My prediction is that this strategy will work out better for the companies than the article expects. Why? Because firms are actually often absolutely lousy at recognising which of their employees are high performers in the first place.
It is a tough job market. Minus the very top echelon of talent, switching jobs today is a lot more challenging than in the past. Management knows this and can shave a few pennies off the books by capitalizing on this moment.
it is management that is successfully convincing people that it is a tough job market - it is not - it is same as before. I am a contractor, have more work offered than I can take (same as before, maybe even slightly more). four friends/former colleagues got new jobs since the beginning of December, each had multiple offers and got decent to significant pay increases compared to previous positions.
As top talent who received primarily ‘peanut butter’ raises for many years, I never much minded that. No amount of salary would have made me able to afford housing near work in sfbay, and I cared much more that my employer fire the incompetent (which, for a time, they tended to do) than I minded being paid less to work with a better crew. When I decided to leave, I did so because leadership had shifted so much that they had stopped enforcing competence as a matter of policy. Pay was simply not a factor so long as it covered the basics, and I refused to let it be used as a bribe.
> No amount of salary would have made me able to afford housing near work in sfbay
I assure you there are people who live there who can afford to do so because they make enough money. Switching from startup salary to bigco at the same experience level in the same location doubled my comp. A few promotions later and it doubled again. That's when housing started to look affordable.
Isn’t this almost the same? In both cases, it feels unfair that you are paid the same as someone lesser. In your case, the lesser is a -1X developer, and in the article, I guess the 10Xer compares themselves with a 1Xer. I’m at least thinking that a 10Xer wouldn’t mind a similar bump in pay compared to a 7Xer, but somewhere you draw the line as unfair.
In my opinion, management should cull -1Xers, while also trying to reward top talent, even if it has it’s downsides.
It doesn’t feel unfair to be paid unevenly to me? I guess one upside of the whole prosociopath thing is that I don’t feel cheated by that particular circumstance. I feel cheated when someone is given authority without proper skill and experience, to the degree that I suspect other people do about pay, though. A lot more harm is done by assignment of authority to incompetence (in a non-training context, anyways) than is done by decoupling pay and competence.
However: I’m extremely hostile to overall wages as a fraction of revenue being held artificially low to increase the imbalance of payouts in favor of executives and shareholders. I think it’s appropriate to pay executives more because they bear a higher proportion of legal exposure than non-executives; I do not think it’s appropriate how most executives treat workers raises as a “cost center to be minimized” differently from their own pay as a “profit center to be maximized”. Similarly, I think that there’s a solid argument for paying your company’s long-term strategy cross-functional team according to having to bear the long-term responsibility and awareness of risks and so on. You can’t ask a base wage worker to care about your company; that’s a lot to ask, and requires an additional share of payment than just a day job would.
No disagreement about the harmful-when-present workers, though!
Standard across the board percentage raises have been the case where I work for the last 5 years or so. Nothing for merit. You can get a bump if your job title changes but not simply for good performace.
It doesn't motivate anyone to do anything above and beyond expectations, obviously.
Does this mean that year over year people actually lose money to inflation if the only way to get an increase is with a job title change? That sounds pretty damn horrible to me.
Which is why this needs to be paired with performance incentives. Base pay increases to address attrition, and perf comp to drive engagement and retain top talent.
This is just what happens when it's an employer's job market. A lot of people got used to good raises when talent was in high demand, but that's not where we are now.
I worked in aerospace in the early '90s. After the Soviet Union fell you were really happy when your raise was large enough to cover inflation.
The impact for me was I quit and founded a company, got funded. I work with my friends and it's great.
Corpos are very sick right now, friends that stayed behind with +8y xp are very burnt out and annoyed having to deal with barely functional employees for a "peanut butter" raise.
AI has been an excellent excuse for holding back new hires. It might give me a 20% productivity boost, but that doesn't help if my workload increases by 50%.
Meanwhile I'm considered a high performer at my company and I've been pushing for years to get our company to adopt flat percentage raises and flat dollar amount bonuses very literally against my own financial interest.
