

Why I Never Let Employees Negotiate a Raise - markmywords
http://www.inc.com/magazine/20090401/how-hard-could-it-be-employees-negotiate-pay-raises_pagen_2.html

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ratsbane
This is not the first of Spolsky's essays that's left me simultaneously amazed
at his brilliance and clarity and dismayed at something around the edges that
just completely misses. Maybe it's just the title that's misleading. His
emphasis on openness is great but he's really just moved the discussion from
"how much money" to "how should I rate your contributions." Most salary
discussions come down to this question and it's a concept that's very
difficult to define precisely. The guy whose lunchtime conversations shape his
colleagues' ideas may have made a profound contribution but if his own direct
efforts don't match "Has consistently had major success..." then I'm guessing
there's still a lot of room for negotiation - particularly if the employee
realizes that making this case will give him a lot more money. Focusing on
output is great, but that's what most salary negotiations end up being about.

~~~
spuz
I think the point is that Joel tackles the problem of assessing each
employee's contribution straight on and unambiguously. I'm sure there is
opportunity for negotiation if you believe you have made more contribution
than your position on the ladder would suggest. Most other companies won't
even attempt to explain how they determine salaries because they are not brave
enough to tell their employees "you're good, but not great". Equally, most
employees aren't willing to discuss it objectively - we all think we're above
average, right? By attempting to put more structure around the process, Fog
Creek are making it a lot easier for them and their employees to talk openly
about their (and their colleagues') contributions.

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roschdal
_"Because salary information is viewed as particularly sensitive, employers
often go to great lengths to keep it under wraps."_

In Norway, salary information is viewed as public information. Each year the
government releases the income, assets and amount of payed tax of every
citizen, so that the media can make it public. It is then made searchable
online, for example here: <http://skattelister.no/>

~~~
wallflower
In the U.S., companies that want to use H-1 visa programs must release
specific salaries for specific titles.

Warning: Look at these databases at your own risk. You may be shocked at what
others at your company are probably earning. Google H1-B salary database.

~~~
helwr
thanks, i even found my own case there

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portman
I'll make the same comment I made when this was posted last year:

Fog Creek has secret _profit-sharing_ plans. All Joel has done is move a
portion of employees' compensation from the "salary" column to the "profit-
sharing" column.

If Joel were to begin posting the annual profit sharing of all employees,
including Michael and Joel, then this article would make sense. But until
then, it's just flair.

~~~
df07
I work at Fog Creek, and this is just incorrect. Profit sharing is a simple
formula known to everyone in the company, so you can easily figure out how
much everyone made in profit sharing at the end of the year.

Honestly, I know it sounds too good to be true, but all compensation is
completely open and honest.

~~~
portman
That is not what I was told when I asked last year. Thanks for jumping in and
clarifying.

Just to be clear - does that apply to Joel and Michael too? If so, a tip of
the hat to both of them.

~~~
df07
Since the formula is based on number of days worked, I've always assumed that
they just use the same formulas for themselves (and they get a lot more
because they've worked at Fog Creek much longer than anyone else), but I guess
I've never asked.

But I think the point is more that I know I'm not getting screwed over
compared to my peers in the company -- it wouldn't really bother me to find
out that they take extra for themselves since it is their company and all...

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oliveoil
Say what you want about the article, but there's one really nice thing about
his system: because there's a formula instead of negotiation, the good hackers
who are often poor negotiators don't have to worry they have lower salary than
the average or poor programmers who just happen to have better people skills
or however you call it.

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huherto
"I found a Seattle-area software-consulting firm called Construx that had
published on its website the outline of a decent professional ladder system"
It sounds like it is just another consulting firm. Construx founder and CEO is
Steve McConnell, he wrote some great books about software development back in
the day.

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robryan
I find the experience idea their very arbitrary, so no experience from when
your in school counted and 1 year no matter how many years in a "menial"
position.

It kinda implies that while in school you couldn't have possibly picked up any
experience that would define you above someone who has a year of industry
experience.

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kurtosis
An off-topic Complaint:

I was going to read this article, but halfway through the first paragraph some
stupid ad blocked my view. I'll definitely think twice before clicking through
on anything pointing to inc.com again.

~~~
j3fft
same here. super annoying. not sure I'll ever read anything from inc.com
again.

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bdr
"if you're the kind of person who likes to use self-important HR jargon"

Wow, talk about self-important. People have a term for something you just took
a paragraph to explain. Can you guess why? This comes across as a pointless
dig to make yourself feel superior.

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helwr
this whole Microsoft-style pay scale reminds me of government jobs, or worse -
Soviet Union where my parents earned a standard doctor-engineer-truck driver-
movie director-nurse salary of 100 rubles a month +/- the bureaucrat defined
'pay scale'. Come on, people, this is a free market!

"is this the UDA? / Or is this the IRA? / I thought it was the USA / Or just
another country" (c) Sex Pistols

~~~
jerf
Capitalism is a series of centralized entities embedded in a larger sea of
freedom with no (theoretically) overarching order imposed.

