this. Freezing salaries is another. If any devs hired during covid think that their salary was totally justified and shouldn’t be cut directly or indirectly, then they are more likely than not delusional. It was a frothy hiring market, and the upward pressure on salaries across the board was not healthy for the overall tech ecology, imho (the smaller companies couldn’t afford competent devs). Note that I am actually an advocate of tech corps sharing more of the spoils with their employees, but not in the way that it happened during the pandemic. Reward competence selectively rather than randomly rewarding just being a warm butt in a seat during a hiring boom. I have no doubt that during this “pay freeze” at MS, the star performers will still be rewarded somehow.
  - fzeroracer 3y ago
    Okay, but there's a core flaw in your argument: Microsoft has already cut jobs, and now they're freezing salaries for everyone. You're effectively trying to say that everyone at Microsoft deserves a pay cut and that their salary is unjustified, which seems a fair bit more delusional. It seems to me you're working backwards from the position of 'Microsoft is justified in what they're doing' and then continuing to adjust your position in order to make that statement true. Given that Microsoft is still extremely valued according to their stock prices and that their earnings are higher than ever, citing market conditions as a reason to cut salaries when your market condition is positive reeks of bullshit.
    - csa 3y ago
      > You're effectively trying to say that everyone at Microsoft deserves a pay cut and that their salary is unjustified Key employees and high performers will be rewarded at MS and elsewhere. It just won’t be announced in a press release. If you want to disagree with me or think that what I say is bullshit, that’s fine. The market will have the final say. I’m just a pundit on a message board. Imho, this move by MS, which will probably be followed by others, is just them exercising their options on their side of the labor market. If folks don’t like it, they can leave and/or change careers. There will almost certainly be a little bit of collateral damage, but I imagine that most of the high value-add people will be happy with their pay packages while keeping their mouths shut.
      - Firmwarrior 3y ago
        I wish I could short MSFT, but it still seems like a bad move. The whole company is built around being just barely good enough and hard enough to remove that they stick around forever from inertia The products are all going to keep getting worse as they lose the talent to maintain or upgrade them meaningfully, but it'll take a long time for the company to fade away
listenallyall 3y ago
Inflation impacts big-ticket items as well... home prices, college tuition, VIP Disney tours, backyard pool builders, etc
dclowd9901 3y ago
What is the natural conclusion of your argument? That if you make “enough”, you shouldn’t make more? Hogwash.
- csa 3y ago
  The natural conclusion is that jobs (at least in the US) are a type of labor market. There is push and pull on both sides. During the pandemic, the market heavily favored employees. The market now favors employers. The direction of the price of labor seems to have been more or less appropriate during each of these periods. On a personal level, I don’t have much sympathy for folks whose worst experience in a labor downturn is simply not getting an inflation adjustment — it’s about the mildest correction in defined labor costs/benefits that can happen to them. I don’t think these folks realize how close to having no job they and/or their current peers actually are — that would really suck. To the issue of whether MS should make this move or not (esp. given their financials), that’s a different issue. As I have mentioned elsewhere, I think that there will be quite a bit of quiet total comp boosts to favored folks — RSUs, retention bonuses, spot bonuses, promotions, “promotions” (e.g., different title, same job), etc. Salary curves are rarely smooth and unidirectional over the course of a career. Most folks, in fact, will have a very spiky salary curve. I think many folks who came into tech after 2009 or so just haven’t seen or experienced this spiky curve, and their limiter range of expectations is showing.

by csa 3y ago

fzeroracer 3y ago

A paycut is a paycut no matter how you try to spin it. If someone's earning 150k a year with 5% inflation and doesn't get a raise the next year matching inflation, they are quite literally taking a 5% pay cut in comparison to changing jobs which likely offers salaries starting at the post-inflation level. In this case it's worse because not only are their salaries not going up, but the things nominally used to get around raising salaries (bonuses, stock) is also not going up. You trying to spin it by saying 'well they're earning 300k+ a year anyways' is not helping your point when there are plenty of junior and mid-level engineers earning far below that which are going to be most impacted.

csa 3y ago
My thesis is that many of them, especially at places that grew a lot during covid like MS, were/are overpaid relative to their skill set / ability to add value. Cutting positions was one way to correct this. Freezing salaries is another. If any devs hired during covid think that their salary was totally justified and shouldn’t be cut directly or indirectly, then they are more likely than not delusional. It was a frothy hiring market, and the upward pressure on salaries across the board was not healthy for the overall tech ecology, imho (the smaller companies couldn’t afford competent devs). Note that I am actually an advocate of tech corps sharing more of the spoils with their employees, but not in the way that it happened during the pandemic. Reward competence selectively rather than randomly rewarding just being a warm butt in a seat during a hiring boom. I have no doubt that during this “pay freeze” at MS, the star performers will still be rewarded somehow.
- fzeroracer 3y ago
  Okay, but there's a core flaw in your argument: Microsoft has already cut jobs, and now they're freezing salaries for everyone. You're effectively trying to say that everyone at Microsoft deserves a pay cut and that their salary is unjustified, which seems a fair bit more delusional. It seems to me you're working backwards from the position of 'Microsoft is justified in what they're doing' and then continuing to adjust your position in order to make that statement true. Given that Microsoft is still extremely valued according to their stock prices and that their earnings are higher than ever, citing market conditions as a reason to cut salaries when your market condition is positive reeks of bullshit.
  - csa 3y ago
    > You're effectively trying to say that everyone at Microsoft deserves a pay cut and that their salary is unjustified Key employees and high performers will be rewarded at MS and elsewhere. It just won’t be announced in a press release. If you want to disagree with me or think that what I say is bullshit, that’s fine. The market will have the final say. I’m just a pundit on a message board. Imho, this move by MS, which will probably be followed by others, is just them exercising their options on their side of the labor market. If folks don’t like it, they can leave and/or change careers. There will almost certainly be a little bit of collateral damage, but I imagine that most of the high value-add people will be happy with their pay packages while keeping their mouths shut.
    - Firmwarrior 3y ago
      I wish I could short MSFT, but it still seems like a bad move. The whole company is built around being just barely good enough and hard enough to remove that they stick around forever from inertia The products are all going to keep getting worse as they lose the talent to maintain or upgrade them meaningfully, but it'll take a long time for the company to fade away

listenallyall 3y ago

Inflation impacts big-ticket items as well... home prices, college tuition, VIP Disney tours, backyard pool builders, etc

dclowd9901 3y ago

What is the natural conclusion of your argument? That if you make “enough”, you shouldn’t make more? Hogwash.

csa 3y ago
The natural conclusion is that jobs (at least in the US) are a type of labor market. There is push and pull on both sides. During the pandemic, the market heavily favored employees. The market now favors employers. The direction of the price of labor seems to have been more or less appropriate during each of these periods. On a personal level, I don’t have much sympathy for folks whose worst experience in a labor downturn is simply not getting an inflation adjustment — it’s about the mildest correction in defined labor costs/benefits that can happen to them. I don’t think these folks realize how close to having no job they and/or their current peers actually are — that would really suck. To the issue of whether MS should make this move or not (esp. given their financials), that’s a different issue. As I have mentioned elsewhere, I think that there will be quite a bit of quiet total comp boosts to favored folks — RSUs, retention bonuses, spot bonuses, promotions, “promotions” (e.g., different title, same job), etc. Salary curves are rarely smooth and unidirectional over the course of a career. Most folks, in fact, will have a very spiky salary curve. I think many folks who came into tech after 2009 or so just haven’t seen or experienced this spiky curve, and their limiter range of expectations is showing.