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The Almighty Buck Businesses

Open Salaries: the Good, the Bad and the Awkward (yahoo.com) 258

Posted by Soulskill from the increasing-your-income-with-game-theory dept.
gollum123 writes: More employers, from Whole Foods Market, with 91,000 employees, to smaller companies such as SumAll and Squaremouth, are opening up companywide salary information to all employees. They generally don't disclose it to the public—but one company, Buffer, posts all employees' salaries on its website. The idea of open pay is to get pay and performance problems out on the table for discussion, eliminate salary inequities and spark better performance. But open pay also is sparking some awkward conversations between co-workers comparing their paychecks, and puncturing egos among those whose salaries don't sync with their self-image.
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Open Salaries: the Good, the Bad and the Awkward More

Open Salaries: the Good, the Bad and the Awkward

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  • Everything is going just fine for Whole Foods and they need something to fuck things up.

    I would think a Board member would tell them that this opens a can of worms and will ultimately distract from the core business.

  • State employees (Score:5, Insightful)

    by 110010001000 ( 697113 ) on Wednesday January 13, 2016 @12:41PM (#51294113) Homepage Journal
    Personally, I am in the private sector, but I don't care what others are getting paid. Usually a company will trot out the line: "well you are making more than the average so you didn't get much of a salary bump this year". I tell them I don't care what the average is, that is someone elses problem. And we are all making peanuts compared to the executives, so who cares what the "average" for the company is. Obviously "average" doesn't apply to C level.

    • Re:State employees (Score:5, Informative)

      by i.r.id10t ( 595143 ) on Wednesday January 13, 2016 @12:53PM (#51294221)

      State employee? I are one. And my salary is available via public information request. In fact, a few years ago our IT department had to provide a dump of name, position, and salary to a local newspaper which promptly posted it on their website, searchable, sortable, etc.

      • Yes, I was one too at a University once and my salary was public information. Not sure if every state does that.

      • State employee? I are one. And my salary is available via public information request. In fact, a few years ago our IT department had to provide a dump of name, position, and salary to a local newspaper which promptly posted it on their website, searchable, sortable, etc.

        My only "day job" was working for the state of Indiana, at Indiana University. Each year someone would publish a list of all employees with salaries. I have a really good memory, so my salary negotiation each year was "so and so is incompetent and they're making $x, plus that represents an increase of $y over the year before that. Also, so and so always comes to me for help and he's been here 15 years and makes $z". I felt bad for my boss, as there was simply no refutation.

        She told me when I quit after

      • Are you sure that it even takes a public information request? There are sites on the internet that aggregate public employee salary data and make it available through a simple google search. My salary and my co-workers' salaries are available for anyone to see through such a search because we work for a public state university. It even includes previous years' salary data. In fact, a google search for just my name brings a link to my salary on findthedata.com within the first page of results!

    • My last job was at a state agency. Salaries were online for everyone to see. I didn't notice any problems related to that.

      In my department, at least, each person's job was a bit unique ; nobody else did exactly what I did, so there wasn't a direct comparison. Raises (without a promotion) were quite limited because the legislature only approved 1%-2% per year merit raises for the agency, meaning almost everyone got a similar raise. To give one person a 10% raise would mean 9 other people got no raise, so t

  • Buffer salaries (Score:5, Informative)

    by 110010001000 ( 697113 ) on Wednesday January 13, 2016 @12:46PM (#51294163) Homepage Journal
    Here is a link to the buffer salaries. https://open.buffer.com/transp... [buffer.com] It pays to be a hipster!
    • Also, they are paying 70k+ for a job with the title of Twitter Hero. And the company looks like it generates social media spam messages. It is amazing a company can make so much money doing something completely useless.

      • It is amazing a company can make so much money doing something completely useless.

        Welcome to the internet citizen.

