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Comment by saagarjha | Hacker News Reader

> The document also discussed how the proposals could be best presented to employees to minimize frustration, according to one of the people.

> The document said this could be rolled out without upsetting staff because workers didn’t know what the existing rate was, so wouldn’t notice if it declined.

I really don't know what they expected. You're cutting the salaries of your employees; the best case, yet highly unlikely scenario is that nobody notices. More likely, your attrition rate will increase as Google becomes slightly less attractive for employees to stay at, or the worst case but highly likely scenario is that you have these slides get out and now everyone is unhappy because they're being paid less and having information willfully hidden from them.

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GF worked at a game company. When she started they'd give bonuses based on the profits. Later they changed bonuses based on how well the company beat Wall Streets expectations.

Really demoralizing when the company posts a fat profit, the top managers take home a large bonus, you you get nothing because the quarterly profit was a little under expectations.

I'd be surprised if there haven't been economic studies on this type of action. So either the executives don't care, as they know people are replaceable and it won't hurt the company either way, or they don't care as they know they will be moving on soon enough, and they just want to milk their positiion for what they can.

Would they get a bonus if the company lost a ton of money, but less than the analysts expected?

How was her average total compensation affected by the change?

Seen this a few time in my career, "sorry guys, I know we had another record quarter/year, but we didn't make our stretch goals so there won't be any bonus". Then you read the filing which all public companies must do and it details 7- and 8-figure payouts to the big bosses.

Also, on a side note, I wonder if companies are trying to impress when they say that you bonus could be "up to" 10% or 20% of your salary. They way I read it is that no matter how well you do and how well the company does, your upside is capped!

No, they were discussing cutting the number of promotions. If say, the top 10% of people got promotions and now only the top 8% did, no one person can easily notice that they would've gotten promoted but now didn't.

I was immediately reminded of a scene from "Office Space": "Peter: You’re gonna lay off Samir and Michael?... Do they know this yet?

Bob: No! No, of course not! We find it’s always better to fire people on a Friday. Studies have statistically shown that there’s less chance of an incident if you do it at the end of the week."

It's all so hilariously penny-wise and pound-foolish.

> You're cutting the salaries of your employees

They were allegedly cutting their bonuses, not salaries. That's a pretty significant difference if you ask me.

I'm using the term loosely to describe total compensation.

I understand; counting bonuses as a regular part of your compensation is dangerous though. While it is a part of your compensation, the employer is fully within their right to reduce or raise this part as much as they see fit.

Getting angry because of this is rather strange. That's precisely what you sign up for with bonuses: "This part is variable and may go up or down."

Yes, I see your point; slashing base salary is different than not paying a bonus or significantly reducing it. However, the net effect is still the same: employees take home less money, and their estimation of how much they can "expect" to get is thrown off. The change here is actually more insidious, because it takes advantage of the fact that employees don't actually know what the "average" bonus is, so by tweaking it a few percent is unlikely to be noticed by any individual employee.

Even when the bonus formula is well-known and fairly standardized, to the degree that is consistently paid out over a long period, people start thinking of it as effectively part of their salary. If it goes away or is significantly reduced because of company performance or whatever, it's taking away money people were (even if somewhat irrationally) putting in the sure thing bucket.

If Google is like Facebook in this respect then a senior engineer who "meets expectations" in a performance review stands to make at least 15-20% of their salary as a bonus. If you get below "meets expectations" you are probably going to be fired very soon. Hence your "meets expectations" bonus target is essentially no less guaranteed than the base compensation you would also lose out on if you were fired. The bonus target at companies like this is not an "above and beyond" bonus. There are bonus multipliers (and potentially non-standardized discretionary equity bonuses) for higher than expected performance.

It is not uncommon for recruiters to specify the expected value of bonuses as part of selling the position. If the bonuses are subsequently slashed, this feels bad, even though you don't have it guaranteed by your contract.

It is dangerous, but it is also fairly common if the bonuses are all but guaranteed and make up a significant part of the total compensation.

And giving less of a bump on promotion.

So someone promoted 2 years ago? They may be on a not insignificant amount more than you for no other reason than timing.

> The document also discussed how the proposals could be best presented to employees to minimize frustration, according to one of the people.

These approaches always annoy me as it feels the company's leadership is unable to talk straight to their employees. E.g. my employer had some layoffs recently. The language used internally was that some people were "impacted" by "proposed changes". This language was used by so many execs in different business areas that it was clear that there was some top down direction that this was how they should be referred to. Is it that hard to just say "We missed our revenue targets, so we had to lay off some people"?

As someone caught up in this I welcome the Tesla approach...

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