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The intro explicitly sets up its core point in contrast to the practice you mentioned (“Though firms have relied upon performance-based variable pay for some ti

The intro explicitly sets up its core point in contrast to the practice you mentioned (“Though firms have relied upon performance-based variable pay for some time”) Further: “As a labor management practice, algorithmic wage discrimination allows firms to personalize and differentiate wages for workers in ways unknown to them, paying them to behave in ways that the firm desires, perhaps for as little as the system determines that the workers may be willing to accept.18 Given the information asymmetry between workers and firms, companies can calculate the exact wage rates necessary to incentivize desired behaviors, while workers can only guess how firms determine their wages.19” This is different from, and may produce different effects to (that’s that the paper’s about! I haven’t had time to read it all yet, but will tonight) something like a transparent productivity-based pay rate or bonus. The paper may not hold up (I think the main idea of it alone is interesting, though) but it is not about productivity-based bonus or pay structures.

WalterBright 2y ago
Companies always pay as little as the workers will accept. The workers always go for as much pay as they can get. This is the Law of Supply & Demand. There's nothing sinister about it, it's the way markets work. Companies will not pay more than the value a worker creates minus the opportunity cost. Measuring this value makes for more accurate control of costs. > workers can only guess how firms determine their wages The companies can only guess what the workers determine their lowest acceptable pay is. > information asymmetry Googling what similar jobs pay is only a click away. And why should the companies show their cards? Workers don't show their cards, either. That's not how markets work. When was the last time you said to employer: "I want $100,000, but the absolute minimum I'll accept is $80,000."? The company doesn't know if the candidate is going to be a top performer or a quiet quitter, but the candidate knows that.
- vundercind 2y ago
  The article is about significant changes in the capabilities of companies to do the things you say they want to do, with more information and at a finer degree and much faster pace than before. It’s the linked PDF on the site, if you want more than the intro on the page.

WalterBright 2y ago

Companies always pay as little as the workers will accept. The workers always go for as much pay as they can get. This is the Law of Supply & Demand. There's nothing sinister about it, it's the way markets work. Companies will not pay more than the value a worker creates minus the opportunity cost. Measuring this value makes for more accurate control of costs. > workers can only guess how firms determine their wages The companies can only guess what the workers determine their lowest acceptable pay is. > information asymmetry Googling what similar jobs pay is only a click away. And why should the companies show their cards? Workers don't show their cards, either. That's not how markets work. When was the last time you said to employer: "I want $100,000, but the absolute minimum I'll accept is $80,000."? The company doesn't know if the candidate is going to be a top performer or a quiet quitter, but the candidate knows that.

vundercind 2y ago
The article is about significant changes in the capabilities of companies to do the things you say they want to do, with more information and at a finer degree and much faster pace than before. It’s the linked PDF on the site, if you want more than the intro on the page.