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Comment by angarg12 | Hacker News Reader

I worked for a very old fashioned company in Germany that used a similar system to pay employees. After about a year I became the lead of my team. But since some of my colleagues had been in the company about 10 years, they were getting paid more than me. Frustrated, I left for a better (and better paying) job.

I believe these systems produce a "dead sea effect". High performer will leave, being able to get better deals elsewhere. Low performers will stay, since they can' find a better deal elsewhere.

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If you felt you were underpaid, leaving is fair. I don't really understand the requirement that all bosses are paid more than those they supervise, though. I mean, emotionally I can understand feeling that way. But I don't think it's a rule of nature or something.

For instance, coaches often make less than their star players. Directors and producers often make less than star actors. Hospital directors seem to make less than surgeons.

My boss doesn't know how much I'm paid. I like it that way. He communicates how he feels I'm doing to the people that need to know and it's working out ok.

This sounds like an unusual arrangement. Who actually determines your pay?

It is often called "matrix structure", in which you have two bosses: HR boss that knows your salary, and day-to-day project boss that does not.

I find that interesting, and also concerning.. but I suppose it depends on the office culture.

I tried to ignore my peers and direct reports salaries when I first moved into management... I lost an employee after 2 years when another place offered him a 80% raise.

At that point, I realized I couldn't count on a 3rd party to properly evaluate an employee's worth, and I started to take an active role in ensuring people are paid as close to market as we could afford (though, as a non-profit, we struggle to compete for technical talent)

> I lost an employee after 2 years when another place offered him a 80% raise.

First, I'd say it's quite normal in non-profits.

Second, I believe that in a structure when you don't know the salary of your reports, there is always someone they can discuss it with if they feel they deserve more - and that person would definitely consult your opinion then.

Well, I make a lot. I'm sure my boss is aware of that. I don't know a single person that is paid this much in Toronto and doesn't have to manage others. Not even close. So maybe that's why he doesn't need to know.

Here in Switzerland, most of the non-IT people I'm talking with are genuinely surprised that for instance project managers are paid less that developers. For them just hearing the word "manager" = big buck.

Supply and demand at work I guess; if it's easier to get project managers than developers it becomes obvious which one should be paid more.

Whenever I hear the term "Project Manager", and imagine all of the confusion collectively experienced by anyone who has had to explain that job, I think of Mr Burns from the Simpsons saying "Am I that out of touch? No, it's the KIDS who are wrong".

Let's call it "Project Coordinator" or "Project Advocate" or something.

Let’s call them “Project Secretary”, that should tune them down a bit…

> lead of my team

A lead isn't a manager or boos.

That being said, a lead is frequently more valuable than the followers.

Traditional companies paid manager more, but supply and demand of engineers vs managers means that more and more middle management is making less than engineers.

I think this makes a lot of sense. Management is not "better", it is simply "different".

And in terms of actual value delivered to the business, I doubt that a low/mid-level manager delivers significantly more than an experienced and productive individual contributor.

Organizations need both good managers and good individual contributors. Clearly managers of technical contributors need enough technical experience to make sound management decisions. But that doesn't seem like a good reason to constantly promote people upwards, nor does it seem like a reason to always pay managers more than ICs by default.

However I think in some cases managers end up subject to extra risk if a project goes bad, so they are probably entitled to some increased "hazard pay" for that. (The risk/responsibility structure might be inverted at some toxic dysfunctional organizations, but that's beside the point.)

All of your points are valid. But here is the catch which many ICs might not realize. There are far more management positions than pure ICs. It's the unfortunate that you be disadvantaged if you stick to strict ICs path. The competition is also fierce. The talented ICs are so far above the rest (the 10x/100x engineers).

It's a simple supply and demand problem. The company needs a lot more of above average managers/hybrids. It's not good for average ICs to stuck to their little world if they want better promotions.

Just to clarify when you say IC you mean literally an IC as opposed to the leadership path in an IC vertical? Many companies expect hither level ICs to be leaders in one way or another, you don’t need to go down the management path.

I mean the essence of the problem comes down to people management. If you mean the pure technical role, then yes that's what I am referring to which has far less positions. And usually your competition would be the elites. Because many ICs try to avoid people management.

I am not talking about whether there is a such a path for ICs. I am talking about the numbers problem. The unfortunate truth is that there are far more positions involves people management. Engineering manager is good example because ICs can wield their technical skills. But still, this roles still requires you to do substantial people management.

I agree that inherently management isn't more valuable than IC-ness, but in terms of scope (which is one, though not the only metric for value) it's hard to argue that you have more scope than your manager. They're still responsible for what you're working on. Often more competent ICs are more independent, so this is a bit complicated since a manager of an independent IC can focus more effort elsewhere, but still.

The way I see this usually at places with strong IC tracks and levels is that an L7 IC is payed more than an L6 manager, but its uncommon for the L7 IC to report to the L6 manager. You usually, though not always report to someone more senior than you, and very rarely report to someone less senior.

Also its far easier for a people manager to increase their scope than for an IC to do the same, so in some sense the advancement path is more clear.

Telling or managing a player to kick the ball into the back of the net is a lot easier than actually kicking it in the back of the net.

Telling or managing a team of 20 people to put products on shelves is a lot harder than putting products on shelves.

