
The one-salary experiment, ten years in - polymetis
https://iwantmyname.com/blog/the-one-salary-experiment-ten-years-in
======
issa
I've always found it strange that companies don't give raises to current
employees. A team I am on just lost a good engineer to another company
offering him a $30k+ raise. He would have stayed if our company had even given
him half of that. Instead, they let him go, and how will have to hire someone
else, probably at that higher salary. So weird, and seems to happen a lot.

~~~
ui-explorer12
The same thing happens when you've been with a mobile/telecom/etc company for
a long time. They milk you for every penny they can get and give all the promo
pricing to new customers. The pay sales higher commissions for new sign-ups
and treat existing loyal clients like garbage.

It really bugs me to have to waste the time to change providers for everything
every ~2 years, but I'd feel like an idiot if I left thousands of dollars per
year on the table. It's a stupid game, and companies are not immune.

~~~
davidbanham
Many companies have done the sums on this and have dedicated churn teams. If
you call and tell them you're planning to leave because you can get a better
deal elsewhere they'll often match or better it in order to retain you.

It's a bit iffy since if everyone did this all the time the incentive to
advertise low rates gets removed. As an individual bonus, though, it means you
don't need to do all the paperwork it takes to change providers.

~~~
batiudrami
Most of the time it's as easy as calling and asking the first person you get
connect to if you can "speak to retentions". I've always been put straight
through.

------
ng12
People have written books on this stuff. There's an entire field of research
on this subject and I think tech people discount it for being "too MBA".

One of the most important findings is that pay generally will never motivate
employees, but it will reduce their incentive to leave. Generally most job
factors affect one of two separate but related scales: motivation to stay and
reluctance to leave. Entirely non-surprising that devs are the ones who left
because by hard capping their pay you are reducing their reluctance to go work
somewhere else with higher pay.

~~~
sa46
> Entirely non-surprising that devs are the ones who left because by hard
> capping their pay you are reducing their reluctance to go work somewhere
> else with higher pay.

The surprising part is that their dev retention (article notes small sample
size) of ~3 years matches Google at 3.1 years and surpasses Uber, Dropbox,
Tesla, Facebook and Airbnb. [1] That suggests that the culture created by the
one-salary experiment increases the motivation to stay enough to offset the
incentive to leave.

[1]: [https://www.businessinsider.com/average-employee-tenure-
rete...](https://www.businessinsider.com/average-employee-tenure-retention-at-
top-tech-companies-2018-4)

~~~
shhehebehdh
Well, maybe. Or it shows that they hired people who were relatively comp
insensitive, possibly due to being unable to command higher wages elsewhere.
Hard to know.

~~~
Aeolun
Isn’t that what was said?

~~~
titanomachy
The first comment said that the culture is so good that devs don't leave even
with capped salary. The next comment said (politely) that maybe they don't
leave because they are for some reason unable to command top-tier salaries.

------
steven2012
Right now I'm struggling with whether or not to leave. I'm currently at a
well-known company, and I'm uncharacteristically happy because my WLB is the
best it's been in my career.

However, I'm getting a bit bored and I also know I could make at least $50,000
a year more if I leave. Hell, even the new engineers joining my company at the
same level are making more than I am.

But the culture and pay at my company is just good enough such that staying
isn't a horrible decision. And I don't want to start studying dynamic
programming again for my interviews (I've never used it except in interview
environments, so I keep forgetting and losing the ability to quickly answer
questions).

So yes, I could make a nice amount more (plus large sign on bonus) but WLB is
good enough to keep me, at least for another year. I pick up my kids every day
at school and I love it, it's worth the money for now.

~~~
bmdavi3
What if you went to your manager, or whoever you feel is the right person,
asked if you could speak one on one, and said...

"I really love working at this company. The work is interesting, I love the
people, the culture, <one more legitimate pro goes here>. But I also know I
could be making X if I went elsewhere. I love the work I'm doing, and I want
to keep doing it here, but I also don't want to be leaving money on the table.
What can we do?"

This phrasing, pretty much verbatim, has worked really well for me in the
past.

~~~
readingnews
I wish I worked at your firm. I once worked at a place and saved them millions
in one year. At the yearly review, they said "well, that was some good work".
That was the entire review. When I said "how about giving me an extra 1k a
year (a bit less than others who had been there for a while were getting) I
was told we had no extra cash. Well... wow, I just saved you like 1.5 million
dollars. I am not asking for that, even spread out over 20 years I am asking
for 20k.

I have been reading HN for years. I have no idea how you people have such nice
jobs...

