Why Coder Pay Isn't Proportional To Productivity

theodp writes "John D. Cook takes a stab at explaining why programmers are not paid in proportion to their productivity. The basic problem, Cook explains, is that extreme programmer productivity may not be obvious. A salesman who sells 10x as much as his peers will be noticed, and compensated accordingly. And if a bricklayer were 10x more productive than his peers, this would be obvious too (it doesn't happen). But the best programmers do not write 10x as many lines of code; nor do they work 10x as many hours. Programmers are most effective when they avoid writing code. An über-programmer, Cook explains, is likely to be someone who stares quietly into space and then says 'Hmm. I think I've seen something like this before.'"

Comments

As always, make yourself known

[sopssa]

Programming is usually team work and as such kind of hard to measure compared to salesman who just pulls for himself. Another thing is that coders aren't usually that good at expressing themself, so it may not be obvious who is being more productive than others.

And how do you measure that productivity? Is it the amount of code you write? What if its bad code.. Is it the quality of code? What if that shows up as less productive.. No one notices unless you make it visible and show your boss or developer that you're the man.

But being awesome coder and making upper level see it won't get you 10x salary. It might get you a better salary, but at that point you should probably aim for developer position or boss level, because that will happen eventually.

I know a person who used to run a application company. There was a coder who worked as such for some years, but he also took more important stuff to handle in the company. His boss always told how good coder he is and definitely noticed him over the others working there. Later he became the boss running that company, when the old one stepped down and only owned the company anymore.

But want to just work as an average coder? Expect average salary.

Re:As always, make yourself known

[JWSmythe]

    But, code is a product, and expected to be created. The value is obvious when it's completed, but still worthless to the bean counters until someone in sales sells it to a customer. The more customers they sell the code to, the more profitable it's become.

    The thanks never comes down to the programmers. When the product is completed, it's likely they'll be let go, since no more work needs to be done. The sales staff could continue selling it for years, and making a profit.

    I was told, I have to be able to sell the product. That's not where I want to be. I like creating things. I prefer to leave it up to sales to make it profitable. Unfortunately, the way most bosses run the show, development will always be a negative cashflow area, and sales will always be positive. In that, they consider development bad for the company, and forget that without our work, they'd never turn a profit.

Re:As always, make yourself known

[PopeRatzo]

No worker in America has pay which is "proportional to productivity". That's not how our system works.

As long as you've got CEOs making 200-400 times the pay of the average worker in the same corporation, it is impossible to have any pay which is "proportional".

The specific kind of profits which most American companies strive for, the short-term profits that they return to their equity shareholders, make it necessary to pay all workers less than they are worth. And the trend is accelerating. If the same reduction in real income for workers that started during the Reagan administration continues, in 20 years the majority of American workers will be making about ten percent over minimum wage.

Re:As always, make yourself known

[FooAtWFU]

When the product is completed, it's likely they'll be let go, since no more work needs to be done. The sales staff could continue selling it for years, and making a profit.

Software that's finished in finite time? (Forever-finished, not just this-release-finished.)
What a concept! Exactly what segment of the industry are you working in over there? If my organization stopped development for a year or two just to sell the existing stuff, our competitors would soon crush us handily.

Re:As always, make yourself known

[liquiddark]

Probably games. God knows they seem to stop working on the damn things as soon as the first blush of cash crosses the table.

Re:As always, make yourself known

[dkleinsc]

This very problem was written about (at great length) by some guy named Karl Marx. Basically, his point was that the capital owners will always pay their employees less than they're worth to the capitalist, because that creates profits.

Re:As always, make yourself known

[BitZtream]

Another thing is that coders aren't usually that good at expressing themself, so it may not be obvious who is being more productive than others.

Bullshit. Good programmers are great at expressing themselves, thats what programmers DO. That excuse is made by crappy 'programmers' who are really just introverts who aren't actually good at programming but rather are even worse at dealing with other living creatures.

A programmers job is to take an idea and express it in a way a computer can understand. All we DO is express ourselves, if you aren't good at expressing yourself, you aren't a good programmer.

Re:As always, make yourself known

[DeadDecoy]

Or like someone who wants to buy a sammich from Subway. Oh you don't give them $20 for a footlong sub? Greedy pig.

