
Ask HN: Why do managers get paid more than individual contributors? - rishirishi
A manager in this context is one that has direct reports and does not directly contribute to the work.<p>It is not to say that what managers do is not important. But, I am not yet convinced that as a manager you should get paid more because you have direct reports and have people management responsibilities.
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pbiggar
In good companies there are two career paths:

\- a management track

\- an IC (individual contributor) track

There are different levels on the different tracks, and each is paid for that
level. A super experienced IC will be paid more than a junior manager, and
vice versa. So it doesn't have to be true that a manager earns more than an
IC, and for example many ICs at Google are paid millions of $$, much much more
than the average manager (or average IC, of course).

But when managers are paid more, why is that? Sometimes, the experience needed
to be a manager is higher. For example, an engineering manager that wasn't
previously an engineer may struggle to manage their team. As such, an
engineering manager might have 10 years of engineering behind them before
making the leap over to other track, and we don't just start them at the
bottom given their relevant experience.

Another reason is that managers are multipliers. A good manager can take a
team of good ICs and turn them into amazing ICs working together as a team. A
bad manager might multiply the team by 0.5, or 0.1, but no-one hires a manager
expecting them to suck, so you pay them as if their multiplier is 2x (and
hopefully fire them if they suck).

Of course, managers and ICs are different roles in the employment market. ICs
often don't like management (which is a challenging, and often very different
job from ICing). So they different have supply/demand curves.

If the above doesn't apply to your workplace, then the obvious thing is true:
they pay managers more because they value managers more. Whether that is the
right thing to do is clearly in the eye of the beholder.

~~~
rishirishi
Good perspective, pbiggar.

Question for clarification: Do those ICs making "a lot" report to managers
that make more, less or equal (generally speaking of course)?

~~~
pbiggar
Everything is highly situational. I couldn't tell you whether it's better to
have your most valuable ICs managed by the best managers, or whether the most
valuable ICs need only limited management and you should have your best
managers focusing on improving more junior engineers.

(This assumes that the "managers" are strictly people managers. Often,
managers might do some or all of managing teams, products, releases, people,
or technical leadership. It certainly wouldn't be unheard of to have a
manager's team include an engineer far senior to the manager.)

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scarejunba
This doesn't always happen but when it does, assuming economic efficiency and
perfect information, there are some good reasons:

* Managers' actions take effect across the entire team, and therefore having a 1x manager vs a 1.1x manager on a 10 person team is like if any individual (assuming evenness in the team) goes from 1x to 2x.

* It is harder to find someone who can effectively manage human beings than someone who can effectively solve technical problems. Mildly supportive evidence is the percentage of people who complain about their managers vs. the percentage of people who complain about how hard the problems they have to solve are. Your maximum attainable compensation is the minimum of the value you provide and the cost to replace you, and good managers are rare.

* In practice, few people are pure managers - they also solve technical problems. Often, they will participate in architecture questions, but not implementation. If they do so, their technical contributions are also on a lever.

However, there are secondary factors too:

* Managers tend to have more experience. More experience, until a point, leads to higher compensation because successful experienced people are rarer

* The depth to which humans perceive contribution to success is limited. A CEO will see whether his engineering division is effectively delivering value and reward or punish its organizational leader. Likewise all the way down the chain. This is leverage in terms of responsibility and risk.

But the short form of my theory is that where it's true, it's often because
they deliver comparatively higher value to the organization.

If it's true, a consequence would be that the organizations that have a
culture of self-organization and alignment will have managers that command
smaller multipliers solely on their management skills while those whose
members require substantial management (for mediation, communication, or
prioritization) will place a premium on managers.

~~~
rishirishi
For the sake of conversation, let's loosely define a manager as someone who is
responsible for enabling teams to succeed and assessing performance of their
directs. Could you pay that manager equal or less than their direct individual
contributors? How would the market respond?

~~~
scarejunba
Honestly, I don't know if it's not commonly the case. I have one direct report
who is paid 10% more than I am and I had an IC candidate reject us in favour
of Google last week who I offered both more stock and both more salary.

I don't honestly think this is very rare. Certainly word on the street is that
Netflix comp is fairly close on Senior ICs and Senior Engineering Managers, if
not slightly tilted towards the former, but I don't know for sure.

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iandanforth
Well let's start by noting that there are exceptions to this rule. A principal
engineer in a couple companies I've worked for was in a higher bracket than
almost all the managerial levels.

