You know what those top earners are going to do then? Quit. And then you end up with overpaid mediocre talent and a product roadmap that is suffering from the loss of top performers.
The more we celebrate victimhood as some kind of hero status, the more we shame and punish those who achieve and create success the worse off we're all going to be. A private company has every right to compensate its employees with its private capital anyway it wants, and they're going to want to do it in a way that achieves the goals of the business. They're not distributing welfare checks, they're a business.
It may well be, if not more likely to be, the other way round - you could be a GOOD performer, but since you can't or don't gork office politics, you are underpaid or even not at the level of challenge and seniority you should be.
These are merits. They mean you're easy to work with, people want to work with you, you know how to make and maintain important relationships. You'd make a good leader. You can recruit talented people. You can get preferential treatment from vendors. Your projects get noticed.
If you can't play this game, it doesn't matter if your technical skills are better. You won't have a chance to put them into practice. You won't have allies. No one will want to work with you or listen to your opinions.
Perception = you are good at communicating your work to others
Connections = you have a strong network and stay informed and know who to talk to for different tasks
Face time = you are easy to get along with
Ability to handle office issues = you are a lubricant that make the group dynamic work
If you don't do those things, then you could write fantastic code, but: no one will know about it, know to ask you about it, be aware you're doing it, and find you somewhat of a drag on the office atmosphere. Basically, your work is not useful to the company that is paying you, and you should be paid less because of this.
You can blame office politics, you can blame your lack connections, or whatever hand you were dealt. It probably wasn't a fair hand, but it's on you to make the best that you can out of it.
I don't cry about unfairness. I look at what I want, and I figure out how to get it.
It would seem that most employers would rather bear the cost of replacing someone than increasing their compensation to align with the value provided.
These things are all extremely important pieces of keeping a company functioning well. To the extent that if you're good at these things and mediocre at whatever your main job is you are probably more valuable to the company (as in very literally adding more value) than someone who excels at their main job but can't cope with working in an office. If it's true that people who are good at those things are being rewarded more than people who aren't then we are actually doing pretty at basing pay on merit.
Office politics are, obviously, something you need to be good at to achieve seniority in an office.
I’ve been with my company for nearly 2 decades and only know about 10 people, and only 2 of those well. I worked with one person for five years on a daily basis before they learned I was married with a bunch of kids.
My salary has gone up 84% in those 18+ years. I make way more money than I feel I deserve (though I’m not complaining). I’ve never asked for a raise or anything like that. They just keep giving me raises on their own. Just recently in the middle of the pandemic they gave me a 16% raise out of the blue.
I don’t know for sure how much others make, but I’m fairly certain I’m one of the top earners. It frankly baffles me.
My salary went up 300% during the first three years of my career... but it mostly meant that I had no idea about the market when I was freshly out of university, and my employer was happy to take the advantage of my ignorance. (As I later found out, the increased salary was still way below the market rate.)
I am not contradicting your judgment, just saying that increased salary may also have another interpretation. And how much you feel you deserve, that also depends on your background, etc. For example, it felt quite weird to me when I was making more money than both my parents together; and yet, it was below the market rate for my type of job.
84% raise doesn't sound like much if you've also increased in seniority in that duration.
If the CTO sits no more than 2 cubicles away from every engineer he better know who the top performers are. If employees are playing politics at a small company, that company is already doomed.
Hehe.
This is a false dichotomy. I see this kind of language frequently in discussions. In my experience, it does not tend to invite more thinking. On the contrary, it tends to polarize and discourage discussion of other options.
So, please, let's move away from overly simplistic arguments. So instead of false dichotomy, let's explore a range of options.
Consider this proposal: First, reduce the CEO's compensation (call it C) by multiplying by X (where 0 < X < 1). Second, use what is left, C(1-X), to increase compensation of the other employees. For various allocations [1], what are the possible outcomes?
One would hope [2] that companies operating in a relatively free and somewhat capitalist system like the US would directly or indirectly explore the values of X in order to find better and worse results.
As for me, I would bet there are values of X that lead to better outcomes for both the company and the satisfaction of its employees.
I would be interested in models and studies that examine this question. Would anyone like to share some they have read?
[1] Some (e.g. libertarians) might call this a "redistribution" and look at it with a negative light. I suggest calling it an "allocation" because I think of it as an optimization problem. The goal is not to maximize CEO pay. The goal is to maximize company success and overall employee satisfaction. (We might define success as (i) profit or (ii) or accomplishing some mission.)
[2] I say "hope" but I do not expect it. There are many market failures and organizational factors that may get in the way.
Maybe one of the biggest myths is that we can appraise performance objectively and that pay is nothing but a function of that performance.
In reality, this is nothing but price discrimination for the price of labor; just like it would be in an airline's best interest to squeeze the most individual dollar amounts out of every individual passenger for the same flight, it is in employer's best interest to pay the absolute minimum that can convince each particular employee to do the same work.
Information symmetry or collective bargaining destroys that advantage.