~~~
Waterluvian
I think what's most telling is what you did after that meeting. Did you quit
and go work elsewhere?

Don't get me wrong, I don't think companies should be so short sighted as to
nickel and dime employees. But your one true source of leverage is to actually
get up and leave.

~~~
flukus
There's a lot more leverage than that depending on the particulars of the
story. It may have been OP that identified a saving that could be made and
their leverage is a future unwillingness to identify such things. Maybe
they'll stop questioning things and "code to spec" in future. Maybe they'll
ignore those erroneous errors they notice throughout the day and wait for a
bug report in production.

Companies that don't give raises can expect all of these behaviors.

~~~
Waterluvian
To me that seems just plain immature.

~~~
flukus
It's immature to clock in, do exactly what you get paid for and clock out? If
the company expected you to do more than that then they would compensate
appropriately.

------
lawn
What happens when a skilled and very hard worker gets the same raise as
someone who's not as skilled and not working very hard?

For example if the skilled one solves the hard problems the less skilled one
cannot solve. And if the lazy one spends a bunch of time on facebook.

It isn't about the salary in absolute terms. It's about recognition and to be
appreciated for the good work he's doing. But instead he gets the lesson that
it doesn't matter.

Now there are two options:

1\. Get a new job

2\. Stop working so hard and stop caring about the work you do

Both are very bad options for the employer. This can only work if everyone are
of similar skill and motivation.

~~~
mkane848
This hurt to read, got hosed on my last performance review/raise because my
supervisor threw me under the bus for things he never voiced as issues when
HIS boss started asking questions he didn't know the answer to (because I do
all the work).

Got the same raise/bonus as someone he referred to as "retarded", so I've been
working on #1 because I've already caught myself doing #2 because even after
voicing concerns and trying to fix communication issues, management hasn't
changed at all.

The shitty part about #2 is that a lot of times you don't catch yourself doing
it at first. It starts off as just having a bad productivity day, then you
stop caring about busting your ass for a deadline because it's never
recognized, then you stop trying to chase after people to answer your emails
despite getting told that, rather than programming, I need to reply
faster...Slippery slope of apathy. I think I liked my job at some point.

~~~
scruple
> someone he referred to as "retarded"

Yikes. Even if I had gotten a huge raise, 25% or higher, if I heard my manager
say this I'd be looking for a new job that day. There's no way that person is
fit for their position. If they're willing to say that about someone in front
of you, you have to assume they're willing to say the same thing about you in
front of someone else. The point being that that behavior is very toxic, very
unprofessional, and is nothing but a giant red flag to get out.

~~~
mkane848
In the same conversation, he said "You're friends with <coworker> outside of
work, right? Look, don't tell him this, but we can get 10 of him, we can't
find many of you" then still gave me a 2.5% raise. I literally don't get what
sort of person you have to be to confirm that someone's my friend, then
proceed to shit on them in a professional setting. Head of the department (his
direct boss) was sitting there too. The co-worker in question has basically
been single-handedly tackling security and busts his ass, but luckily his
supervisor isn't terrible and goes to bat so he at least got the raise he
deserved (he's still looking for other jobs too, don't worry).

Been looking (not as hard as I should be) for a new job since that review,
unfortunately being stubborn about staying in central New Jersey isn't doing
me any favors. Just trying to maintain my sanity in the meantime while I look
around :/

~~~
scruple
That's honestly insane. I mean, you know that people like that are a dime a
dozen, and that they're obviously out there in companies all throughout
departments as rank and file and in management and executive positions. I
guess it's just a little bit extra terrifying to wake up one day and realize
it's your boss, and from what you're saying it's his boss, too.

> unfortunately being stubborn about staying in central New Jersey isn't doing
> me any favors. Just trying to maintain my sanity in the meantime while I
> look around :/

I know that all too well. I'm not dealing with managers who are as outwardly
assholish as you are but there's more problems than solutions where I work. My
current flavor of employment handcuffs are a full-time remote position. The
job itself isn't that bad, but I'm underpaid and overworked. The full-time
remote plus the little bit of autonomy that I have in my work keeps me from
looking too hard. Complacency, by any other name.

------
ACow_Adonis
As an economist, you'd expect them to have trouble attracting highly skilled
people seeking only wages.

On the other hand, also as an economist and from my own personal experience,
there's a whole host of non-monetary benefits a flexible business can provide
(which other businesses and corporates seem to balk at), and there's also the
little talked about preference of some people wanting a negative correlation
between pay and hours the job at the margin.

I've got my own stories. Issues I've had at previous employers include remote
working, flexible hours, leave, intellectual property disputes over my own
work, or non compete/ non publication issues.

When I left my previous job at banking, I actually interviewed for a lower
paid position at uni of Melb. We got to the stage where we were all happy,
only I said "I'll work for you if I can do 4 days a week, because I want to
send time with my family and working on my own projects".

The bureaucracy said no.

I walked away and I'm back in a higher paying job again...(but with better
hours and conditions than my previous ones).

Its always amazing to me the lengths businesses will go to in order to not
hire the right staff...

