Comment by figmert
3 years ago
Why shouldn't Dave and Cathy know what Bob is earning? They're the same level, they should earn the same.
3 years ago
Why shouldn't Dave and Cathy know what Bob is earning? They're the same level, they should earn the same.
While I support all efforts at increasing information transparency, I disagree that prices need to be the same. It is possible that humans are sufficiently different in the quality of the labor they are selling that a buyer might price them differently.
For example, I am willing to pay a higher price for someone has 10 years of experience and is less likely to make mistakes or other desirable qualifies more than someone who has 0 years of experience, even though they are doing the same work.
The problem with your example is that you are making the assumption that someone with 10 years of experience is less likely to make mistakes in practice than the person with 0 years of experience. I've seen several examples over my career where the technically "more experienced" individual is not truly the better suited for the job. You won't know that until you hire them and, in my opinion, is a good reason for why you should pay someone based on the job (so long as they qualify for it). It doesn't mean that everyone needs to make exactly the same amount, because I think there is an argument to be made for someone who has more tenure at a company to retain them and for their role-specific experience. But that shouldn't be a >5% difference.
Also, I don't see how people can't see that this is precisely the logic that contributes to women generally getting paid less for doing the same job. Anecdotally, I joined a company and had about 7 years of experience. My "peers" in performing exactly the same duties as me had probably about 25 years of experience. I was responsible for the 2nd largest revenue generating P&L that generated the highest profit margin (which I actually turned around from losing money in 6 months). I found out I was getting paid $70k less than "my peers." Are you going to tell me that despite performing the exact same job and actually performing it objectively "better" that I should have made less money? This is the kind of stuff that routinely happens to women.
> I've seen several examples over my career where the technically "more experienced" individual is not truly the better suited for the job. You won't know that until you hire them and, in my opinion, is a good reason for why you should pay someone based on the job (so long as they qualify for it).
We go through life making a lot of guesses and utilizing a lot of prior probabilities. Work history is, in my experience, one of the stronger signals available to us.
If an employer initially pays an employee less due to less track record, then finds out the employee is as good as other employees, and does not adjust the pay, then that employer is stupid and will eventually lose the good employees to places with better management. Assuming employees have access to sufficient labor pricing data and can see they can earn more elsewhere.
> But that shouldn't be a >5% difference.
What is the basis for this cutoff?
> Are you going to tell me that despite performing the exact same job and actually performing it objectively "better" that I should have made less money?
You should have made whatever the maximum you could negotiate. If this employer did not want to pay you more, you should switch employers. A good employer would have paid you much more than the others.
>This is the kind of stuff that routinely happens to women.
No, your example is bad management incentivizing bad employees and turning away good employees.
Women being paid less due to being women is illegal discrimination.
2 replies →
No, you clearly should have been making more, which is the other side of the "compensation for jobs that differ should not be mandated to be the same" argument.
Are you saying that "despite performing the exact same job and actually performing it objectively 'better' that they should have made the same money"?
I have software engineers on my team who are literally creating twice as much business [edit to add: value] per year despite being at the same level. (The actual peak to trough ratio is probably higher than that, but it's at least 2x.) Why should they be paid exactly the same or even within 5% of each other?
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Isn’t difference in experience one aspect that is represented by different levels? In other words, it’s not the same work if experience vastly differs.
It could be, but I do not see why it has to be. And “vastly” is a nebulous term, maybe an employer wants to classify “levels” more or less broadly, and wants to reward within “levels”, I don’t know, I just don’t see a need to prescribe a very specific system of employee management.
They're at the same level, but maybe not doing the same job. Even if they're nominally in the same "job code" the actual mechanics of what they are doing, the sensitivity of their work, the skills required for success, the markets/industries they are operating in, the pay scale where they live, the level of functional support they are receiving may all be substantially different. Of course there may also be other decisions such as upping salary to entice an employee not to accept that other job offer they got (do you want to remove pay leverage of looking for jobs elsewhere by mandating same salaries?), or any such other consideration.
Individual pay isn't some 2+2=4 math equation, it's multifactorial. Now any company with good internal controls would have people in some sort of band where for comparable (not identical) work there's a range of normalcy relative to the value the work provides in the given markets the labor is occurring.
> the actual mechanics of what they are doing, the sensitivity of their work, the skills required for success, the markets/industries they are operating in
Surely these are all criteria that should determine your level. What's the point of levels if you're saying each level consists of arbitrary other levels?