      • Re: (Score:2)

        by Nidi62 ( 1525137 )

        Also, they are paying 70k+ for a job with the title of Twitter Hero. And the company looks like it generates social media spam messages. It is amazing a company can make so much money doing something completely useless.

        It is surprising that people who create nothing can make so much (WTH is a "happiness hero" anyway). Sadly they make more than I do and if no one was doing my job then a significant portion of global travel would literally stop within months.

      • Re: (Score:2)

        by swb ( 14022 )

        It is amazing a company can make so much money doing something completely useless.

        I think the social media space is full of these kinds of companies only because ad agencies are full of clueless executives who only know that they need "social media capability" and don't have it, so they farm it out to this kind of company, mark up the cost, and pass it on to their client.

    • I was curious, so I took a peek. Can anyone tell me what the hell a "Happiness Hero" is or does? I'm guess customer service or HR, but a title like that is so damned saccharine they'd have to pay an extra $5,000 for the necessary dental coverage.

  • In Norway, EVERYONES salary is available (Score:5, Informative)

    by Anonymous Coward on Wednesday January 13, 2016 @12:49PM (#51294185)

    In Norway, EVERYONES salary is available and guess what, nothing bad happened.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      In Norway, EVERYONES salary is available and guess what, nothing bad happened.

      Not exactly. Total income after tax deductions are published. But you have no idea if that total is from one job or several jobs or stock market profits or real estate profits or whatever taxable sources of income a person may have. All you get is the sum. Also, you don't know what tax deductions have been subtracted from the published total - people are always surprised when some millionaire has 0 taxable income. Probably paid a lot of interest or invested everything . . .

    • Re: (Score:2, Interesting)

      by war4peace ( 1628283 )

      You don't say...
      https://en.wikipedia.org/wiki/... [wikipedia.org]

      Yeah it has nothing to do with salaries but it has everything to do with "nothing bad happened".

    • Yeah, Norwegians are atypical. They jump out of saunas into frozen lakes... nothing fazes them!

  • Huge breach in privacy.

  • Might cause more problems in a big company (Score:5, Interesting)

    by ErichTheRed ( 39327 ) on Wednesday January 13, 2016 @12:54PM (#51294231)

    Everyone who works for a big enough organization has probably run into people who you have no idea how their salary is justified. I'm not just talking about "oh, I'm better than him because I know more," I'm talking about the secrets that confidential salaries can hide:
    - Board members' less-than-qualified family members/business associates/friends getting paid a relatively huge salary compared to their role/contribution
    - Senior level people who have been "parked" after a division closure or similar event -- often because they have lots of knowledge that would otherwise disappear, more often because they are politically connected
    - Revealing how much politics really affects salaries would be a huge morale-buster.

    The bigger the organization, the more these become apparent. For example, look at HP laying off 30,000 employees or IBM laying off 20,000. Most of it is probably offshore talent replacement in these cases, but I'm sure there are plenty of highly-compensated people left over from acquisitions, etc. that they're just taking the opportunity to purge because they were making a lot of money and not contributing a lot.

    • This is exactly what happens and why companies are so dead set against employees discussing compensation. You have to ask yourself if you want to know and if you're being ripped off are you willing to live with it or walk. If you can't answer those questions it's better not to look.

      A little off topic but similar in result. I was working for Compaq when HP took over. HP execs were outraged to find out Toshiba was charging Compaq substantially less for a particular HDD they both sourced.

      • Re: (Score:2)

        by DamonHD ( 794830 )

        We are running an open payroll (to other staff, not public, though we did consider that).

        We are small and a start-up and not paying anything astonishing to anyone, but it sure takes away some furtiveness and toxicity that we can just have the discussions out in the open. Some do stuff for us for free for the open source goodness, some we pay "London Living Wage" to which is a bit above minimum wage, and some we pay a little more than that. Only myself and my co-director are full time and we get paid less

    • Re: (Score:2)

      by dj245 ( 732906 )

      Everyone who works for a big enough organization has probably run into people who you have no idea how their salary is justified. I'm not just talking about "oh, I'm better than him because I know more," I'm talking about the secrets that confidential salaries can hide: - Board members' less-than-qualified family members/business associates/friends getting paid a relatively huge salary compared to their role/contribution - Senior level people who have been "parked" after a division closure or similar event -- often because they have lots of knowledge that would otherwise disappear, more often because they are politically connected - Revealing how much politics really affects salaries would be a huge morale-buster.

