The word "protective" doesn't seem apt here, as that would imply he had his employees' best interests at heart, when clearly he only had the company's best interests in mind (which is fair, given that's the job of the CEO).
Try "possessive".
I've read that book (audio) - that was one of the more cringeworthy passages of the book. What I gathered was that Tim probably felt like "hey I wouldn't do this, but it's Steve and he's my boss so I have to put a marginal defense out there".
I agree with you, the way these rich people look at employees as chess pieces rather than humans is awful. If you're so afraid of someone quitting, then address that by making it worth their while not to quit! Not with collusion for god's sake.
The fact that they call someone getting a better job "being poached" just says it all really. (If you use this phrase, take a moment to really think about what you are saying.)
As soon as someone pulls the trigger and starts poaching it gets exponentially more expensive for these companies to operate.
This is the Prisoner's Dilemma, plain and simple.
If your employees are under pure default at-will employment, its not poaching to seek to hire them out from under you, because you haven't purchased a property interest in their continuing to remain your employees. And, if you have purchased such an interest, then you suddenly don't need a no-poaching agreement to prevent them from being poached.
A multiparty no poaching agreement with the other main employers in the industry -- particularly a secret one -- is essentially trying to impose the restriction of having an extended contract with your employees without paying them for accepting that restriction.
The ability to do that is HIGHLY restricted by labor laws. I'm not saying you couldn't get around it with very careful contracting... but I wouldn't want to count on it.
The ability to do that under the law is demonstrated by the fact that there are whole major industries where this kind of contracting with talent is normal. (Legal limitations tend to highly restrict the ability to get a remedy beyond money damages for breaches of such agreements, to be sure, but they don't tend to prevent the agreements themselves.)
It tends to be expensive (both in terms of what you pay the talent and in terms of the overhead associated with contracting), but if the talent is really valuable enough, that's the price you pay.
If you aren't willing to pay that price, you shouldn't complain about people "poaching" what you didn't want to pay the cost to have a durable claim to in the first place.
If a company sold a widget that routinely generated $500k in profit per year each and leased it for $125k/year, would it make business sense to keep it at that price? Hell no! Charge as much as the market will bear. That's just supply and demand.
[1] http://nypost.com/2014/02/28/apple-has-biggest-slice-of-prof...
Imagine if Apple had to pay $300K per employee what kind of a landscape that would be. Nobody but Apple could afford to hire anyone.
If employees getting a lower salary enables a company to take risks, doesn't that mean the employees are shouldering the risk?
With lower salaries, the company can assume more risk, there's more room for failure. With higher salaries the employee becomes an increasing liability.
Just compare how hiring in France is, where terminating people is significantly more difficult, with an at-will environment like California.
I can understand why large company CEOs would want to do this. I can even empathize with them and imagine myself wanting to this were I in their situation. I can also see how this affects employees, though, and why employers shouldn't be allowed to do so.
Either way, it would surprise me if people who are otherwise happy at their company would randomly switch to a partner company unless either: a) the salary offered were significantly (>30% or so) higher than at their current company for similar work in similar conditions (meaning they are undervalued or undercompensated at their current company), b) the other company looked much more promising a place to work for or offered a much better position (in terms of autonomy or career advancement). Pretty sure the solution there is just to compensate your employees fairly and make their work conditions on par with the standard for similar workers in the industry (or better, if possible).
It's kind of like a union in some regard. No wonder companies don't like it.
It's not really, but that is an enlightening comparison. Using the prisoner's dilemma as an analogy for this hiring situation, the employees aren't players (prisoners, if you prefer) at all. Which is exactly the problem.
That just gives you the reason why two companies would want to collude and would have to agree to collude to get the best outcome for both companies.
I agree the more important issue is as you say; the legal and moral aspects are what they are because of the fact that employees are being treated as resources or pawns. But that means that we are happy to see a prisoners dilemma dynamic here, it means that there has to be some type of collusion to make this dynamic happen. Collusion is explicit and detectable. Much better than the various other types of exploitative dynamics that are emergent.
Okay, but the problem itself is different. In a classic prisoner's dilemma the players cannot know how the other will decide and so they act in the manner which benefits them the most. When pursuing their interests they both rat out their accomplice, with the ironic outcome that neither avoids punishment.
> But that means that we are happy to see a prisoners dilemma dynamic here, it means that there has to be some type of collusion to make this dynamic happen. Collusion is explicit and detectable.
Okay, but the collusion is why it's not a classic prisoner's dilemma, I would think.
