[everdev]

I've seen team chemistry dissolve when pay information was released.

The problem is with egos, Employee A might view themselves as more valuable to the company than Employee B and vice versa. If Employee B gets a raise, Employee A will want one too, or a higher one. A spiral of trying to get a higher salary relative to other team members can begin.

Also, Employee A and Employee B might have private salaries that meet or exceed their expectations and everyone is happy. When salary information is public, unhealthy comparing can begin. Even though they're grateful for what they have, they see that more might be available if they ask for it.

[michaelchisari]

Seems like a pandora problem to me. You have the problem because that box has never been opened. Had that been the way salaries were handled from the beginning, you wouldn't have the issue. But opening up salary information mid-stream can cause a lot of conflicts (some justified, some not).

The question is, when going from private to public information, how best to handle it so that it isn't a source of chaos.

[brm]

One part of this I've never seen discussed is that they reveal the salaries but they almost never reveal what the company believes it can afford to pay everyone involved and how the salaries influence the health of the company. It becomes employee vs employee vs company then instead of people seeing how it all fits together.

I often think its that the transparency is only halfway that causes many of these peer to peer problems. It also doesn't help that most white collar work these days isn't directly translatable to revenue. Its easier to tell a salesman what he's worth than a designer etc...

[powvans]

Another thing that is often forgotten is that everyone has different opportunities in the market for jobs. Two people may contribute equally to a project, but one of those people might be paid more because the company had to outbid a competitor. This goes to your point about the health of the company. It might not be fair, but the company might not have the resources to offer a raise for the sake of fairness.

[BoiledCabbage]

> It might not be fair, but the company might not have the resources to offer a raise for the sake of fairness

They definitely have the option of not offering the raise and the employee choosing to leave. If the employee isn't worth X dollars more then the company should be ok with them walking without that bump.

In the end the issue being discussed is asymmetrical info, and positions. If an employ is producing less than their cost they don't get to keep that "surplus". They get written up / fired. But if an employee is producing more than their cost, the employer gets to keep that surplus. It's an imbalance.

Asymmetrical info on salaries produces this situation. I'm not saying it's right or wrong, but it is imbalanced.

[majormajor]

There's another factor of asymmetrical info, though: asymmetrical info on your own value vs others. You can't assume that you are better positioned to judge your own value to the company than other people are. You're the most biased possible party!

This is the crucial bit: "In a study of engineers at two major Silicon Valley companies conducted some years ago, I found that nearly 40% perceived themselves as performing within the top 5% of their peers. Ninety-two percent felt they were in the top quartile, and only one engineer felt his or her performance was below average."

Say you're the manager. Let's start off with the optimistic case: you have a good relationship with your team, are using objective but not necessarily easy to measure (to prevent gaming) criteria to evaluate your employees, and you are pretty accurate in your assessment of how valuable each person is. They aren't going to believe you. Almost everyone thinks they should be near the top. You have no way to win this unless you judge purely based on lines of code or other such measures, in which case you've actually already lost for other reasons.

And then consider how hard this is for a less experienced manager new to the team, who might not have a full picture of everything but is going to get hammered by people complaining about not being at the top of their peer pay grade.

You can go away from pay for performance, which the article notes, but do you really want to? Is that the situation you'd prefer to work in, where you know what someone makes purely because you know how much anybody with that many years tenure would make?

[vacri]

It's the same with driving skill - the bulk of people think that they're better than average drivers.

[mlady]

I think this goes back to the risk vs. reward the employer takes when owning and running a business. The owners took the risk of starting a business and is taking on additional risk of employing people.

I'd argue that it is a sign of a healthy company when each employee is producing more value than they are taking home in their paycheck.

I am instinctively for transparent salary information, but I'm not sure if I can intellectually back it up.

[lr4444lr]

Disagree. A person's salary is not simply based on the work they do for the company. It is the opportunity cost of their next best option + whatever incentive is needed to make working there better enough to a significant degree. That cost isn't strictly money, and is intensely personal, in the literal sense of the word. Posting people's salaries obscures the determinations that went into settling on that number, and convey a false metric to compare the incomparable.