      The bigger the organization, the more these become apparent. For example, look at HP laying off 30,000 employees or IBM laying off 20,000. Most of it is probably offshore talent replacement in these cases, but I'm sure there are plenty of highly-compensated people left over from acquisitions, etc. that they're just taking the opportunity to purge because they were making a lot of money and not contributing a lot.

      I agree with your first paragraph- there are about 6 father/son pairs in my company of just ~55 employees, and in many cases, one of the employees is terrific, and the other is completely worthless. Sometimes it is the father, and sometimes the son. It is impossible to get rid of the "bad" one without risking the "good" one leaving as well.

  • A lesson learned as a Scout (Score:3)

    by Marginal Coward ( 3557951 ) on Wednesday January 13, 2016 @01:03PM (#51294295)

    As a person with 30 years of experience, it seems likely that I make more than my boss, who only has 6 years of experience. In fact, by boss's boss once hinted something to the effect to me. So, is that unfair to the boss? We could debate whether he or I contribute more to the organization, or whether I'm worth X times what he makes. But that's irrelevant. Presumably, when my boss has 30 years of experience he likely also will make more than someone who has only six years of experience.

    This is a bit like the union "seniority" system. Fairness comes not in terms of value-added per pay-received but in terms of the fact that ostensibly underpaid younger people will eventually become ostensibly overpaid older people.

    You may disagree with the above, but what if everybody in this story knew each others' salary? I think that would just lead to a lot of bad feelings by those who feel they are underpaid (which was me in a past life), and wouldn't accomplish much of anything. It seems like a very bad idea to me, and not just because I'm now a highly paid senior person, but primarily because I saw the problems it caused among me an my coworkers when I worked at a Boy Scout camp at age 15: being young, we didn't know not to discuss these things, and when we discovered apparent discrepancies in our pay, it led to a lot of bad feelings.

    • Re: (Score:2)

      by Rinikusu ( 28164 )

      Not in the slightest. I've worked for several organizations, both in the .gov contracting sector and in the private sector, where job salaries were posted on the job postings (and available for lookup in "the book" or now on an intranet somewhere). You could grouse about how lousy someone was at their job (just remember, someone is most likely grousing about *your* performance, too), but we all knew what we got paid.

    • I would argue that it led to trouble because you and your co-workers were 15 years old and couldn't behave and think like responsible adults. The entire Federal Government basically has open pay data. There is actually a site, I'm too lazy to look up atm, which lets you lookup how many civil servants, and of what pay grade, work for every agency. Within agencies everyone knows what pay grade everyone else is in. Many people will complain about how the government can't do anything right, but when it comes to

      • Looking back on that time now that I am a "responsible adult" (tee-hee), I still don't think what went on back then was fair, and I don't think that knowing the discrepancies did me any good.

        As has been pointed out here, there are many cases of open pay that seem to work. I just don't think it's the generally preferable thing. Specifically, I don't know what the big advantage is. One thing I can think of is that it might somehow lead to some sort of "fairness" by treating pay in some sort of systematic w

        • Why would you think that government employees would be immune to it? What makes them different, other than the fact that they work for an employer that uses an open system? Do you think only people who are okay with openess work for the government? On what basis?

          I don't work for the federal government, but like many state employees my salary is public information. I deliberately *don't* look at what other people make because it is too depressing (anyone who thinks that publicly disclosed pay makes it equita

          • Why would you think that government employees would be immune to it? What makes them different, other than the fact that they work for an employer that uses an open system? Do you think only people who are okay with openess work for the government? On what basis?

