5 ms·

This is a valiant effort but I wonder how the practical allocation of the jobs is determined. If the market salary for an employee is 50k, if you raise it to 70

by bko 12y ago

This is a valiant effort but I wonder how the practical allocation of the jobs is determined. If the market salary for an employee is 50k, if you raise it to 70k, you will probably have a lot more applicants than positions. Do the current employees get grand-fathered into the job despite more qualified candidates? When hiring new employees, how do you decide among the increasing rank of equally qualified candidates? That being said, a bump in pay will almost certainly help reduce costs associated with retention and retraining and may turn out to be a good business decision, not to mention the publicity.

pc86 12y ago
Are otherwise qualified employees fired the moment a more qualified candidate expresses interest in their job? I don't see that being an issue. Perhaps what determines "qualified" will increase along with pay? I think it will certainly increase the overall quality of employees over time, and this may push out the least capable folks over time. Has there been any comment by the higher-paid-but-by-no-means-rich contingent of the company? I imagine there are quite a few developers, engineers, and other technical folks in the $90-125k+ range there whom this does not affect directly, but may impact their ability to get raises? The article states company profits are going from $2MM to $500k so the odds of this impacting someone's 3% raise if they make $125k is slim but still a possibility depending on team size and composition (I would think).
- bko 12y ago
  This kind of broad policy will almost certainly have unintended consequences that will be interesting to watch play out.
  - cookiecaper 12y ago
    I agree. Realistically I think this will be a short-lived experiment; everyone who got the raise will keep it, but I wouldn't be surprised if they go back to paying new hires a market-competitive salary within 12 months.
borgia 12y ago
>a bump in pay will almost certainly help reduce costs associated with retention and retraining and may turn out to be a good business decision, not to mention the publicity. I was thinking about this when reading the article myself. It has to help retention as it instantly becomes less desirable to move company if the market salary is far below what your current company is paying, which is what this will do. For the time being it's great for all involved. The employees benefiting from it should be careful in terms of how they adjust their lifestyle based on the extra income though, because if the company went under or there were redundancies or similar they are almost assuredly going to experience a significant drop in their earnings.
officemonkey 12y ago
Think about it: how much does the lowest paid staffer make there? 25,000? 30,000? These lower-paid staff will be very loyal, because they're getting a very significant and possibly life-changing raise. They're not going to quit on you, and they're not going to kill the golden goose. Recruitment has real costs. Hiring and training, and dealing with the hiring mistakes you make, all cost money. Having a happy staff saves a lot of money, time, and headaches.
- albinoloverats 12y ago
  > They're not going to quit on you, and they're not going to kill the golden goose. Especially if by going somewhere else they have to take a significant cut.
- rhino369 12y ago
  I also wonder if this company even has low paid staffers. The business I work for doesn't directly employ anyone under ~60k. Instead the kitchen staff, the cleaning people, the mail room, document processing people, etc. etc. are all contracted out.
  - JTon 12y ago
    Actually, it's a significant chunk. From the article: > After Monday's announcement, anybody making less than $50,000 -- more than half of the company's 120 employees -- immediately got bumped up to at least $50,000, according to a company spokesman. The minimum will increase to $60,000 by the end of 2016 and $70,000 by the end of 2017.
- Shivetya 12y ago
  can we really make this assumption? if everyone is paid the same where is the incentive to do more? how is morale affected in the reverse when you know you make as much as someone else who decides to slack? while there are some benefits to increasing salary very large increases may negatively affect those already at a higher pay scale and some may dissociate effort with reward. now if you dangle the carrot out there as a truly obtainable reward for meeting fair targets, then it truly becomes incentive for both retention and reward
ukigumo 12y ago
Is there a direct correlation between higher qualifications and better performance and output? If having two equally qualified employees, is their salary requirement the only decisive distinction? I think this experiment will have quite a few positive net outcomes (publicity, reduction of cost with recruitment and retention, etc) but on the longer run employees making 70k will automatically know that they are on the lowest pay scale so I'm unsure how that will work out.
- cookiecaper 12y ago
  It can definitely foment discontent when, say, a low-mid-level software engineer pulls the same as clerical workers. I wonder if that will have any effect on the company's ability to hire professionals. Maybe they'll expect a commensurate salary bump; if you're paying 1.8x the normal salary for a clerical or support worker, shouldn't you pay 1.8x the normal salary for a professional? What kind of message does that send about how much the company values professionals, and will pros be more comfortable at companies with more conventional pay structures (even though I doubt any would admit that publicly)?
  - ukigumo 12y ago
    That could be one way of doing things (all salaries raise in proportion to the minimum). It would make the company highly attractive for prospective employees and raise the stakes for current staff so would be an interesting "experiment".
- emodendroket 12y ago
  I think that if you're looking at the entire field and see that, in terms of the entire market, you're being well-compensated, you probably wouldn't spend a lot of time being resentful of other people in your company. I guess I could be wrong.
  - ukigumo 12y ago
    That would be definitely the case if your salary is way above market standards, but if ~70k is around what you would be making anywhere else, then it would like be a stress factor. I mean, this is just a supposition I'm making. Maybe all salaries raise in line with the minimum.

