Employees may benefit from open salaries, but it is not at all clear they benefit from fixed compensation. By removing any option to bargain, wages can be kept suppressed by appeal to the system that defines them; collective action would be needed to negotiate a rise to everyone's salaries, and this is unappetizing to most. Currently, good negotiators can help to steadily float the compensation of all employees by raising the compensation percentiles across the board (good negotiators are likely spread across companies that compensate at different levels of the spectrum, based on field, ability etc), which are typically used by companies when calculating their opening offers to candidates.
So, open salaries are a good thing because they increase the number of good negotiators. Fixed salaries are not, because it eliminates all negotiators.
Speaking from the perspective of a recent college graduate:
Seeing ranges via Glassdoor has been very helpful in understanding what I'm worth. Of course that data is not going to be completely accurate, but it's a baseline that I find helpful.
Although Glassdoor is great, it's not a silver bullet. I want to see an even more open culture about compensation moving forward.
It seems to be a trend over the last 2 years. Not sure why, but it could be in reaction against the anti-employee practices google/apple & co were engaged in:
This assumes that you live in a low crime environment. Otherwise the increased transparency could easily be used by criminal elements for targeted crimes.
If it's shared in a corporate environment or anonymously, it shouldn't. I generally expect most of the people I work with the be in a +/- 10% band for my "peers", and +10-50% for my immediate management level, which my understanding is pretty accurate from the numbers I've seen.
I don't know about recently, but this has always been an obvious way to keep salaries low. If you restrict the information people have, then of course you can screw some of them over. Its in corporation's best interest to create taboos around salary so you feel more ashamed of being ripped off than angry for being ripped off.
This has already played itself out with price tags. Back when buying things was a personal negotiation process, it was possible to rip some people off while you had to work to get a good deal. This of course continues today with cars. However, its incredibly hard to charge people different prices at a grocery store when all prices are public. So too it would be very difficult to underpay someone if salaries were public.
The flip side of that is that it's possible for some employees to get very high salaries which companies wouldn't be willing to offer if all salaries are public.
When I worked for a big company, there were people I was absolutely OK with making a big salary. Some people were just absolute superstars and everyone knew they were awesome for the team. Of course, I have no idea what they made. What would actually be harder however is to give underserving people larger salaries.
This already happens in a fuzzy way now right: most everyone understands that their boss makes more money. We don't know exactly how much of course, but its "understood". If we transitioned to a place where people who are doing amazing work also make more money, I think there'd be no problem at all.
The problem is that performance is much fuzzier than salary data. If you're not working directly with someone and if you don't have a great handle on what business metrics are, it can be very hard to understand why they're producing so much more value than you.
This effect can be even more distorted when people start irrationally factoring in years of experience. If salaries were public, you'd definitely start to see people who have put in their 10 years gripe about newcomers earning way more than them (often justifiably).
It also penalizes good negotiators, which might be a socially positive thing but I certainly wouldn't like it.
> It also penalizes good negotiators, which might be a socially positive thing but I certainly wouldn't like it.
It probably penalizes snazzy dressers and charismatic people too, which snazzy dressers and charismatic people probably don't like.
But at some point you have to ask, what is a company optimizing for? It has limited resources, X dollars to spread amongst Y people. If you optimize a system to give a lion share of that to good negotiators, its not just socially worse, its economically worse for your business. You might find yourself with a hiring system that ends up with good negotiators instead of good engineers (if an engineer that is socially awkward receives a better offer from somewhere else, he may choose that offer instead of using it to "play" you to get his salary up).
> It also penalizes good negotiators, which might be a socially positive thing but I certainly wouldn't like it.
No, it doesn't penalize good negotiators. It fails to reward them when being a "good negotiator" isn't relevant to the business metrics for the position they work in, but the absence of an unearned reward isn't punishment.
And this isn't merely socially positive, but its a positive for the business, because it increases the incentive for good negotiators to seek positions where that is relevant to job duties, since it avoids rewarding that skill where it is not relevant. As such, it increases the alignment between the incentives provided by compensation with the business interests of the employing firm.
If you find out you are getting paid less than others in your company it's possible that you are getting ripped off but it's also possible that they are seen as more valuable than you. The problem is that no one is going to accept being told that.
As I mentioned in a lower comment, I would be fine being payed less than someone who is clearly doing more than me (where more is a function of the job of course). When I was an engineer at a large company, there are many people there that I'd probably be upset about NOT making more than me. This does not mean I'm underpaid. Underpaid is when you are paid less than what you are bringing/the market rate.
Landon Donovan is a superstar that brings in the crowds to LA Galaxy. Bradford Jamieson IV is an 18 year old who has a career total 8 goals.
The point is not having everyone settle on ONE average salary or something, its not allowing similarly skilled/performing people receive widely different salaries based on unrelated things like negotiation skills. If anything, I'd wager in the sports world most similarly performing athletes make similar amounts thanks to this.
I can see a world in which open salaries benefit both employers in aggregate and employees in aggregate. (Intuitively, this shouldn't be surprising; more information leads to a more efficient market.)
Open salaries have the effect of making it easier for people to ask for numbers close to the mean, and harder to ask for numbers far from them. Obviously this benefits employees currently making lower numbers. But also, if there are companies paying their "10x" programmers huge salaries because they're worried about them jumping ship, open salary data from other companies helps push back on that, which saves the company money (that could be used to fund paying everyone else more).
Companies that don't do heavy amounts of recruiting don't have a good sense of what competitive salaries are, because they aren't regularly getting indirect information from candidates who negotiate. Open salary info helps these companies pay closer to the true competitive salary, which prevents them from losing good candidates without risking overspending. This is definitely good for the company, but it's also good for employees who have a fairer choice of jobs at fairer salaries.
Closed salaries are a great way to maintain the status quo. There is some Prisoners' Dilemma-ish behavior where one company opening salaries alone probably gets them a particularly bad result in the short term, so the clever thing to do is to exert social pressure for everyone to cooperate.
The same group of people trying to drag us all to the lowest common demonitator.
The same people who don't want parents reading to their children because it gives that child an advantage over children who's parents don't have time to read to the child. [0]
> The same people who don't want parents reading to their children because it gives that child an advantage over children who's parents don't have time to read to the child.
Er, the WND article you cite to support the existence of such people greatly distorts the ABC source article [0] it cites, where the quote it takes out of context is not supporting an argument that parents shouldn't read to the their children as it presents it (and, in fact, is a joke -- a "quip", in the words of the source -- made by the speaker before being followed by: "We should accept that lots of stuff that goes on in healthy families—and that our theory defends—will confer unfair advantage".)