            Maybe government employees also are somehow immune from irony*.

            *more irony...sorry :-)

  • Comment removed (Score:4, Interesting)

    by account_deleted ( 4530225 ) on Wednesday January 13, 2016 @01:03PM (#51294299)
    Comment removed based on user account deletion

    • > as his earnings from any assets he may hold in the buffer corporation such as interest from stock or dividends paid.

      Fyi stocks pay dividends, bonds (loans) pay interest.
      If someone loaned the company $100,000 and they are being paid 4% interest on that loan, that's an entirely separate transaction from whether the person is also an employee of the company. If the company issued bonds, anyone, any employee or non-employee can buy that bond (make the loan) and be paid interest on the money they loaned.

      Si

      • Comment removed based on user account deletion

        • Re: (Score:2)

          by jdavidb ( 449077 )

          this is how the vast majority of millionaires BECOME millionaires - buying a bit of stock each month, typically through a mutual fund.

          This is a widely held belief, but its false. The average millionaire is a millionaire because of the concept of dynastic wealth. They are rich through the lottery of birth

          {{citation-needed}}, for both of you.

        • I'm generally aware of the rising importance of inheritance on wealth inequality, but do you have any source or data where we can see that the majority of millionaires are such because they inherited their wealth?

          I know a lot of boomer millionaires, and most weren't born into it. Most saved a lot during the 60s, 70s and 80s to get there.

          I think your point holds true for people with net worth > 10 million. But a million dollars isn't much these days.

        • Less than 10% of millionaires inherited significant wealth.

          I'm currently DOING this, getting rich, and it IS working, just like it's always worked for other people who do it. It's not quick, but it works. At this point you decide which is most important to you - holding on to a mistaken belief or retiring as a millionaire. Because this is how it does work.

          Here's a calculator for you to run different scenarios, but the bottom line the calculator will tell you is that you need to EITHER save $480/month (PR

      • Re: (Score:2)

        by pnutjam ( 523990 )
        Sure, let's just pretend that CEO's and management class don't get huge stock grants and stock options, watering down the value of the stockholders.

    • get employees to compete amongst eachother for salary equity

      You forget that national and multinational corporations employee people all over. I for one know that I make a less than those in my department that live in CA, although I am probably in a better financial state than them because the cost of living in the mid-west is considerably lower. I don't gauge my salary by what the company pays everyone else but instead by what other companies are paying for talent in my area.

    • Huge difference between salary and total compensation. Stock options, bonuses, etc. In addition, many execs at that level get a lot of perks like corporate cars, air travel (corporate jet or spousal travel), lodging and sweetheart loans that are forgiven after some milestone (time or performance based), as well as a host of other "goodies". That $218,000 is likely more like walking around money.

  • the concept worked for U.S. C.E.O.s (Score:2, Interesting)

    by Anonymous Coward

    When U.S. publicly traded companies had to disclose top managers' compensations their collective compensations increased. Employers couldn't really screw them over. (Arguably, it was these employees screwing them.)

    Capitalism/shareholders really can afford being squeezed of profits in order to pay fair market value for labor.

    • Are you sure you have your timeline correct? I thought it was the trend of their compensations increasing that lead to the disclosure requirement.

  • This is actually quite smart. When you have low skilled employees, a poor economy, and weak organised labour, making salary data available basically turns your employees on themselves. It would make it harder for a single employee to negotiate a higher salary, and general labour market conditions (outsourcing, unemployment etc) will keep aggregate salaries suppressed. Pretty much the opposite to why tech companies are so secretive about the astronomical amounts they have to pay technical staff.

    As for those

  • Transitions are allways awkward (Score:5, Insightful)

    by erice ( 13380 ) on Wednesday January 13, 2016 @01:18PM (#51294379) Homepage

    The problem is not that salaries are now open. The problem is that they were secret for so long allowing various forms of corruption to grow and fester. It is always awkward when previously hidden rubbish is exposed to the light. The solution, though, is not to go back to hiding salaries but to keep them open. That way existing inequities get cleaned up and new ones are not allowed to sprout.