by bko 12y ago

pc86 12y ago

Are otherwise qualified employees fired the moment a more qualified candidate expresses interest in their job? I don't see that being an issue. Perhaps what determines "qualified" will increase along with pay? I think it will certainly increase the overall quality of employees over time, and this may push out the least capable folks over time. Has there been any comment by the higher-paid-but-by-no-means-rich contingent of the company? I imagine there are quite a few developers, engineers, and other technical folks in the $90-125k+ range there whom this does not affect directly, but may impact their ability to get raises? The article states company profits are going from $2MM to $500k so the odds of this impacting someone's 3% raise if they make $125k is slim but still a possibility depending on team size and composition (I would think).

bko 12y ago
This kind of broad policy will almost certainly have unintended consequences that will be interesting to watch play out.
- cookiecaper 12y ago
  I agree. Realistically I think this will be a short-lived experiment; everyone who got the raise will keep it, but I wouldn't be surprised if they go back to paying new hires a market-competitive salary within 12 months.

borgia 12y ago

>a bump in pay will almost certainly help reduce costs associated with retention and retraining and may turn out to be a good business decision, not to mention the publicity. I was thinking about this when reading the article myself. It has to help retention as it instantly becomes less desirable to move company if the market salary is far below what your current company is paying, which is what this will do. For the time being it's great for all involved. The employees benefiting from it should be careful in terms of how they adjust their lifestyle based on the extra income though, because if the company went under or there were redundancies or similar they are almost assuredly going to experience a significant drop in their earnings.

officemonkey 12y ago

Think about it: how much does the lowest paid staffer make there? 25,000? 30,000? These lower-paid staff will be very loyal, because they're getting a very significant and possibly life-changing raise. They're not going to quit on you, and they're not going to kill the golden goose. Recruitment has real costs. Hiring and training, and dealing with the hiring mistakes you make, all cost money. Having a happy staff saves a lot of money, time, and headaches.

albinoloverats 12y ago
> They're not going to quit on you, and they're not going to kill the golden goose. Especially if by going somewhere else they have to take a significant cut.
rhino369 12y ago
I also wonder if this company even has low paid staffers. The business I work for doesn't directly employ anyone under ~60k. Instead the kitchen staff, the cleaning people, the mail room, document processing people, etc. etc. are all contracted out.
- JTon 12y ago
  Actually, it's a significant chunk. From the article: > After Monday's announcement, anybody making less than $50,000 -- more than half of the company's 120 employees -- immediately got bumped up to at least $50,000, according to a company spokesman. The minimum will increase to $60,000 by the end of 2016 and $70,000 by the end of 2017.
Shivetya 12y ago
can we really make this assumption? if everyone is paid the same where is the incentive to do more? how is morale affected in the reverse when you know you make as much as someone else who decides to slack? while there are some benefits to increasing salary very large increases may negatively affect those already at a higher pay scale and some may dissociate effort with reward. now if you dangle the carrot out there as a truly obtainable reward for meeting fair targets, then it truly becomes incentive for both retention and reward

ukigumo 12y ago

Is there a direct correlation between higher qualifications and better performance and output? If having two equally qualified employees, is their salary requirement the only decisive distinction? I think this experiment will have quite a few positive net outcomes (publicity, reduction of cost with recruitment and retention, etc) but on the longer run employees making 70k will automatically know that they are on the lowest pay scale so I'm unsure how that will work out.

cookiecaper 12y ago
It can definitely foment discontent when, say, a low-mid-level software engineer pulls the same as clerical workers. I wonder if that will have any effect on the company's ability to hire professionals. Maybe they'll expect a commensurate salary bump; if you're paying 1.8x the normal salary for a clerical or support worker, shouldn't you pay 1.8x the normal salary for a professional? What kind of message does that send about how much the company values professionals, and will pros be more comfortable at companies with more conventional pay structures (even though I doubt any would admit that publicly)?
- ukigumo 12y ago
  That could be one way of doing things (all salaries raise in proportion to the minimum). It would make the company highly attractive for prospective employees and raise the stakes for current staff so would be an interesting "experiment".
emodendroket 12y ago
I think that if you're looking at the entire field and see that, in terms of the entire market, you're being well-compensated, you probably wouldn't spend a lot of time being resentful of other people in your company. I guess I could be wrong.
- ukigumo 12y ago
  That would be definitely the case if your salary is way above market standards, but if ~70k is around what you would be making anywhere else, then it would like be a stress factor. I mean, this is just a supposition I'm making. Maybe all salaries raise in line with the minimum.