I agree that a range should be public, but an employee's salary should remain within the range for their level. If they're demonstrably more valuable to the company, they should be promoted within a transparent structure.
All of these things can substantially vary within a single internal level (or external benchmark grade). Why would your physical location determine your level? Why would your career level change if you're doing the same type of work as someone, but using a technology or skillset that is more rare and thus commands a higher premium in the marketplace? Another example: two people doing the same type of accounting work, but one of them has to get national security clearance for the group they cover - same level, same job, but the barriers to entry for one of those jobs will create a substantial compensation variance (but the level doesn't change).
Organizational leveling criteria and compensation criteria are certainly related, but not interchangeable. Organizational leveling criteria is a reflection of your internal hierarchy of authority, decision making, and accountability. Compensation criteria considers that to a degree, but also accounts for more externalities, individual organizational differences, and at times a reflection of strategic priorities.
What does “same level” even mean then?
Organizational leveling criteria is a reflection of your internal hierarchy of authority, decision making, and accountability. Compensation criteria considers that to a degree, but also accounts for more externalities, individual organizational differences, and at times a reflection of strategic priorities.
These things are related certainly, but they cannot be considered interchangeable of you will find yourself over-paying for labor or losing recruiting battles to your talent competitors due to underpaying. Believe me - most organizations would love nothing more than to just pay everyone the same and be able to retain their desired stuff and stay competitive in the market. Compensation activities are a drain.
It's a matter of perspective.
From a worker point of view, being open about what we're earning will help bring to light if we're being exploited.
From a business owner point of view, employees having this knowledge disturbs the power imbalance employers enjoy when it comes to compensation negotiations.
I think more people than you'd expect in HN are in the latter camp. This site was launched as Startup News, after all.
Most users are workers who haven't figured out they aren't capitalists yet.
Temporarily Embarrassed Millionaires.
Most haven't also realized that just because they work in software, it doesn't mean the world hasn't changed. The times of Microsoft's IPO creating tens of thousands of millionaires and multiple billionaires are gone. Until the next big platform pops up, things are not frozen, but stuck in mud.
The biggest Windows apps have probably been the same since 20 years ago. The biggest MacOS apps, same. The biggest iOS apps probably stabilized at least 5 years ago. Android, same.
Quoting kids: game's gone.
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Everyone at the same level is not the same. At most companies people can expect to be in level for a few years.
Pay scales are ranges not points. You want to be able to reward good performers higher than lesser performers, even in the same level, so that the incentives are aligned. Promotions to a next level are part of this but those only happen every few years for most people.
Why should everyone at the same level earn the same? There are still differences in skill and willingness to work for a given range.
"Willingness to work for a given range" gets exploited by employers at the expense of employees. It helps prop up structural (gender/race) pay gaps and breeds distrust among employees as some salaries inevitably leak out.
The structural pay gaps exist because salaries are not public in the first place.
Paying less due to gender and race is already illegal. The only reason it prevailed is because proving it is difficult if you do not have access to the data.
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Why should they earn the same? They’re not the same person.
Why have levels then?
Generally as a business scales it makes sense to add processes and standardization. But levels do not have to dictate equal salary. People are different, with different motivations, assets, and leverage.
Personally, throughout my career I've actively tried to earn less than coworkers. It gives me more wiggle room to goof off, makes my similar accomplishments look/feel a bit more impressive, and helps keep me off the chopping block at layoff time. I actively don't want to be paid the same as somebody with the same job title/level as me.
And I can understand why someone who adds more in terms of output and contribution would want to earn more than someone else who adds less.
Of course, there's (what I see as) good pay inequality and bad pay inequality (that which is driven by systemic injustice, discrimination, etc.). If a company thinks standardized salaries are the best way to fight that, that's a choice they're welcome to make.
That's communism. In companies, one's salary is related with his/her output or salary negotiation skills.. Dave, Cathy and Bob could be in the same level, where the salary range fluctuates between 60k - 95k. Who is where, depends of the both factors mentioned above.
> They're the same level, they should earn the same.
No, they shouldn't. They should earn exactly as much as they can get their employer to pay them. I've worked hard in my career, I've negotiated hard for pay at new jobs, raises, bonuses, promotions, etc. Some people don't. If I'm not going to be able to negotiate my pay, by definition I'm going to be making less. Why in the world would I want that?