The philosopher isn't arguing against parents reading to their children, he's discussing work he and a colleague are doing to construct a principled philosophical theory in favor of the family, including the particular activity that WND wants to miscast the article as presenting him as opposed to.
Its always a good idea to have some skepticism when reviewing a news report, and to follow through and check sources (especially when they are linked so it is nearly zero-effort to do so.)
Perhaps particularly with a site with as strong an ideological bent as WND posting something that fits so neatly into an ideological stereotype as that article.
I seem to have been misunderstood due to the bluntness of my reply. But even your article admits that these people exist in the opening paragraphs.
>So many disputes in our liberal democratic society hinge on the tension between inequality and fairness: between groups, between sexes, between individuals, and increasingly between families.
The power of the family to tilt equality hasn’t gone unnoticed, and academics and public commentators have been blowing the whistle for some time
My bad for selecting a shitty source - I pay absolutely no attention to the political slants of different news agencies - but my point stands: people are making these arguments. They will argue for "equality" by dragging anyone above them down to their level: the LCD.
I can easily see how my parent post could be misconstrued as arguing Swift is making this argument. My argument is that he is investigating this issue largely because people exist that are making these arguments.
> But even your article admits that these people exist in the opening paragraphs.
No, it does not "admit", or even indicate, or even hint, that there are people arguing that parents should not read to their children because it creates an unfair advantage.
> but my point stands: people are making these arguments.
Well, there's 7-ish billion people on the planet, so perhaps somewhere you can find one making the argument you refer to, but when you do, I think its going to be hard to support your claim that the group making that argument is, even approximately, coextensive with the group proposing open salaries.
The book Predictably Irrational[0] has a good section on how making the salaries of CEO's of publicly traded companies public information is one of the things that has helped lead to their salaries spiking so incredibly in recent years. It's been some time since I read the book but if I remember correctly the argument is that making them public basically removes any social embarrassment or taboo around having extravagant salaries. If sharing salary info becomes more commonplace in other areas I wonder if you'd see the same thing or the exact opposite.
I haven't read that book, but isn't increased negotiating power for CEOs a more likely explanation than social embarrassment? If I've been chosen as the lead candidate for a CEO, it's a lot easier to justify a large salary if I can point at our competitors and say that I should be paid competitively to their CEOs.
It is more of a creeping process. Since no boards think their CEO is below average (if they did they would fire him/her). If their CEO is above average then the compensation they feel their CEO is due should also be above average. If everyone starts doing this then the average CEO salary will keep rising and rising. We end up in a world where all the CEO’s are above average and their salaries are in the stratosphere.
The fact that board members are also themselves either executives in the same or other firms, or likely to be employed as such in the future, means that board members also have a self-interest in the trend of rising executive salaries.
Governmental or state university-employed developers (as well as all other employees) have long had their salaries a matter of public record. Their salaries generally are lower than private sector though total compensation including paid time off (often 6-8 weeks/yr) must be considered.
Yeah, when I worked for 5 years as a developer in municipal government, I may have had less total take home pay than some of my peers, but my "hourly rate" was easily comparable. I had 5 weeks of vacation a year to start, and worked 35 hours a week, every week.
You're right that making the CEOs of publicly traded companies helped cause them to increase (among other reasons), but wrong about the mechanism.
What actually happened was the following. Suppose you're on the Compensation Committee of a board of a publicly traded company. You're deciding the CEOs salary. How do you do this? Simple, you take a look at the other public companies that are comparable (revenue, market cap, sector, etc). You get an average.
Now you don't want pay your CEO the average rate, do you? After all, he's clearly above average. So you choose a rate that's say, 75% percentile.
But this algorithm plays out iteratively. Each iteration, compensation for CEOs go up as every company tries to pay above average.
Not all H-1B's are treated like that, but regardless, the public data is inaccurate.
It tells us the amount on the original application, not the amount you're necessarily getting paid after working there for a while.
I've had my H-1B for several years, and the amount I'm being paid now (I have never transferred to another company) is more than double the amount listed on the internet. Same story for the other 2 people in my company (~50-person startup) currently on a H-1B.
Great, let's take 3 cases from the same company and use that to extrapolate how H1Bs are treated in the US.
I was an H1B too, and I was very well paid, it doesn't change the fact that the majority of H1Bs are used to underpay foreigners who won't complain by fear of being let go and sent back home in 24 hours.
As an engineer in the bay area, I don't really want to share my salary information. It's very personal. I don't want people to know that I'm making far less or far more, I just don't even want to think about it. I already have enough things that cause me social anxiety, I don't really need another. If I'm happy with my salary, why can't that be good enough? I'm fine with people being allowed to talk about how much they make, but if I don't want to share my information, that should be OK too.
I would probably consider not working for a company if they said they made salaries public. Some people value their privacy to a greater extent I guess.
For the record, I don't think it should necessarily be posted everywhere what salaries are (even though I do in fact believe that would be net positive), however I think the culture around salary discussion needs to change. People need to not be offended by the question (you can of course deny the information).
As I mention in a comment below. Compare this to other transactions: if grocery stores convinced everyone that the price of eggs was a very personal matter, and impolite to share, such that I couldn't ask you "hey how much did you get those eggs for at the store?", then they could absolutely start charging incredibly variable rates. All of a sudden you'd need to do your research on "market egg rates" and "egg negotiation tactics". You have to know your stuff to make a good case for spending 5 bucks on those eggs. This happens today with car dealerships and any bart-based system, where of course the seller has much more information than the buyer.
So too your boss has much more information than you during a salary negotiation. He knows if your proposed salary raise is bogus because he can compare you to similar performers, you can't. You have no idea if the raise he offered you is good or 10% what everyone else is getting. If after raises were handed out everyone shared them with each other, I ASSURE you they'd at the very least make sure that the people that deserved good raises got it.
The point is not for employees to share their personal information, but to manipulate employers into transparency about the prices they are willing to pay for employees' time. People are sharing their salaries not because they are personally keen on revealing their own information, but because convincing enough people to do it all at once effectively forces their employer into transparency whether they like it or not. At that point, it's harder for management to argue that continued secrecy would accomplish anything positive.
The real goal is to create a new norm where companies publish their salary ranges openly instead of being cagey about it, so that it will be obvious when particular employees are being underpaid, and so that prospective employees can make rational, informed decisions about where they want to work.
