[arpyzo]

My observations suggest that this applies far more to lower performing employees than higher performing ones since the barrier to change jobs is lower for top tier talent.

In effect this means that while companies that give paltry pay bumps that don't keep up with the market may successfully hold on to lower performing employees, they'll be continually churning through top performers.

[aleph_minus_one]

> My observations suggest that this applies far more to lower performing employees than higher performing ones since the barrier to change jobs is lower for top tier talent.

I think talent and the capability to market/self-promote oneself (I believe only for the latter capability, the barrier to change jobs is much lower) are mostly uncorrelated.

[downut]

EDIT: Grrr! This comment meant for the GP, sorry.

I think there is an unstated underlying assumption in this comment that "higher performing" implies "drop-in transferable technical/social skills" legible to the target interviewing entity. Maybe for software but for wide swaths of actually engineering (double graduate engineers in this family) I doubt that rather strongly.

The default 2 weeks vacation for the decades experienced new hire is a pretty strong tell.

[qingcharles]

Coming from the EU, every time I see "2 weeks vacation" I get a twitch.

[bb88]

But is this actually a problem for a company? I think most companies can only afford second rate talent with the top tier talent going to FAANG companies anyway.

What most companies are really looking for is undervalued high performers. And there's probably a lot of those still that haven't moved to the bay area.

I think MBA's these days have decided that they'll hold labor costs low by not rewarding high performers, and then hire whoever they can to fit their budget, but then have a yearly 5% layoff to hold their employee's feet to the fire.

And then those same MBA's get a bonus for keeping costs low, meanwhile enjoying their beach houses on the weekends.

Granted it sucks to be an individual contributor, but if you're a manager, you have incentives for cutting costs to the bone.

[aleph_minus_one]

> What most companies are really looking for is undervalued high performers.

I'm not sure about that, since very smart people often tend to be, well, "a little bit difficult to handle", in particular by bosses who got to their position by office politics instead of merits (as many do).

If companies were really looking for high performers, they'd create an environment where high performers can really flourish. Because in my observation there exist quite a lot of high performers who are "held down" by their current work environment, this would attract quite some potential high performers, including undervalued ones.

[jprete]

> In effect this means that while companies that give paltry pay bumps that don't keep up with the market may successfully hold on to lower performing employees, they'll be continually churning through top performers.

The same effect might even be partially responsible for the OP observation. I.e. the cause and effect might not be "job-hopping gets you paid more" but it might instead be "having a lot of skill gets you paid more and also enables you to job-hop more confidently".

[thayne]

Or maybe people who are better and more confident at negotiation and interviewing are also more confident at hopping jobs. But those skills may or may not correlate with the skills you care about.

Just because you are a good software engineer doesn't mean you are good at finding a new job.

[s1artibartfast]

why not do both? thats what I see.

Firms give paltry pay bumps as default, but will fight with competitive salaries to retain top performers.

Top performers get completive raises by going to their boss with an offer letter from a competitor.

[delusional]

General consensus among my colleagues and bosses are that anyone who comes to a routine salary negotiation with a competing offer is encouraged to take it. If you've been eyeing a different opportunity, then you're not going to find your current role engaging. The money is rarely enough to keep you for long.

[sandos]

I live in Sweden, but very early on in my career I was told that showing a competing offer would simply be viewed as "blackmailing" and you would not become very popular. I never used that tactic, instead just switching jobs.

Now the jobmarket is nothing that can be compared to the Bay area, for sure. For example many places more or less use the standard increases brokered by the union, even if you or the workplace is not unionized, with some skewing for being a high performer.

[jcon321]

Would you really bring your boss an offer letter? Even as top performer it seems like a bad idea to take any counter offer.

[antonyt]

If you're a reasonably well-performing IC at US big tech, your "boss" is often also a grunt with little real control over your salary. Just a different flavor grunt from you. In my experience, these managers are often happy to throw money at you but don't have much latitude to do so. Having a competing offer gives THEM leverage to try to convince those guarding the money hose to open the faucet a little.

[mmh0000]

Yes! I've done it several times. It's one of the best and most reliable ways to get a raise.

It's "business." Your manager isn't going to make a counteroffer, then wait a month and fire you. I mean, they might if they're a total D.bag, but I've not yet had that experience. And if I had, I'd already proven to myself and my manager that I could get a higher-paying job elsewhere. It'd be a minor annoyance on my side.

I don't want to give away specifics, so take these numbers with a lump of salt; the ratios are correct:

Went from $50k/yr [1]-> $80k/yr [2]-> $120k/yr [3]-> $205k/yr

[1] The company wanted me to stay and raised my pay to match the competing offers.

[2] The company wanted me to stay and raised my pay to match the competing offers.