[retrogradeorbit]

Interesting that you called this a pandora problem. It seems you are suggesting you should just open pandora's box and release all the world's evils! Doesn't the fable imply the solution is keeping the box shut, not to open it as quickly as possible and just get used to the evil?

[maxxxxx]

Salaries are a dysfunctional market like health care. No market can function properly without all parties having the same information.

All arguments against salary transparency seem to be that people will be unhappy when they find out that the company has screwed them over and therefore it's better for these people to be ignorant.

[ballenf]

> No market can function properly without all parties having the same information.

Salary info is a very small piece of the information needed to evaluate the fairness.

The article details quite extensively how difficult it is to communicate the totality of information in all but a few circumstances. If everyone could see every piece of relevant info then I'd agree.

One example: my value to the company may be for something you see as worthless. But you don't have the full strategic roadmap of the company's leadership in mind when you devalue my contribution. And the company may have valid reasons for not making the strategy widely known in the company. If you learned that I got a big raise for my success in that area, you'd feel slighted. The problem there isn't lack of info re: salaries, it's the impossibility of every employee having every bit of info needed to make the assessment.

[steveax]

Surely then the company could explain this reason. More trustworthy? Something else? This would give the employee the option of trying to improve that aspect their performance.

I’m not saying this is easy, or without pitfalls, but the biggest reason I’m for transparency is that it helps protect against unfair salary discrepancies.

[jaredklewis]

> No market can function properly without all parties having the same information

What markets function like this? I have no idea what the cost of growing, harvesting, shipping, and selling a banana is. At every step of this process there are capital investments, labor costs, and profit margins that are totally opaque to me. And yet I can look at the price of a banana and decide if I want to spend the money or not. One beautiful aspect of markets is that not everyone has to spend years researching every purchasing decision. The makert sets a price for you. If one company has margins that are too high, another steps in to take some of that profit, by offering at a lower price until it reaches equilibrium.

The job market seems similar. I don’t know how companies set their offer price but I am capable of evaluating offers all the same.

[emblaegh]

You know how much a banana is worth because you've seen how much people charge for bananas from different origins in different grocery stores. Knowing how much your peers are getting paid is important information when evaluate an offer, and helps to ensure a more efficient job market.

[freshhawk]

So you feel that if you knew that other consumers paid different prices for the same products but that information wasn't available to you that would be fine?

That would be the equivalent analogy. That you know you are paying the same price for bananas from the corner store as everyone else.

[lmm]

> If one company has margins that are too high, another steps in to take some of that profit, by offering at a lower price until it reaches equilibrium.

Right, but that mechanism is only possible if information is public. You don't know about the pricing of growing, harvesting, shipping and selling bananas - but it's possible to find out, and a company looking to enter the market would find out. You can rely on market pricing because the market lets you outsource your research to other market participants, but that only works if research is possible in the first place.

[crdoconnor]

>One beautiful aspect of markets is that not everyone has to spend years researching every purchasing decision.

Largely because somebody else out there is doing it on your behalf in order to make a buck.

Without market transparency you wouldn't be able to rely upon this happening.

[maxxxxx]

I can go a lot of stores and ask them how much a banana costs. Then I can compare prices. However, I can't go to companies and ask them how much they pay for a position. That means I can't compare. I don't know what the market price is.

[Shivetya]

No, you completely discount human nature here. There are far too many people who are more concerned about what others get and have than is healthy. Plus in many work environments you end up with those who either think that one party is not justified in their rate or that they themselves are woefully under compensated. Worse, you have a bunch who will not work beyond what they think is "fair".