The idea is that transparency would mean that companies have to keep things more equitable and/or be able to clearly articulate why some people make more than others. That seems like less social anxiety to me. But I don't see any reason why it couldn't be voluntary and achieve more or less the same end. If employers know that it could be made public, they'll have to behave as if it will be made public.
I am in the Valley, and while I don't want my salary publicly disclosed, I am willing to reveal it in hopes that it helps everyone else get more competitive salaries - better salaries = happier employees.
Is there a non-company-specific place to post salary info? Maybe many of us on HN could provide data on it. Particularly interested to see salaries outside the valley, in the UK as well.
I just had a realization (seems obvious in hindsight), here's my hypothesis:
The desire to share salary is inversely proportional to the gap between the top and bottom.
On one extreme, if every engineer were paid exactly the same, there's clearly no reason to hide salary, since everyone knows it. At the other extreme, where one engineer is paid $500k/year and another is paid $100k/year where both were hired on the same date and do the same work, the higher paid one doesn't have much to gain from publishing salaries. Nor does the company, since they're getting the same value from both engineers, but saving $400k on the cheaper engineer.
Reality is somewhere in between these two extremes.
> one engineer is paid $500k/year and another is paid $100k/year where both were hired on the same date and do the same work, the higher paid one doesn't have much to gain from publishing salaries. Nor does the company, since they're getting the same value from both engineers, but saving $400k on the cheaper engineer.
This makes no sense. The company could fire the enigneer making $500k and hire 2more at $100k, and still save $300k.
I get that you're fitting numbers to the example, but when everything else is held equally, pay discrepancy is typically 5-10%, based on ones ability to negotiate.
Your huge mistake is in assuming employers have access to a deep pool of available talent they believe is qualified. Rightly or wrong, employers are very picky about who they find attractive , and they perceive a shortage. Hence they pay extra to good negotiatiors.
I've been open about my salary for years with friends and family and the taboo is starting to change it seems. When I first started talking about salary in the early-2000's I met a lot of resistance, but now I've notice friends dropping how much they make in casual conversation.
For me at least, there is no embarrassment and instead is used to make decisions about the future. If someone makes more, I ask myself why and how can I get there? If someone makes significantly less, and they care to know, I tell them how I got to where I am in hopes of helping them.
Unfortunately, employers trying to squash this has not changed. I remember 15 years ago when I got sat down the first time, by a fortune 100 company, and told we do not talk about salary. I also remember when the same conversation happened in a start up just a few months ago. The motivation still hasn't changed -- keep the worker 'happy' and underpaid whenever possible through information disparity, intimidation and "right to work" laws.
I really hope this "open salary" trend doesn't continue. It has the effect of systematically decreasing the standard deviation in developer salaries. Poor negotiators (and some poor performers), of course, love having access to this salary information as pointing to a public average is any easy way to ask for more money without having to put much effort into actually negotiating. Great negotiators, on the other hand, are getting salaries far above the median for their positions and the additional information wouldn't help them at all. I strongly suspect that if salaries were public companies would be far less willing to give in to great negotiators as a single isolated case could easily cause cascading demands from other employees.
(Note that salary ranges/averages are irrelevant if you're a great negotiator except as a story-telling tool. All you should be playing with is your BATNA and the company's BATNA.)
If you don't think open salaries have a negative effect on top engineer salaries, look at how little Buffer is paying.[0]
In the status quo, open salaries are a tax on poor negotiators which companies and good negotiators split. As a pretty good negotiator, I hope we don't go public.
What is the social value of having negotiation skills be a large determinant of one's salary? Why not diminish this cause of variance (perhaps relatively disadvantaging those who currently have anomalously good negotiation skills, but perhaps benefiting those who have not bothered specifically developing negotiation skills (or who have erroneously convinced themselves that they have))?
You're saying that we shouldn't talk about pay, because when we talk about pay we get paid like Buffer devs do, which you think is obviously low compared to other salaries, which we can't actually prove because we don't talk about pay.
It's a bit like telling someone that you're giving them $100 in a box, but not to open the box, because if you open it, it'll turn into $20. "You can only have a high salary if you have no way to verify that it's high." Even if true, where does that leave us?
> which we can't actually prove because we don't talk about pay.
Just because salaries aren't public doesn't mean you can't get any salary information. Just go on a few interviews, set up an auction, and see what you can get.
> It's a bit like telling someone that you're giving them $100 in a box, but not to open the box, because if you open it, it'll turn into $20.
It's a cute analogy, but the more complete version would include a box market, where other people with insight into the box market are interested in buying the box I've been given. In such a scenario, I could shop around my box to see what it's actually worth without having to open it up.
"There's $100 in this box. You can't open it, or look inside it, but trust me, it's there. Now you need to go over to my mate George, and give him the box, and he'll give you $100 for it. But only if you haven't opened it!"
Now it just sounds like you're being recruited as a drug mule. :)
Okay, granted, in your scenario their are multiple box dealers who are willing to bid on your unopened-but-totally-contains-$100 box. If you work at it, it's quite possible that you might even get some semblance of a fair offer. But should you need to work at it? And this still feels like a system which lends itself to collusion, uncertainty, and unfairness. Nor is that even hypothetical; we KNOW that our industry suffered from a serious wage-fixing cartel which was only recently busted open.
I feel like any argument against transparency has a high bar to clear.
One hopes that you're being paid for value to the company, and it's not obvious that being good at negotiating your own salary is well-correlated with providing value / having valuable skills. Though I see that morgante disagrees, so maybe we should explicitly discuss this!
I actually think it's not only rational but also good for the industry and society (long-term) for employees to push hard on improving themselves at the expense of their current employer. But many employers will act in what seems to be rational self-interest, and prefer candidates who won't prioritize themselves over their employer when it's close to zero-sum. (For instance, many employers require tracking and approval of expenses, instead of saying "We hired you to act in the company's interest" and dealing with abuse of expensing after the fact, as they would with e.g. abuse of root credentials.)
I'm also not particularly convinced that being good at negotiating your own salary is well-correlated with things you might do on behalf of the company, especially for many non-management-track software engineering careers.
> Though I see that morgante disagrees, so maybe we should explicitly discuss this!
I'd actually love to have a discussion about that, as I think it's an implicit assumption behind a lot of these anti-negotiation threads.
For my part, I do think that negotiation skills correlate with ability to deliver business value. Ability to command high salaries tends to follow from: (a) understanding what businesses actually value, (b) understanding market dynamics, (c) strong storytelling and communication skills, and (d) confidence/risk tolerance. All of these are, to me, valuable skills for software engineers as they help to translate business strategy and market dynamics into functioning software.
