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0 pointsjseliger14y ago0 comments

I was just going to say something like this. In The Logic of Life, Tim Harford writes about how CEO pay reformers thought that making CEO pay public would cause companies to reduce pay because high pay was so outrageous. The opposite happened.

Why? Because who wants to be in the bottom 50%? Practically no one. If you open up salary information, everyone is going to want to be "above average," even in companies that pride themselves on hiring exceptional people--like Google.

This year, the median is $90K, so everyone will want $95K. Next year, it'll be 95K, so everyone will want $100K, and so on.

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michaelochurch14y ago

Fog Creek has a "ladder" system based on some fairly objective criteria. Based on years of experience and certain assessments of project scope and skill level, each employee gets a number between 8 and 16 that determines pay. This means that compensation is based on performance.

Now, the only point of controversy is whether the employee and employer agree on performance. If there's a discrepancy there, at least there's something meaningful to discuss and, if the difference is irresolvable, then they should separate.

This isn't perfect, but the gossip-driven salary-discovery system is even more imperfect and has the same problems.

gavingmiller14y ago

Could you elaborate on this criteria?

egor8314y ago

http://www.joelonsoftware.com/items/2009/04/01.html more links inside

older version http://www.joelonsoftware.com/articles/fog0000000038.html

michaelochurch14y ago

http://www.joelonsoftware.com/articles/Ladder.html

r00fus14y ago

Yes, the Verblen effect: http://en.wikipedia.org/wiki/Veblen_good (in this case the CEO is the Verblen good, the company is the customer).

j / k navigate · click thread line to collapse

0 pointsjseliger14y ago0 comments

This year, the median is $90K, so everyone will want $95K. Next year, it'll be 95K, so everyone will want $100K, and so on.

0 comments

michaelochurch14y ago

This isn't perfect, but the gossip-driven salary-discovery system is even more imperfect and has the same problems.

gavingmiller14y ago

Could you elaborate on this criteria?

egor8314y ago

http://www.joelonsoftware.com/items/2009/04/01.html more links inside

older version http://www.joelonsoftware.com/articles/fog0000000038.html

michaelochurch14y ago

http://www.joelonsoftware.com/articles/Ladder.html

r00fus14y ago

Yes, the Verblen effect: http://en.wikipedia.org/wiki/Veblen_good (in this case the CEO is the Verblen good, the company is the customer).

j / k navigate · click thread line to collapse