7 ms·

It is most likely not the ratio part but the median pay of all other employees part. You need to keep an ordered list of the pay of every single other employee

by uiri 12y ago

It is most likely not the ratio part but the median pay of all other employees part. You need to keep an ordered list of the pay of every single other employee and keep it up to date as people join and leave the company. Then there is the issue of accounting for part time or temp workers.

ghshephard 12y ago
I assure you that every company I've ever worked for has had that list of salaries at the tip of their fingers. This would be next to zero additional effort if it's only salary ratio. The problem is - you can easily play games with bonuses, stock options, etc... to make it appear that the CEO has a low salary.
obstinate 12y ago
So like SELECT MEDIAN(salary) FROM employees (That's valid Oracle.) I mean I get that there'd need to be some adjustments to normalize salary to yearly salary and factor in non-cash benefits, but come on.
- hueving 12y ago
  So what you're saying is all that non-technical HR people have ever to do is normalize all of the employee salary data and load it into a database and then run this query? Easy peasy!
- raverbashing 12y ago
  But in production this takes 3 Java developers, 2 Oracle "specialists", one year and a couple million dollars to implement.
  - spacemanmatt 12y ago
    Ah, back when I was a programmer without any SQL/DBA skills, I thought like this too. Now I know better than letting unskilled workers (e.g. lots of so-called DBAs, most developers) develop schemas or queries.
  - srtjstjsj 12y ago
    If you pay them all the median wage, that won't hurt convergence.
- e12e 12y ago
  That was my thought as well. They need those numbers (or some contractor that handles payroll need those numbers) for reporting taxes etc anyway. There's no way that it is "cumbersome" to implement. I mean they need to total them up (salaries) for the quarterly reports -- and making one of those must be far more "cumbersome" than to report on a couple of core business stats...
- ptaipale 12y ago
  The devil is in the details. Those "some adjustments" are not exactly trivial, if they need to be correct and undisputed. And different people may have different requirements for what is "correct". Things get trickier when the company is multinational. You might even be prevented by law from handling the salary data of one country in another. (FWIW, I have some years experience as a line manager in a multinational, with reports in another country; this was not always a breeze even though from what I know, we were a decade or two ahead of most multi-nationals in the level of international integration of corporate IT.)
thwarted 12y ago
If HR or Finance doesn't have this, they aren't doing their job. The company should know exactly how much money is going to payroll every pay period and should know exactly how much they are paying each employee. If they don't know this, the company has bigger problems.
anigbrowl 12y ago
And yet somehow they manage to do a payroll cycle every 2 weeks, produce W-2s every year and so on. I don't get it, obviously this would add up to quite a bit of admin work at a very large company but it's basically the sort of thing you can do very easily with a spreadsheet.
- ptaipale 12y ago
  Assuming you know what data to include and what not. For instance, it is not obvious to me whether the "company" means a company in one country only, or all the legal entities of a multinational. Should you include part-time workers, and if you should how should you do it (the actual pay or the FTE equivalent pay, and what are the FTE hours for different jobs?) It's a quagmire.
  - tannk11001 12y ago
    That doesn't sound like a quagmire, so much as a couple pages of typical regulatory detail.
    - w00kie 12y ago
      That's what GAAP is for no?
  - anigbrowl 12y ago
    If that's too much for someone to deal with they're probably not going to last long as a CEO. This is the kind of thing people have HR departments for, and you're telling me they can't crunch a few numbers? Come off it.
    - notahacker 12y ago
      It's obviously possible to generate a figure; less obvious that the figure is actually meaningful, once people understand that subtle accounting differences like whether to include the salaries of the staff of the Manila office and whether to include total comp for the sales team with very aggressive bonus structures actually has more effect on the headline ratio than an above-market increase in CEO pay. And perversely, laying off workers to outsource their jobs to an offshore BPO firm almost certainly gives the appearance the company is improving the staff pay...
a3_nm 12y ago
> You need to keep an ordered list of the pay of every single other employee and keep it up to date as people join and leave the company. Is it even possible to run a company without having this information somewhere?
- mryan 12y ago
  In most countries, certainly not. The tax office will require this information so it is already being stored somewhere.
  - ptaipale 12y ago
    However, "pay" is different from "wage". What you pay is quite straightforward. What is an equivalent wage or salary is not quite so clear.
    - mryan 12y ago
      Sure, there is a distinction between pay and wage. However, tax offices - at least here in the Netherlands, and the UK - are interested in equivalent wage, rather than the direct salary number.
      - ptaipale 12y ago
        Really? Tax office is not interested on what was actually paid, but a full-time equivalent pay? I mean, let's take someone who is working three days per week (not unusual here) for a compensation of 1500 € per month. That means 60 % of full working time. He or she gets 60 % of "full time" salary. The tax office would want to know the FTE salary of 2500 € per month, and not what was actually paid? I think we're not speaking of the same thing...
        mryan 12y ago
        I think you're right, we're talking about different things :) I misinterpreted your comment - I was thinking of things like company cars, travel benefits etc. being considered part of the taxable pay package.
bandrami 12y ago
What kind of a business doesn't know that already? Now that I think of it, the best-run company I ever worked for was completely open-book; everybody could always see what everybody else was making.
SpaceRaccoon 12y ago
Why yes, I run a company and have no idea how much my employees are compensated, and funnily enough, not even my own salary. This is probably why my books never balance every year. I knew shouldn't have fired our accountant.
jackmaney 12y ago
> You need to keep an ordered list of the pay of every single other employee and keep it up to date as people join and leave the company. Holy shit, you're right! We need a Hadoop cluster with AT LEAST 128 nodes to even come close to the amount of hardware necessary to process such data!

