And how do they arrive at the budgeted number? Lots of companies want to ensure they are paying a sufficiently high number to get sufficiently capable employees in a competitive market. While many (including me) find things like Pave gross, it's not a one way street, they can push wages up.
You’re thinking of the actual budget for a position not what a company could in theory budget.
A small businesses owner who pays themselves whatever is left over after expenses doesn’t care about what other companies pay, the company only has so much money. Apple could increase salaries up to the point where they make zero profit, but the goal is profit maximization not salary maximization.
It’s fundamentally the attempt to limit salaries that causes companies to look at the overall market.
The limit on pay is the amount of money they can budget to the position not what other people are paying.
And how do they arrive at the budgeted number? Lots of companies want to ensure they are paying a sufficiently high number to get sufficiently capable employees in a competitive market. While many (including me) find things like Pave gross, it's not a one way street, they can push wages up.
You’re thinking of the actual budget for a position not what a company could in theory budget.
A small businesses owner who pays themselves whatever is left over after expenses doesn’t care about what other companies pay, the company only has so much money. Apple could increase salaries up to the point where they make zero profit, but the goal is profit maximization not salary maximization.
It’s fundamentally the attempt to limit salaries that causes companies to look at the overall market.
7 replies →