~~~
Consultant32452
All I want is the ability to get compensated for benefits I decline,
particularly the company health plan. I've never been able to negotiate this
successfully.

~~~
sokoloff
Do you really care if you get paid $190K + $10K because you didn't take the
medical plan vs just getting paid $200K whether or not you take the plan?

~~~
zbentley
That's a false dichotomy; outlays per employee depend on the benefits each
employee draws.

That said, dudul's comment on this thread indicate why this often is not
(financially speaking) an option.

~~~
sokoloff
All the more reason to negotiate for the thing that you care about (that my
W-2 box 5 says $200K at the end of a full year) and not whether you'd get more
because you skip a given benefit or less because we notice that you really hit
those Friday donuts pretty hard.

IMO, it's more productive to negotiate for _what_ than for _why_.

------
jessriedel
The first bullet point of the top comment from 5 years ago begins "As the
company grows,...". The company has N=20 employees now. How many did they have
5 years ago? N is extremely low for making any generalizations, and it
certainly isn't growing like a startup (in the sense Paul Graham uses the
term).

~~~
soneca
According to a comment on the original HN thread, their "about" page at the
time listed 8 people.

20 is not small enough to make it irrelevant as an experiment in my opinion.

~~~
jessriedel
Thanks for the number!

Case studies are not irrelevant, but it's generally a bad idea to generalize
from them without strong reasons. It's more like "Here's an effect I notices
in my one-off example. Keep an eye for that to see if you notice it
elsewhere."

------
gwern

        20 total employees
        all but four are still involved with the company
        all four that left were developers
    

What fraction total are devs?

------
scriptkiddy
From the article:

> To me, the ideal workplace is one that lets me enjoy my own life… not one
> that tries to merge with it.

I don't think I can overstate how profound this is. I've worked for a couple
of companies that tried to sell themselves with "You'll be part of a family",
or "We do all sorts of department events". It always means the same thing: "We
want you to stay in the office as long as humanly possible and we'll treat you
strange if you want to work from home instead of commute 1.5 hours to the
office every day."

Unfortunately, the "family" mindset seems to be growing more popular in many
sections of the software industry.

If a job doesn't require physical presence in order to completed to a high
degree of quality, remote work should not be treated as a privilege.

What's strange to me is that in most tech companies, having employees work
remote could drive expenses WAY down considering that the company would not
have to rent/lease/buy any office space, desks, coffee machines, etc. It also
means that they will not need to pay an office manager or janitorial staff.

------
mutatio
The approach seems fanciful - especially if applied to organisations with more
diverse roles - for example would they really pay a janitor the same as a top
level developer? The cynic in me feels the fact they don't have a broad
spectrum of roles (20 total employees); the organisation is engineered to not
be disparate in terms of expertise. More cynicism: most "lowly" roles would be
outsourced to service companies and conveniently sidestepped.

~~~
ComodoHacker
You can always outsource cleaning and other service jobs and say proudly "We
maintain our principles".

You can even try this with some high paid but infrequent job like system
architect.

~~~
pbhjpbhj
You can say you maintain your principles, but you clearly aren't of you're not
paying _everyone_ the same.

------
tfehring
I wonder how much of the perfect retention for non-developers is because of
"gold-plated handcuffs"? It would obviously be nice to make X% of the market
rate for your position for X >> 100, but it would not be nice to have to take
a (1 - 100/X)% pay cut if you want to leave the company for whatever reason.
Lots of people can't afford to take a substantial pay cut because they align
their recurring expenses, particularly housing, with their salary.

Also, it's interesting to consider how much this would force "bullshit jobs"
to be automated, either internally or through SaaS offerings. Note that
"bullshit" != "traditionally low-paying" \- customer support roles, which are
crucial but traditionally low-paying, are the obvious counterexample.

