[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.

[gaius]

If you have a skill graded from 1-10 with 10 being the best, and you have 10 people, 9 rated 5 and 1 rated 1, then the sample average is 4.6 and 90% are above it, yet noone is actually good. This explains driving...

[watwut]

There are multiple differing definitions of "good driver" (speed vs safety vs comfort). It is not just people being overconfident.

[tbrownaw]

I'd assume that's actually correct. Most drivers are pretty good and a handful are bad, so the median skill level is higher than the mean.

[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?