by uiri 12y ago

ghshephard 12y ago

I assure you that every company I've ever worked for has had that list of salaries at the tip of their fingers. This would be next to zero additional effort if it's only salary ratio. The problem is - you can easily play games with bonuses, stock options, etc... to make it appear that the CEO has a low salary.

obstinate 12y ago

So like SELECT MEDIAN(salary) FROM employees (That's valid Oracle.) I mean I get that there'd need to be some adjustments to normalize salary to yearly salary and factor in non-cash benefits, but come on.

hueving 12y ago
So what you're saying is all that non-technical HR people have ever to do is normalize all of the employee salary data and load it into a database and then run this query? Easy peasy!
raverbashing 12y ago
But in production this takes 3 Java developers, 2 Oracle "specialists", one year and a couple million dollars to implement.
- spacemanmatt 12y ago
  Ah, back when I was a programmer without any SQL/DBA skills, I thought like this too. Now I know better than letting unskilled workers (e.g. lots of so-called DBAs, most developers) develop schemas or queries.
- srtjstjsj 12y ago
  If you pay them all the median wage, that won't hurt convergence.
e12e 12y ago
That was my thought as well. They need those numbers (or some contractor that handles payroll need those numbers) for reporting taxes etc anyway. There's no way that it is "cumbersome" to implement. I mean they need to total them up (salaries) for the quarterly reports -- and making one of those must be far more "cumbersome" than to report on a couple of core business stats...
ptaipale 12y ago
The devil is in the details. Those "some adjustments" are not exactly trivial, if they need to be correct and undisputed. And different people may have different requirements for what is "correct". Things get trickier when the company is multinational. You might even be prevented by law from handling the salary data of one country in another. (FWIW, I have some years experience as a line manager in a multinational, with reports in another country; this was not always a breeze even though from what I know, we were a decade or two ahead of most multi-nationals in the level of international integration of corporate IT.)

thwarted 12y ago

If HR or Finance doesn't have this, they aren't doing their job. The company should know exactly how much money is going to payroll every pay period and should know exactly how much they are paying each employee. If they don't know this, the company has bigger problems.

anigbrowl 12y ago

And yet somehow they manage to do a payroll cycle every 2 weeks, produce W-2s every year and so on. I don't get it, obviously this would add up to quite a bit of admin work at a very large company but it's basically the sort of thing you can do very easily with a spreadsheet.

ptaipale 12y ago
Assuming you know what data to include and what not. For instance, it is not obvious to me whether the "company" means a company in one country only, or all the legal entities of a multinational. Should you include part-time workers, and if you should how should you do it (the actual pay or the FTE equivalent pay, and what are the FTE hours for different jobs?) It's a quagmire.
- tannk11001 12y ago
  That doesn't sound like a quagmire, so much as a couple pages of typical regulatory detail.
  - w00kie 12y ago
    That's what GAAP is for no?
- anigbrowl 12y ago
  If that's too much for someone to deal with they're probably not going to last long as a CEO. This is the kind of thing people have HR departments for, and you're telling me they can't crunch a few numbers? Come off it.
  - notahacker 12y ago
    It's obviously possible to generate a figure; less obvious that the figure is actually meaningful, once people understand that subtle accounting differences like whether to include the salaries of the staff of the Manila office and whether to include total comp for the sales team with very aggressive bonus structures actually has more effect on the headline ratio than an above-market increase in CEO pay. And perversely, laying off workers to outsource their jobs to an offshore BPO firm almost certainly gives the appearance the company is improving the staff pay...

a3_nm 12y ago

> You need to keep an ordered list of the pay of every single other employee and keep it up to date as people join and leave the company. Is it even possible to run a company without having this information somewhere?

mryan 12y ago
In most countries, certainly not. The tax office will require this information so it is already being stored somewhere.
- ptaipale 12y ago
  However, "pay" is different from "wage". What you pay is quite straightforward. What is an equivalent wage or salary is not quite so clear.
  - mryan 12y ago
    Sure, there is a distinction between pay and wage. However, tax offices - at least here in the Netherlands, and the UK - are interested in equivalent wage, rather than the direct salary number.
    - ptaipale 12y ago
      Really? Tax office is not interested on what was actually paid, but a full-time equivalent pay? I mean, let's take someone who is working three days per week (not unusual here) for a compensation of 1500 € per month. That means 60 % of full working time. He or she gets 60 % of "full time" salary. The tax office would want to know the FTE salary of 2500 € per month, and not what was actually paid? I think we're not speaking of the same thing...
      - mryan 12y ago
        I think you're right, we're talking about different things :) I misinterpreted your comment - I was thinking of things like company cars, travel benefits etc. being considered part of the taxable pay package.

bandrami 12y ago

What kind of a business doesn't know that already? Now that I think of it, the best-run company I ever worked for was completely open-book; everybody could always see what everybody else was making.

SpaceRaccoon 12y ago

Why yes, I run a company and have no idea how much my employees are compensated, and funnily enough, not even my own salary. This is probably why my books never balance every year. I knew shouldn't have fired our accountant.

jackmaney 12y ago

> You need to keep an ordered list of the pay of every single other employee and keep it up to date as people join and leave the company. Holy shit, you're right! We need a Hadoop cluster with AT LEAST 128 nodes to even come close to the amount of hardware necessary to process such data!