My company not only gives percentage based bonuses but gives a higher percentage to higher salary earners. It pisses me off every year that the people who would be most positively affected by the extra money get less. But worse with the "performance" based raises where they have a fixed number of annual raise percentages means the unlucky sods who have shitty managers get less than inflation every year while I get higher every year.
It's a shit economy and job market, what are you going to do with a shit raise, quit? IMO this is all part of the larger trends with layoffs and RTO to head count, especially for the more "costly" ICs.
True, but... I get the feeling the job market is bimodal.
Anecdotal, but I see people out of a job for years on end, saying they applied for 2000 jobs in the meantime, while others still keep getting recruiter messages on LinkedIn and can get a new position in a matter of weeks.
Granted, people who quit because of a low raise are probably having other problems as well, which maybe is beneficial for companies. But I still feel like this is companies investing in mediocrity.
I moved to a new city for college. I made a friend, who I considered well-off (he was also a bit heavier). One time I went to his place, and he wanted to have some snack, so he grabbed a jar of Nutella and some sliced bread. On a piece of bread, he put on a layer of Nutella that was not thinly-spread at all, that I thought "Oh, I didn't even consider that it's actually possible to spread a thick layer of Nutella on bread. I guess well-off people are different!"
A few of my friends and I have joked about something similar. You can tell a lot about a person's family's financial status when they were children based on how they build a sandwich as an adult. Slices of meat, what style cheese, etc.
My prediction is that this strategy will work out better for the companies than the article expects. Why? Because firms are actually often absolutely lousy at recognising which of their employees are high performers in the first place.
It is a tough job market. Minus the very top echelon of talent, switching jobs today is a lot more challenging than in the past. Management knows this and can shave a few pennies off the books by capitalizing on this moment.
it is management that is successfully convincing people that it is a tough job market - it is not - it is same as before. I am a contractor, have more work offered than I can take (same as before, maybe even slightly more). four friends/former colleagues got new jobs since the beginning of December, each had multiple offers and got decent to significant pay increases compared to previous positions.
As top talent who received primarily ‘peanut butter’ raises for many years, I never much minded that. No amount of salary would have made me able to afford housing near work in sfbay, and I cared much more that my employer fire the incompetent (which, for a time, they tended to do) than I minded being paid less to work with a better crew. When I decided to leave, I did so because leadership had shifted so much that they had stopped enforcing competence as a matter of policy. Pay was simply not a factor so long as it covered the basics, and I refused to let it be used as a bribe.
> No amount of salary would have made me able to afford housing near work in sfbay
I assure you there are people who live there who can afford to do so because they make enough money. Switching from startup salary to bigco at the same experience level in the same location doubled my comp. A few promotions later and it doubled again. That's when housing started to look affordable.
Isn’t this almost the same? In both cases, it feels unfair that you are paid the same as someone lesser. In your case, the lesser is a -1X developer, and in the article, I guess the 10Xer compares themselves with a 1Xer. I’m at least thinking that a 10Xer wouldn’t mind a similar bump in pay compared to a 7Xer, but somewhere you draw the line as unfair.
In my opinion, management should cull -1Xers, while also trying to reward top talent, even if it has it’s downsides.
It doesn’t feel unfair to be paid unevenly to me? I guess one upside of the whole prosociopath thing is that I don’t feel cheated by that particular circumstance. I feel cheated when someone is given authority without proper skill and experience, to the degree that I suspect other people do about pay, though. A lot more harm is done by assignment of authority to incompetence (in a non-training context, anyways) than is done by decoupling pay and competence.
However: I’m extremely hostile to overall wages as a fraction of revenue being held artificially low to increase the imbalance of payouts in favor of executives and shareholders. I think it’s appropriate to pay executives more because they bear a higher proportion of legal exposure than non-executives; I do not think it’s appropriate how most executives treat workers raises as a “cost center to be minimized” differently from their own pay as a “profit center to be maximized”. Similarly, I think that there’s a solid argument for paying your company’s long-term strategy cross-functional team according to having to bear the long-term responsibility and awareness of risks and so on. You can’t ask a base wage worker to care about your company; that’s a lot to ask, and requires an additional share of payment than just a day job would.