I like the privacy of my coworkers not knowing my exact compensation, it is not their business. If we follow your logic to its natural end, why not force disclosure of all expenditures each of us make as well? (which on another topic, that is the best reason to never have digital currencies)

[Retra]

It's almost like trying to argue that doctors shouldn't heal their patients because it would be too upsetting for them to change themselves. How about we give them the information they need to learn how to make proper evaluations of their situation? Yes people can be stupid about things. But keeping information from them is not the cure for this, it is the cause. People would not be so concerned if they were part of a professional culture which rewarded them for responding maturely to such discrepancies.

If team cohesion breaks down because pay information is revealed, give them pay cuts for being petty and disruptive. This is not an unsolvable conflict. People are not advantaged by remaining ignorant of their status in a transaction.

>I like the privacy of my coworkers not knowing my exact compensation, it is not their business.

It is their business to conduct the business of the company which employs them, which includes the distribution of that company's funds. Maybe people in other companies don't need to know, but people in yours do, because it is their business.

[Negitivefrags]

> If team cohesion breaks down because pay information is revealed, give them pay cuts for being petty and disruptive.

The floggings will continue until morale improves.

[AstralStorm]

Or the disruptive people quit or are fired.

[matwood]

> No, you completely discount human nature here. There are far too many people who are more concerned about what others get and have than is healthy.

This is a great point, and let me add that it becomes 10x worse when money is involved. Some (many?) people are just flat out irrational when it comes to money. Jealously and envy quickly block any rational thought when it comes to explaining why someone might make more than they do.

[jdavis703]

In Norway salary information is public, but with a catch. If you ask for someone's salary information they learn who made that inquiry. This might be as good as you can get with getting salary transparency and mitigating privacy concerns.

[robaato]

I think already discussed on HN, but here's one link: https://www.theguardian.com/money/blog/2016/apr/11/when-it-c...

[walshemj]

I know I once dealt with a case where a senior manger (paid roughly 4x the median wage) was really upset as he no longer qualified for a business needs phone at home which was something like £15 quid a month

[jimbobimbo]

No, there're other arguments as well. One of which is privacy, for example. Many people value their privacy more than some elusive goal of full transparency.

[lmm]

Privacy is "some elusive goal" too. The salary taboo exists because it benefits the rich and powerful.

[freshhawk]

You know everyone in HR and many of the employees who are friends with people in HR know your salary right?

[vilmosi]

If you consider that private information. Plenty of people, inside the company and outside, know that information. It's not that personal in my opinion.

You can even reasonably guess someones salary based on their job and location, especially a coworker's.

[waegawegawe]

The same could be said of much private medical information. Guessability, or someone else knowing the information, are not the controlling factors in what is considered private information.

[richardknop]

That doesn't mean it's not private. Lots of private information is known by lots of people. Your health record is known by your doctors and the government presumably. Government knows everything about my taxes, my date of birth, national ID (or SSN in US) etc. That doesn't mean it's not a private information. I don't want to share my salary details with other people unless I choose so.

[jimbobimbo]

There're plenty of ways to learn of one's SSN or birthday date too - this is still private information, which doesn't concern other people, unless the person explicitly wants to share it.

[ycombobreaker]

It's not private from payroll, but everybody knows that, and payroll is expected to exercise discretion.

Precisely the people with hard-to-guess salaries may value that privacy.

[dawnbreez]

Most privacy concerns have to do with information that could be harmful in the wrong hands. My web history is useful to me, but if my roommate gets ahold of it, I will be embarrassed to no end. My SSN ensures I can identify myself within America's bureaucracy, but if someone else has it they can open credit cards in my name. My salary lets me make a budget but if someone else knows what my salary is...then what? How does that information harm me when a third party gets it?

[AstralStorm]

The third party may be:

- an insurance company demanding a premium because you're well paid

- competitor bidding for your labour anchoring their offer to your current salary

Those are just two cases were it could be harmful. The idea is to make the information available and transparent while still not making it public and still protecting it.

[dawnbreez]

Fair enough. The Glassdoor system may be best here, as mentioned in several other comments.

[jimbobimbo]

The answer is: I don't know.