Next let's explore the ideal case. An engineer is very good at using tools to
accomplish work. A good manager should be very good at using/making/helping
_humans_ accomplish work. Totally different skill set, but not easy, and
potentially very profitable for the company. I think that there is a belief
that if you assume responsibility for a team that you are now the primary
locus of work getting done or not and thus your risk/reward levels are
increased.

The reality is more along the lines of, "persuasive people end up in control
of capital and then pay people like themselves more." Really effective
leaders, through myriad strategies both good and bad, manage to take the
potential work output of a group of individuals and focus it on _their_ goals
preferentially. This is super powerful. They see this as their particular
talent and power and, noting how powerful it is, want to compensate others who
are doing something similar. This is an admittedly jaded and machiavellian
take on management.

~~~
rishirishi
Your machiavellian take holds water, in my opinion.

If managers were paid less than (or just as much as) their directs, what would
change?

~~~
dasil003
If one company did it they'd lose all their good managers. If all companies
did it then all the engineering managers with IC experience would stay in IC
roles, and the managers you'd end up with would be much much worse.

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obelix_
Cause handling people and their issues is about 5000 times harder than
handling code. Your code doesn't get cancer, run away with a coworker, go
bankrupt, have opinions, lie, steal, needs to be told how to use a restroom,
needs protection when it's layoff season etc etc etc

~~~
phkahler
You seem to have a problem hiring the right people ;-)

~~~
xrd
How many people have you hired and managed?

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phamilton
They often don't.

But when they do, it's because of leveraged impact. If I'm a 10x engineer,
then that's a huge individual contribution. However, if I'm a 2x manager with
12 reports, then my impact is greater than a 10x engineer. That is to say, if
I can make my 12 reports twice as productive, then that's a huge benefit to
the org. If I'm a 2x director with 4 managers reporting to me, then that 2x
compounds through each level of the org.

Now, a 2x manager might seem far fetched, but so is a 10x engineer if we're
being honest. Think about your productivity under your best boss vs your worst
boss.

What is a bit of nonsense is bad managers. But that's a whole different issue,
with tomes of academic research (see The Peter Principle) trying to figure out
why incompetence is so pervasive in management.

~~~
im3w1l
It's hard to imagine a manager making people do 2x as much. But it's not so
hard to imagine a manager making people work on something 2x as important.

~~~
cosmie
Making your reports 2x as productive is far more expansive (and less visible)
than just ensuring they're working on stuff 2x as important or doing 2x as
much work.

Think of software for a moment. Has there every been a library, language,
framework, etc that you absolutely love to use? The API is just right, the
framework is the perfect level of opinionated vs. not opinionated, it just
gets out of your way and lets you accomplish what you want, it's consistently
reliable, it has fantastic backwards compatibility, it's error handling
semantics are clear and the right level of verboseness, the internals are so
well architected that it's also incredibly performant, etc.

 _It 's just such a pleasure to work with_. It's always just what you need,
right when you need it, exactly how you needed it.

A company is a system, just like software. And a team is a submodule within
that system. A 2x manager is the person that is able to make (and maintains)
their team into the type of beloved system I mentioned above. How they do that
is dependent on their expertise at comprehending, navigating, and influencing
the larger system, and shaping their team to be precisely what that larger
environment needs.

As hard as it is to do the above, it's really, really easy for a 0.1x manager
to destroy that type of system/team. A few breaking API changes ("my team no
longer handles those types of request you've been giving my team for years" vs
"I've spoken with team x and it turns out they're more appropriately staffed
to complete that work. Don't worry though, I've got a change management
process in place and will ensure the handoff is seamless for you", refactoring
some internal code that kills performance (i.e. losing important ICs without
any risk mitigation/change management in place), etc can all tank the goodwill
and community adoption of that once beloved system.

I switch between being an IC, a purely people manager, a functional manager
(i.e. a team lead with people management and hiring/firing authority), and a
"manager" (that's effectively an IC with a manager title so I have the
organizational authority to execute the type of work I was doing). If you've
never been a manager before, let me tell you: doing that shit right is
exhausting. The biggest difference between being an IC and being a manager is
that, as an IC, I'm able to ignore 90% of the bullshit around me and focus on
my work. As a manager (whether doing IC work or purely people-managing), I
can't _ever_ tune out that organizational noise/bullshit/dysfunction/needs,
because the more in tune I am with that the more likely that I can position my
team to support the company, and in doing so ensure the peace of my team.