(Then again, I come from a place of believing engineers should have broad latitude and that software-driven companies should be more like law firms.)
So I think that's true for some roles but not all. I personally end up arguing about what markets we should and shouldn't enter, presenting at industry conferences, etc., because I find that interesting. But, for instance, a junior ops employee on a pager schedule primarily provides business value by getting good at the technologies that other people have chosen, not by paying attention to the market, by being able to present convincing arguments to others, etc. Yet that's a crucial role to business values.
I think this may be true of junior roles in general, and I think it's junior roles where I'm most worried, as a social-responsibility thing, about the fairness of salaries. I care less about earning $150K when I should be earning $200K than I do about earning $50K when I should be earning $100K, since it makes far more difference in my quality of life. (Even though they're the same delta value for the company!)
I could buy that there is a more generalize skillset of communication and persuasion: ops getting dev to clean up messes before putting them in prod, developers convincing open source maintainers into fixing their bugs for free, employees convincing prospective new hires to join, etc. And I do think it's valuable to measure that in addition to raw technical skill, both in hiring and in performance reviews. But I suspect there's enough reason to doubt that that correlates strongly with personal salary negotiation. Some people just don't do well pushing back on their direct superiors, but none of these other cases involve direct superiors. Somewhat more rationally, if you're worried about your job for office-politics reasons, or if it's riskier than usual to lose your income (maybe you're starting a family or have health issues), the right decision might be to take a safe, lower salary instead of trying for a higher salary with a small percentage chance of losing the negotiation badly. People without those concerns -- like me, who lives alone with no medical expenses and can bother my parents if worst comes to worse -- have a much higher risk tolerance, and I don't think personal risk tolerance particularly proxies for business value.
I also think that skill is learnable, and there are obvious poor incentives for a company to teach employees how to ask for more personal salary, but probably great incentives to teach employees how to negotiate better in the general case.
(As I understand it, big law firms rely on a sizable work force of associate lawyers and especially paralegals and other staff, who at least start out with very little say in the direction of the firm, what cases are taken, etc., right? And the partners are owners, not simply employees? I can definitely imagine open salaries and probably even unionization for the staff, which wouldn't compromise the ability of the partners to keep running the firm and making plenty of money.)
So I think that's true for some roles but not all. I personally end up arguing about what markets we should and shouldn't enter, presenting at industry conferences, etc., because I find that interesting. But, for instance, a junior ops employee on a pager schedule primarily provides business value by getting good at the technologies that other people have chosen, not by paying attention to the market, by being able to present convincing arguments to others, etc. Yet that's a crucial role to business values.
I think this may be true of junior roles in general, and I think it's junior roles that I'm most worried, as a social-responsibility thing, about the fairness of salaries. I care less about earning $150K when I should be earning $200K than I do about earning $50K when I should be earning $100K. (Even though they're the same delta value for the company!)
I could buy that there is a more generalize skillset of communication and persuasion: ops pushing back on messes from dev, developers talking open source maintainers into fixing their bugs for free, employees convincing prospective new hires to join, etc. And I do think it's valuable to measure that in addition to raw technical skill, both in hiring and in performance reviews. But I suspect there's enough reason to doubt that that correlates strongly with personal salary negotiation. Some people just don't do well pushing back on their direct superiors, but none of these other cases involve direct superiors. Somewhat more rationally, if you're worried about your job for office-politics reasons, or if it's riskier than usual to lose your income (maybe you're starting a family or have health issues), the right decision might be to take a safe, lower salary instead of trying for a higher salary with a small percentage chance of losing the negotiation badly. People without those concerns -- like me, who lives alone with no medical expenses and can bother my parents if worst comes to worse -- have a much higher risk tolerance, and I don't think personal risk tolerance particularly proxies for business value.
I also think that skill is learnable, and there are obvious poor incentives for a company to teach employees how to ask for more personal salary, but probably great incentives to teach employees how to negotiate better in the general case.
(As I understand it, big law firms rely on a sizable work force of associate lawyers and especially paralegals and other staff, who at least start out with very little say in the direction of the firm, what cases are taken, etc., right? And the partners are owners, not simply employees? I can definitely imagine open salaries and probably even unionization for the staff.)
You know, I appreciate being rewarded on my ability to do the job, not my ability to negotiate. I'm glad you're getting rewarded for something other than your work, but the rest of us are unhappy about that.
I do appreciate your candor, though, and I hope you won't be offended at mine.
> I do appreciate your candor, though, and I hope you won't be offended at mine.
Not offended at all.
I would argue, however, that the best way to get good at negotiation is to actually gain a strong understanding of what it means to do your job well.
The real risk I see with open salaries is that most engineers tend to overvalue engineering knowledge and undervalue business understanding. So they'll see the solid engineer with great business savvy as overpaid when he makes more than the other intermediate engineers. Companies, unfortunately, will be pressured to underpay their top performers.
If you actually understand what it means to be good at your job and you are good at your job, and you feel you've negotiated a salary that reflects your actual worth...
What are you worried about?
It seems to me that you'd only need to be worried if you believed your compensation came at the expense of others. If it doesn't, then you should be fine.
Said better than I could. Alternatively, this is a form of negotiation, just a moderately collective one (not to be confused with collective bargaining): you now need to defend your salary to your peers, not just your boss. Meanwhile, when your peers push on open salaries, that is how they are negotiating, because they don't find the present approach optimal for them. So, like all good business books encourage, they're doing something creative/unexpected but completely above-board to improve their bargaining position.
> Companies, unfortunately, will be pressured to underpay their top performers.
Or to educate their engineers as to what it means to perform so that they understand why their top performers are really top performers (and simultaneously understand the skills they should be developing to be top performers.)
Which, if you think about it, the companies should be doing anyway, independent of open salaries. But open salaries would increase the obvious incentive...
I don't want you to make more money because you're a pretty good negotiator; I want that money distributed to employees based on engineering results rather than negotiating skills. I don't want engineers who are focused on looking for and creating BATNA's and getting good at story telling rather than working as engineers.
> I want that money distributed to employees based on engineering results rather than negotiating skills
Why should money be distributed based on engineering results? Business results are what matter and a startling number of engineers are bad at assessing business results.
> I don't want engineers who are focused on looking for and creating BATNA's and getting good at story telling rather than working as engineers.
That's fine, but keep in mind that the easiest way I've found to influence my BATNA is to actually get great at my job.
> Why should money be distributed based on engineering results? Business results are what matter and a startling number of engineers are bad at assessing business results.
