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There has been a recent trend in tech discussions to have greater transparency in compensation, and more importantly, removing negotiation from employment proce

There has been a recent trend in tech discussions to have greater transparency in compensation, and more importantly, removing negotiation from employment procedure (see recent changes at Reddit). I fear that this move would dramatically hurt startups, who need all the flexibility they can get. Moreover, this move could dramatically kill any form of cohesiveness in startups. Lastly, this move would de-emphasize the importance the skill of negotiation, which would be a detriment to the company. To those who don't know, most large companies already have a structured pay table. Try working at AT&T or McDonalds, and you can probably predict where your salary will be in the next 5-10 years. Real negotiation for most people in most positions mainly happens in small firms and startups. Lack of salary negotiation will only scare away well qualified candidates who don't fit some arbitrarily made rubric (which will almost always back out to years worked, which is a terrible standard). Imagine if by paying 20k extra, you can get one of those mythical "10x rockstar" engineers. Would you remove your ability to hire him? By opening up everyone's salaries, it will only hurt the startup culture, as it will only make people dislike each other. I often found engineers and business development people devalue each others work, in large part because neither party can understand the work of the other. Imagine them knowing each others salaries! Each side can find a justification on why they are being under-compensated while the other over-compensated. Startups need cohesiveness to survive. Lastly negotiation is a valuable skill in the workplace. Interviews reward people who can handle stress and negotiate. Imagine a shipping date is imposed upon you, and not all the features can be included. You're going to want a leader on the engineering team to negotiate with the strategy makers to find an equitable solution. De-emphasizing negotiation is de-emphasizing a critical human skill.

derefr 11y ago
Publicizing salary just requires, as a prerequisite, publicizing the objective value each employee is adding to the company. Which requires everyone agreeing on an objective standard for calculating that value. Once you have that, kbowing salary isn't nearly as scary. On the other hand, once you have that, people will start actually thinking of their peers in terms of being high- or low-ROI...
- dylanjermiah 11y ago
  Most will not see not see if as their coworkers objective value. You're dealing with people of emotion, not objectivity.
dogecoinbase 11y ago
By opening up everyone's salaries, it will only hurt the startup culture... This is completely true, though perhaps not for the reasons you put forth. "Startup culture", as it currently exists, is a mechanism for VCs to consume recent CS grads who don't know how much they're worth and extract as much value from them as possible before they get a family/house/realization of how they should actually be compensated. Startups and VCs use their information asymmetry as regards salaries to exploit this inefficiency in the compensation market. Imagine if by paying 20k extra, you can get one of those mythical "10x rockstar" engineers. Would you remove your ability to hire him? You haven't removed your ability to hire them at all by being transparent about compensation -- you simply now have to be able to justify that to your team. If you are unable to justify it, that should tell you all you need to know about what "10x" means. Recognizing that someone is tricking you by using guilt to convince you to suppress your own salary is the first step of learning how to negotiate effectively.
rcoder 11y ago
I seriously disagree with just about every point in this. First off, transparency != lack of negotiation. It just means that your colleagues might be able to see the outcome of that negotiation. Even with salary bands you still need to determine where in the band you land on day 1, and those bands are often wide enough (10-15%) to allow quite a lot of flexibility. Also, most "large corporations" will have many job descriptions and titles indicating seniority: an Engineer II will have a wildly different salary band from Principal Engineer, leaving plenty of room for negotiation on hire. Second, there is basically no way to determine that someone is a "10x" engineer (if such even exists) via an interview. Decades of studies across the industry have shown that interviews are a terrible means of assessing potential performance, and unless you've worked with someone on an essentially identical product in a similar company before you can't predict their output now. (Also, see above re: strawman argument about not being able to move $20k for an exemplary candidate.) Third, if you can't build trust across teams (with or without visible salary info) you have much deeper problems than your comp being public. Fix this before everything else. If you're building "cohesiveness" by implying to your staff that every other teams makes less money (and is therefore less valued) you're setting yourself up for real problems down the road. Finally, salary negotiation is a very different beast than feature and scope negotiation. The former assumes a selfish if not antagonistic stance ("get as much as I can") while the latter should be collaborative ("deliver the best possible outcome given our constraints"). People who are good at the former may or may not have the empathy and vision needed to deliver on the latter.
DougWebb 11y ago
...this move would de-emphasize the importance the skill of negotiation, which would be a detriment to the company. And it would benefit the employees of the company, who are disadvantaged because they only negotiate salary every now and then vs the hiring manager who does it all of the time, and who also has insider information on what the company is willing to pay and what everyone else in the same position is earning. For an employee, knowing that your company, and probably your manager, reduced your income simply because they could is not very good for morale and loyalty to the company. ...some arbitrarily made rubric...years worked, which is a terrible standard Totally agree with you there. Structured pay tables have to be based on more meaningful metrics than seniority and job title. I got glass-ceiling by that for a long time because I didn't want to switch from development to management, and my company (CTO and his toadies) didn't want to let me join the Architects group. ...engineers and business development people devalue each others work...Each side can find a justification on why they are being under-compensated while the other over-compensated. That's true, but the business development people tend to be more highly compensated, work fewer hours and more regular schedules, and have much more political power within the organization. It'd be better if there were objective metrics for measuring everyone's value that both sides could understand, so they don't devalue each other. Everyone doesn't have to get paid equally in order for everyone to get paid fairly, and if a startup can cultivate a culture where everyone feels they're being treated fairly, they're going to be a great place to work. Interviews reward people who can handle stress and negotiate. Also people who are good at "faking it until they make it" and other techniques that work well for interviewing but not so much for doing the job. I don't think taking the salary negotiation out of the interview would reduce the stress level much, or the interviewers ability to judge how the interviewee handles stress. You're going to want a leader on the engineering team to negotiate with the strategy makers to find an equitable solution. No, you want a leader on the engineering team and a leader with the strategy makers to collaborate on finding the best solution for the company's needs. There should be no negotiation involved at all. This is mathematical constraint-solving, not deal-making.
thedufer 11y ago
> this move would de-emphasize the importance the skill of negotiation, which would be a detriment to the company Can you explain this a bit more? Because poor negotiators are paid easily half as much as good ones in this industry, but the amount of my value that hinges on my negotiating ability is somewhere between 0 and 1%.