[3] The company didn't want to pay that much, so I put in my two weeks and moved to a different company.

From my experience, I've found that requesting a raise without a competing offer often leads to a small or no increase in pay. However, when I've approached my manager with a better offer in hand, it has consistently resulted in substantial pay raises.

[willcipriano]

I'd feel bad wasting the time of the other company just because my current one doesn't value me.

[downut]

Why? You proved you're competent to the potential suitor by obtaining an offer. They got some valuable quality candidate interviewing experience which can be difficult to achieve, and you got a rock solid tangible improvement in your work QoL, even if the target ultimately didn't achieve their hopeful hire. Possibly they got some data that (to them) implies they should have offered more money. Win win. I would say a win for all of us because "more money".

[willcipriano]

Sure, I guess you could play it back and forth like your sibling comment implies, that seems risky though (you might end up with no offers).

Also why do I want to stay with the cheap people? They proved to be unable to deliver market rates for my efforts unless I make a big scene about it. I don't like to do business with people like that.

[mmh0000]

They're always welcome to offer more money.

[s1artibartfast]

Why? Everything is a negotiation and you're not wasting their time.

It's no different than price shopping between mechanics. You can do that while being clear on your intentions and not making any promises you can't keep

[geph2021]

It depends on the counter offer and your situation. I would have agreed with you, but a couple years ago I told my employer that I had a job offer kind of land in my lap (I wasn't actively looking), that it was good and I was inclined to take it. I wasn't unhappy at my current job, but the change in title/seniority and compensation of the job offer was definitely worth it. They didn't want me to leave, so they countered with a very strong offer, which I decided to take and stay with the company. If you want to leave because you're unhappy with other aspects of your job, then I agree that accepting a counter offer doesn't seem like a great choice.

[s1artibartfast]

That is literally how I got my last promotion. I set up a meeting and told them I had an offer I intended to take. They had a 20% raise and promotion approved within 24 hours.

I also routinely get asked by managers for promo recommendations for coworkers thinking about leaving. IF they refuse to counter, then you should be asking yourself why you are staying.

You cant pull this maneuver more than once or twice, but it lets them know you are serious and wont just whine and accept token raises in future negotiations.

[eternal_braid]

What company is that?

[JohnFen]

> Top performers get completive raises by going to their boss with an offer letter from a competitor.

In my businesses, I've had employees do this a couple of times. Both times my response was "you should take that offer". Also both times, if they'd asked for a pay increase equal to what the offer represented, they probably would have gotten it.

Coming to me with an offer letter in an attempt to get a pay raise is a thing that I think speaks very poorly of the person. It's an attempt to extort me, their current employer, and it's showing great disrespect for the company they got the offer letter from (because the employee is basically just using that employer and wasting their time).

[bb88]

I appreciate your honesty here. I would argue, you should appreciate your employee's honesty as well.

If you have a market based salary view of the world, and an employee says they're actually worth more than what your merit/market system is paying them (and has proof), you should probably respect that.

The fact they're coming to you first is a risk in and of itself.

[JohnFen]

> an employee says they're actually worth more than what your merit/market system is paying them, you should probably respect that as well.

We are in total agreement here!

[bb88]

You said:

> Coming to me with an offer letter in an attempt to get a pay raise is a thing that I think speaks very poorly of the person.

Don't get me wrong, I appreciate your honesty here, But I don't think that's fair, and probably why you're getting push-back in this thread.

[JohnFen]

The part that gives me pause isn't that the employee is agitating for their own interest. That's good and expected. It's the method by which they're doing it.

It's OK if you and others don't think it's fair. We just disagree on that aspect. I don't think it's fair for an employee to use that particular method. To me, it comes off as a kind of extortion to the current employer, and mistreats the employer who made the offer.

Others can, of course, have a different opinion. Nothing wrong with that. We simply disagree.

To make a little meta-comment: I am genuinely surprised at the negative reaction I've gotten from a few people here. I really didn't think I was saying anything all that controversial. Live and learn, I guess!

[synthc]

This is so shortshighted, it's not about 'respect', its about market value. By bringing an offer your employees are proving their market value, and you don't want to match it, so they will leave.

[aleph_minus_one]

> By bringing an offer your employees are proving their market value, and you don't want to match it, so they will leave.

Leaving is exactly what JohnFen actually recommended to these employees.

[JohnFen]

It's about treating people decently, in my view. It's not necessary to try to set up a bidding war in order to demonstrate market value. The disrespect that rankles me is the treatment of the company that made the offer, honestly.

I just choose not to play that game. It's unnecessary. If an employee can't just come to me and be straight about their compensation requirements, that's a problem.