~~~
cortesoft
Yeah, I have definitely noticed this... when I was younger, I felt a ton of
freedom, knowing I could get another good job easily if the one I was in went
south. As my career advanced and I kept making more money, I started to
realize that there were fewer and fewer jobs available that could pay my
salary.

It is a weird feeling.

------
kazinator
Someone who makes pinwheel trinkets sold in a dollar store simply doesn't
deserve the same compensation as, say, a skilled machinist. That's not my
personal prejudice: the free market for the labor end products themselves
decides that by pricing them differently.

When some workers with different skills are paid the same under the umbrella
of an organization, it's shielding them from these market effects.

This concept simply cannot scale to an entire economy.

~~~
smashcash
> Someone simply doesn't deserve

> the free market decides that by pricing them

You are conflating deserve with what the market will provide.

------
zitterbewegung
The article says that the top 10 % for software developers in SF is $136,000
(and they state that this is low). I thought that the top 10% is around $200k
of compensation? Am I wrong?

~~~
trishume
I think the issue is they got that figure from a site that only counts base
salary, when a lot of high end dev compensation comes as bonus or stock.

~~~
caprese
yeah although people want to know "how much do people make" or "how much are
people paid"

they - and the sources they find on google - quickly conflate income, salary,
compensation while also having wrong and old aggregated information for all of
it

this works for most people's fields, doesn't work for tech.

------
ars
So, how much do they actually pay? If the article said, I didn't see it.

------
caprese
> the average software developer in Wellington NZ makes NZ$64k. We pay more
> than that, but when you become a remote company, people start looking for
> the $134k USD

These are two different scales, so for help I will normalize them:

$64,000 NZD = $43,641.60 USD

$134,000 USD = $134,000 USD

~~~
robocat
I am very skeptical of that reported average.

The average salary in Wellington, is NZ$59,649.

Maybe get a new graduate for $50k.

~~~
robocat
"Skilled IT candidates are in high demand across the country and employers are
offering more to secure talent with a 3.1 per cent increase in average pay to
$110,657"

[https://www.stuff.co.nz/business/109953426/trade-me-data-
sho...](https://www.stuff.co.nz/business/109953426/trade-me-data-shows-where-
nzs-biggest-salaries-are-in-2019)

Why is payscale so horribly wrong? Are employers spamming it to use as an
argument for lower pay?

------
breadbox
Fascinating! Thanks so much to the company for writing this followup -- every
year or so I've wondered how this company was doing and if the experiment was
still going. It's heartening to learn that it is.

------
chrisco255
I love iwantmyname's service. Super easy to use and been using it for years.
One question I have is, does everyone have equal equity in the company there?
And if not, does this not count as additional comp besides salary? Also, it
would seem to me that this becomes less sustainable the larger your team gets.

~~~
sitharus
Looking at the Companies Register the answer is no, employees do not get
equity. That's likely due to how equity-based compensation is treated in New
Zealand tax law. It gets complicated so it'd be unusual for a small company to
do it.

~~~
nathan_f77
That's very strange. I have a friend who joined a startup in New Zealand, and
they also didn't get any equity.

Maybe startups in New Zealand could start offering some equity to attract the
best software developers.

~~~
sitharus
yep, the biggest NZ startup - Xero - gave equity to all full time employees.
The difficulty is accounting for it due to how income tax is assessed on
stocks which makes US-style stock options unattractive. Most companies that
offer stock do it through a related-party loan and a bonus to pay that but
there are interesting tax implications.

------
dang
From 2014:
[https://news.ycombinator.com/item?id=7713916](https://news.ycombinator.com/item?id=7713916)

~~~
e1ven
Do you think it'd be worth adding a feature to link those automatically?

~~~
dang
Probably, but it's not obvious how to write software that gets that right,
i.e. finds the interesting links that a human would find via searching, while
omitting the uninteresting or unrelated ones.

This case is a good example. I found it by searching on the domain and the
word 'salary'. But could software have picked it out of
[https://news.ycombinator.com/from?site=iwantmyname.com](https://news.ycombinator.com/from?site=iwantmyname.com)?

------
rgoulter
Aside from pay, I find the anti-hierarchical aspects interesting.

How people interact in a small business is surely different than in a larger
business, so I'd guess small business is more inclined to need a culture of
"we're all in this together".