I'm not a bad actor, who spends all their time figuring out how to make profit off of someone else's private info. I'm pretty sure there're very creative ways private information (salary and not) can be misused, but I don't want to find out by volunteering this information.

[ythn]

> All arguments against salary transparency seem to be that people will be unhappy when they find out that the company has screwed them over and therefore it's better for these people to be ignorant.

Why do you assume someone making less is being "screwed over"? Imagine employees A and B. B greatly outperforms A and therefore rightly makes more. However, A is delusional about his skills and thinks he is as good as B. Pay information is made transparent and A sees he is making less. This makes him mad because by all rights he ought to be making as much as B! This type of comparison/resentment might make A want to quit or ask for a raise, whereas before he was both content and fairly paid at his performance level.

[09094920394314]

Sounds like the only benefit is keeping A in his delusion, instead of informing him via a competitive market that his skill is not as high as he thought he'd be. Oh, and saving the company money. And making it easier to have private favorites.

If someone is in an executive position, and something like you describe happens, it is their fucking job description to resolve the problem. Meanwhile, by having open salaries, everyone has the information needed for a competitive market. Including college graduates, who get screwed over routinely

//Edit: Oh, and if A ever DOES need to find a new job and advertises his "delusional" skills, either him or his next company will feel the pain from the lack of price information here

[psergeant]

    > saving the company money

Companies not over-paying for their resources is generally a pretty critical factor in them staying solvent and being able to employ people, rather than a nice-to-have.

[crdoconnor]

To put it another way, it's a pretty critical factor in ensuring that more wealth flows into profits rather than salaries and a way to keep sickly companies afloat via the deception of their employees.

[argv_empty]

Then A is free to do so, but if he's not actually worth more, then he's likely to find out in his job search that he can't command B's salary. WSJ seems oddly unwilling to let the free market resolve this issue.

[scaryclam]

I really wish this was true, but alas, there are a lot of devs out there who talk a great interview but can't cut it with the real work. They tend to get hired with inflated salaries, screw up the companies systems for a year and then move on when questions start to get asked (but of course, they'll tell themselves the company changed, not that they've messed up). Unfortunately, there are not enough companies out there who can unearth this type of incompetence before hiring.

[trowawee]

Sure, that might happen. But you're invoking a potential problem that might happen, when we have problems (gender and racial pay gaps) that are A. more severe than the potential problem you're invoking, B. already demonstrably occurring, and C. potentially correctable via salary transparency. If we can make a step towards correcting existing problems, and the best argument against it is "this might create a less-severe problem at some point in the future", we should probably take that step.

[dawnbreez]

The solution is for the manager to sit down with A and tell him to stop being a brat.

No, seriously. If A is getting upset because he feels he's not paid "fairly", but A isn't contributing enough to get paid more, then someone needs to tell A exactly why he's being paid less. And if you can't explain why, then you need to reconsider that decision very, very carefully.

[throw2016]

This doesn't hold. If A is 'greatly outperforming' then a bonus or incentive can be linked to the greater performance leading to a higher pay.

Without measurements how can we can say who is delusional, A or B? Ultimately transparency benefits everyone except those who currently non transparently draw greater wages without justification.

People will adopt their attitudes, there is no place for immaturity and ego in a professional context.

[kromem]

The problem is not with egos, the problem is that they have a preconceived notion that they are equal with their coworkers, and then suddenly find out they are not.

Had the designation been clear from day one and each individual pay scale evolved over time publicly, I seriously doubt there'd be the same issues.

In essence, a reveal all at once is the equivalent of a massive swath of promotions to one's co-workers and not to yourself (for the lower paid), all in one day - yeah, of COURSE it's going to harm team dynamics. That doesn't mean we should only promote people in secret though, right?

Transparent compensation is simply a more granular hierarchy of representative productivity and value to a company, and the respective compensation, than a simple job title. We don't lose our minds at the idea that some employees are junior, others senior, etc. So what's substantially different with a more granular system to what already exists?

