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Comment by ng12 | Hacker News Reader

People have written books on this stuff. There's an entire field of research on this subject and I think tech people discount it for being "too MBA".

One of the most important findings is that pay generally will never motivate employees, but it will reduce their incentive to leave. Generally most job factors affect one of two separate but related scales: motivation to stay and reluctance to leave. Entirely non-surprising that devs are the ones who left because by hard capping their pay you are reducing their reluctance to go work somewhere else with higher pay.

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> Entirely non-surprising that devs are the ones who left because by hard capping their pay you are reducing their reluctance to go work somewhere else with higher pay.

The surprising part is that their dev retention (article notes small sample size) of ~3 years matches Google at 3.1 years and surpasses Uber, Dropbox, Tesla, Facebook and Airbnb. [1] That suggests that the culture created by the one-salary experiment increases the motivation to stay enough to offset the incentive to leave.

[1]: https://www.businessinsider.com/average-employee-tenure-rete...

Well, maybe. Or it shows that they hired people who were relatively comp insensitive, possibly due to being unable to command higher wages elsewhere. Hard to know.

Isn’t that what was said?

They were saying this specific company might have a biased group of devs who are abnormally insensitive to salary, thereby removing its value for a generalized conclusion.

The first comment said that the culture is so good that devs don't leave even with capped salary. The next comment said (politely) that maybe they don't leave because they are for some reason unable to command top-tier salaries.

iwantmyname says they've had ~20 employees. You can't compare a company like that to Google, Uber, Tesla, etc, who've got multiple orders of magnitude more employees.

20 employees is down in the range where noise dominates. I’m not sure exactly how many employees are required for statistical significance, but it has to be in the hundreds.

Totally depends on the effect size and the threshold at which you're evaluating statistical significance. If their churn were 10x higher than Google's, 20 employees over 10 years would probably be enough to confirm the difference at a high level of confidence. But if their "true" long-run churn is "only", say, 10% higher than FAANG and friends, you would need a much larger sample to identify that.

N.B.: Even a 10% increase in employee churn is expensive in general, and even more so when your recruiters make as much as your senior engineers.

Depends how senior the devs in question were and how competitive their interviewing abilities were. Junior devs who don't interview well are easier to retain for example.

Also, top companies have a problem because they are top companies. Working there is a signal to other employers that you're top talent as vetted by a top company. That increases the values of offers thrown at you and eventually one may be enough to pry you out.

I guess it depends on how much of the culture is generated by that point. It could be that the culture could be good _despite_ this, or some other angle.

I imagine that this policy is a consequence of some good internal culture

If their base salary is decent, then it might not be surprising at all. Determining whether an individual stays in a particular job involves multiple weighted variables. To give an example, once an individual has a base level of financial security, salary could easily become less important than time spent with loved ones. But there are some people who will give the maximum weighting to money no matter what, and companies which optimize for this variable will always need to outcompete all other companies on salary to retain employees. In this case, it's no surprise that their retention rates are relatively low. Looking at the article that you referenced, I notice that the companies with the highest retention rates aren't the ones with reputations as having the highest salaries.

Note that they're also New Zealand-based - I don't know the numbers but I wouldn't be surprised if average retention there is a bit higher than the Bay Area. (Someone correct me if they have stats that say otherwise!)

That BI article is confused.

The title says "here's how long the average employee stays at the biggest tech companies" (retention), but then it goes on to give stats about average tenure.

If your company doubles in size every year, then your average tenure is going to be very low--most people just started recently! You simply cannot use average tenure as a proxy for retention or turnover.

The OP makes the same mistake, which is where I stopped reading.

One of the most important findings is that pay generally will never motivate employees

Grow up poor, and see how much pay motivates you. I think never is too strong a word.

This myth is perpetuated by people who never tried to motivate people with money.

Worse, they've tried to motivate people with pathetically small amounts of money

>I gave you a 25 cent raise over minimum wage! Why aren't you happy!

Do you need the best devs in the world to be the n-0000th domain registrar?

> One of the most important findings is that pay generally will never motivate employees, but it will reduce their incentive to leave.

Having talked to a crowd of senior people who were leaving their jobs recently, I think there's a lot to be said about money as a 3rd factor when switching jobs further down in your career.

Raising someone pay to match only works when the other factors for their departure are going to be addressed (and there, I've had people tell me "Deciding to leave was very hard and changing it back is even harder").

However, motivating people to perform at their best is entirely independent of that - most of the good people I worked with merely wanted to make an impact and receive the help they need in doing that.

Pay is one of those things, because money enables people - when someone is having a new baby & a salary bump helps her with daycare needs, can be a win-win.

I have switched companies four times in my career. Every time so far pay has been one of the top two drivers.

I can see that. A business is in business to make money. If we’re making money and the executives are getting bonuses and raises and I don’t get raises, I’m out. And if you tell me I’m not getting a raise because we’re “family” Im gonna puke on ya on the way out.

Switch the topic to executive compensation, and all of the reasonable research-based arguments about how much does money really motivate a person go out the window.

I've been in the situation where I was able to build a team with salaries 20-30% over market. It was great while things were great, but after the commercial side of the business went to hell, the higher salaries kept a bunch of unmotivated people from seeking greener pastures. Double-edged sword to be sure.

What’s the difference between motivation to stay and reluctance to leave?

I think that should have been “motivation to work.”

If I had to guess, differing incentives. Both are synonymous for "why they stay" but with different base reasons.

I view this generally:

Motivation to stay is being directly excited by the work you’re doing or the thing you’re building. You want to work where you are. If another opportunity comes along you probably wouldn’t consider it.

Resistance to leaving means you’re at a pleasant place to work, the money is good, and you like your job, but you’re not super excited about the thing you’re building. If another opportunity came along you might jump if it’s something you really want to do (this is harder if your current pay is high and job is pleasant).

Think about someone who works at an non-profit NGO versus someone who works an 80 hour week at an investment bank. The NGO worker might only be making $30k/year but he stays because he really cares about his work. The investment banker might hate his job and hate the long hours but stay because of the high salary he'd be unlikely to match elsewhere. The NGO worker has high motivation and low reluctance, the i-banker has the opposite.

The actual technical term for this is motivation vs. hygiene: https://en.wikipedia.org/wiki/Two-factor_theory

Well, ibanker making 300k and working 9-6 is a thing. Get the best of both worlds.

I think they are referring to Herzberg? https://en.m.wikipedia.org/wiki/Two-factor_theory

Sounds like a different way to express that.

Yes, thank you. This is what I was looking for.

I think motivation to stay is the positive. Like you genuinely like going to your job.

Reluctance to leave is that even if you don't like your job, leaving is even more painful, maybe due to the loss of salary, or because the interview process is too much of a hassle, or other opportunities are just as bad if not worse, etc.

The way I think about it is motivation relates to the things you actively enjoy about your job. These are the "here are the neat things I do at my work" type of items.

Reluctance to leave is the sum of things that make you want to stay where you currently when someone else tells you about all the exciting things they do at their work. It's more like friction keeping you where you are.

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