Also, we're not that happy. The collusion means the companies can avoid punishing one another prisoner's dilemma style. Great for the companies but bad for the employees, since "punishment" in this context involves... hiring.
I think this is directly related to the language used within most companies -- at least all those I've worked at -- to describe their employees: human resources. I think this is because people too easily conflate human resources with natural resources, which are consumed by some manufacturing process.
Once upon a time, I worked at a company whose internal management guidelines stressed loading new hires with as much work as they could bear to determine their breaking points. Work load was then scaled back to some sustainable-ish percentage of that maximum, and the employees were worked until burnout. The expectation was they would then leave the company. Obviously they had an absolutely absurd amount of turnover. Upper management saw nothing wrong with utilizing their resources in this manner. This experience obviously colors my view of things.
In my opinion, the phrase human resource is simply dehumanizing. But, I also think it might be a necessary psychological barrier that is required by massive companies. If the upper management actually conceive of their organization as made up of employees, not human resources, they may act or react more slowly, become less risk averse, etc. That is bad for business! Likewise, I think there's a similar statement to be made about citizens vs. consumers when speaking about another type of large organization: governments.
Language and the words we choose matter. They shape our thoughts, and define what is possible. We ought to choose better words.
Wow. That's... ballsy.
Sure, holding down salaries might not have been the primary motivation.
Doesn't change the fact that collusive no-hire agreements hold down salaries, and Cook and Jobs are smart enough to know this.
People believe they've been deprived of money and attention by default, so they'll eat up anything that appears superficially credible and gives them occasion to lay blame for that deprivation.
If you don't want your prized employee leaving, there's a really easy solution: pay him enough to stay. If he's that valuable, then it's worth paying.
Since the solution is so easy, but Jobs et al didn't want to apply that solution, I can only conclude that suppressing salaries was precisely the idea. If it wasn't about suppressing salaries then they could have just increased the salaries for these key employees such that leaving for another job was no longer an attractive prospect.
I understand that theoretically the wage would be negotiated to the point where it was no longer attractive to poach or be poached and everyone's life would continue along swimmingly. The problem is that I don't believe this would happen in the Real World. There is just too much emotion involved, and perception is too fickle, for this to work out well for anyone. The industry's productivity would be deeply damaged, not just from the high-level executive POV where you're comparing year-over-year profit-dollars-per-employee, but also from the tangible, objective POV, where it would take much longer to get things done.
There's a reason that anyone who gets caught up in a poaching war takes effort to avoid that situation from occurring ever again, and there's a reason that employees aren't going out and more actively inciting bidding wars no matter how fun it sounds in theory to have two or more companies tripping over themselves to outbid each other for you. Putting aside the actual economic realities that would be incurred, employees have real emotional needs that would be difficult to meet in a poaching culture. People need continuity and camaraderie. People need a sense of accomplishment and contribution. Those things are not going to occur if 25% of your workforce churns over to the competitor and back again every year, and like I said, while I understand the theory that the churn would eventually stop once a "market price" for the labor was stabilized, I don't think that's how it would play out in real life; I think the entities would commonly harbor feelings of resentment and betrayal, and I think many participants would adopt other combative emotional stances, that would deeply impede the industry's function.
I'll have to do some research and see if I can find some real-life data that may credit or discredit this theory.
We also need to acknowledge that anti-poaching agreements can be interpreted in various ways. My understanding is that most of these agreements bar active recruitment or incitement of sitting employees at members of the pact, but they do not bar hiring an employee away if he seeks you out. There may be exceptions and this may have changed depending on the interpretation of different persons in the HR dept. I definitely believe that refusing to hire employees who seek out employment externally due to your no-poach agreement is uncool.
We agree that there is some salary level where that constant churn of poaching doesn't happen, right? As you said, people generally like to stay where they are. That means that poaching will only work if you can offer something substantially better. When employees are paid well enough that it's not worth paying them substantially better just to convince them to leave their current job, the poaching churn will stop.
If Jobs wanted to stop the poaching churn without being evil and without breaking the law, it would have been easy: go out and figure out what that salary level is, and start paying it. Or heck, he wouldn't even have to go that far. If we assume that the "no poaching" level is vastly higher than current salaries, all he'd have to do is pay, say, 50% higher than the other companies around, then keep an eye on things and continue bumping up compensation if and when other companies started to follow along.
I don't see how that scenario has any negative outcomes for anyone besides shareholders and executives who counted on being able to pay $1 to an employee in return for $10 of value forever. There would be no feelings of resentment and betrayal, no combative emotional stances, because none of the churn you describe would happen.