What Blizzard workers did might feel like a revolt in the US, but there are countries where total income and taxation information of each individual must be publicly listed annually.
This doesn't matter at all, information asymmetry based extraction is still there.
The employer is buying labor in large quantities from many sellers, and because they don't appraise all units of labor individually (they can't), they are individually negotiating the least amount of money they can get away with. The fact that prices are concealed between these individual sellers (candidates/employers) is the only way this can work (information asymmetry).
When a buyer is shopping for a airplane ticket, they are shopping for the relatively same service from many providers, but they know these different prices and choose the cheapest (no information asymmetry). When, however, the airlines are using personalized pricing and the buyer doesn't know this (information asymmetry), the buyer is screwed over because they pay the maximum they would for the same flight, while the next guy is potentially getting a steep discount.
In both cases, if the information asymmetry is cured (as in sharing your salary or what money you paid for a ticket), the strategy no longer works because this changes the individual price points (people have huge loss aversion bias and they definitely react to the idea of being screwed over). The fact that they are buyers vs sellers in these transactions doesn't matter at all.
"Shopping for the best offer" depends on knowing what offers were available to you and the others to begin with.
This is a common kind of one-sided argument. For the sake of argument [1], let's say I grant than an organization has the rights and freedoms like you say. There is another side to it: employees have rights and freedoms too. In a democracy, people can and should use their influence and political power to address their concerns.
[1]: Employers do not have "every right" to compensate employees "anyway it wants". As one example, see the Equal Pay Act: https://www.eeoc.gov/equal-paycompensation-discrimination .
What is motivating this interpretation? Do you interpret something in the original article as suggesting this?
What about the article (which contrasts multi-million dollar executive pay against minimum-wage workers) suggests to you that someone is "celebrating victimhood"? If so, who is this someone?
> ... the more we shame and punish those who achieve and create success the worse off we're all going to be.
Can you unpack your assumptions and logic in coming to this conclusion?
I like that you said "top earners" as if it implies that "top earner" equals talent. It's far more likely that there is underpaid talent in the company that is about to leave for a better job. This is what employers are scared of. They want to underpay people that deserve more and you're just playing right into that trap as if it somehow benefits you. What if you aren't actually a top earner? How do you know that there is no "overpaid mediocre talent" already in the company?
>A private company has every right to compensate its employees with its private capital anyway it wants, and they're going to want to do it in a way that achieves the goals of the business. They're not distributing welfare checks, they're a business.
As I said. Salary transparency does not change anything about that. The welfare argument can be made by both sides. Employees shouldn't distribute welfare checks to their company either, they're not volunteers.
No, a business will spend money in a way that optimizes the goals of the various middle-managers in between those with money and those who make the decisions with that money. Those middle-people aren't paper-clip optimizers and so their decision making does not approximate that of a profit-maximizing firm.
Maybe, maybe not.
The opposite could be true: employees might more likely to quit a company that generally pays other employees poorly. There are lots of reasons why this might be the case.
Here is one type of scenario where that may be true. Many people recognize that company performance is not a simple linear combination of individual employee performance metrics. Having a well-functioning team is a substantial component of overall company success. With this in mind, it makes sense to work for a company that recognizes value more broadly, and understands that even "top" individual performers exist in a context of "non-top" individual performers. Therefore, if those "top" performers think it through, they will want the "non-top" people to be paid fairly.
For me, finding out that my more skilled colleagues make more money than me would be encouraging. It would mean that if I learn more, I could possibly get a raise.
The bad news is to find out that the people whom I admire because of their god-like skills actually make the same money as I do. That means that I have most likely already hit the financial ceiling.
To elaborate on my comment: I'm suggesting that an employee's full value to the organization should be reflected in their pay. For example, someone with slightly less than average skill in some area (e.g. as indicated by project performance up to this point) may have other strengths.
I recommend that you disabuse yourself of such a comparison.
Arthur Clarke is famous for saying "Any sufficiently advanced technology is indistinguishable from magic." As you build your knowledge and skills over time, you may find that others are just as impressed by you as you were by this other person.
I think this discussion is by and large irrelevant to any so called "top earner". If a person is highly paid and then considers any subsequent conversation about pay in a "cost-benefit" mindset they are pretty much not going to be a useful voice for equality.
I'm not condemning them mind you. To say one view or the other is better is a question of personal conviction. But if they're regarding their superior pay as strictly a matter of their personal benefit then I find it very unlikely any ethical argument would sway them to act in their coworkers benefit.
And we all are top earners, right? Statistics tell me most of us aren't. The consequence of sharing salaries is not equity but people being able to negotiate better so most likely average salaries will go up. CEO salaries have been public for a while now and I haven't seen them going down so top earners shouldn't worry. Instead they can negotiate better too.
The people that already negotiate have no incentive to share salaries
The people that can’t negotiate won’t be able to just ask for a higher number
That's exactly what your boss wants you to believe. What if you somehow, without sharing yourself, found out that you actually were nowhere near a top earner? Would that affect your conclusions?
