[goofygrin]

This is retarded.

The owner has employees. Not partners. He is carrying all the risk. Slow pay? He pays. Personal guarantee needed? His house is on the line. Needs cash to hire the next employee or to float more payroll while the work ramps up? Ya its his cash.

He's effectively made everyone an equal partner with unequal risks and responsibilities.

[sopooneo]

I thought somewhat of the opposite. They're not partners unless they have equity. And if he has a great deal of equity, and the company is valuable, his own salary may be less significant than buy-out or IPO money.

[kybernetikos]

I wouldn't make the point quite like you have, but yes. Employees lose a lot less than the owner if the company is run into the ground because it's paying the employees too much.

That's not to say that that is what is happening in this situation - I don't know, but while I love the transparency aspect, I would not expect the 'allow employees to choose their salary' to reliably create a good outcome for the company. (Having said that, allowing management to set salary secretly doesn't always work great either.)

I expect that it only stands a chance of working well if your employees are genuinely bought in to the whole idea of the company.

[wpietri]

What's your evidence?

Typically, people who are involved in decisions feel much more engaged in dealing with the results. My expectation is that if something happened to the company, his employees would be much more loyal. Certainly if I worked for him, I'd be willing to take some bad times with the good times.

The one open-books company I visited had extremely loyal employees and great camaraderie. Causality is hard to untangle there, but it's not unreasonable that this is much smarter that the "Mine! It's all mine!" approach to employee relations that is a common alternative.

[ghostdiver]

at the end of the day for most of employees all that matters is how much money lands in their pocket

if they wanted to be business partners they wouldn't become employees in first place

[wpietri]

I don't believe that first sentence is true. The studies I've seen for programmers put money relatively far down on their list of priorities. See McConnell's Rapid Development for a summary of the research.