I think that "everyone is as important as everyone else" is in tension with
"the market rate for developer and support roles are different than our flat
salary".

I think they're right about some of the negatives about "traditional
performance reviews and salary negotiation". But I'd be cautious about whether
"everyone is as valuable as everyone else" brings more problems than it
solves.

~~~
dcosson
Yeah, I have a really hard time seeing how this would be a nice culture to
work in. Everybody is clearly not as valuable as everyone else, and it seems
pretty inevitable that people would come to resent each other and stop working
hard, if you’re just as valuable whether you do amazing work or mediocre work.

------
aristophenes
I don’t think this can work on a larger scale. If you pay a doctor the same as
you pay a medical technician, who is going to go through 4 years of med
school? Some sure, for the love of it, and those will be the best. But we
already get those. It seems to me that this company can exist, because
everyone else has created the market that creates more developers. If everyone
else did the same, everyone would already be scrambling for just as many devs
out of a much smaller pool.

------
pjbster
_3\. I’m not sure how the accounting would work, but if we kept the salary the
same and tied it to a quarterly bonus structure based on company profits, it
could create a more direct link between short-term productivity and income.
(That’s not really a fundamental change though… more like a nudge.)_

Don't do this. This is the first step towards stack ranking and your 2nd-best
developer walking out the door. Followed by the new 2nd-best after that.

I've never seen it tried but I think profit sharing should be allocated along
salary share lines. So if you pay 20 employees an equal salary they should all
get an equal share of the dividend. If an employee is actually paid, say, 7%
of the total salary pot then they should get 7% of the dividend and everyone
else would get their %-age share correlating with their %-age of the salary
share.

If any rock stars feel they're owed "their fare share" since they did more
contributing, then they should negotiate a mutually agreeable salary or find
another employer who values them more in line with their expectations.

I'm aware that successful pro athletes expect individual performance bonuses.
As do successful Large Company" employees. Whether this is just survivorship
bias in action or not, I'm not qualified to say.

------
jopsen
Maybe it's not a bad thing to avoid hiring narcissistic overconfident wannabe
rockstar developers :)

I'm not saying there aren't awesome developers who are worth their weight in
gold. But maybe some shops don't need them.

That said, allowing for a single salary per level for junior/senior/.. might
be fine too.

------
sjapkee
>We don’t believe in a hierarchy or in more important people.

You shouldn't believe in this. This is fact.

~~~
dtech
Valve is a well-known company that works like this. People who've left say
that hierarchy and power structure still exist, but is informal and hidden.

~~~
rcxdude
Exactly. A power structure will always exist, and it's generally better (or at
least fairer) when it is at least explicit and relatively transparent as
opposed to implicit and hidden.

~~~
Retra
Does the power structure actually need to be reflected in the pay scale
though?

~~~
rcxdude
Not necessarily, no (in fact it may be inverted, e.g. managers making less
than an engineer or technician under them).

------
Simon_says
Do all employees have equal equity?

------
tengbretson
This seems like a great idea if what you are trying to build can be
accomplished by a bunch of average to slightly below average developers.

------
howard941
I'm interested in learning in how these excellent results work outside of Kiwi

------
craneabove
fishtoaster, where you at?

------
scarface74
They can say all of the feel good stuff they want. I always have the same
question - are there outside investors? If there are, by definition the entire
purpose of the company is an exit strategy. Statistically, that exit strategy
is to be acquired. As an employee without equity you should have no loyalty to
the company above getting a check every two weeks and doing your best work
during those two weeks.

The owners of the company are concerned with maximizing their returns - you
should be also.

The “lifestyle businesses” are the only ones where I believe that there is any
chance of the founders being truthful that they want to “have a different type
of company.”

~~~
village-idiot
While I’m somewhat sympathetic to your point in general about loyalty, I think
you’ve missed the point by a lot. This is more than “feel good words”, this is
a concrete set of actions about compensation that affects how much money gets
paid to whom. In the world of business it doesn’t get much further from “feel
good words” than that.

I would also advise caution about loyalty for equity. Bery few startup
employees are paid enough on exit event—if it ever happens—to compensate for
the time, stress, and loss of wages that they incurred over a non-startup job.
Most people would be statistically better off not working for equity, and just
accepting cash.

~~~
scarface74
Oh I don’t trust equity either. I wouldn’t take less than market compensation
under any condition.

If they are investor backed. They are still playing with other people’s money.