Well, for engineering staff, it makes sense that compensation is based on engineering results to the extent that that is what those employees have control over.
(If your staff are given broader responsibility, the results that figure into their compensation should be broader.)
I do believe in giving employees pretty broad responsibility, but even in area with narrower responsibility you should be able to connect your engineering work to the business metrics it's meeting.
Even if engineers aren't deciding what projects to pursue, they should be able to quantify their work in terms of how well they're implementing those business projects.
As of a few years ago, starting salaries for fresh-out-of-college software engineers in the Bay Area at decently-funded pre-IPO companies were consistently around $100K. I don't have a good sense of what it is today, nor what it is for early-stage startups, large companies, non-profits, etc.
(This is what happens when you don't talk about numbers!)
> Says who? Where are you getting that information, if you think nobody should talk about their salaries?
From friends, offers I've received, and offers I've given.
It's not that I don't think anybody should talk about their salaries. It's that we shouldn't have "open" salaries—nobody should be compelled to reveal their salary, particularly in an "anonymous" way.
I suppose I'm a poor negotiator since I'd be well pleased with Buffer's salary for my position. Not sure how me being a good negotiator would add more value to my company though, so calling it a tax seems mean spirited and self serving.
I haven't put that much thought into people knowing my salary, since it's private. I went to great lengths to hide the value of the transaction of my home though. At the time, I was a bit embarrassed about how much I spent and I didn't want it being public.
In most of USA, you can't hide the sale, but you can attach a fictitious name to it, so people who don't know your address can't just Google your house by name.
Sharing salary information would give rise to more social inequality, taboo and bias about type of role, company and growth prospects. It allows HR to negotiate with you on their terms rather than based on competence. If they want to make salary sharing info public for all employees, they should also make it voluntary and pay employees each month for this release of private info.
The company I work for makes all salaries and bonuses visible to anyone in the firm.
Salaries are simple, there are only 3 bands of salaries.
Bonuses are based on the firm's and employee's performance as well as a multiplier based on how much salary they took. Smaller salary, larger bonus multiplier and visa versa.
The system works pretty well and I haven't noticed any negative consequences from having this information internally visible.
Maybe if we get above 100 people at some point this will break down?
Serious question to others... What's the downside of having your fellow team member's know your salary?
Who cares about a "movement"? This reminds me of the hashtags #Together4Her when somebody shares a tweet about a young woman with cancer, or a woman attacked by thugs, etc. What _exactly_ will 50k tweets with this hashtag do to make this woman feel better?
Similarly, what would a "movement" achieve? Would 50k people make a public announcement of their salaries, risking immediate lay off due to breaking their promise for silence on the matter when they have signed their labor contract?
No? Then what is this post even about? Click-bait for more page hits?
Actions > words. If you can't put your wallet where your mouth is, keep the hell quiet, there's enough noise as it is.
I admire the guy from SumAll, though. Wish more people would do the same as him -- or join him.
The "movement" is not the same as one for cancer or attacks, etc. Its a movement about information where publicity (transparency) is the goal. It achieves what people want, salary information to be transparent. From there, people can make their own judgements on how to act given that information. But without it, they have nothing.
Honestly, I don't see how this is clickbaity at all.
For most companies, the amount of money represented by the difference in salary of 2 employees is negligible. (Definitely not negligible for the employees!) It's not even a blip on the cash flow statement. This is especially true of venture-backed startups whose operating model is going-for-broke.
What this means is that a person has a price that he or she can command and it's based less on their work experience/abilities and more on their experience of getting paid: they get used to a certain standard of living. If a company wants to hire a person, it will need to meet or beat that standard.
So yeah, the longer a person has been in the workforce, the more they are probably getting paid. But even this can vary from person to person, depending on how the person has been managing his or her salary and what companies he or she has worked at.
"Experience" is a proxy for technical ability and expected standard of living.
Usually a company will decide if it wants to hire a person, first. If yes, they start to negotiate pay based on a bunch of factors. Really, it's two parties trying to find each others' comfort zone; there isn't a formula. Sometimes there is no middle ground and no hire happens. Sometimes, to save time, recruiters will probe you to find your comfort zone before they even interview. Most of the time, if a company decides it wants to hire you, it will do what it can to make that happen. It's the desire to win.
If the candidate is a no-hire, there is no negotiation, he can't say "what if I work for less!"
Other factors that bear on salary:
* What are the current market conditions? When you were hired?
* What is the rate of job churn?
* Salary versus equity
* Location
* Employee demand: well known companies and probably pay less because more people want to work there.
* What does your boss make? Can't make more than her
* Name recognition on your resume. Did you go to Stanford? Did you work at Google?
* Signing bonus?
When I was younger this used to upset me. I guess I got over it as started to get paid more. But I realize that getting paid a personal and psychological endeavor, not a simple mathematical formula.
I caveat all this by saying I'm an engineer in SF in 2015: shit's crazy.
It's always seemed strange how salary/pay is a "private" thing in American culture. In NZ, AU and UK it's something that could be brought up at a party (if talking about work), and no one would think it was rude.
Is this because people feel judged about how much they make in the US? (At least, more so than other countries?)
I'm surprised this article didn't mention sites like Glassdoor, which uses yelp-like reviews and metrics on salary as the lead for it's job search site. I'm not horribly impressed with Glassdoor - I feel it has some flaws in how it collects and presents information - but it's a conversation opener, and should be lauded.
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[ 2.9 ms ] story [ 188 ms ] threadSo, open salaries are a good thing because they increase the number of good negotiators. Fixed salaries are not, because it eliminates all negotiators.
Seeing ranges via Glassdoor has been very helpful in understanding what I'm worth. Of course that data is not going to be completely accurate, but it's a baseline that I find helpful.
Although Glassdoor is great, it's not a silver bullet. I want to see an even more open culture about compensation moving forward.
http://arstechnica.com/tech-policy/2015/03/judge-oks-415-mil...
Almost everyone? Except slick talkers and employers.
anyone negotiating for salary.
you get paid for what you can negotiate, and when you don't have a lot of information to act on, it's hard to negotiate well.
This has already played itself out with price tags. Back when buying things was a personal negotiation process, it was possible to rip some people off while you had to work to get a good deal. This of course continues today with cars. However, its incredibly hard to charge people different prices at a grocery store when all prices are public. So too it would be very difficult to underpay someone if salaries were public.
This already happens in a fuzzy way now right: most everyone understands that their boss makes more money. We don't know exactly how much of course, but its "understood". If we transitioned to a place where people who are doing amazing work also make more money, I think there'd be no problem at all.