Your comment is sadly, more insightful than someone quoting Karl Marx. Individual customers try to maximize the utility of their dollar by buying the cheapest thing and as a consequence lower the value of another person's work. When everyone does this, wages get minimized. Hence, outsourcing is popular because we can usually pay cheaper wages to someone else. CEOs who do the min/max-ing get paid a lot, but how much they're paid is probably small compared to how much they save; usually in the short term. Though the nice thing is that this helps produce the most amount of work and goods can be distributed efficiently. Wee capitalism. There are probably some corner cases where this model breaks, hence government regulation tries to establish a baseline pay so low-skill workers don't get too screwed creating subclasses and pockets of poverty.

Re:As always, make yourself known

[Grygus]

I do not understand your argument.

Just because the CEO's work results in a larger financial transaction doesn't mean he is more productive; he's just doing his job, same as the coder. If they both come in and work hard for eight hours every day, their productivity is equal. The CEO needs to be paid more because the requirements are higher; the position seeks to attract the most applicants in an effort to attract the most qualified applicant. Beyond the amount of money needed to affect that attraction, CEO pay is both wasteful and unfair.

I don't claim to know what that amount should be. Perhaps a CEO really should make fifty or a hundred times the highest paid coder, though I would guess it should be significantly lower. Currently CEOs are routinely pulling down up to four hundred times the average worker's salary. That is obviously too high, and is the result of business forces that have nothing to do with fair compensation or the worth of a CEO, any more than housing prices set by the market were based in reality.

The CEO has no deal to make if not for the workers. He is not some Adonis from on high come to save the company and create money from thin air. He is a representative. His talents can have great value, but with very few exceptions his impact in real terms is going to be overshadowed by that of hundreds of workers. If this weren't the case, nobody could ever successfully strike.

Bank tellers handle a lot more cash in a given day than any programmer but are paid considerably less, so worth isn't based on the amount of money you move around.

Can you explain why a CEO is always more productive than any of his workers? Surely with the gap in salaries there is no room for overlap; he must always and without exception be a far more effective worker. How can this be true?

Re:As always, make yourself known

[Sabriel]

Oh, what the hell. I'll say it. That "good CEO" couldn't do the job without standing on the shoulders of everyone underneath. And emotions are *important*, because otherwise we'd be a bunch of robots (and some CEOs would love that, darling little sociopaths that they are).

Ability to shoulder risk? Stability? How many billions have we had to throw away on bailouts because a bunch of those CEOs turned out to be incapable of giving a damn about the risks - to other people - of destabilising the economy?

Frankly I don't think many here would mind that CEOs can make many times average worker pay if they didn't also see CEOs sailing off in their new yacht/plane/limo while the company retrenches a quarter of its workforce because times are "tough"...

Gross disparity during adversity (whether real or PR snow job) is poisonous to morale - and, for those who insist on "rational analysis", also to productivity.

Finally, I do think there are good CEOs out there. More than the bad. But it doesn't require a lot of bad ones to break the system, and when the system itself rewards sociopathic behaviour, that's not good and does not bode well.

Re:As always, make yourself known

[Surt]

I think the problem most people have with CEO pay is that we see them perform their jobs so incompetently, it is painful to know that they get paid so much for such lousy work. I know I could do much better, but I'm not 'qualified' for the work, so I can't get the job. I'd be happy to do the job twice as well for a quarter of the pay.

Re:As always, make yourself known

[PopeRatzo]

And yet a good CEO can execute a strategy that will increase profits hugely.

But guess what? Even the worst CEO, who drives his company into the ground, is making more than 100 times the average worker, not including the fat golden parachute he's going to walk away with when he gets fired.

If someone working the line makes a mistake and gets fired, guess what he walks away with?

Re:As always, make yourself known

[PopeRatzo]

In other words, a severance package is not a reward for a failed CEO. It's an incentive to hire better CEOs.

Like most elements of "free market capitalism" this hasn't worked as advertised.

Re:As always, make yourself known

[dtfusion]

There is a very simple counter factual to this. CEO pay has grown 6 fold since 1990 (Forbes). The economy hasn't. Median salary hasn't. Have they somehow become six times rarer or six times more effective without the economy noticing? The market doesn't drive ceo salary. Productivity doesn't drive ceo salary.