Any employee should be able to ask "Why is Bob making more than me?" the same way they might ask "Why was Bob promoted to XYZ position instead of me?" And a healthy company should be able to answer the question with the reasons why for the former, just as a healthy company can answer the latter. If an employee is lagging in salary over time because upper management isn't seeing the same value as their equally experienced co-workers, this should be made clear to that employee so that they can find out why their efforts aren't having as much value, and either adapt accordingly, or find an environment where their efforts will be better valued.

Imagine a classroom where each student can see their own grade as a number out of 100, but has no idea what the average is, spread, etc. You could have a C student who thinks they are doing as well as an A student, because they have no context for how they are being graded. Yes, there will be drama with each student knowing the other's grade, but they'll better know their own relative performances.

At very least, we should have anonymous compensation transparency, where employees can know where their own salary stands in the company compared to tokenized other salaries, so the conversation can at least be "Why is #335 making more than me?" instead of "Why is Bob making more than me?". In small firms/upper management levels this won't be all that anonymous, but it could mitigate the drama in larger employment pools while still providing the contextual benefit.

[closeparen]

>Imagine a classroom where each student can see their own grade as a number out of 100, but has no idea what the average is, spread, etc. You could have a C student who thinks they are doing as well as an A student, because they have no context for how they are being graded. Yes, there will be drama with each student knowing the other's grade, but they'll better know their own relative performances.

Don't have to imagine it. This is how all of my education worked from kindergarten through undergrad. Grades are there as an absolute measure of how well you've accomplished what you and the institution set out to do; your peers' performance is not relevant to that question.

My high school and university both had longstanding policies against disclosing any information about GPA distribution or class rank, explicitly to discourage students from measuring themselves in relation to each other. Facing highly ambitious and academically successful student bodies, administrators (rightly, in my opinion) feared the cutthroat and competitive climate that grade transparency might create, and felt it didn't align with either institution's mandate.

Instead, we measured ourselves against our education and career goals and broad population averages, against which we were overwhelmingly successful. You didn't have to be better than your friends, only good enough for the college applications you had in mind (or later, the grad schools or employers you had in mind).

I view professional compensation the same way. A salary is good to the extent that it funds the housing, transportation, financial security, dining, entertainment, toys, travel, etc. that I'm after. As long as I'm in the Bay Area, no salary will ever be satisfying with respect to housing, but later in life, once I've attained conditions for my family similar to the ones I grew up in, what do I care if a coworker makes more? (Though I certainly couldn't resist reading and resenting it if available, I have no need for this information).

Put another way: I don't care that I'm beating 90% of startup employees if I still have to live with roommates. I don't care that I'm beating 90% of my high school classmates if none of them are going to college at all. I don't care that 90% of bigco employees are beating me if I can comfortably afford a nice condo with a short walk to the office. I don't care that 90% of my high school classmates are beating me if they're all going to Harvard and I'm accepted to the schools between #2 and #10.

[freshhawk]

If you know that your coworker makes more you have valuable information the next time you are negotiating a raise. You have a good attitude about the larger picture for sure, but some of those coworkers making more than you are only doing so because they had more insight into how hard they could push in negotiation.

[tpxl]

It was exactly the opposite where I studied. All exam results were public, albeit anonymized where each student had an identification number instead of their names. This didn't promote unhealthy competition, but rather fostered seeking help from students who outperformed you.

[z3t4]

But schools don't have an incentive to hand out a low grade C where the student deserves an A. And schools can't advertise that: hey! We give out high grades then other schools, come study with us!

[ryandrake]

> At very least, we should have anonymous compensation transparency, where employees can know where their own salary stands in the company compared to tokenized other salaries

This is a great and underrated idea. Have an upvote! This solves the privacy concern neatly while removing the unfair information asymmetry.

[astura]

>The problem is with egos, Employee A might view themselves as more valuable to the company than Employee B and vice versa. If Employee B gets a raise, Employee A will want one too, or a higher one. A spiral of trying to get a higher salary relative to other team members can begin

The same exact thing happens with promotions and titles, so should they be secret too? If it's such a problem then how about getting rid of positions altogether and just say "everyone's equal?"