This effect can be even more distorted when people start irrationally factoring in years of experience. If salaries were public, you'd definitely start to see people who have put in their 10 years gripe about newcomers earning way more than them (often justifiably).
It also penalizes good negotiators, which might be a socially positive thing but I certainly wouldn't like it.
It probably penalizes snazzy dressers and charismatic people too, which snazzy dressers and charismatic people probably don't like.
But at some point you have to ask, what is a company optimizing for? It has limited resources, X dollars to spread amongst Y people. If you optimize a system to give a lion share of that to good negotiators, its not just socially worse, its economically worse for your business. You might find yourself with a hiring system that ends up with good negotiators instead of good engineers (if an engineer that is socially awkward receives a better offer from somewhere else, he may choose that offer instead of using it to "play" you to get his salary up).
No, it doesn't penalize good negotiators. It fails to reward them when being a "good negotiator" isn't relevant to the business metrics for the position they work in, but the absence of an unearned reward isn't punishment.
And this isn't merely socially positive, but its a positive for the business, because it increases the incentive for good negotiators to seek positions where that is relevant to job duties, since it avoids rewarding that skill where it is not relevant. As such, it increases the alignment between the incentives provided by compensation with the business interests of the employing firm.
Landon Donovan is a superstar that brings in the crowds to LA Galaxy. Bradford Jamieson IV is an 18 year old who has a career total 8 goals.
The point is not having everyone settle on ONE average salary or something, its not allowing similarly skilled/performing people receive widely different salaries based on unrelated things like negotiation skills. If anything, I'd wager in the sports world most similarly performing athletes make similar amounts thanks to this.
HN readers.
> who benefits from Open Salaries?
Employees.
Open salaries have the effect of making it easier for people to ask for numbers close to the mean, and harder to ask for numbers far from them. Obviously this benefits employees currently making lower numbers. But also, if there are companies paying their "10x" programmers huge salaries because they're worried about them jumping ship, open salary data from other companies helps push back on that, which saves the company money (that could be used to fund paying everyone else more).
Companies that don't do heavy amounts of recruiting don't have a good sense of what competitive salaries are, because they aren't regularly getting indirect information from candidates who negotiate. Open salary info helps these companies pay closer to the true competitive salary, which prevents them from losing good candidates without risking overspending. This is definitely good for the company, but it's also good for employees who have a fairer choice of jobs at fairer salaries.
Closed salaries are a great way to maintain the status quo. There is some Prisoners' Dilemma-ish behavior where one company opening salaries alone probably gets them a particularly bad result in the short term, so the clever thing to do is to exert social pressure for everyone to cooperate.
The same people who don't want parents reading to their children because it gives that child an advantage over children who's parents don't have time to read to the child. [0]
[0] http://www.wnd.com/2015/05/parents-reading-to-kids-blasted-a...
Er, the WND article you cite to support the existence of such people greatly distorts the ABC source article [0] it cites, where the quote it takes out of context is not supporting an argument that parents shouldn't read to the their children as it presents it (and, in fact, is a joke -- a "quip", in the words of the source -- made by the speaker before being followed by: "We should accept that lots of stuff that goes on in healthy families—and that our theory defends—will confer unfair advantage".)
The philosopher isn't arguing against parents reading to their children, he's discussing work he and a colleague are doing to construct a principled philosophical theory in favor of the family, including the particular activity that WND wants to miscast the article as presenting him as opposed to.
Its always a good idea to have some skepticism when reviewing a news report, and to follow through and check sources (especially when they are linked so it is nearly zero-effort to do so.)
Perhaps particularly with a site with as strong an ideological bent as WND posting something that fits so neatly into an ideological stereotype as that article.
[0] http://www.abc.net.au/radionational/programs/philosopherszon...
>So many disputes in our liberal democratic society hinge on the tension between inequality and fairness: between groups, between sexes, between individuals, and increasingly between families.
The power of the family to tilt equality hasn’t gone unnoticed, and academics and public commentators have been blowing the whistle for some time
My bad for selecting a shitty source - I pay absolutely no attention to the political slants of different news agencies - but my point stands: people are making these arguments. They will argue for "equality" by dragging anyone above them down to their level: the LCD.
I can easily see how my parent post could be misconstrued as arguing Swift is making this argument. My argument is that he is investigating this issue largely because people exist that are making these arguments.
No, it does not "admit", or even indicate, or even hint, that there are people arguing that parents should not read to their children because it creates an unfair advantage.
> but my point stands: people are making these arguments.
Well, there's 7-ish billion people on the planet, so perhaps somewhere you can find one making the argument you refer to, but when you do, I think its going to be hard to support your claim that the group making that argument is, even approximately, coextensive with the group proposing open salaries.
[0] https://www.amazon.com/dp/0061353248
When I left, it wasn't because of the money.
What actually happened was the following. Suppose you're on the Compensation Committee of a board of a publicly traded company. You're deciding the CEOs salary. How do you do this? Simple, you take a look at the other public companies that are comparable (revenue, market cap, sector, etc). You get an average.
Now you don't want pay your CEO the average rate, do you? After all, he's clearly above average. So you choose a rate that's say, 75% percentile.
But this algorithm plays out iteratively. Each iteration, compensation for CEOs go up as every company tries to pay above average.
"Let's see how much immigrants with a gun on their head make so I can ask the same."
It tells us the amount on the original application, not the amount you're necessarily getting paid after working there for a while.
I've had my H-1B for several years, and the amount I'm being paid now (I have never transferred to another company) is more than double the amount listed on the internet. Same story for the other 2 people in my company (~50-person startup) currently on a H-1B.
I was an H1B too, and I was very well paid, it doesn't change the fact that the majority of H1Bs are used to underpay foreigners who won't complain by fear of being let go and sent back home in 24 hours.
I would probably consider not working for a company if they said they made salaries public. Some people value their privacy to a greater extent I guess.
As I mention in a comment below. Compare this to other transactions: if grocery stores convinced everyone that the price of eggs was a very personal matter, and impolite to share, such that I couldn't ask you "hey how much did you get those eggs for at the store?", then they could absolutely start charging incredibly variable rates. All of a sudden you'd need to do your research on "market egg rates" and "egg negotiation tactics". You have to know your stuff to make a good case for spending 5 bucks on those eggs. This happens today with car dealerships and any bart-based system, where of course the seller has much more information than the buyer.