Re:As always, make yourself known

[Opportunist]

Sorry, no sale. One of the core reasons why these jobs are shipped overseas is that the wages are much lower there. Lower than what would be necessary to purchase the goods produced. It's essentially a repetition of history, the scale is just bigger and more people are involved. In 1930, the core problem was that the factory workers earned too little money to purchase the goods they produced. Today, we have Chinese workers who don't have the money to buy the goods they produce (ok, that wasn't part of the plan anyway, they weren't supposed to buy them), but the people who are supposed to buy them can't either because they don't earn any money at all. The whole system kinda-sorta worked for as long as people had some savings to fall back. When the savings were gone, they started refinancing their homes. Now that the real estate bubble popped big time, they can't do that anymore either. People started cashing in their insurance, and if people do that in droves, the insurance and financing companies start to quiver. And, as we have seen, crumble.

I'm quite sure that one of the core reasons for the mess our economy is currently in can be found in the offshoring of jobs. If you want a market economy to work, people have to buy. People have to have money to buy. People need jobs to have money. Companies have to offer jobs in the country they want to sell in, so people have those jobs, thus money, thus can consume. I'm no BA major, but even I know that much.

Another contributor to productivity invisibility .

[YXdr]

The uber-coder's code works the first time - it sits there silently and invisibly working.

Meanwhile, everyone is looking at the hard work and long hours being put in by the guy who's code needs lots of help. He gets the notice, not the guy who did it right.

If something is hard to measure...

[judolphin]

It's also hard to reward. Also, "Paying a developer by the line is like paying an plumber by the pipe."

Anecdote from folklore.org

[dysfunct]

This anecdote sums it up quite nicely. Now all we need is a few more of those and we have data :P

Re:Another contributor to productivity invisibilit

[GasparGMSwordsman]

The other item that almost everyone overlooks is that an Uber-coder writes READABLE code. If you look at what a really good programmer writes you will be able to understand what is going on, even 10 or 20 years after it was written. Unfortunately, most people suck...

People do notice

[Colin Smith]

As I pointed out previously, incompetent programmers require more servers. Their code spends more time not running, requires a larger support infrastructure to deal with the problems created and generally reduces profits all round.

These days it's difficult to point at a specific individual, but teams are easy. You can see which teams are a group of competent engineers and which are just a clusterfuck[1] of developers.

[1] the collective noun for developers.
 

Re:Because it's hard to measure

[nine-times]

It seems to me that it's probably true that it'd be very hard to come up with good metrics for a programmer, but I think people should be more careful about metrics in general.

Sure, you can measure a bricklayer by how many bricks he can lay in an hour, but is that really how you want to measure him? What about quality? Doesn't it matter if the resulting wall looks good? Doesn't it matter whether the resulting wall will hold together under stress?

But now even those are pretty simple things. Let's get a little more complicated. You're a contractor and you hire 6 bricklayers. One guy doesn't seem to work as quickly as the rest, and they all give you comparable results. You fire the slow guy and suddenly all the other guys slow down. Quality drops. The client is less happy. What happened?

Maybe if you look into the situation, you find that the slow guy was slow because he was spending some of his time communicating with the client. He was spending part of his time overseeing the other bricklayers, keeping them on task, and keeping them from being too sloppy with their work. He's been serving a vital role in your team, but you don't see that just by measuring a couple simple metrics.

Like all statistics, productivity metrics can be useful, but they can also be misleading. You should make sure you really know what they mean before you make too many judgements on them. In evaluating your employees, it's better if you actually know your employees and have a sense for who they are, how they work, and how they fit together as a team. The value of a person just can't be represented in a couple of numbers.

Precisely.

[unity100]

When i have a task. i find myself 'procastrinating' for days on end, unable to commit myself directly to writing the code. during the period, the task regularly comes to my mind in sudden, odd places, doing odd things, like in wc taking a dump, trying to go to sleep, going to the grocer's and so on. then, after a few days, i suddenly sit down and swiftly complete the task. it seems like im hatching things, dealing with the thing in subconscious before doing it.

the good side, it works. and good. the bad side, i feel like im procastrinating and being irresponsible during the hatching period and its annoying.