The second point is exactly why salaries are hidden - to drive down wages. There's a damn good reason why American professional athletes players union make sure salaries are published. You only thought your salary was fair based on the information your employer gave, which was "it's fair, trust us."

[ThrustVectoring]

It's less about ego, and more that the removal of ambiguity in the workplace hierarchy is itself a social attack. If Alice is considered "better" than Bob, then Bob cannot act as if he were "better" without getting smacked down for being uppity or putting on airs or the like.

It's not about the money. It's not even the fact that you ranked them. It's that you ranked them publicly, and from a place of authority to boot. And worse still, on a one-dimensional scale.

[lend000]

It only seems weird because it isn't the norm -- like one of the other commenters mentioned, we tend to know the approximate net worth / salaries of family/friends and yet society, on average, continues to run.

And in large companies with salary ladders, we know the range of all our coworkers.

[kaosjester]

It seems like this could be fairly easily resolved by the management having a rigid "we pay everyone the same, deal with it" position, perhaps up and and including a formula for salary computations.

[maxxxxx]

You don't have to pay everyone the same. Just be ready to justify why one gets paid more than other. CEOs have pay transparency but somehow the world doesn't go under.

[jimbobimbo]

CEO salary is public in public companies, because they work for shareholders (who are the general public).

[maxxxxx]

I work for shareholders too and I am not even allowed to publish my salary.

[ballenf]

Went to your profile out of curiosity to see if your employer is public. The linked site in your profile is... odd. Has the site been compromised or am I missing the joke?

[jimbobimbo]

I highly doubt that your paygrade/position is anywhere near the level, where public shareholders would care.

[maxxxxx]

Where is the cutoff? If shareholders care about the CEO salary they also should care how much 20000 people like me make.

[mattnewton]

Get ready to see a) people gaming the formula and b) talent leaving because they feel like they are paid the same as people who contribute less.

Edit: Not that it isn’t currently gamed and not that this doesn’t already happen: I’m pro pay transparency but there aren’t any magic fixes here, this is a really complicated social issue.

[trowawee]

Something like Buffer's formula (https://open.buffer.com/transparent-salaries/) isn't really "gameable", as far as I can tell. And the counter argument might be that you'd attract talent that appreciates the transparency.

[phil21]

I'm curious what talent would appreciate the transparency? The only thing I can come up with is "average" talent.

The high performers will view it has a hard cap on compensation and look elsewhere, in my experience at least. Obviously this cannot be entirely correct, but it's hard for me to get into the mental space of someone who wants to be paid exactly as much as their peer sitting next to them. In my career I've always wanted to outperform the next guy - and be compensated accordingly.

I say this as having been both a high performer and an under performer. In the hard personal years where I am underperforming I would love transparency and know what to expect. In the years I was "crushing it" I'd have set myself back financially by a decade+ had I simply been okay with the average compensation for my position.

[trowawee]

I mean, as long as we're trading unverifiable anecdata, I've known high performers who were being underpaid because they were recently out of school or came out of non-traditional backgrounds. I suspect they would have appreciated this kind of system.

And the only people I can think of who would prefer the existing opague system would be those who benefit from it: management and people receiving outsized salaries for some anti-merofratic reason.

[phil21]

> or came out of non-traditional backgrounds.

That was me! I can say without a doubt I quickly learned to only work for small companies where I reported to the owner directly. This enabled me to get 50% raises YoY when starting out - where my corporate job was limited to the typical "well, that wouldn't be fair to the rest of the group" style politics.

I would say it's vastly more important to the hypothetical vulnerable high-performer than the guy graduating MIT or Harvard working for Google. They start at an extremely high salary and will do fine no matter what. The high performing high school dropout needs rapid massive raises just to eventually get to par with the other group - assuming similar performance.

