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Open Salaries: the Good, the Bad and the Awkward (yahoo.com)

Posted by Soulskill on from the increasing-your-income-with-game-theory dept.

gollum123 writes: More employers, from Whole Foods Market, with 91,000 employees, to smaller companies such as SumAll and Squaremouth, are opening up companywide salary information to all employees. They generally don't disclose it to the public—but one company, Buffer, posts all employees' salaries on its website. The idea of open pay is to get pay and performance problems out on the table for discussion, eliminate salary inequities and spark better performance. But open pay also is sparking some awkward conversations between co-workers comparing their paychecks, and puncturing egos among those whose salaries don't sync with their self-image.

11 of 258 comments (clear)

  1. State employees by 110010001000 · · Score: 5, Insightful

    Personally, I am in the private sector, but I don't care what others are getting paid. Usually a company will trot out the line: "well you are making more than the average so you didn't get much of a salary bump this year". I tell them I don't care what the average is, that is someone elses problem. And we are all making peanuts compared to the executives, so who cares what the "average" for the company is. Obviously "average" doesn't apply to C level.

    1. Re:State employees by 110010001000 · · Score: 5, Insightful

      You would be surprised. Just ask. The worst thing that ever happened to me when I asked for more money was "no". Don't be so scared. I guarentee the execs are negotiating every year their compensation aggressively.

    2. Re:State employees by Anonymous Coward · · Score: 2, Insightful

      The worst thing that can happen is that they start looking for your replacement, who you'll be asked to train. Be damn sure that your company values you at the level that you think you should be paid before bringing up this topic. I've renegotiated my salary, and stayed on for several years after that at a nice salary, but I think they resented it, and I was let go with a chunk of my department the next time layoffs occurred.

    3. Re:State employees by 110010001000 · · Score: 2, Insightful

      No, chances are they were going to lay you off anyway. That has nothing to do with asking for a higher salary. Silliness.

    4. Re:State employees by pnutjam · · Score: 5, Insightful

      Meanwhile, your lifetime earnings go up (SS), you can afford to save more, and HR gives your next employer a higher salary number. I don't see the downside.

      --
      Cheap storage VM.
    5. Re:State employees by Kokuyo · · Score: 4, Insightful

      Still better to have high salary.
      1. You earn more while it lasts
      2. If you're worth the money, you'll be very safe in a well managed company.
      3. If you're not worth your money, you shouldn't be paid said money.
      4. If you're worth it and they fire you for it, it's a bad company and you shouldn't WANT to be working for them.
      5. If there's a chance you'll lose everything without a job, your country is bad and you should help change that.

      I know it's not as simple to pull off, but we're seeing now what happens if everyone just rolls over and licks boot at the threat of losing the job...

  2. minimum wage and 29 hours a week max for lot's by Joe_Dragon · · Score: 4, Insightful

    minimum wage and 29 hours a week max for lot's of workers makes them look bad.

    1. Re:minimum wage and 29 hours a week max for lot's by Anonymous Coward · · Score: 1, Insightful

      It's a grocery store, that's the same in a lot of other grocery stores. Until you make checker, if you are lower level, box-boy (or what ever it's called in PC speak these days) baggers, etc, are all paid minimum wage and lucky to get even 29 hours

  3. Transitions are allways awkward by erice · · Score: 5, Insightful

    The problem is not that salaries are now open. The problem is that they were secret for so long allowing various forms of corruption to grow and fester. It is always awkward when previously hidden rubbish is exposed to the light. The solution, though, is not to go back to hiding salaries but to keep them open. That way existing inequities get cleaned up and new ones are not allowed to sprout.

  4. My dad always told me... by bobbied · · Score: 3, Insightful

    A company can never pay you what you are worth because they'd never make a profit doing that.

    I think, he was telling me to that I should work for myself if I really wanted to get paid. I think he was right. You don't get rich working for somebody else. It's a good living sometimes, but after 25 years I'm not getting rich doing what I do...

    --
    "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
    1. Re:My dad always told me... by Solandri · · Score: 4, Insightful

      A company can never pay you what you are worth because they'd never make a profit doing that.

      While that's literally true, it's more complicated than that.

      If you work at a company, you are able to devote 100% of your time doing what you are best at. Call it $100k worth of work. Your pay may be, say, 70% of that 100% productivity's value - $70k. So the company is "only paying you" 70% of what you are worth.

      You say screw them and decide to work for yourself. You get bogged down doing a lot of bureaucracy and paperwork running your own business. Taxes, accounting, tracking down and wooing new clients, dealing with defective product returns, booking your own trips or scheduling vehicle repairs, etc. If that takes up 30% of your time, then you are only able to produce only 70% as much work as when you were working at the company. Consequently, you end up making... $70k. Same as when you were at the company.

      When you worked at the company, you spent 100% of your time doing what you are best at. Someone skilled in taxes and accounting spent 100% of their time doing those things. Someone good at getting new clients spent 100% of their time doing that. etc. So the stuff that takes 30% of your time when you are self-employed, is done for only 10% of these people's time because they are much better at it than you are.

      Consequently the net cost to the company to produce the same amount of work you did when you were self-employed is $70k + $10k = $80k (keep it simple and assume everyone gets paid the same per unit of productivity). The value of your work is $100k, they paid you $70k, other workers $10k (for the fraction of their work they do related to you), and the remaining $20k the company kept for operations and profit.

      You were working just as many hours as when you were self-employed, but you were doing only what you were best at doing, thus you were more productive. You were getting paid just as much as when you are self-employed ($70k), but your higher productivity by putting you together with other employees is what allowed the company to make a profit. There's also synergistic effects. If you're a specialist in materials and another employee is a specialist is biochemistry, the two of you together may be able to come up with a great product which neither of you could've made alone.

      Adjust these numbers a little and you could actually end up making more money working for a company than you could alone. It takes a special blend of someone with a trade skill, plus accounting skills, plus management and organizational skills, plus people skills (to woo customers) to succeed on their own. If you are deficient in any one of these skills, you are probably better off working for a company where people better at these tasks can handle it for you. (Or you can start your own company but hire or partner with someone skilled in the area you're deficient in - how Jobs and Wozniak complemented each other.)

      The real benefit of working for yourself isn't that you make more money per hour of work you put in. Most self-employed people work more hours because they spend 8 hours doing their trade skill, then 2-3 more hours afterward doing all the management and paperwork. The real benefit is that if you succeed, the fruits of your success pass directly to you, instead of being absorbed by the company. (The flip side of course is that if you fail, you don't make money or even lose money, whereas working for a company you're guaranteed to make at least your salary. Employment is like a savings account at a bank - you can't lose money, but you pay for that safety with a very low interest rate. Starting your own business is like taking your money and investing it in stocks instead of putting it in a savings account - you could make a lot more money, but you could also lose money.)