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> Having employees not discuss salary is all about the employer having more power/control, and the employees having less. You seem to imply that just because t

by laureny 13y ago

> Having employees not discuss salary is all about the employer having more power/control, and the employees having less. You seem to imply that just because the employees know all the salaries, they have more control. This is not accurate. They have more knowledge but certainly not more control. If anything, the fact that the salaries are the result of a simple equation means that the employees have close to no control over the money they make. Also, a lot of factors contribute to the productivity of an employee, most of which cannot be accounted for in a simplistic equation, things such as working long hours, working on weekends, good attitude, willing to take on unpopular tasks, etc...

phillmv 13y ago
>They have more knowledge but certainly not more control. Knowledge is power, as they say. Industry wide wage negotiation is basically a collective action problem; publicizing your wages lowers the barriers/cost for negotiating for higher wages. Most people are, by definition, paid less than their marginal value and thus have some leeway for a raise to begin with. Besides, it works for CEOs: http://www.newyorker.com/talk/financial/2013/10/21/131021ta_talk_surowiecki http://www.newyorker.com/talk/financial/2013/10/21/131021ta_...
kosei 13y ago
Though I think that's why this is a good solution: it still provides the company with wage control while creating transparency for the employees.
- A1kmm 13y ago
  It is not beneficial to the company over individual wage negotiation. Suppose V_i is the amount of value the ith employee contributes to the business (V_i = revenue from employee i, minus non-salary costs). For the business, the hire makes sense if the salary is anything in (-inf, V_i) - but with the lower the better. Presumably, the company believes that their computed salary (call it S_{f,i}) is such that S_{f,i} < V_i for all employees. However, there are things that the formula doesn't take into account - for example, an employee might be bad at negotiating, and be willing to accept a salary below S_{f,i}, or they might have something in their history (e.g. a conviction) that means that it is hard for them to find alternative work and they are willing to work for less if told to take it or leave. Similarly, a very good prospective employee might be currently paid S_{c,i} in (S_{f,i}, V_i), or an existing employee might have received a counter offer S_{c,i} in (S_{f,i}, V_i) - it is rational for the business to offer S_{c,i} (or another number between S_{c,i} and V_i) to gain / keep that employee, but it isn't in their interest to give every employee the same pay rise.
  - kazagistar 13y ago
    This post might be better without the mathematical abstraction. > An employer wants to pay their employee as little as they can get away with, as long as it is less then the value that employee provides. Presumably, this company set such salaries. > However, there are things that the formula doesn't take into account - they lose the ability to screw bad negotiators and convicts out of money. > Similarly, if people are offered higher salaries elsewhere, it might be worth it for the company to counter-offer with something still less then the employees value to them to keep that employee, but they don't want to do the same for everyone.
city41 13y ago
I disagree they don't have more control. If the salaries are out in the open, then pay disparages would need to get addressed. Those who are severely underpaid would look for another job, so the company would need to give them a raise and fix the situation. I've known plenty of very good employees who were severely underpaid simply because they didn't know any better.
grecy 13y ago
> You seem to imply that just because the employees know all the salaries, they have more control. This is not accurate. No. I'm saying that because the employees know all the salaries, the employer has less control. The employer can no longer dictate terms and make secret differing deals with different parties.
- laureny 13y ago
  > No. I'm saying that because the employees know all the salaries, the employer has less control. How does the employer have less control when he is unilaterally deciding what the formula is and he can stonewall any request to discuss salary by hiding behind that formula? "You know what, Dave, I know you want more money but I just decided to add a negative 'is disrepectful of superiors' factor' and your salary just went down $5k. Isn't transparency great?".
  - grecy 13y ago
    > How does the employer have less control when he is unilaterally deciding what the formula is and he can stonewall any request to discuss salary by hiding behind that formula? Once everyone knows the employer is doing that kind of BS, they will go elsewhere, and the employer will be left with no employees. Employment is not some kind of privilege we should be thankful for. Remember that.
    - mynewwork 13y ago
      > Employment is not some kind of privilege we should be thankful for. Remember that. So someone is compelled to provide me with employment? By what force and why? Am I automatically entitled to employment at any company of my choosing? Can I decide that you, Grecy, are responsible for employing me?
      - svmegatron 13y ago
        No. The employment contract is a business arrangement. Describing it in such value-laden terms does a disservice to all parties. One is employed presumably because the arrangement is mutually beneficial; if it stops being mutually beneficial the arrangement is renegotiated or terminated.
nilkn 13y ago
This isn't true. In the posted numbers, there aren't any major discrepancies between people doing the same job. But imagine if you saw two programmers with roughly the same background and experience with a $20k+ difference in salary. The reason you don't see that is precisely because the salaries are public. Your error is assuming that the same formula would be used if the salaries weren't public. The employer is forced to use a simple, consistent formula. They would be under no such pressure if all salaries were secret.