Re:there are Programmers then here are PROGRAMMERS

[spiffmastercow]

I'd argue that there are more of them than you think.. It's just that all the hard (and cool) stuff has already been done. So the guy who 30 years ago might have developed the first viable JIT compiler is now working on some esoteric feature of some esoteric codebase that you've probably never heard of. There's a lot more programmers now than there were when those guys got their start,

And for the record, I'm probably a better coder than Bill Gates ever was (as for a business-man, not so much).

Re:Also

[Monkeedude1212]

What is efficiency?

Delivering a 100% perfect product 3 months late?
Delivering a 99% perfect product 1 week early?

I've always been a firm believer in the 80-20 rule. (Keep in mind its kind of like the rule of thumb, so it wavers a bit). You can achieve 80% of a programs functionality with 20% of the effort. That's 20% of bugs, which is alot, but in the business side, its only 20% of what it would take to be perfected. Most people agree thats a decent trade off. Thats where you should set the first goal post. Once you reach that goal post, something might have come up. Perhaps you'll want to work on new features that clients have requested. Bam, another 80-20 you can fire off. If there isn't anything else to add, work on reducing those bugs.

And that is why he fails

[SuperKendall]

Basically, his point was that the capital owners will always pay their employees less than they're worth to the capitalist, because that creates profits.

Except that you could also say the capitalist always always pays people exactly what they are worth, and increases costs to consumers to create profits.

Both are non-sensical. That's why in reality, someone decides if payment being offered is worth them working for the company. Pretty much by definition, you are being paid what you are worth because only you can really decide that by accepting an offer. If you think you are not "being paid what you are worth" then you need to find someone who will pay you that, or at least leave and not suffer the insult of a continued paycheck.

Re:And that is why he fails

[jayme0227]

Except that those with capital are the ones who decide how much you get paid. If you have no capital, you have no opportunity to increase your worth. It's all fine and dandy to say "If you really think you're worth more, go somewhere else." but if the jobs all pay the same amount, you can't go somewhere else. It's also very difficult to start your own business because the established businesses, with their economies of scale, can crush small ones and push them out of the market (see: Wal-mart).

The biggest problem with capitalism is that, for it to truly work, it requires that every party has equal information. This just isn't the case, information requires time to gather, and time costs money. Therefore, those with money get the information and use it to their advantage whenever they can. There's a reason that Harvard grads get the best paying jobs, and it's not because they are the "best and brightest," as they'd have you think they are.

Don't get me wrong, I'm a capitalist, but to assume that it is a perfect system is silly. To abuse a Winston Churchill quote about democracy, "Capitalism is the worst economic system there is, except all the others."

Game theory

[Kjella]

It doesn't matter if you don't get paid what you're worth, as long as you aren't going to be paid better anywhere else. Because what's your game options, quit and get a different job that sees even less of your value? Go independent and try to bill rates that high? Join a start-up and try to get that much of the total? Quit or take a long vacation and pray they'll miss you enough to take you back on a higher salary? Yeah right.

A lot of people might know internally what you did, but it's hard to convince outsiders that the projects you did really were that hard and you were that crucial to the solution and your solution was that great. Maybe even your boss knows you're brillant and he's rather fire the whole team and hand the money to you if that was what's needed to make you stay, but it will never come to that. Because who else would pay you that much money? Nobody. I guess maybe if you got some entrepreneurial skills and build the company around yourself it might happen, but that takes a very special kind of people which rarely overlaps with mastering coding.

Here we go again

[e2d2]

I almost stopped reading when he said Joel Spolsky.

Joel is always looking down his nose at other coders who don't have degrees from MIT. Yet he thinks pointers are the ultimate test of a programmer. He has written one tool that is of note - Fogbugz. That is, if he even wrote the code.

He just reeks of "I know better". He wrote his own language to code-gen classic ASP applications, along with PHP. Right there is a red flag. Did they move to the new ASP.net platform? Nope. That wasn't good enough I guess. No they decided to stick with classic ASP and write a language that outputs both ASP and PHP. Epic arrogance combined with ignorance IMHO.

Then look at Fogbugz. It's just a typical bug tracking application. That's it. Did it need a new language? Hardly. So now these guys wasted all that time on something only they can use and it makes zero dollars. Way to go. Real top notch development there. Fact is his company is small potatoes.

Why do I rant on Joel? Because this guy is believing the shit he spouts and extrapolating from it. Frankly I'm sick of hearing from him about what makes a good programmer. If you aren't a good programmer yourself then STFU about what makes a good programmer. Writing a few insignificant applications doesn't make you a rock star.

