Ask HN: Why are compensation tiers secret? | Hacker News Reader

Ask HN: Why are compensation tiers secret?

43 pointsgigatexal32 comments

Having them so gives the employer all the power as the employee negotiating an increase is left in the dark and with few tools. Not everyone has three offers in their pocket.

It’s annoying that things like Glassdoor have to exist. The economic principle at play is asymmetric information and it sucks.

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Why does it annoy you? Are you concerned that you may not get a fair deal? Less happy that colleagues at the same job level may be getting paid more or less?

To get a balanced perspective it would useful to read up on both sides of the approach. For example, on one end you have Google's Laszlo Bock arguing in his book Work Rules, that its good that Google "pays unfairly" (https://goo.gl/3hWbQw). On the other end, are the Scandinavian countries like Norway where you can walk into a tax office and see anyone's tax return (https://goo.gl/P5WqW1)

Ricardo Perez-Truglia (https://goo.gl/4DemkS) is someone whose research touches this topic. His findings are briefly mentioned in this video (https://goo.gl/m7ECXM)

I find it annoying at the company where I work at because it's impossible for me to determine where I can be financially if I stay with the company for another 2/3/4/5/10 years. I have no idea what the pay grades are for seniors, experts, leads, managers - and HR refuses to answer even a simple question of "if, in 5 years, I am a team lead, how much money could I be making, plus/minus 5k".

One thing I personally looked for is the tenure of senior folks at the companies I used to work at. It is a better indicator of whether it is worth your while staying at a company. As corny as it sounds, money isn't everything. And tenure is a great indicator of "everything considered, is this a good place to invest my working years?"

But I see that you have an immediate need. philosophical and theoretical answers won't help you :-) .

- One useful source I found was http://h1bdata.info/index.php . If your company hires H1B's then this source is gold. - Look at job postings your company does and have a friend who would fit the profile call them and ask for a salary range for that position. - One thing I have found effective is actually asking the "seniors, experts, leads, managers" the question you want answered.

I think this is a good point. The company I used to work for had a different hierarchy that people would get promoted within but it was never made clear a) what you had to do to get that promotion and b) what sort of pay increases got you there. It was a small company that grew into a medium-sized one (30 to 150 people in four years) but any discussion of more formalization or salary bands going forward was poo-poo'd as being "too corporate".

This despite any time annual reviews coming around and there being a round of promotions that would kill morale the following week.

Yeah I am unhappy. I’ve given them 4 years only to find the role I was in had no upward mobility and then I move into a role with an industry standard title and the loyalty and experience I bring from my previous role (non sw dev to sw dev) brought a measly 5% raise.

But I will read your links as I think I might be one sided and / or still jaded.

Most jobs, at least at big employers, are split up into 4 quartile ranges. So bottom 25, lower middle 25, upper middle 25, and upper 25. Obviously super simple, but it helps to realize this framework going in.

You can actually buy textbooks on how to construct payroll guidelines...do this and you can backwards engineer what you should be getting.

At larger companies its pretty easy to see where the delineation is in major pay groupings. It is a pyramid and the top two layers are often paid a lot more (per person) than the rest.

Working at a smaller company (~100-200) it is really hard to know where you stand and what opportunities there are for a promotion/major pay increase.

You may often read on here and elsewhere that you should job change every 2 years and you will see significant pay increases. Major pay bumps in my mind are 10-20% more. This only works to a point and will plateau.

Once you are a senior enough you are in the "top" tier for that role and other paths are actually different skills. Management is not engineering and consulting isn't all engineering either.

Interesting answer. Can you recommend one of those textbooks?

Payroll for Dummies

This kind of attitude frustrates me. It takes the stance that the world should change to make it best for your own personal situation.

Take charge of your own decisions and work out what actions you can do to make your situation better.

https://simpleprogrammer.com/2016/10/10/salary-negotiation-s...

You assume its in the best interest of labor to be "every man for himself". Collective bargaining is a thing, you know?

I think the commenter is aware of collective bargaining, but probably prefers individual bargaining.

It's not really about the "best interest of labor"; personally, I wouldn't work in an industry with collective bargaining.

Why shouldn't it?