[kcb]

The balance of power is still vastly in favor of the company that made the offer. Meaning, they could rescind the offer at any time for any reason and possibly ruin the potential employees life. Whereas the reverse case of the potential employee rejecting an offer is much less likely to have a material impact on the company. For this reason I don't think the company deserves that much concern.

[s1artibartfast]

>If an employee can't just come to me and be straight about their compensation requirements, that's a problem.

That's exactly what they are doing, but with evidence to boot so you are on the same page.

[JohnFen]

But it's not evidence of anything other than than a company has valued that potential employee at a particular rate. What an employee is worth to an employer is pretty subjective. Someone that is worth 7 figures to one company may only be worth 6 or 5 to another.

Having an offer in hand is valuable to the employee, certainly! There's nothing wrong with getting an offer, then asking your current employer for a raise that would meet or exceed that offer. The issue I have is actually communicating that offer to the current employer.

Now, don't get me wrong -- I'd certainly never punish or fire anyone who did that. I'm just not going to give in to what I perceive as extortion, and what I perceive as being unfair to the employer who made the offer.

[maxerickson]

How often can they ask you for a pay increase (the price discovery you approve of) without making you start thinking some other negative thing?

[JohnFen]

I don't understand this question. What negative thing would I think?

If someone asked me for a pay raise and I turned it down, I'd also explain exact why I turned it down. (This is hypothetical as I've not turned down a pay raise). I wouldn't think poorly of anyone for just asking for a raise, but I suppose I'd start to get annoyed if they did it daily when the reason that I turned them down was still true.

[s1artibartfast]

That's strange to me. Why is it extortion? They're doing you a favor by giving a chance to compete. Seems like honest communication to me.

It is no different than giving customers a notice of price increase or giving contractors an option to bid.

[JohnFen]

It smells of extortion to me because the reason for doing it is to use the offer as a threat.

> Seems like honest communication to me.

Extortion is honest communication, too. The existence of an offer doesn't do anything to help me decide whether or not I can go along with a pay increase. It only communicates that the employee wants to threaten me into agreeing to one.

In my opinion, the better way is to ask for the pay raise without mentioning the offer. If they I don't give them the raise and it's that important to them, then they should just take the offer.

> It is no different than giving customers a notice of price increase or giving contractors an option to bid.

I think it's very different from that, actually. You can require a raise as a condition to stay at the company without trying to use another offer as a weapon.

[s1artibartfast]

I guess to me, extortion or threat imply taking or degrading something you are entitled to. It doesn't seem like you think you are entitled to the work of the employee, so I'm honestly confused by the reaction.

At first I thought it was simply because it is presented as an ultimatum, but it seems like you have no problem being given conditions. Saying I want X to keep working here is acceptable, but the same exact statement with an offer weaponizes it.

If they have an offer they don't tell you about but have an otherwise identical request, is that less of a threat?

[lupire]

You admit to intentionallu underpaying your employees, and then insinuate moral failing on their part for proving their worth to after you told them your underestimate of it? Good for them that they left, and left you poorer for it.

[JohnFen]

> You admit to intentionallu underpaying your employees

Not at all. I've never intentionally underpaid anyone.

> then insinuate moral failing on their part for proving their worth

Also not at all. Presenting an offer letter from someone is not "proving their worth". My objection is the manipulation they're engaging in rather than just asking for what they think they should be getting.

> and left you poorer for it.

Only one of them left, and I was not left poorer for it at all.

I'm not sure why you seem so hostile here. I never dealt with anyone in bad faith, even a little.

[anthony_d]

I think I see your point but it definitely feels shady to me.

First, personally I’ve never asked my employer to match an offer. I just leave.

I do think the thought process makes some sense though.

If I feel I’m underpaid I’m going to look around to confirm before talking to anyone.

If I get confirmation I’m being underpaid then I’m going to wonder why. Here’s where I have a choice… I either assume it’s because you’re intentionally underpaying because you think you can, or it’s because you don’t understand what you’re doing.

I know companies understand compensation because I’ve worked in management and on compensation planning software, that’s why I don’t talk about it.

More naive people might give you the benefit of the doubt, i.e. think you just don’t know what’s fair. Those people give you a chance to fix it, and only then learn that you’re intentionally underpaying them.

It does speak badly of the person but only in the sense that they’re naive and think you “mean well” in some sense.

[JohnFen]

> I either assume it’s because you’re intentionally underpaying because you think you can, or it’s because you don’t understand what you’re doing.

There are other explanations as well: for instance, just because an employee is worth a given rate to one company in no way means that the same employee is worth the same amount in another company.

[barbariangrunge]

Job performance doesn’t really matter in tech. It’s all about interview skills and leetcode