It is simpler than that

[Anonymous Coward]

In the modern world, those who create wealth are *never* paid anything close to the value of what they created. The lion's share goes to the rich fat-cats that sit at the top of the corporate ladder, contributing nothing that wouldn't have been present otherwise.

Exploitation - its how humans do things.

Re:I'm not "doing nothing", I'm thinking

[zuperduperman]

> 1. He had his own office, and sometimes he'd put up his feet and stare off into space. He told me that people passing by his office assumed that he was "doing nothing." But, he told me, he wasn't doing "nothing", he was very much doing something: thinking.

I'll go even further. I have the privilege of working from home / running my own outfit.

I frequently simply go to sleep if I feel like it. For a while I felt guilty about this, but the reality is that I usually only doze for 10 minutes or so and when I wake up I have 5 solutions sitting in my head for what I need to do next. I'm not sure how or why it works, but I can struggle through a whole afternoon feeling sleepy and doing mediocre work or I can take a 10 minute nap and be a rock star for an hour ... so I do. I wish this was accepted practice in workplaces because I'm sure productivity would rise overall.

That's the public propaganda goal

[zogger]

This equilibrium is what they hard sell to the populations, as the justification for their policies, but no way do they ever want to achieve that.

The globalist fatcats will *always* make sure there is a great imbalance in wages (a lack of equilibrium) so they can take advantage of wage arbitrage, plus get paid to destroy any approaching equilibrium, then get paid again to start to reconstruct it..but they will never let it actually get there. It isn't nearly as profitable for them after that point of equilibrium, nor would they be able to maintain so much political power, which is even more of a lust for the uber rich than just the mere accumulation of currency units. The dig on that ultimate control over other humans, that is theior primary goal and lust, that is why so many political and economic top people appear to be so sociopathic at times..it is because *they are*.

    They have done this construction/deconstruction, keep the people divided and conquered repeatedly over the years, and that is by the use of war, external or internal and frequently both, by destroying the infrastructure and a lot of the population in other areas that are approaching parity with them (and in their own areas frequently as a blow-by). In many instances, at the tippy top of capitalism, (WW2 is a prime example) they fund all the warring sides *at the same time*, destroying a lot of what had been built up, which therefore needs another infusion of the people's capital (their labor and most of their wealth, overtly or through other political controls) to them so they can rebuild..what they engineered to destroy in the first place. They get *rewarded* for being high level criminals. Over and over again.

It's pretty easy to wipe out a productive middle class during a war phase and reduce them back down to serf/peon class, to be exploitable in the normal kingly manner, your own people or those folks over yonder, it doesn't matter to that class of exploiters.

It is very wasteful and downright painful for the global populations as a whole that they keep on doing this, that we can't achieve a fair and balanced natural economic equilibrium, but it serves the purpose quite well (for them) by maintaining these top 1% crooks and predators in their positions at all times.

The aristocracy was never abolished in practice, just in a lot of cases they dropped that public "royal blood" stuff and started wearing more "normal" attire so they would not appear to be as such. Just a camouflage maneuver and so they can continue to fake out their herds of slaves by telling them they now live in some sort of "elected by the people" government, when it has always been these same fatcats calling the shots and doing the most in the way of profiting from other's work.

They are *wolves* and will always act in a predatory manner. They may even war on some other of their fellow wolves now and then, but the wolves as a class are always united in that they need to keep the wolves and prey animals/herds separate and cowed.

Here's an obvious example of wolf class versus their prey animals, so they can keep feeding on them and make it look like they aren't. All this war on carbon and new taxes and permits and credits and treaties and schemes and laws and so on. Well, the serfs and peons (and I include any alleged "middle class" that exists anyplace, they are still the property of the wolves, they are temporarily allowed a few more toys in exchange for perpetual lifetime indebtedness and subservience to the wolves) will be paying for that, because there ain't a singe fatcat wolf predator out there who is going to drive less, fly less, eat less, stop living in multiple mansions, etc.

  All the ones "negotiating" all this nonsense...whatever they negotiate is NOT going to apply to them or impact their lifestyles in any practical measurable manner. The wolves will remain wolves and their sheep will be eaten just as much and be shorn a little closer to the hide, that's all.