    • I had a job several years ago where the recruiter called me for a $25/hour tech job. When I went to the interview, I was informed by the assistant manager that the manager was out and that the job paid only $15/hour. I told him I was no longer interested in the position. For several weeks the recruiter and manager tried to get me to reconsider. A few weeks after that, the recruiter accidentally emailed me a spreadsheet with salary information and the position I was applying for only paid $10/hour.
    • I'd actually prefer to see how much income tax everyone paid. I don't care so much if a CEO managed to wangle himself a million dollar salary, I do care if that prick is not contributing to the system that allows him to earn it.

  • Something rotton in the department... (Score:5, Informative)

    by __aaclcg7560 ( 824291 ) on Wednesday January 13, 2016 @01:25PM (#51294429)
    I had a boss who made a big deal about giving me a routine 2% raise after I was with the company for six years. When I pointed out that I got a 50% raise after my first year and every raise since then was always 2% because of the salary cap, he got mad because I made more money than him for four years. Although we were coworkers for nearly five years before he became a manager, he thought he was better than everyone else and his paycheck proved it. That I made more money than him for many years didn't sit well with him. Needless to say, I got a job and a 40% pay raise at a different company.

    • My Father decades ago worked writing software for mainframes in assembler. Part of his compensation was some percentage of commission on sales and licensing of stuff he wrote. A fellow co-worker and him both noticed over the years that whenever either of their pay managed to exceed their managers pay for the year the commission percentage would get trimmed a little for the next year. My Father never seemed to indicate that this upset him, but he did seem to take perverse pleasure in pushing his pay high eno

      • That manager was an idiot.

        In old school companies where you must always make more than your 'down reports', you use the most successful of your 'reports' to drive your own salary up. You don't hold his down, that's just stupid.

  • This isn't that new. People in unions can typically calculate what anyone else makes based on their position and seniority. People in the military know just by rank plus a couple other factors like danger pay. In Ontario, Canada if you work for the public sector and make over $100,000 your name and salary are published in a list every year (colloquially called the "sunshine list"). This is usually done for the same reasons stated above, and usually benefits the employees overall (which is why unions req

  • But in the short to medium term, it's going to cause a lot of problems. In most companies of any size there are wage disparities between people in the same job for a variety of reasons, exacerbated by the simple fact that companies rarely pay you more than they think they can get away with. So when a company institutes transparency like this you will have a lot of people who were reasonably content suddenly very unhappy to discover that some of their teammates who are doing the exact same job are making m

  • My dad always told me... (Score:4, Insightful)

    by bobbied ( 2522392 ) on Wednesday January 13, 2016 @01:44PM (#51294625)

    A company can never pay you what you are worth because they'd never make a profit doing that.

    I think, he was telling me to that I should work for myself if I really wanted to get paid. I think he was right. You don't get rich working for somebody else. It's a good living sometimes, but after 25 years I'm not getting rich doing what I do...

    • A company can never pay everyone what they are worth. They can pay more than you in particular are worth. (For a fun game, ask three people across the political spectrum if CEOs fall into the second sentence or not).

      And worth is relative. You can certainly be worth a lot to one company, but almost nothing to any other.

    • Re:My dad always told me... (Score:5, Insightful)

      by Solandri ( 704621 ) on Wednesday January 13, 2016 @03:06PM (#51295361)

      A company can never pay you what you are worth because they'd never make a profit doing that.

      While that's literally true, it's more complicated than that.

      If you work at a company, you are able to devote 100% of your time doing what you are best at. Call it $100k worth of work. Your pay may be, say, 70% of that 100% productivity's value - $70k. So the company is "only paying you" 70% of what you are worth.