While "How can I change to adapt?" may be the more productive reaction to most personal problems, the "This is unfair. How can the world change to accomodate me?" reaction is, in fact, the one that is more altruistic. This is how society discovery ways to improve laws. By complaining intelligently and in a way that considers others' needs besides your own, you are contributing to society.

This is costing you time, therefore you are actually sacrificing something to help others. Yet people always get this condescending reaction from conservatives.

That, and it's just painful to see people endorse unfairness as some kind of natural law. The amount of natural law is very limited. Almost everything is possible, apart from perpetual motion and the like.

I think people just realize that employee pay is often never tied to how much value an employee provides, but rather how much leverage an employee has. This gets confusing as employers often view leverage as value, but it's a different type of value compared to volume of output (which is how many employees would define their value).

So it stands to reason that if employees want to "take charge of their own decisions" it is directly tied to the decisions of their co-workers. You can't increase your leverage if your co-workers deleverage themselves/decide they don't care about money.

I don't understand how you don't understand this.

Valid points

>Having them so gives the employer all the power

That's why they are secret; nothing more to it.

Making all salaries public will almost certainly mean your wage costs go up. There are bound to be a range of different salaries given to people doing the same job. So all the ones at the bottom end will be turning up to the annual review demanding to be uplifted to match their peers. If they are turned down then they are likely to leave or just be less productive because they are not happy. Any need people recruited can see the public salaries and therefore negotiate a better pay deal than they might have otherwise.

It is hard to find a case where making the salaries public does not lead to higher wage costs.

For proper capitalistic and rational decisions to be made both parties need as much information to make wise decisions. Lower skilled workers might demand higher wages but they can be told no and they can leave. There’s plenty of supply of contract workers to fill the gaps but in the end it will leave firms with people who are not only happy with the compensation packages they have also the products or services or tech stack the firm is creating / using.

I think government and military have standardised pay grades.

This is correct. Everyone knows what everyone else is making. Part of why rank and the "pecking order" are so much more pronounced and obsessed over.

> Everyone knows what everyone else is making.

How wide are the grades? I know a few corporate places that have "standard pay grades" except they're normally wide enough to grant managers almost laughable latitude in what they pay people on the same grade. There's at least one place I know which has a single grade covering £40k to £80k.

The solution to this is not to hide data (it's illegal in the US to forbid employees talking about it with each other anyway, which means they can compile a list of what everyone's making).

The solution is to take salary negotiation out of it. Flat pay structure within a job title/level, with criteria laying out what the requirements are for each title and each level, solves this immediately, and rather than turning into "Why should Bob make more than me when I work as hard", turns into "Here's what we need to see in order to promote you to Widget Adjuster level 3, would you like to work out a plan for how to get there?"

I think in reality that doesn't work either. When they want to promote you they can gloss over certain criteria.

When they don't to give you pay rise, they can point to oddly specific criteria

I think it's just common sense. Employers leave it up to you to share your income or not. Feel free to share your numbers with your colleagues... you'll quickly realize that nobody wants to share this kind of information. Which is the real answer to your question ;)

In Germany, it's impossible for employers to tell their employees not to talk about their salaries. It collides with §2 of the German constitution.

Not completely secret. You can find recent data with very specific salary ranges: http://thestartupconference.com/2017/03/25/the-350k-google-s...

Well then let’s fix this. Post below with your title, years of exp, and salary in USD (sans bonuses or stock etc.).

SW Dev Lvl 1 : 0 years : 76k

But your post highlights the inherent problems with just listing people's experience and salary:

- location matters - two people in the same industry, same experience, same title , different locations may have very different salaries

- equity and bonus matters - some people want to structure their comp for more upside in an exit, others want more base, some people like bonuses. A sales person at an enterprise software company might make 165k base and then make another 165k in commission and bonus

- "experience" is variable - if i spent four years as an engineer, before spending 1 year as a product manager, do I have 5 years of experience or 1?

Simply listing numbers makes it difficult to assess whether you really are over-or-under-paid relative to your peers.

Don't forget selection bias as well. People who may earn outside the already reported range are more likely to not report IMO.

true -- it's not great but it's a start. Just knowing some basics would be a boost.

This made my heart stop for a second.

SW Dev Senior : 17 years : 35k (EUR)

sad

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