At SI, we follow the Joel Spolsky tiered structure that Sebastian mentions -- you're hired at a salary based on your experience and talent and you can be promoted into a higher salary, but we only give cost-of-living raises; no performance raises.
The reason why we decided this: as an introverted geek, I found the social I-want-a-raise dance to be awkward and embarrassing. I really just wanted to focus on working on interesting stuff and be paid fairly. I always wondered how my pay could possibly be fair if there was room to negotiate up? It seemed wrong that others could be compensated better simply for being more outgoing that I was.
So I'm curious -- what method do HNers like better? Would you prefer your employer to have a negotiated or Joel Spolsky-style tiered pay scale?
Negotiation, especially in introverted geek circles of people too afraid to ask for a raise / figure out what their contributions to the company are.
I like negotiating because I know how to dig through the financial reports and figure out how I'm contributing to the bottom line, and with out a bunch of other people claiming the same thing it makes it easier to negotiate raises.
It's especially good to ask for a raise right after the CEO gives one of those our employees are our most valuable asset talks, and after they say something like "the way i look at it is if a employee who has been paid 250K in 3 years walks out the door, it's like 250K of knowledge walking out the door". Then you use their figures and put in place a financial model where you walking out the door with 5 years of experience costs them 500K. The best part about these models is the more you increase your pay the more the financial models suggest your pay should be increased.
The point is to negotiate at the right time, usually when the CEO is trying to keep people from leaving and there is spare cash floating around. My BANTA has always been show the rest of the team the financial models and how they could be making more, and then find something else to do. Business is a contact sport. If you can't get yourself a raise , go get the rest of your team a raise and voila now you're being underpaid and your raise is justified.
Also, I'd go fight for anyone's raise a) so they'd back me up for mine and b) so it would increase the avg salary in the company making your own raise seem fair.
I never understood this argument. You still need to sell yourself for movement into the higher salary range. It ends up being the same system as performance raises.
I've only ever had to do the I-want-a-raise dance, and when I heard about the tiered scale, it was like a beacon of light from Jesus.
If I ever interviewed for two places, and they were equal on all parts, except one had a tiered scale, I'd pick the tiered scale in a heartbeat. Wouldn't hesitate one bit.
The biggest problem I've found with asking for raises is that I don't have a clear career path. I can't look and see the minimum I'd be making if I stick with the company for 15 years. I think the tiered path would be much better for employee loyalty and holding on to institutional knowledge of coworkers.
Unless you have good evidence that you're worse than the average dev in the shop, tying yourself to a scale where everybody gets exactly the same pay is guaranteed to leave you underpaid.
If you're good at what you do, you can make more than somebody who's less good. It's a shame that you have to actually stand up for yourself and ask to be paid what you're worth, but that's the world we live in.
Incidentally, you're not going to be there in 15 years. If you're good (and remember, we're assuming you are), stuff will come up and you'll jump on it. There are certainly people who look for long term job security in this industry, but except in extremely rare cases, those people tend to know that they're a bit behind the curve and therefore would likely not find another job if they had to contend on the open market.
Depends on the payment structure. The company I work for pays everyone the same (very high) base salary. Each programmer works on their own product and earns royalties off the top of it. Then there are variable bonuses based on the company's overall performance which are the same for everyone.
It's the best of both worlds but obviously it only applies to companies where one person "owns" each product.
Because it would free me to focus on other concerns. As long as I found the scale reasonable, I could focus on other ways to ensure that the job is rewarding.
there is clearly a perverse incentive for equity holders to apply downward pressure on salaries, so why do you guys think tiered is any different? I'm skeptical that there's any difference at all between average salary at tiered companies vs regular companies.
Even if the average salary is the same - the two schemes will benefit different people depending on their personality type. What kind of person do you want to attract?
The reason why we decided this: as an introverted geek, I found the social I-want-a-raise dance to be awkward and embarrassing. I really just wanted to focus on working on interesting stuff and be paid fairly. I always wondered how my pay could possibly be fair if there was room to negotiate up? It seemed wrong that others could be compensated better simply for being more outgoing that I was.
So I'm curious -- what method do HNers like better? Would you prefer your employer to have a negotiated or Joel Spolsky-style tiered pay scale?