      You say screw them and decide to work for yourself. You get bogged down doing a lot of bureaucracy and paperwork running your own business. Taxes, accounting, tracking down and wooing new clients, dealing with defective product returns, booking your own trips or scheduling vehicle repairs, etc. If that takes up 30% of your time, then you are only able to produce only 70% as much work as when you were working at the company. Consequently, you end up making... $70k. Same as when you were at the company.

      When you worked at the company, you spent 100% of your time doing what you are best at. Someone skilled in taxes and accounting spent 100% of their time doing those things. Someone good at getting new clients spent 100% of their time doing that. etc. So the stuff that takes 30% of your time when you are self-employed, is done for only 10% of these people's time because they are much better at it than you are.

      Consequently the net cost to the company to produce the same amount of work you did when you were self-employed is $70k + $10k = $80k (keep it simple and assume everyone gets paid the same per unit of productivity). The value of your work is $100k, they paid you $70k, other workers $10k (for the fraction of their work they do related to you), and the remaining $20k the company kept for operations and profit.

      You were working just as many hours as when you were self-employed, but you were doing only what you were best at doing, thus you were more productive. You were getting paid just as much as when you are self-employed ($70k), but your higher productivity by putting you together with other employees is what allowed the company to make a profit. There's also synergistic effects. If you're a specialist in materials and another employee is a specialist is biochemistry, the two of you together may be able to come up with a great product which neither of you could've made alone.

      Adjust these numbers a little and you could actually end up making more money working for a company than you could alone. It takes a special blend of someone with a trade skill, plus accounting skills, plus management and organizational skills, plus people skills (to woo customers) to succeed on their own. If you are deficient in any one of these skills, you are probably better off working for a company where people better at these tasks can handle it for you. (Or you can start your own company but hire or partner with someone skilled in the area you're deficient in - how Jobs and Wozniak complemented each other.)

      The real benefit of working for yourself isn't that you make more money per hour of work you put in. Most self-employed people work more hours because they spend 8 hours doing their trade skill, then 2-3 more hours afterward doing all the management and paperwork. The real benefit is that if you succeed, the fruits of your success pass directly to you, instead of being absorbed by the company. (The flip side of course is that if you fail, you don't make money or even lose money, whereas working for a company you're guaranteed to make at least your salary. Employment is like a savings account at a bank - you can't lose money, but you pay for that safety with a very low interest rate. Starting your own business is like taking your money and investing it in stocks instead of putting it in a savings account - you could make a lot more money, but you could also lose money.)

  • Google employees do this informally (Score:4, Interesting)

    by Shawn Willden ( 2914343 ) on Wednesday January 13, 2016 @01:54PM (#51294699)

    Some employees chatting about salary openness decided to take it upon themselves to do it. Someone created a Google Form and shared it on a very widely-used internal mailing list (~40K subscribers). People could choose to provide their username or not; many did. About 3000 employees added their data in 2014, which included career ladder, level, location, gender and base pay rate. For 2015 the form was revised to add "total compensation", because a significant part of Google employee compensation is in the form of stock grants and bonuses. Analysis of the numbers shows that compensation is pretty fair. There's no gender gap (not surprising because Google HR watches those stats closely). There are some significant differences between people at different locations, but those correlate pretty well with cost of living differences.

    • Keep in mind that employees who earn "total compensation" are either managers or engineers. Everyone else works for contractor agencies that provides a paycheck and a standard benefits package. If someone is fretting about the current stock price, they're not a contractor.

  • and puncturing egos among those whose salaries don't sync with their self-image.

    Awwwww. We need some of this on wall street and every corporate boardroom.

  • Haven't these been around for a while? Is this news?

  • The number of independent variables exceeds the number of data rows. Therefore, it is possible for a set of rules to be created to arbitrarily map each employee to any desired salary. In other words, these "rules" are less effective AND LESS TRANSPARENT than arbitrarily setting each person's salary.

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