[vladimirralev]

Much more simple than that. Just take a cut from the profits your project generates or supervises. If the project doesn't generate or supervise anything just get a cut from the overall budget which is allocated based on how valuable the project is to the company.

[ajiang]

Favors near term profits far more than long term growth, which you could argue is not good for the longevity of the company. Plus, there would be competition over the seemingly most profitable projects. And there are projects that don't generate any profit, but has benefits that are very difficult to quantify.

[vladimirralev]

But if that's true then it applies to shareholders and execs as well. Should we change their compensation plans? Yes there will be competition over the profitable projects and that's how it should be. Projects without profit don't exist. If the project doesn't have profit then the company wouldn't allocate budget. If they allocate budget then the project is profitable. It is up to the project leaders to have the fight and justify budgets if it's not that obvious.

[dingaling]

> Projects without profit don't exist.

Depends on your industry. In finance there are many, many projects which have to be done for legal compliance. There is no 'profit' for the company; the goal is to be permitted to remain in business.

Funds have to be allocated to do the project, but it brings in no new revenue. It might actually incur new costs, such as ongoing storage for audit logs.

[vladimirralev]

Well, any prevented loss can also be interpreted as profit. So depending on what kind of money is at stake you can reasonably claim a cut. You provide insurance and your cut is the price of the insurance policy. It's a well established business.

[ajiang]

Not arguing at all that things have inherent value, but the challenge is having an objective way of putting a dollar value to those activities.

For example, does a backup generator add any value if the electricity never goes out? Do you only assign it 'profit' if electricity goes out? How do you calculate the value of the downtime if electricity does go out? Does it encourage people who've worked on setting up a backup generator to 'wish' for outages?

It's a challenge. Even if you do have answers to all of these questions, there will always be levels of subjectivity resulting in politics, and the effort involved will be itself an administrative workload of which the 'profit' would be difficult to assess.

[a_c_s]

Then there would be no technical support staff - upgrading computers generates $0 new revenues and has significant costs.

Clearly there is value in not forcing developers to use 15 year old machines, but it isn't so clear to quantify.

Since whomever 'quantifies' this data then has enormous influence as to what projects are worked on, you risk just shuffling around the politics: instead of fighting over what projects to work on it becomes about how many dollars each project is worth.

[vladimirralev]

Unless you discount the expert time saved per year. This is actually a real metric. How do you think they calculate the budget for tech support? They measure time wasted in tech issues, multiply by the expert wage and then start doing a binary search up and down to see what optimizes the cost at average salary increments. Of course politics corrupt the process eventually.

[munificent]

I worked at EA when they tried a similar model. It was astonishingly effective at slaughtering any technology shared across game teams. Large companies get economies of scale by being able to reuse technology across multiple revenue generating products. If your compensation system can't accommodate that, you'll lose it.

[vkou]

How much profit does QA generate? What about internal build/test tools?

[vladimirralev]

QA gets a budget at the price of an insurance policy. Just like an insurer would gauge the risk and ask for a price.