So too your boss has much more information than you during a salary negotiation. He knows if your proposed salary raise is bogus because he can compare you to similar performers, you can't. You have no idea if the raise he offered you is good or 10% what everyone else is getting. If after raises were handed out everyone shared them with each other, I ASSURE you they'd at the very least make sure that the people that deserved good raises got it.
The real goal is to create a new norm where companies publish their salary ranges openly instead of being cagey about it, so that it will be obvious when particular employees are being underpaid, and so that prospective employees can make rational, informed decisions about where they want to work.
In that situation, he does not get to choose wether or not his salary is disclosed
The desire to share salary is inversely proportional to the gap between the top and bottom.
On one extreme, if every engineer were paid exactly the same, there's clearly no reason to hide salary, since everyone knows it. At the other extreme, where one engineer is paid $500k/year and another is paid $100k/year where both were hired on the same date and do the same work, the higher paid one doesn't have much to gain from publishing salaries. Nor does the company, since they're getting the same value from both engineers, but saving $400k on the cheaper engineer.
Reality is somewhere in between these two extremes.
This makes no sense. The company could fire the enigneer making $500k and hire 2more at $100k, and still save $300k.
I get that you're fitting numbers to the example, but when everything else is held equally, pay discrepancy is typically 5-10%, based on ones ability to negotiate.
Yeah, of course companies pay more.
Not 5x to someone who outputs the quality of work and has the same skillset.
For me at least, there is no embarrassment and instead is used to make decisions about the future. If someone makes more, I ask myself why and how can I get there? If someone makes significantly less, and they care to know, I tell them how I got to where I am in hopes of helping them.
Unfortunately, employers trying to squash this has not changed. I remember 15 years ago when I got sat down the first time, by a fortune 100 company, and told we do not talk about salary. I also remember when the same conversation happened in a start up just a few months ago. The motivation still hasn't changed -- keep the worker 'happy' and underpaid whenever possible through information disparity, intimidation and "right to work" laws.
(Note that salary ranges/averages are irrelevant if you're a great negotiator except as a story-telling tool. All you should be playing with is your BATNA and the company's BATNA.)
If you don't think open salaries have a negative effect on top engineer salaries, look at how little Buffer is paying.[0]
In the status quo, open salaries are a tax on poor negotiators which companies and good negotiators split. As a pretty good negotiator, I hope we don't go public.
[0] https://open.bufferapp.com/introducing-open-salaries-at-buff...
Nothing in my comment said there was actually social value in having negotiation skills.
I'm talking about my personal experience and the drawbacks I see.
Do you think Buffer pays its employees fairly?
You're saying that we shouldn't talk about pay, because when we talk about pay we get paid like Buffer devs do, which you think is obviously low compared to other salaries, which we can't actually prove because we don't talk about pay.
It's a bit like telling someone that you're giving them $100 in a box, but not to open the box, because if you open it, it'll turn into $20. "You can only have a high salary if you have no way to verify that it's high." Even if true, where does that leave us?
Just because salaries aren't public doesn't mean you can't get any salary information. Just go on a few interviews, set up an auction, and see what you can get.
> It's a bit like telling someone that you're giving them $100 in a box, but not to open the box, because if you open it, it'll turn into $20.
It's a cute analogy, but the more complete version would include a box market, where other people with insight into the box market are interested in buying the box I've been given. In such a scenario, I could shop around my box to see what it's actually worth without having to open it up.
"There's $100 in this box. You can't open it, or look inside it, but trust me, it's there. Now you need to go over to my mate George, and give him the box, and he'll give you $100 for it. But only if you haven't opened it!"
Now it just sounds like you're being recruited as a drug mule. :)
Okay, granted, in your scenario their are multiple box dealers who are willing to bid on your unopened-but-totally-contains-$100 box. If you work at it, it's quite possible that you might even get some semblance of a fair offer. But should you need to work at it? And this still feels like a system which lends itself to collusion, uncertainty, and unfairness. Nor is that even hypothetical; we KNOW that our industry suffered from a serious wage-fixing cartel which was only recently busted open.
I feel like any argument against transparency has a high bar to clear.
Seems just as biased as rewarding those with negotiating abilities.
I actually think it's not only rational but also good for the industry and society (long-term) for employees to push hard on improving themselves at the expense of their current employer. But many employers will act in what seems to be rational self-interest, and prefer candidates who won't prioritize themselves over their employer when it's close to zero-sum. (For instance, many employers require tracking and approval of expenses, instead of saying "We hired you to act in the company's interest" and dealing with abuse of expensing after the fact, as they would with e.g. abuse of root credentials.)
I'm also not particularly convinced that being good at negotiating your own salary is well-correlated with things you might do on behalf of the company, especially for many non-management-track software engineering careers.
I'd actually love to have a discussion about that, as I think it's an implicit assumption behind a lot of these anti-negotiation threads.
For my part, I do think that negotiation skills correlate with ability to deliver business value. Ability to command high salaries tends to follow from: (a) understanding what businesses actually value, (b) understanding market dynamics, (c) strong storytelling and communication skills, and (d) confidence/risk tolerance. All of these are, to me, valuable skills for software engineers as they help to translate business strategy and market dynamics into functioning software.
(Then again, I come from a place of believing engineers should have broad latitude and that software-driven companies should be more like law firms.)
I think this may be true of junior roles in general, and I think it's junior roles where I'm most worried, as a social-responsibility thing, about the fairness of salaries. I care less about earning $150K when I should be earning $200K than I do about earning $50K when I should be earning $100K, since it makes far more difference in my quality of life. (Even though they're the same delta value for the company!)
I could buy that there is a more generalize skillset of communication and persuasion: ops getting dev to clean up messes before putting them in prod, developers convincing open source maintainers into fixing their bugs for free, employees convincing prospective new hires to join, etc. And I do think it's valuable to measure that in addition to raw technical skill, both in hiring and in performance reviews. But I suspect there's enough reason to doubt that that correlates strongly with personal salary negotiation. Some people just don't do well pushing back on their direct superiors, but none of these other cases involve direct superiors. Somewhat more rationally, if you're worried about your job for office-politics reasons, or if it's riskier than usual to lose your income (maybe you're starting a family or have health issues), the right decision might be to take a safe, lower salary instead of trying for a higher salary with a small percentage chance of losing the negotiation badly. People without those concerns -- like me, who lives alone with no medical expenses and can bother my parents if worst comes to worse -- have a much higher risk tolerance, and I don't think personal risk tolerance particularly proxies for business value.
I also think that skill is learnable, and there are obvious poor incentives for a company to teach employees how to ask for more personal salary, but probably great incentives to teach employees how to negotiate better in the general case.