derefr 11y ago

Publicizing salary just requires, as a prerequisite, publicizing the objective value each employee is adding to the company. Which requires everyone agreeing on an objective standard for calculating that value. Once you have that, kbowing salary isn't nearly as scary. On the other hand, once you have that, people will start actually thinking of their peers in terms of being high- or low-ROI...

dylanjermiah 11y ago
Most will not see not see if as their coworkers objective value. You're dealing with people of emotion, not objectivity.

dogecoinbase 11y ago

By opening up everyone's salaries, it will only hurt the startup culture... This is completely true, though perhaps not for the reasons you put forth. "Startup culture", as it currently exists, is a mechanism for VCs to consume recent CS grads who don't know how much they're worth and extract as much value from them as possible before they get a family/house/realization of how they should actually be compensated. Startups and VCs use their information asymmetry as regards salaries to exploit this inefficiency in the compensation market. Imagine if by paying 20k extra, you can get one of those mythical "10x rockstar" engineers. Would you remove your ability to hire him? You haven't removed your ability to hire them at all by being transparent about compensation -- you simply now have to be able to justify that to your team. If you are unable to justify it, that should tell you all you need to know about what "10x" means. Recognizing that someone is tricking you by using guilt to convince you to suppress your own salary is the first step of learning how to negotiate effectively.

rcoder 11y ago

I seriously disagree with just about every point in this. First off, transparency != lack of negotiation. It just means that your colleagues might be able to see the outcome of that negotiation. Even with salary bands you still need to determine where in the band you land on day 1, and those bands are often wide enough (10-15%) to allow quite a lot of flexibility. Also, most "large corporations" will have many job descriptions and titles indicating seniority: an Engineer II will have a wildly different salary band from Principal Engineer, leaving plenty of room for negotiation on hire. Second, there is basically no way to determine that someone is a "10x" engineer (if such even exists) via an interview. Decades of studies across the industry have shown that interviews are a terrible means of assessing potential performance, and unless you've worked with someone on an essentially identical product in a similar company before you can't predict their output now. (Also, see above re: strawman argument about not being able to move $20k for an exemplary candidate.) Third, if you can't build trust across teams (with or without visible salary info) you have much deeper problems than your comp being public. Fix this before everything else. If you're building "cohesiveness" by implying to your staff that every other teams makes less money (and is therefore less valued) you're setting yourself up for real problems down the road. Finally, salary negotiation is a very different beast than feature and scope negotiation. The former assumes a selfish if not antagonistic stance ("get as much as I can") while the latter should be collaborative ("deliver the best possible outcome given our constraints"). People who are good at the former may or may not have the empathy and vision needed to deliver on the latter.

DougWebb 11y ago

...this move would de-emphasize the importance the skill of negotiation, which would be a detriment to the company. And it would benefit the employees of the company, who are disadvantaged because they only negotiate salary every now and then vs the hiring manager who does it all of the time, and who also has insider information on what the company is willing to pay and what everyone else in the same position is earning. For an employee, knowing that your company, and probably your manager, reduced your income simply because they could is not very good for morale and loyalty to the company. ...some arbitrarily made rubric...years worked, which is a terrible standard Totally agree with you there. Structured pay tables have to be based on more meaningful metrics than seniority and job title. I got glass-ceiling by that for a long time because I didn't want to switch from development to management, and my company (CTO and his toadies) didn't want to let me join the Architects group. ...engineers and business development people devalue each others work...Each side can find a justification on why they are being under-compensated while the other over-compensated. That's true, but the business development people tend to be more highly compensated, work fewer hours and more regular schedules, and have much more political power within the organization. It'd be better if there were objective metrics for measuring everyone's value that both sides could understand, so they don't devalue each other. Everyone doesn't have to get paid equally in order for everyone to get paid fairly, and if a startup can cultivate a culture where everyone feels they're being treated fairly, they're going to be a great place to work. Interviews reward people who can handle stress and negotiate. Also people who are good at "faking it until they make it" and other techniques that work well for interviewing but not so much for doing the job. I don't think taking the salary negotiation out of the interview would reduce the stress level much, or the interviewers ability to judge how the interviewee handles stress. You're going to want a leader on the engineering team to negotiate with the strategy makers to find an equitable solution. No, you want a leader on the engineering team and a leader with the strategy makers to collaborate on finding the best solution for the company's needs. There should be no negotiation involved at all. This is mathematical constraint-solving, not deal-making.

thedufer 11y ago

> this move would de-emphasize the importance the skill of negotiation, which would be a detriment to the company Can you explain this a bit more? Because poor negotiators are paid easily half as much as good ones in this industry, but the amount of my value that hinges on my negotiating ability is somewhere between 0 and 1%.