by laureny 13y ago

phillmv 13y ago

>They have more knowledge but certainly not more control. Knowledge is power, as they say. Industry wide wage negotiation is basically a collective action problem; publicizing your wages lowers the barriers/cost for negotiating for higher wages. Most people are, by definition, paid less than their marginal value and thus have some leeway for a raise to begin with. Besides, it works for CEOs: http://www.newyorker.com/talk/financial/2013/10/21/131021ta_talk_surowiecki http://www.newyorker.com/talk/financial/2013/10/21/131021ta_...

kosei 13y ago

Though I think that's why this is a good solution: it still provides the company with wage control while creating transparency for the employees.

A1kmm 13y ago
It is not beneficial to the company over individual wage negotiation. Suppose V_i is the amount of value the ith employee contributes to the business (V_i = revenue from employee i, minus non-salary costs). For the business, the hire makes sense if the salary is anything in (-inf, V_i) - but with the lower the better. Presumably, the company believes that their computed salary (call it S_{f,i}) is such that S_{f,i} < V_i for all employees. However, there are things that the formula doesn't take into account - for example, an employee might be bad at negotiating, and be willing to accept a salary below S_{f,i}, or they might have something in their history (e.g. a conviction) that means that it is hard for them to find alternative work and they are willing to work for less if told to take it or leave. Similarly, a very good prospective employee might be currently paid S_{c,i} in (S_{f,i}, V_i), or an existing employee might have received a counter offer S_{c,i} in (S_{f,i}, V_i) - it is rational for the business to offer S_{c,i} (or another number between S_{c,i} and V_i) to gain / keep that employee, but it isn't in their interest to give every employee the same pay rise.
- kazagistar 13y ago
  This post might be better without the mathematical abstraction. > An employer wants to pay their employee as little as they can get away with, as long as it is less then the value that employee provides. Presumably, this company set such salaries. > However, there are things that the formula doesn't take into account - they lose the ability to screw bad negotiators and convicts out of money. > Similarly, if people are offered higher salaries elsewhere, it might be worth it for the company to counter-offer with something still less then the employees value to them to keep that employee, but they don't want to do the same for everyone.

city41 13y ago

I disagree they don't have more control. If the salaries are out in the open, then pay disparages would need to get addressed. Those who are severely underpaid would look for another job, so the company would need to give them a raise and fix the situation. I've known plenty of very good employees who were severely underpaid simply because they didn't know any better.

grecy 13y ago

> You seem to imply that just because the employees know all the salaries, they have more control. This is not accurate. No. I'm saying that because the employees know all the salaries, the employer has less control. The employer can no longer dictate terms and make secret differing deals with different parties.

laureny 13y ago
> No. I'm saying that because the employees know all the salaries, the employer has less control. How does the employer have less control when he is unilaterally deciding what the formula is and he can stonewall any request to discuss salary by hiding behind that formula? "You know what, Dave, I know you want more money but I just decided to add a negative 'is disrepectful of superiors' factor' and your salary just went down $5k. Isn't transparency great?".
- grecy 13y ago
  > How does the employer have less control when he is unilaterally deciding what the formula is and he can stonewall any request to discuss salary by hiding behind that formula? Once everyone knows the employer is doing that kind of BS, they will go elsewhere, and the employer will be left with no employees. Employment is not some kind of privilege we should be thankful for. Remember that.
  - mynewwork 13y ago
    > Employment is not some kind of privilege we should be thankful for. Remember that. So someone is compelled to provide me with employment? By what force and why? Am I automatically entitled to employment at any company of my choosing? Can I decide that you, Grecy, are responsible for employing me?
    - svmegatron 13y ago
      No. The employment contract is a business arrangement. Describing it in such value-laden terms does a disservice to all parties. One is employed presumably because the arrangement is mutually beneficial; if it stops being mutually beneficial the arrangement is renegotiated or terminated.

nilkn 13y ago

This isn't true. In the posted numbers, there aren't any major discrepancies between people doing the same job. But imagine if you saw two programmers with roughly the same background and experience with a $20k+ difference in salary. The reason you don't see that is precisely because the salaries are public. Your error is assuming that the same formula would be used if the salaries weren't public. The employer is forced to use a simple, consistent formula. They would be under no such pressure if all salaries were secret.