(As I understand it, big law firms rely on a sizable work force of associate lawyers and especially paralegals and other staff, who at least start out with very little say in the direction of the firm, what cases are taken, etc., right? And the partners are owners, not simply employees? I can definitely imagine open salaries and probably even unionization for the staff, which wouldn't compromise the ability of the partners to keep running the firm and making plenty of money.)
I think this may be true of junior roles in general, and I think it's junior roles that I'm most worried, as a social-responsibility thing, about the fairness of salaries. I care less about earning $150K when I should be earning $200K than I do about earning $50K when I should be earning $100K. (Even though they're the same delta value for the company!)
I could buy that there is a more generalize skillset of communication and persuasion: ops pushing back on messes from dev, developers talking open source maintainers into fixing their bugs for free, employees convincing prospective new hires to join, etc. And I do think it's valuable to measure that in addition to raw technical skill, both in hiring and in performance reviews. But I suspect there's enough reason to doubt that that correlates strongly with personal salary negotiation. Some people just don't do well pushing back on their direct superiors, but none of these other cases involve direct superiors. Somewhat more rationally, if you're worried about your job for office-politics reasons, or if it's riskier than usual to lose your income (maybe you're starting a family or have health issues), the right decision might be to take a safe, lower salary instead of trying for a higher salary with a small percentage chance of losing the negotiation badly. People without those concerns -- like me, who lives alone with no medical expenses and can bother my parents if worst comes to worse -- have a much higher risk tolerance, and I don't think personal risk tolerance particularly proxies for business value.
I also think that skill is learnable, and there are obvious poor incentives for a company to teach employees how to ask for more personal salary, but probably great incentives to teach employees how to negotiate better in the general case.
(As I understand it, big law firms rely on a sizable work force of associate lawyers and especially paralegals and other staff, who at least start out with very little say in the direction of the firm, what cases are taken, etc., right? And the partners are owners, not simply employees? I can definitely imagine open salaries and probably even unionization for the staff.)
I do appreciate your candor, though, and I hope you won't be offended at mine.
Not offended at all.
I would argue, however, that the best way to get good at negotiation is to actually gain a strong understanding of what it means to do your job well.
The real risk I see with open salaries is that most engineers tend to overvalue engineering knowledge and undervalue business understanding. So they'll see the solid engineer with great business savvy as overpaid when he makes more than the other intermediate engineers. Companies, unfortunately, will be pressured to underpay their top performers.
What are you worried about?
It seems to me that you'd only need to be worried if you believed your compensation came at the expense of others. If it doesn't, then you should be fine.
Or to educate their engineers as to what it means to perform so that they understand why their top performers are really top performers (and simultaneously understand the skills they should be developing to be top performers.)
Which, if you think about it, the companies should be doing anyway, independent of open salaries. But open salaries would increase the obvious incentive...
Why should money be distributed based on engineering results? Business results are what matter and a startling number of engineers are bad at assessing business results.
> I don't want engineers who are focused on looking for and creating BATNA's and getting good at story telling rather than working as engineers.
That's fine, but keep in mind that the easiest way I've found to influence my BATNA is to actually get great at my job.
Well, for engineering staff, it makes sense that compensation is based on engineering results to the extent that that is what those employees have control over.
(If your staff are given broader responsibility, the results that figure into their compensation should be broader.)
Even if engineers aren't deciding what projects to pursue, they should be able to quantify their work in terms of how well they're implementing those business projects.
Uh...it looks like they are paying a lot of engineers >$90,000. In what world is that how little ???
(This is what happens when you don't talk about numbers!)
Market rate for junior engineers is >$100k and for senior engineers it's easily >$150k.
From friends, offers I've received, and offers I've given.
It's not that I don't think anybody should talk about their salaries. It's that we shouldn't have "open" salaries—nobody should be compelled to reveal their salary, particularly in an "anonymous" way.
There are...
$60k (base) + $12k (1.2 multiplier) + $22k (location) + $10k (salary instead of equity) = $104k.
Also your sample size is 1. Looking at salaries across their entire company they're a bit shit[0].
[0]: https://open.bufferapp.com/wp-content/uploads/2013/12/buffer...
Salaries are simple, there are only 3 bands of salaries.
Bonuses are based on the firm's and employee's performance as well as a multiplier based on how much salary they took. Smaller salary, larger bonus multiplier and visa versa.
The system works pretty well and I haven't noticed any negative consequences from having this information internally visible.
Maybe if we get above 100 people at some point this will break down?
Serious question to others... What's the downside of having your fellow team member's know your salary?
Similarly, what would a "movement" achieve? Would 50k people make a public announcement of their salaries, risking immediate lay off due to breaking their promise for silence on the matter when they have signed their labor contract?
No? Then what is this post even about? Click-bait for more page hits?
Actions > words. If you can't put your wallet where your mouth is, keep the hell quiet, there's enough noise as it is.
I admire the guy from SumAll, though. Wish more people would do the same as him -- or join him.
Honestly, I don't see how this is clickbaity at all.
What this means is that a person has a price that he or she can command and it's based less on their work experience/abilities and more on their experience of getting paid: they get used to a certain standard of living. If a company wants to hire a person, it will need to meet or beat that standard.
So yeah, the longer a person has been in the workforce, the more they are probably getting paid. But even this can vary from person to person, depending on how the person has been managing his or her salary and what companies he or she has worked at.
"Experience" is a proxy for technical ability and expected standard of living.
Usually a company will decide if it wants to hire a person, first. If yes, they start to negotiate pay based on a bunch of factors. Really, it's two parties trying to find each others' comfort zone; there isn't a formula. Sometimes there is no middle ground and no hire happens. Sometimes, to save time, recruiters will probe you to find your comfort zone before they even interview. Most of the time, if a company decides it wants to hire you, it will do what it can to make that happen. It's the desire to win.
If the candidate is a no-hire, there is no negotiation, he can't say "what if I work for less!"
Other factors that bear on salary:
* What are the current market conditions? When you were hired? * What is the rate of job churn? * Salary versus equity * Location * Employee demand: well known companies and probably pay less because more people want to work there. * What does your boss make? Can't make more than her * Name recognition on your resume. Did you go to Stanford? Did you work at Google? * Signing bonus?
When I was younger this used to upset me. I guess I got over it as started to get paid more. But I realize that getting paid a personal and psychological endeavor, not a simple mathematical formula.
I caveat all this by saying I'm an engineer in SF in 2015: shit's crazy.
Is this because people feel judged about how much they make in the US? (At least, more so than other countries?)