I can almost guarantee you that if salaries were transparent it would have been a huge scandal in a few of the companies I worked at since I was making 2-3x the wages of those next to me. It would have been untenable for those managers to pay me that, even though/if I were worth it - they'd have done nothing but deal with politics and fallout from it. I still believe I was underpaid in most of those positions compared to the folks they had working there.

Egos are easily bruised. When that 19 year old high school dropout is making more than the 45 year old with a degree people start to complain. Loudly. They don't even look at work output or performance - it's utterly irrelevant to most.

I see both sides to this, but I'm relatively certain salary opaqueness helped me through the start of my career. Now? Maybe not as much. It's much harder to stand out at an exceptional level once you reach a certain point.

[watwut]

I have seen great performers underpaid, because they sucked at negotiation and were humble.

[a_imho]

Discriminating wages on arbitrary criteria like geographic location goes against equal work = equal pay and that compensation should be based on contribution [1].

Location base: For the other 65% of the base, we factor in each location’s cost of living using Numbeo together with data from Payscale and Glassdoor, which we then use to have a base salary for that particular location (say New York or Cape Town).

[1] https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...

[walshemj]

And it will lead to pay inflation as publishing CEO's salary proves

[rjzzleep]

A lot of German institutions work this way. There are a lot of problems with this. But one of the biggest is the following:

When you notice that someone that brings zero value to the company gets the same salary as you one of two things happens:

1. you either loose any incentive to do anything

2. or you quit.

In time all what you're left with is the people you don't want.

[trowawee]

Ok, but that's not really my problem. That's bad management, because they're apparently carrying around a bunch of dead weight and not doing anything to correct that problem.

[dmitrygr]

firing someone in EU isn't easy, no matter how useless they are.

[yorwba]

I'm not sure why you think that. At least in Germany, if an employee can't do the work they are obligated to do by their employment contract, they are in violation. After they have been notified of the violation (or if it is obvious, e.g. because they didn't even go to work), it is their duty to correct that. If the employee is unable to satisfy the requirements, they can be terminated with an appropriate notice period.

(Termination protection does not apply if the behavior of the employee is the reason: http://www.gesetze-im-internet.de/kschg/__1.html)

The process may not be fast, but for a useless employee, it would be difficult to claim that the termination was unjustified, so the outcome is essentially guaranteed. I would call that easy (as opposed to simple).

[Pyxl101]

Yes ... and this is a major drain on EU companies that make them less competitive than companies with "at will" employment. They can't fire low-performers easily, and they can't afford to take a gamble on people since firing them is so difficult if they don't work out.

[walshemj]

That's mostly propaganda and the fear of "socialist" Europe its actually quite easy to remove people for poor performance assuming it is really poor performance or trying to avoid redundancy.

If its so easy to fire in the USA why is hr so paranoid about it

[DanBC]

In the UK you can be fired within the first two years without reason (unless it's connected to a protected characteristic). After two years you can still be fired - the company just has to follow a simple procedure of giving you some warnings before firing you.

Employer tribunals are not free and are intimidating to use, so many people who are wrongfully dismissed don't seek justice.

[bshimmin]

Having had to fire someone who had been at a company for more than two years, I can say it was anything but a simple procedure: it involved a performance improvement plan which lasted interminably (and actually sapped a really surprisingly large amount of my own time...) and it became an awful lot more complicated when it turned out the guy was on anti-depressants. In the end, HR suggested I take the guy to the pub for lunch and they told me a series of things I could say to encourage him to quit but which couldn't possibly be construed as constructive dismissal; thankfully over lunch he told me he'd got another job offer, and I walked him out of the office the following day with a great sense of relief.

[ascorbic]

It's not specifically an EU issue. The UK is a lot more like the US in that respect, as is Ireland.

[dx034]

That's not a problem with equal salaries. Even if salaries are opaque, underperforming or lazy colleagues lower morale. Incentives can still be given by allowing people to quickly move up the ranks if they perform well.

[tom_mellior]

All that is true regardless of the other person's salary.