It's hard to image what a 2x manager is, because there's no single way to
define one. But as an IC, having (or losing) a 2x manager will have a
noticeable impact on you and your team's productivity over time, in any of a
dozen or so different ways.

~~~
tbihl
Yeah, you nailed it.

I think of managing as keeping a bunch of freight trains from smashing into
one another. The manager can't claim to be making things move twice as fast,
and it's hard to recognize the absence of disaster as a contribution. But if
the managing were going poorly, everyone would be far worse off.

~~~
cosmie
Pretty much. A good manager is easy to spot by the how predictably their
freight trains crash (if its not above company norms or team standards prior
to their tenure). A bad manager is easy to spot, because you can see the
disaster around them. But a 2x manager is like a blackhole - there's nothing
to observe directly, and you can only spot one if you're carefully observing
everything around it. But if a really good manager disappears and is replaced
by just a good manager, you'll slowly see that blackhole-like influence
disappear and their team metrics revert to company norms.

------
apatters
To answer this question accurately you have to look at it from the perspective
of the person who has the authority to make the hires (e.g., C-level, VP,
people with financial control).

Aside from the multiplier effect of a good manager which is mentioned in a few
other comments, a manager is someone to whom the employer can delegate
responsibility. This is usually the most valued skill set an employee can
possess -- if as the owner/CEO/VP/General Manager you can just take a certain
area of the business, give it to that person, and sleep easy at night knowing
that it's taken care of, that peace of mind is worth any price because you're
now able to focus your energy on other areas of the business.

The same cannot generally be said about any IC (even though in come cases
great ICs can have a remarkable impact on the business).

As you go deeper down a corporate hierarchy motivations may become distorted,
but fundamentally this is how it works at the top.

~~~
jackgolding
yup i agree, find it weird that "delegate authority" is so far down the
conversation here.

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notacoward
Like others, I'll start by questioning the assumption behind the question. I
know I've made more than some of my managers, starting at least ten years ago.
Many people get this idea very early in their careers, when it's true because
they're just starting out and (obviously) their managers are not, but after
only a few years of big raises and easy level advancements it needs to be re-
evaluated.

When it is true that managers make more, there's no single reason. On the good
side, the effect of a good manager compared to a bad one can be bigger than
for an IC. On the bad side, managers get to whisper more in the ears of those
who control the money. In between, and most often, let me ask you one simple
question.

* Would you want to be a manager?

For me the answer is HELL NO. I got close to it once, and didn't care for it.
Many other ICs feel the same way. You'd have to pay us extra to give up what
we do now for management work ... and so that's exactly what often happens.
Supply and demand, pure and simple.

~~~
dasil003
This is true, over my career as my companies have grown I've naturally taken a
tech lead and then manager role because it was the most effective way to help
the team and it turns out I'm very good at it. But if it wasn't compensated
better then I'd simply stay in my lane as an IC, and the companies would
suffer due to having to bring in inferior management lacking technical skills.

------
pkaye
Most engineering managers I've worked with were engineers with strong
technical background who have good people or project management skills. I had
managers who wrote or knew every line in the code base. When someone left they
could take over on a pinch and cleanup the mess. These days I think it is more
common in startups to promote engineers to management too early before they
develop these skills.

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scarface74
I left a company where I was the Dev Team lead for a company where I am “just”
a Senior Developer. I happen to be getting paid slightly more:

My experience is that I was much more effective as a team lead than an
individual contributor. I was able to do and guide research, do proof of
concepts that other people productized and had far more accomplishments
guiding a team of junior to mid level developers.

Now, trying to implement the same kind of changes as an individual contributor
is taking far longer. I have more say so over the architectural direction of
my team now just based on my expertise and relationships and no red tape (here
I’m an AWS admin, at my prior company I had to go through multiple approvals
to get anything done), but since I actually have to do the work instead of
directing a team, my accomplishments are a lot slower.

I can see first hand the effectiveness of my manager and his ability to be a
force multiplier over my ability to get things done as an individual
contributor.

I’m not complaining, when I had a choice when I was looking for a job I could
have been hired as an architect/Dev lead making slightly more than I make now
using technology I was intimately familiar with but I wouldn’t be able to grow
my technical skills and I like development.

