The world would be a very very shitty place if we had to negotiate for everything on an individual basis. It's much more efficient to find the few people who actually have that skill and let them do it for the group (and we can spend more time actually trying to fucking improve the human species well-being instead of bickering on $$s).
> Disclosure absolves managers of the need to negotiate effectively, which means you get managers who can't negotiate, which is the worst possible outcome for a company, since what is their job again?
uh.. ensuring that their team is productive by handling their well-being issues ?
And human nature being what it is, why won't those few people negotiate better deals for themselves while keeping peanuts for the rest? (see: class action layers, bosses of Unions etc).
Because they would be very bad negotiators and wouldn't be hired in the first place.
And because they probably are scamming the rest of the group, which is a crime in most developed countries.
You're confusing the skill of adversarial negotiation with cooperative negotiation. Cooperative negotiation is a critical business skill within the company. You are all on the same team and should have the same goals.
Competitive negotiation is a good skill to have for some external negotiations. If anything, being good at cooperative negotiation is far more important.
> Disclosure absolves managers of the need to negotiate effectively, which means you get managers who can't negotiate, which is the worst possible outcome for a company, since what is their job again?
Same as above. You're again confusing adversarial negotiation for cooperative negotiation.
> Disclosure lowers all boats in that it causes mean-reversion in the sample, and reduces opportunity and incentive for people to apply themselves and succeed
In every org I've seen with open salaries, I've seen the opposite. That it raises all boats because everyone demands to get paid the same as the highest salary on the team.
That's not an ideal result either.
A better result would be that people get more comfortable with conversations about "here's why they make more than you, and here's what you could do to provide more value and earn more salary".
Someone shouldn't get paid more because they're a better negotiator. But they should get paid more if they provide more value.
I've heard a few stories from people at companies open about salaries that involve such conversations, but not nearly enough such stories.
But the point is that it doesn't revert to the mean, but it reverts to the max.
To clarify, there was no confusion.
When someone says, "take it or leave it," it's bullying. When someone says, "we're paying you this because this is what everyone else gets and that's fair because I'm telling you it is," that's also bullying.
A negotiated price is a function of the true price at which parties arrive at a deal. How do you deal with liars? Find options that yield information about their intent. This is the real art. It's finding information oracles about their position independent of what they present. Some people are simple, most aren't.
In this sense, negotiation is the pursuit of truth.
But cooperative negotiation is when both parties have the same information and the same goals but different constraints. Or they have the same information but different goals.
Then you work together to come up with a plan that meets both needs, but most likely each side must compromise a bit.
That is the negotiation skill that is most important in business, and that is not the skill used when negotiating salaries in most cases.
Although as it turns out my last salary negotiation was in fact a cooperative negotiation, where I made an offer and was then told I asked too low and they offered me more than I asked for.
Telling the person you're negotiating with that they are just being confrontational is simple passive aggression.
After reading GTY, I recommend DeMesquita and Pfeffer, then, go back to Cialdini through a modern lens.
Weird.
Of course, if you are at some crappy, hollowed out and debt laden behemoth solving for cost optimization instead of growth, then it's already a race to the bottom and it doesn't matter.
Salary disclosure removes low outliers, but it doesn't do much to improve those near the mean. Having been disclosing my salary to colleagues (and generally recieving the same in return) I know that people who are close but not far below what they could get... don't really ask, or are satisfied with a below desrved raise.
It also shouldn't do much to affect high outliers. If you are able to convince your employer that you are worth X much, the fact that the other employees are being paid on average X/2 instead of X/3 shouldn't remove your value or negotiating position.
With respect to disclosure absolving managers of the need to negotiate - managers are rarely in a position to effectively negotiate, in fact many hypothesise that the benefit of the growth of the managerial class is to buffer the leadership class from having to negotiate with the majority of the worker class.
Does anyone have a link to the article that was something like "company lifecycles as described by the office" or some such? I can't seem to find it and its highly relevant.
https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...
"Play your part in the comedy, but don't identify yourself with your role."
Salary disclosure is also a prerequisite for having a public discourse about equal pay and equal rights based on factual information. You might call that to: "gang up", but I certainly wouldn't.
Our daughters, girldfriends, mothers and sisters are all living breating people in our lives - maybe even the most important ones we have where as a company is just a thing. My own startups are just a piece of paper, a tax information number, an organizational construct, nothing more. I can create another one in 2-3 days. Close a company and if there's customer demand, another one will just spring to life and fill the gap. I might be sad and in debt for a while, but society at large will not even notice. It doesn't matter.
Real world example: I'm paid almost twice the market rate for my current job. Why? Not because I'm better at it than my peers, but because when I started, I opted for more RSUs (public company) instead of base salary, and the company has grown tremendously. Folks who didn't take the same gamble have a much lower total comp now. Years ago no one knew this was going to happen, so my base salary was lower. If the market hadn't shifted the way it did, should I have been able to complain others are paid more than me? Seems like a gamble with no drawback which is a bit unfair for the others, no?
Some folks opt for more time off. People with the same title end up at a different place within the salary bands based on countless factors, many of which are very subjective (and if you put too many titles, then people will just negotiate the title instead of the salary, effectively doing the same thing).
People are also generally biaised when talking about themselves and aren't very good at fully understanding the context around the salary of others.
All these factors mean that an objective salary based purely on quantifiable factors won't end up 1:1 with how good people are at their job. Thus we have negotiations.