[kgwgk]

Paying everyone the same is the right policy if everyone is equally productive. That equilibrium might be reached by the “overpaid” ones getting better (or leaving) or by the “underpaid” ones getting worse (or leaving). One can fairly easily predict which of those scenarios is more likely.

[gozur88]

It seems like you'd lose your highest performers that way. People who put in a lot of extra hours expect to be compensated for it.

Also, do you really want to set up your incentives such that the smart thing to do is work just hard enough to avoid getting fired?

[phil21]

Which is the precise reason I fled union work when I was younger.

I got sick of being compensated the same (typically worse) as the worst employee on the floor, while doing 5-10x the productive output.

All these policies do over time is ensure you lose top-tier talent and eventually get stuck with a lot of middling folks who are content with the status quo. This can be a good or a bad thing, depending on who you are.

[greedo]

While opaque companies might not release raise figures, everyone generally knows that a promotion involves a raise, in addition to any status bump (assuming no real increase in responsibilities). So promotions can serve as a proxy for raises, causing the same ego issue.

[alayek]

You'd be surprised.

I have a friend, whose team had this policy - no raise with promotion.

He got a promotion with no raise. When asked, his manager said, "you shouldn't work for money. You should work for the learning experience."

He resigned in a month. And this was not some random fringe start-up - one of the biggest companies in the world, with over $100B in market cap.

[vilmosi]

You have some truth to it but maybe we'll get used to it. Same how we get used to X being taller/more attractive than us. We all know it's true, we just don't care that much anymore. It's just life.

[dx034]

The problem is that everyone thinks they can have individual salary levels. For many industries it was/is common that salaries are equal across groups. Good performance can lead to a higher bonus and make you move up the ranks but there was no discrimination for people in the same position. Unions enforced that and everyone could see their potential salary.

Maybe introducing those salaries would be a benefit for both employees and employers.

[scaryclam]

Though this would mean, if I'm trying to hire a developer and their salary requirement is 1000 more than the set band, I either have to employ them at a level too high and pay them more than I budgeted, or not hire them at all even though I could afford the additional 1000 and they were a good fit. I really dislike inflexibility like that. Do some employees get a bit on an unfair deal if they don't negotiate? Yes, they do, but who really cares, as long as they are happy? I much prefer being in the dark about others pay and being able to negotiate terms of employment than shoehorning everyone into the same mold.

[crdoconnor]

>The problem is with egos, Employee A might view themselves as more valuable to the company than Employee B and vice versa.

In which case after finding out they leave and if it turns out they're not all that valuable they mainly just end up screwing themselves.

I'm not sure why any employer would consider this a problem.

An underpaid employee leaving and getting a better job though - sure, that's a problem.

[johnwalker]

I can definitely understand why a team could dissolve. But there are really only upsides for employees to understand why they're being paid X and to be able to model their behavior after the person that gets paid Y.

[save_ferris]

Not necessarily. I once found out how much one of my team members made that started on the same day in the same role as I with the same amount of experience (the HR manager left his most recent offer letter open on her screen about a year and a half after we started). He was making about 66% more than I was (not an exaggeration) and our output was pretty comparable. Needless to say, modifying my behavior to be more like him wasn't the first (or 100th) thing that came to mind.

Was it fair? Who knows, it's not really possible to debate that because it all depends on your definition of "fair". But in my experience, it's not very realistic to assume that employee A sees what employee B makes and objectively understands how they need to improve to make what employee B makes. Especially since that's not really how pay is negotiated anyway.

[shaftoe]

That would work if people were Vulcans.

[anonacct37]

If someone was making 100k more than me, do you really think I'd have to be a Vulcan to want to close that gap?

Seems like a bit of an extreme statement.

[sidlls]

The point is that what a person is paid isn't entirely determined by their behavior at work. Much of it is, in fact, determined by their charm, network, prior history and negotiating skills: none of which necessarily have anything to do with their day to day.

[walshemj]

but the external market breaks that you might need to hire a new person when the market is hot and they will be paid more than some one hired in a recession