But the truth is, I could accomplish a lot more with a team of people
reporting to me but I purposefully stay in my lane even though my manager and
his manager are both pushing me to take a leadership position. I took this job
to learn and improve technically, not to manage.

------
Osmose
First, this is not strictly true; many senior ICs get paid more than managers,
and the comparison between manager-track job levels and IC-track job levels
varies at different companies.

Part of it is that good managers act as an umbrella for their reports and keep
unnecessarily distracting or stressful issues from taking up their time. But
that means the manager is dealing with that stress instead.

Part of it is that managers often have a broader scope of responsibility.
Senior managers and higher often have multiple projects under their belt and
are held responsible for their continued success.

Part of it is that the success state of a manager's work depends on the
success of other employees, which makes it more difficult for them to control
whether they do well by their own effort. A really good manager could be
paired up with a really bad employee who eventually has to be fired; did that
manager do a bad job since their report got fired, or did they do a good job
identifying that they needed to be fired? It's situational, and that ambiguity
increases the risk of being fairly rewarded. Higher risk demands higher
compensation.

Part of it is that demand for good managers is high enough that the market
prices their salaries higher. Anecdotally, I can say that a bad manager hire
has a much worse impact than a bad IC hire, so the stakes are higher, which
raises prices.

~~~
rishirishi
> First, this is not strictly true; many senior ICs get paid more than
> managers, and the comparison between manager-track job levels and IC-track
> job levels varies at different companies.

Are those ICs getting paid more than their immediate manager?

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marcus_holmes
Tradition mostly, I think. The old idea that a boss should be paid more than
the people they manage, because they won't be respected if they earn less.

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bsvalley
From experience, most managers suck, period. There are amazing managers but
it’s pretty rare. I won’t get into too much details here as the OP asked for a
specific question. But it comes from the fact that a 1st line manager’s job is
very close to babysitting, which is not the most rewarding job.

With that being said, why do managers get paid more? Think of it as parents
versus kids. Who has the most responsibilities? Parents... who has collected
the most data? Parents... who gets blammed when things go wrong? Parents...
who pay the price when things go wrong? Parents.

That is why manager have a higher salary braket in general. Plus, they usually
come from an IC path with a big hands-on experience. They’ve already nailed
the IC salary range.

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crb002
Supply and demand. They spend all day in meetings gathering requirements,
fighting to fund their staff, keeping their staff from being dragged off onto
other projects. Few can do it well.

~~~
lvspiff
I'd also add while they may not be doing the work the direct manager should
have general knowledge of what his people are doing and if they need
assistance or guidance should be able to either supply it themselves or be
able to summon the resources to make it happen. They may not be doing the work
directly, but the indirect influence they have to ensure they are building
their employees and having an effective team is what they are getting paid
for.

------
navinsylvester
Lets break it down a bit.

# Ideally you don't want managers to write code since that would set them on a
path where they can get preoccupied with stuff which is not the big picture.

# Managers tend to see the big picture and direct the team on its course with
good people management skills. This is one of the most significant role in the
organization.

# Measuring the importance of an individual to an organization based on
his/her pay package is not the right median.

# Most software engineers are pampered a lot unlike other profession so they
tend to have an inflated ego to assume they are worth more than almost
everyone. Just having an ability to hard labor a building construction never
meant the person is the most significant!. Not an ideal comparison but hope it
drives home the point.

In most cases people envisioning bigger picture can get paid more but that is
in no way an unfair thing.

------
smilesnd
Because it is the only incentive to make a IC want to change into a manager
role. Most of my engineering friends that went from doing interesting things
to being manager always reference the need for more money. Specially if they
were getting gray hairs or getting their kids ready for college.

------
bowlich
I would expect anyone in a professional position to be receiving whatever the
going market rate is.. which will likely not correlate to a chain of
progressively higher pay as you go up the local hierarchy.

This, at least has been the case for each of the SMBs that I've worked in
which managers are purely non-technical and hired for their ability to manage
people and projects (can't afford to not have Engineers doing engineering).

At one place, my direct sup was expected to wear both the manager and Engineer
hat (being technical). The next two layers up were middle managers who only
managed. Neither layer made more than anyone in engineering.

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tossaway44
It depends greatly on which part of a company you’re at.

