Why shouldn't Dave and Cathy know what Bob is earning? They're the same level, they should earn the same.
For example, I am willing to pay a higher price for someone has 10 years of experience and is less likely to make mistakes or other desirable qualifies more than someone who has 0 years of experience, even though they are doing the same work.
Also, I don't see how people can't see that this is precisely the logic that contributes to women generally getting paid less for doing the same job. Anecdotally, I joined a company and had about 7 years of experience. My "peers" in performing exactly the same duties as me had probably about 25 years of experience. I was responsible for the 2nd largest revenue generating P&L that generated the highest profit margin (which I actually turned around from losing money in 6 months). I found out I was getting paid $70k less than "my peers." Are you going to tell me that despite performing the exact same job and actually performing it objectively "better" that I should have made less money? This is the kind of stuff that routinely happens to women.
We go through life making a lot of guesses and utilizing a lot of prior probabilities. Work history is, in my experience, one of the stronger signals available to us.
If an employer initially pays an employee less due to less track record, then finds out the employee is as good as other employees, and does not adjust the pay, then that employer is stupid and will eventually lose the good employees to places with better management. Assuming employees have access to sufficient labor pricing data and can see they can earn more elsewhere.
> But that shouldn't be a >5% difference.
What is the basis for this cutoff?
> Are you going to tell me that despite performing the exact same job and actually performing it objectively "better" that I should have made less money?
You should have made whatever the maximum you could negotiate. If this employer did not want to pay you more, you should switch employers. A good employer would have paid you much more than the others.
>This is the kind of stuff that routinely happens to women.
No, your example is bad management incentivizing bad employees and turning away good employees.
Women being paid less due to being women is illegal discrimination.
Well I definitely agree it was bad management. And I did leave when I realized that despite my performance, they weren't going to compensate me appropriately. To excuse it away as "oh, that's bad management" is being willfully ignorant to the truth that this kind of stuff does happen, in general, more to women. I was in a position where I was fortunate that I could leave and find a better opportunity. But not all women have this luxury. Many need their incomes and don't have the time to look for other opportunities that will value them appropriately.
> Women being paid less due to being women is illegal discrimination.
It's great there are laws to protect women from illegal discrimination. But it's not like that just "magically" corrects itself. You have to bring a suit. Or you just have to leave if you don't want to deal with it. It's like saying "well that's wrong." Sure, it is, but the effort is disproportionately on the "wronged" person to fix it.
> You should have made whatever the maximum you could negotiate. If this employer did not want to pay you more, you should switch employers. A good employer would have paid you much more than the others.
Well yes, and I thought I had. But as I said, it wasn't until I had been at the company, better understood what my "peers" were doing and then finding out that they were paid SO much more than me that I realized I needed to go somewhere else. But I believe the point that many others are making is that if there are been better salary transparency, I could have saved myself some time by realizing they weren't going to value me and what I brought, so I could have passed on the opportunity altogether.
Research continues to fail to support this. At what point is your experience a self-fulfilling prophecy?
Are you saying that "despite performing the exact same job and actually performing it objectively 'better' that they should have made the same money"?
I have software engineers on my team who are literally creating twice as much business [edit to add: value] per year despite being at the same level. (The actual peak to trough ratio is probably higher than that, but it's at least 2x.) Why should they be paid exactly the same or even within 5% of each other?
I'm not exactly sure I would say they are performing the same duties then. Are they all responsible for generating business? I would argue they aren't actually doing the same job. This could be the difference between their salaries being the same versus their compensation being the same. Generating business can be a highly variable achievement from year-to-year, so providing total compensation that is higher for those generating more business than others. If their primary job is to do software engineering, then I would imagine their salary would reflect that job. Additional compensation could be given for doing essentially additional responsibilities over and above their job. You could give the feedback to your other software developers to explain the difference in their total compensation vs. salary. Maybe I'm misunderstanding what you mean when you say "creating business" though.
Pure software engineering type roles, no sales/sales engineering. Just simply being better at value creation via software engineering.
I'm sure you've worked with the "whizzes" and the "whiffers". People who can effortlessly create elegant, reliable systems vs people who struggle to craft limp-along systems that look and behave as if they are comprised of bailing wire and load-bearing bubble gum.
Individual pay isn't some 2+2=4 math equation, it's multifactorial. Now any company with good internal controls would have people in some sort of band where for comparable (not identical) work there's a range of normalcy relative to the value the work provides in the given markets the labor is occurring.
These things are related certainly, but they cannot be considered interchangeable of you will find yourself over-paying for labor or losing recruiting battles to your talent competitors due to underpaying. Believe me - most organizations would love nothing more than to just pay everyone the same and be able to retain their desired stuff and stay competitive in the market. Compensation activities are a drain.
Surely these are all criteria that should determine your level. What's the point of levels if you're saying each level consists of arbitrary other levels?
I agree that a range should be public, but an employee's salary should remain within the range for their level. If they're demonstrably more valuable to the company, they should be promoted within a transparent structure.
Organizational leveling criteria and compensation criteria are certainly related, but not interchangeable. Organizational leveling criteria is a reflection of your internal hierarchy of authority, decision making, and accountability. Compensation criteria considers that to a degree, but also accounts for more externalities, individual organizational differences, and at times a reflection of strategic priorities.
From a worker point of view, being open about what we're earning will help bring to light if we're being exploited.
From a business owner point of view, employees having this knowledge disturbs the power imbalance employers enjoy when it comes to compensation negotiations.
I think more people than you'd expect in HN are in the latter camp. This site was launched as Startup News, after all.
Most haven't also realized that just because they work in software, it doesn't mean the world hasn't changed. The times of Microsoft's IPO creating tens of thousands of millionaires and multiple billionaires are gone. Until the next big platform pops up, things are not frozen, but stuck in mud.
The biggest Windows apps have probably been the same since 20 years ago. The biggest MacOS apps, same. The biggest iOS apps probably stabilized at least 5 years ago. Android, same.
Quoting kids: game's gone.
I think this game's got a lot more time left in it.
Those remaining 20% can still make for decent living, I won't deny that.
Paying less due to gender and race is already illegal. The only reason it prevailed is because proving it is difficult if you do not have access to the data.
Personally, throughout my career I've actively tried to earn less than coworkers. It gives me more wiggle room to goof off, makes my similar accomplishments look/feel a bit more impressive, and helps keep me off the chopping block at layoff time. I actively don't want to be paid the same as somebody with the same job title/level as me.
And I can understand why someone who adds more in terms of output and contribution would want to earn more than someone else who adds less.
Of course, there's (what I see as) good pay inequality and bad pay inequality (that which is driven by systemic injustice, discrimination, etc.). If a company thinks standardized salaries are the best way to fight that, that's a choice they're welcome to make.
No, they shouldn't. They should earn exactly as much as they can get their employer to pay them. I've worked hard in my career, I've negotiated hard for pay at new jobs, raises, bonuses, promotions, etc. Some people don't. If I'm not going to be able to negotiate my pay, by definition I'm going to be making less. Why in the world would I want that?