Fog Creek is free to compensate people in this manner. You are free to seek
employment elsewhere if this is a problem.

It would not be a free market if either A: the government mandated this
approach (or worse, mandated the pay scale) or B: an oligarchy formed where
everybody determined compensation the same way. So far, neither have happened.

(Ironically, many people's proposed solution to various problems caused by
their not liking one particular centralized entity's choice is to centralize
the entire market into one entity. You didn't say anything about that, I just
can't resist pointing that out. Unionizing programmers could have this effect,
though.)

~~~
_delirium
It might be worth noting that there's a decent amount of debate in free-
market-capitalist circles over just how natural it is that these centralized
entities emerge, versus how much they're encouraged/enabled by the government.
A lot of the structure of the modern corporation is basically state-created:
the limited-liability corporate status to begin with, the centralized form of
management with a board of directors, etc.

If there was no built-in scaffolding of corporate status and corporate law,
and it were just individuals operating in a free market forming whatever
arrangements they want via private contract law, it's at least _possible_ that
large, centralized entities wouldn't emerge as easily or as frequently. From
that perspective, the modern "sea of centralized entities" version of
capitalism is itself centrally planned: the government decided that it'd be
best if the economy were made up of a sea of centralized entities, and wrote
the rules so that it happened.

~~~
billswift
Companies exist because they reduce the transaction costs of getting things
done relative to doing everythig with independent contractors for example
(<http://en.wikipedia.org/wiki/Transaction_cost>).

The libertarian argument is about how much government regulation influences
the size of companies, that is how large companies would be absent regulation,
the vast majority of which impacts smaller companies more per dollar of income
than it does larger one.

Limited-liability is a natural, almost inevitable, requirement for joint-stock
companies, such as corporations, to exist. It does NOT limit criminal or
tortious liability of the company; all it does is limit the financial
liability of investors to what they have invested in that company, so if your
retirement account bought stock in a company that went bankrupt, it is only
out what it invested, it does not have to contribute toward paying off the
company's secured debt.

~~~
wlievens
The libertarian argument (not sure from your post if you hold it) is pretty
simplistic.

What kind of government regulation is keeping Microsoft at near-monopoly
level? (if you disagree it's a monopoly, pretend we're a decade back in time)

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brc
The main thing here is that Fog Creek has plenty of margin to use. When
there's plenty of profit to go around, of course you can come up with money
for everyone.

The key question, then, when applying to a company for a job, is do they have
the profit to throw my way?

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zacharypinter
Printed view:

[http://www.inc.com/magazine/20090401/how-hard-could-it-be-
em...](http://www.inc.com/magazine/20090401/how-hard-could-it-be-employees-
negotiate-pay-raises_Printer_Friendly.html)

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JangoSteve
I feel like my system is simpler. I pay people what they're worth to me
(provided I can afford it). Even this system isn't perfect... given a
specified experience/skill level, they may be worth more to me 2 months ago
than they are now (or vice versa). But it makes it very easy to decide what
everyone should get paid.

If they are worth X, but I can only pay Y (where Y < X), then I pay Y (and
hope that they'll work for Y) until I can afford to pay them X. At that point,
I raise their pay to X.

Also note that, if they are worth X, but you can only pay Y, this should only
be a temporary situation. Because, if they are truly worth X, then once you
hire them there should be no reason you cannot afford to pay them X eventually
(since they are bringing that value to your organization).

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sliverstorm
Congratulations, you just invented how public school teachers are paid (at
least so long as unions remain in power). You have one extra measurement, it's
true, but the system is still massively flawed.

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TheSOB88
This site had 3 pop-overs. I'm not sure they want me to read their content.

~~~
frederickcook
Agreed, terrible. The last one didn't have a place to close it, so I bounced.
Too bad, since the discussion looks like it was an interesting article.

~~~
wushupork
I opened firebug and set the display to none but yeah there was no close
button and it was annoying as hell.

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dnsworks
"If you worked as a receptionist for six years, for example, you aren't
credited with six years of experience; I give you credit for one year." I'm
sure Joel's next receptionist will be happy their years of servitude didn't go
to waste.

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eplanit
I thought Joel promised us that he was retiring from writing.

~~~
culled
If you look at the comments you'll see that the oldest one is from April of
last year.

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benofsky
I find it interesting the Spolsky said he was going to stop writing yet keeps
coming back. He mentioned on SO podcast that it was because it was such a time
suck and that's why he wanted to give it up. Obviously he loves it and just
can't...

~~~
tbrownaw
There's apparently no date on the page, but the date in the URL is from about
a year ago. Which makes sense, since I know I've seen this before.

~~~
benofsky
Ah ok :-) - sorry I missed that!