At Microsoft, senior ICs (IC4 and above) make more than managers (typically
M3s) in engineering teams but often the tables are reversed in services and
sales teams, because managers in customer-facing teams have business targets
with direct bearing on their unit/sub revenue.

I’ve been in both kinds of teams, and there is zero correlation between actual
management skills and where HR rates them at, so YMMV.

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cjf4
>does not directly contribute to the work.

This is, in my experience, generally not the case.

Setting aside all the implicit indirect contributions (support, development,
coaching, personality management, etcetera), managers generally shape work by
deciding what work is going to be done, how to mobilize resources,
communicating the results outside the team's domain, and being accountable for
it. Those are direct, tangible contributions.

------
fizixer
I've never heard of the term 'individual contributor.'

Can anyone clarify?

As I understand teams are built from managerial roles and "worker" or
technical or engineering roles. If it has to be a three tier system instead of
two, it (typically) consists of a manager, then one or more tech/team lead(s),
then engineer(s). I'm not sure which one of these are individual contributors.
(or aren't they all?)

~~~
rishirishi
As per your description, engineers would be individual contributors.

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cel1ne
The following is simplified.

Managers are people who enjoy being around groups of people more than they
enjoy being around “things”.

ICs tend to reserve more time thinking and working alone and enjoy talks with
individuals more than navigating group-dynamics.

Enjoyment in groups leads to experience in group dynamics. Experience in group
dynamics and having many relationships gets you more chances to climb up the
salary ladder.

------
fouc
That's not always true.

~~~
megamindbrian2
I work for a company where the CEO admitted to earning LESS than the top
earner. The CEO is still worth more because of other assets, but the VP of
Sales earns the most annual take-home in the company.

~~~
hodgesrm
That's pretty typical for enterprise software. Sales people get zero equity--
their comp is purely a percentage of sales on top of a relatively low base.

This seems economically rational. You want your sales people focused on
selling.

------
badpun
In Europe, it's often not the case. Here, ICs are often hired as contractors
and thus exempt from the pay grades introduced by HR (while managers are
almost often employees). Plus, in many countries contractors pay less taxes
than employees, so their take-home pay is higher.

------
blizkreeg
Here's a simple rule for you to know. As you rise in your career and the
ladder, you get paid (more) for results, not actions or efforts.

Managers and leaders get paid more for that singular reason. Shepherding a
team to achieve a desired result is harder than it seems.

Of course there are bad managers...

------
PetahNZ
Responsibility, managers are expected to keep the project on track and held
accountable it its not

~~~
Tycho
Yes - as with all things, higher reward is for higher risk.

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6t6t6t6
Take a good developer, someone who is motivated and enjoys their job and who
has charisma and inter-personal skills.

Now tell them that they will not be able to code anymore and, intead, that
they will have to deal with other developers' problems.

You need to offer a good raise for that.

------
amriksohata
In terms of skillset I agree they shouldn't be paid, but what you are paying
them for is risk and responsibilities on their head. They are the first to go
if something goes wrong as they made the decisions so you paid them for that
risk.

------
namank
Manager jobs are significantly more stressful and harder to train for than
individual contributors. And my personal opinion is that good managers are
much rarer than individual contributors.

~~~
b34r
It really depends on how much the manager throws themselves into their work.
I’ve had a few really good ones that I felt were actually helpful and the vast
majority that just go to meetings and completely fail to isolate their team
from chaos.

~~~
namank
Yes absolutely. Managing a manager is hard. Objectives and accountability are
easy to get muddled because their tasks are all people based. I am still
looking for a practical and resource-efficient way to manage.

------
bdcravens
Not in every case, but if a manager previously did the work their direct
reports now do, and this is a needed role, higher pay is how you incentivize
someone to make that move.

------
ilkan
Why do waiters make more than cooks? There's your answer

------
aptenodyte
Two reasons:

1) they know how much everybody gets paid 2) they can keep secrets

------
RickJWagner
One of the great secrets that should not be:

Top-notch technicians (programmers) often get paid more than their managers.

True story.

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anoncoward111
Nepotism.

~~~
bdcravens
Except that many managers are hired externally.

~~~
anoncoward111
In that case, I would guess either still nepotism or just incompetence.

A lot of people will hire people from their college networks or whatever it
may be. If they're hiring managers blindly based on some alleged track record,
then they're just downright incompetent or taking a risk that has low odds of
working well for the team :)

