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Open Salaries: the Good, the Bad and the Awkward (yahoo.com)
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.
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.
minimum wage and 29 hours a week max for lot's of workers makes them look bad.
Here is a link to the buffer salaries. https://open.buffer.com/transp... It pays to be a hipster!
In Norway, EVERYONES salary is available and guess what, nothing bad happened.
Everyone who works for a big enough organization has probably run into people who you have no idea how their salary is justified. I'm not just talking about "oh, I'm better than him because I know more," I'm talking about the secrets that confidential salaries can hide:
- Board members' less-than-qualified family members/business associates/friends getting paid a relatively huge salary compared to their role/contribution
- Senior level people who have been "parked" after a division closure or similar event -- often because they have lots of knowledge that would otherwise disappear, more often because they are politically connected
- Revealing how much politics really affects salaries would be a huge morale-buster.
The bigger the organization, the more these become apparent. For example, look at HP laying off 30,000 employees or IBM laying off 20,000. Most of it is probably offshore talent replacement in these cases, but I'm sure there are plenty of highly-compensated people left over from acquisitions, etc. that they're just taking the opportunity to purge because they were making a lot of money and not contributing a lot.
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.
I had a boss who made a big deal about giving me a routine 2% raise after I was with the company for six years. When I pointed out that I got a 50% raise after my first year and every raise since then was always 2% because of the salary cap, he got mad because I made more money than him for four years. Although we were coworkers for nearly five years before he became a manager, he thought he was better than everyone else and his paycheck proved it. That I made more money than him for many years didn't sit well with him. Needless to say, I got a job and a 40% pay raise at a different company.
Some employees chatting about salary openness decided to take it upon themselves to do it. Someone created a Google Form and shared it on a very widely-used internal mailing list (~40K subscribers). People could choose to provide their username or not; many did. About 3000 employees added their data in 2014, which included career ladder, level, location, gender and base pay rate. For 2015 the form was revised to add "total compensation", because a significant part of Google employee compensation is in the form of stock grants and bonuses. Analysis of the numbers shows that compensation is pretty fair. There's no gender gap (not surprising because Google HR watches those stats closely). There are some significant differences between people at different locations, but those correlate pretty well with cost of living differences.
I think the difference between thoughts is that you are comfortable trivializing some of your tax dollars. It costs more money to scrub data and publish only salaries of X, and my taxes are high enough without paying for that too. If voters were all given the facts and all agreed to pay the extra expense to disclose only certain people's money then the people as a whole have spoken and I'm good with that.
Usually people are not informed about extra expenses and risks associated with not disclosing all expenses. There have been numerous cases of nepotism and cronyism where loopholes like yours are used to hide abuses.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
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.)