No disagreement about the harmful-when-present workers, though!
Impressive, very nice. Now let's see the c-suite comp packages.
They're the ones that get CRUNCHY PB raises, or the Nutella raises.
> Starbucks made headlines when it gave 2% raises to all corporate employees in an effort to reduce costs
Maybe I'm jaded, but I suspect this is the only reason.
Later points in the article about being more equitable don't seem valid, as companies generally did not care about that before.
Cost cutting seems to be the only idea executives have left.
Standard across the board percentage raises have been the case where I work for the last 5 years or so. Nothing for merit. You can get a bump if your job title changes but not simply for good performace.
It doesn't motivate anyone to do anything above and beyond expectations, obviously.
Does this mean that year over year people actually lose money to inflation if the only way to get an increase is with a job title change? That sounds pretty damn horrible to me.
Which is why this needs to be paired with performance incentives. Base pay increases to address attrition, and perf comp to drive engagement and retain top talent.
This is just what happens when it's an employer's job market. A lot of people got used to good raises when talent was in high demand, but that's not where we are now.
I worked in aerospace in the early '90s. After the Soviet Union fell you were really happy when your raise was large enough to cover inflation.
Peanut butter raises? Probably past time to work your wage.
The impact for me was I quit and founded a company, got funded. I work with my friends and it's great.
Corpos are very sick right now, friends that stayed behind with +8y xp are very burnt out and annoyed having to deal with barely functional employees for a "peanut butter" raise.
AI has been an excellent excuse for holding back new hires. It might give me a 20% productivity boost, but that doesn't help if my workload increases by 50%.
Meanwhile I'm considered a high performer at my company and I've been pushing for years to get our company to adopt flat percentage raises and flat dollar amount bonuses very literally against my own financial interest.
My company not only gives percentage based bonuses but gives a higher percentage to higher salary earners. It pisses me off every year that the people who would be most positively affected by the extra money get less. But worse with the "performance" based raises where they have a fixed number of annual raise percentages means the unlucky sods who have shitty managers get less than inflation every year while I get higher every year.
It's a shit economy and job market, what are you going to do with a shit raise, quit? IMO this is all part of the larger trends with layoffs and RTO to head count, especially for the more "costly" ICs.
True, but... I get the feeling the job market is bimodal.
Anecdotal, but I see people out of a job for years on end, saying they applied for 2000 jobs in the meantime, while others still keep getting recruiter messages on LinkedIn and can get a new position in a matter of weeks.
Granted, people who quit because of a low raise are probably having other problems as well, which maybe is beneficial for companies. But I still feel like this is companies investing in mediocrity.
It is bimodal, but I am pretty sure almost nobody is getting hired cold in a couple of weeks.
They just keep their radar on and stay in touch. It's a whole job in itself.
Making things seem effortless is what makes them so attractive to begin with. Confidence and options come with the experience.
> “that are even and spread thinly, like peanut butter would be on a sandwich,”
Corporate America apparently can't even make sandwiches correctly.
> There’s always a tension in organizations of how to how to balance the needs of your high performers while taking care of the entire group,”
I don't need you to consider my "needs." Consider your profits then consider my work. Pay me what it's worth.
It's amazing how far companies will go to not pay their best talent appropriately.
I moved to a new city for college. I made a friend, who I considered well-off (he was also a bit heavier). One time I went to his place, and he wanted to have some snack, so he grabbed a jar of Nutella and some sliced bread. On a piece of bread, he put on a layer of Nutella that was not thinly-spread at all, that I thought "Oh, I didn't even consider that it's actually possible to spread a thick layer of Nutella on bread. I guess well-off people are different!"
A few of my friends and I have joked about something similar. You can tell a lot about a person's family's financial status when they were children based on how they build a sandwich as an adult. Slices of meat, what style cheese, etc.
Nah that's dumb. I grew up poor. I make awesome sandwiches now.
Next step is to skip the bread and eat Nutella from the jar with a spoon.
I find dipping a cashew in is even better. The cashew becomes your scooper. The combination is divine.