And then there's environmental factors. If companies aren't allowed to negotiate, you end up with a situation like this:
Company Foo pays 150k for a Sr Eng. Bob is paid 160k at his current job, and Foo is trying to poach him. Bob asks Foo for 165k. Without negotiations, Company Foo can either:
A) Tell Bob tough luck (which in the current market is a bad move. Software Engineers don't grow on trees)
B) Give all their Sr Eng (potentially hundreds or more) a 15k raise. But then the same thing will happen to Company Bar... When does it stop? Should everyone at all tech companies but paid precisely 150k? What if Company Foo and Bar are very different and why? It's very subjective.
There are several good reasons for this, not least that management is required to understand the bigger picture and how the activities under them fit into it, while in general subordinates are not.
Also, subordinates may have personal motivations that would conflict with the priorities of the business if everyone was free to do their own thing. A very common example is developers who come into a tech firm and want to use all the latest cool technologies because they're fun and look great on a resume, which is often not in the best interests of the business.
Better signalling about compensation opportunity is good for employees and for employers who compensate well.
It's bad for shops who pay everyone the same or otherwise pay poorly.
Managers are already given an advantage in negotiations because they have data to refer to. And they use that data opaquely. As in "trust us, you are already paid well".
As a counterpoint, professional athletes and salespeople regularly share salary (or sales) figures. They are certainly not all paid equally.
Skills at zero-sum negotiation, like street-fighting skills, are among the most valuable and useful skills of all to those who possess them and to their allies. But skills at zero-sum negotiation by definition provide no value to society; the value they provide to their possessors is merely expropriated from someone else. This is a significant improvement over street-fighting skills, which provide negative value to society when exercised; a society with more street fights thereby becomes poorer and less happy.
> Disclosure advantages people who collude to apply political pressure (gang up) instead of appealing to principles or leveraging their skill and the value they bring.
This seems unlikely. Disclosure of the market-clearing price generally just reduces information asymmetry.
> Disclosure absolves managers of the need to negotiate effectively, which means you get managers who can't negotiate, which is the worst possible outcome for a company, since what is their job again?
Managers whose special skill is zero-sum negotiation will destroy your company. Managers need to be able to build cooperation and trust, which is the opposite.
The managers I have seen who subscribe to the co-operation model tend to passively ride billions in valuation into the ground. The ones at successful companies are merely survivor bias from riding growth.
A comp package has a salary number, it also has bonuses, commissions, stocks, options, IP ownership, holidays, work from home time, days/week, travel requirements, travel policy, mat/pat leave, non-competes, and myriad other options that effect the salary number you arrive at.
If you agree to a salary number without taking these into account, they will necessarily disadvantage you on these.
When someone asks, what is your salary expectation, you answer, we're using the same market data and it's really a question of the total package.
A lot of people are only interested in deals that screw you. This is a super fast filter to find them.
Also known as "organized labor"
That said I hate negotiation because:
1) I'm not a shark I want open honest talks
2) negotiation can be hacked (a lot of people have charm and can lie their way through) so here goes its 'value'.
It genuinely sucks life out of me when I have to play these games. To the point that I'm giving code for 1% of its market value to a small business because I actually have a human relationship with him.
I call BS.
You, as an employee seeking employment, don’t have much negotiating power. If you really did, then you won’t be seeking a job, that pays money, from someone else.
Your best and really only way to negotiate, is to stand firm with your salary demand. And be ready to walk if they try to game you. This is really, your only advantage.
It also helps if you’re skilled in what you do. And that you beat out your competition.
It helps even more if you’re in a niche field, that is in demand. Like some software development jobs, for critical functions in business. But still, you are salary capped, regardless of how good you are. The company may just opt for someone mediocre to do the job, for less pay.
But if you’re seeking a non-critical job, or if you’re in an entry-level role, then good luck, you are at a severe disadvantage. The employer will feel that you should be so lucky to take their offer.
The power to walk away is the greatest power of all. But if the chips are down, you have to eat, and so your BATNA is poor. This means having a job is the best time to look for the next one. If you need one, you're a price taker. If you don't, you are the price maker.
The hardest thing to accept is that it's mostly attitude.
wut. how exactly do you imagine people that don't have union contracts go about doing this?
>Contrarian view: salary disclosure destroys value for people with negotiating skills
and conversely how are you at an advantage in negotiations when you have no price discovery? e.g. i bought this tuna sandwich for $10 and i feel great about it because i have no way of knowing that the sandwich shop next door has the exact same tuna sandwich for $5.
>Disclosure lowers all boats in that it causes mean-reversion in the sample, and reduces opportunity and incentive for people to apply themselves and succeed
what a hot take - "more transparency from the executive class actually hurts the labor class". brilliant.
It's like saying that tech conferences destroy value for people with tech skills because people share knowledge...
Negotiation skills are mostly useless when the market is regulated, just like most of the western World, excluding the US
My compensation depends on a nation wide contract and its base salary
The variable part depends on my skills, not as a negotiator, but on my abilities to do my job better than the average
I can ask a nice bonus because I produce more value than the average or the same value in less time to the company or the clients I work for
It's really not that hard to negotiate when you have something to offer.
Disclosure advantages people who collude to apply political pressure (gang up) instead of appealing to principles or leveraging their skill and the value they bring. There is general social and economic harm to facilitating this behaviour.
Disclosure lowers all boats in that it causes mean-reversion in the sample, and reduces opportunity and incentive for people to apply themselves and succeed, and prevents valuable and exceptional people from joining the company because their salary expectations are not "to scale."
Disclosure absolves managers of the need to negotiate effectively, which means you get managers who can't negotiate, which is the worst possible outcome for a company, since what is their job again?
It's great to have data for negotiating. I use a bunch of different data sources and options, and I also avoid organizations who say they "don't negotiate," because it means they literally just bully people.
Have at it.