I like the analogy, but I don't fully agree with it. If the "product on shelf" is a basic CRUD app, then sure, managing a team of 20 people might be harder than doing the individual tasks related to putting the product on shelf, but oftentimes there are challenging technical aspects related to the product. In some cases those technical challenges might be harder than management of the team.

Depends on how well isolated the tricksy bits are

have you ever been a manager?

I was thinking stacking shelves in a supermarket as an example of "putting products on a shelf"; but yes, as the complexity, skills required, technical knowledge or genetic 1 in a million requirement goes up for the managed worker there is a point where the degree of difficulty swaps over.

>>Telling or managing a team of 20 people to put products on shelves is a lot harder than putting products on shelves.

no it isn't

You think managing minimum wage shelve stackers in a supermarket is easier than actually stacking the sheles in a supermarket?

Yes, and so do all the managers and stockers that I've known over the course of my decade of stocking shelves.

And why would that be? That's a strong claim that's completely unsupported.

Personally I disagree.

> Telling or managing a team of 20 people to put products on shelves is a lot harder than putting products on shelves.

After 20 years of experience I can tell you it depends on many factors, but first of all on the people you work with.

telling people is easy, actually getting the result that you want in each situation is hard

Is not about bosses and reports, it's about performance. I wasn't anyone's manager. My role as team lead was to organise, coordinate and supervise my colleague's tasks, on top of my IC contributions.

For another example, a guy joined a different team and was killing it, but was getting paid less than another college who was in the company 8 years and was hardly pulling his own weight.

In Wall Street it's common for CEOs to make say 30 million dollars, not more, supervising sick but like SICK traders that haul in arbitrary amounts.

Also whalers in California, there were groups of guys like "we're a great team, we're men, we know how to swim, let's hunt Grey Whales" and hired a captain. On a ship it is imperative to do whatever the captain says, but that doesn't mean the hierarchy exists on shore with the money. There were also captains who hired sailors, more often.

I had a similar reaction to this post, this is not a new way of leveling, this is how leveling was done at most companies for a long time. State Universities and the Federal Government are still very much this way, with a very similar amount of counting years of direct/indirect experience.

Back when I worked in academia I also had a very similar experience to yours. I wasn't leading a team but, especially earlier in my career, it was incredibly frustrating to be making significantly less than people who were both less skilled and less hard working, but simply had more years of experience. The perpetual theme was "you just haven't earned it yet", but "earning it" was purely a function of putting time in, it didn't matter how great the work you did was.

I left to go to tech and even now that I'm on the older side of things I still prefer the pay structure being more closely aligned with the value of your skills + the amount you're willing to put into the job. I get paid plenty, and have no problem with someone much younger and less experienced then me getting paid more with unique skills and responsibilities I'm less interested in having.

"Evaporative cooling" is another term for the effect. Hot talent leaves, cold talent stays, diminishing your total talent-temperature.

Those who leave are not always the best. Those who leave many places quickly are more likely to be difficult themselves and demand more. Those who leave after many years usually turn out to be great.

Those who leave may not always be the best, but those are best will certainly leave. It makes no sense to Not switch jobs if you get higher salary and have capability to get it.

In tech industry where job hopping gives significantly greater raise than yearly increment, those who switch jobs get more exposure and better worldview. While those who stay get 1 year experience 10 times.

PS: Exceptions are always there

Completely understand where you are coming from. I think a combo of both can be important. Some depth at one org is important to see the results of some of your decisions/actions.

Another view is that employees at the old fashioned company you mention don't have to get hired elsewhere in order to receive an annual raise. The company therefore has less turnover, does not hire as often, and is therefore less likely to hire a low performer.

Experienced a very similar situation in Berlin. I assume it may actually be a norm. Loyalty to the company > experience/skills.

That's very interesting, and a contrary norm to many big companies in the U.S. Companies here are happy to pay whatever it takes to fill an empty position, but they often have limits on pay raises that prevent loyal employees from getting fair pay as they gain skills and rise to higher levels of responsibility in the company. Many people enjoy the familiarity and relationships at their job and would rather accept being underpaid than be forced to take a new job every couple of years, so the company loses a few people but gets to keep the rest at below market rate. Loyalty is effectively punished, and job-hopping is how you keep your salary current with the market and your experience.

I know several people who have been affected by this, but the most dramatic was a software engineer at AT&T who had started in an entry-level position in network operations. He had received the maximum allowed raise every year, but he was being paid less than 70% of what other software engineers at the same level were making. The request to make a one-time adjustment to his salary had to be escalated to an executive in another office hundreds of miles away (the VPs in our office did not have enough authority) and took months to process. It was not routine at all. It involved a physical sheet of paper with the executive's signature on it.

Yes, I have seen this many times in my career. Internal transfer has no pay rise and may require equally difficult interviews as external offer. Yet, leave for similar position at another firm is up 20%. And, managers are so "offended" that you are leaving (lack of loyalty). I always think internal transfer is for suckers, as an external transfer almost always means +20%. Bizarre.

Interesting! I didn't know this phenomenon had a name. I've seen the "dead sea effect" at a well known SV bigtech co as well. And this company has biannual performance review rituals.

http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-d...

The blog has a bunch of other good article on related topics.

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