I don’t know about you but far before I showed up for the very first day of my career my expectations were that if I performed better than my peers I would be paid more and if I underperformed I would be paid less. And generally that has proven to be roughly true, with the occasional weird stuff here and there.

The only place I know were this does not seem to be the case are government employees were everybody is paid according to a fixed grid and were salary increases are purely time gated. My experience with working with people compensated on a such a model has been… interesting.

It really depends what company you work in. There are a lot of places where how much people like you determines how you are compensated. You can appear productive while you’re the one who is constantly creating the problems that you swoop in and fix to save the day.

Half of my jobs didn’t rewarded people on performance.

> There are a lot of places where how much people like you determines how you are compensated.

I think this is true literally everywhere. Another factor may be competence, but of similar people, the one whom is liked will probably earn more than the other.

My experience in this industry, and as I've been learning not uncommon in office jobs outside software, is that relative performance is at best noise. The primary factor determining your compensation is your job interview - you get whatever you negotiate when being hired. As a consequence, the compensation is strongly correlated with how recently were you hired - new employees usually start with higher salaries than seasoned employees couple levels higher on the career ladder.

If management doesn’t offer raises or equity to keep total comp in line with market rates, they are knowingly risking attrition.

Sounds reasonable, but in practice (at least in Belgium), practice seems otherwise.

If you want to make a big jump money wise, you have to switch jobs. That's what I see in practice.

My theory is that people are reluctant to switch jobs and so companies count on that fact and pay less. And so to motivate someone to switch they need extra money.

Most companies prefer some attrition to keeping everybody up to date with the crazy run that the software eng market has been in the past 10+ years. Reality is, if your company is good place to work at otherwise, most people won't start looking for a new job only because it could pay 20-30% more. And, at the same time, in many companies payroll is the biggest cost, so if you can keep it lower by that 20-30%, it will have huge effect on the bottom line.