Faced with poaching, Jobs had three alternatives. He could ignore it, he could collude with other companies to stop it, or he could pay his people well enough to make the problem go away. The only reason to choose collusion over better pay is to save money by giving less of it to your workers.
With that said, isn't the obvious solution to just raise everyone's salaries?
Also, the explanation only reinforces the idea that these executives view their employees as chips to be bartered, not free agents.
Most employees do not want to be tied down to the company in a binding fixed-term commitment; how much worse would things be if people weren't free to pursue other employment whenever they wanted? How much more abuse would employees suffer if they didn't have the option of walking out and finding comparable employment at any time?
Most employees want benefits and perks that would be very difficult to provide in the context of independent agency, like medical insurance. In professional circumstances that are based on procuring such agents, there's usually a union, co-op, axis, or league that furnishes the benefits the worker desires. Read this page [1] about the stability NBA players lacked prior to unionization.
The grass is always greener. Perhaps an employee's raw salary would be higher if a free agency model was used, though I personally doubt it would be, but most of the terms of this game are defined by the employee, not the employer.
A world where every employee is an independent agent with his/her own contract is a much, much different world than we have now and would take a long time to analyze with any depth or completion. It's not that there aren't ways to make it work, but the standard employment relationship exists because it's the employment arrangement most conducive to the type of lifestyle the average person wants to have.
It depends on the terms of the contract. If a company offered me a three-year contract for more than I thought I could earn anywhere else over the next three years (e.g., $500K per year), why shouldn't I take the opportunity?
The contract would need to spell out working conditions, of course. For $500K, I wouldn't lock myself into an obligation to work 60-hour weeks for three years straight. My health and sanity are worth more to me than that.
Some of the highest-paid workers in our society lock themselves into contracts: professional athletes, movie stars, etc. Would you want to start filming a high-budget movie if your leading actor could walk off the job at any time?
Why? To understand the motivations of Jobs, Cook, Catmull, etc.? The motivations are clear. Collusion is still illegal, and "seeing both sides" is an attempt at justification.
Steve Jobs is convinced he never did anything bad in his entire life. Except for denying paternity, but that still took a few decades.
It is possible he was very good at deluding himself.
Perhaps that self-delusion is contagious.
If one wants to believe something strongly enough, then maybe one can believe it.
If people want to believe that the only way to produce great form factor and ease of use in a computer is to be Jobs-like and conduct "business" like Apple, then they might believe that, even if there is a good chance or evidence this behaviour is not necessary.
It seems people have a difficult time separating the Apple products from the organization that sells them.
One may be worthy of adoration, the other may not.
But then, I've seen that attitude in startups. The passion for the company as a whole trumps everything so the people are easily disposable to them. Which, as in so many other areas of life, is completely backwards from what they perceive as logical.
The recruiter was going off an old copy of my resume that they found online and was unaware that I had a different employer. When I disclosed this, they immediately refused to go any further in the process because they were worried that if they helped me to leave then my employer wouldn't use them to fill future openings.
I told them to lose my number. Since that time, when one of my friends is looking for work in tech, I steer them away from this particular recruiting firm (I have no desire to blast them here) because of my experience with them.
This happened in the Pittsburgh area, I can only imagine what it was like out there on the left coast.
Employees do not belong to their employers, I don't know why this is such a difficult concept for some people to grasp.
They had, maybe 20-30 employees.
This was the end of the final email exchange between myself and this recruiting company.
Clearly, the bottom line is that clients pay XXXXXX and talent does not. It belittles us both to pretend that it's really about ethics or loyalty.
I don't maintain business relationships in which my interests come last and I don't do business with the dishonest.
Again, please, lose my number.
If you ask your friend to go out with you on a trip along with your girlfriend, would it be ok if your friend builds relationship with her during the trip and she breaks up with you? You can argue that may be your girlfriend found a better fit and you should be ok with that. OR you can argue that you and your girlfriend were doing just fine but your friend violated your trust and lured her away destroying your precious relationship. I bet you can find people arguing both cases as "obviously" right outcome.
PS: I'm not arguing any of the sides but I'm intrigued by this morality problem.
Here's what I think would be a better analogy: let's say you run a restaurant in a small town. The restaurant business is booming, and you and your competitors are all expanding, to the point where it's getting hard to find qualified cooks and servers.
The cooks and servers start working to get a piece of the pie. They move between restaurants as higher pay is offered. You desperately need more staff and since you can't find new people, you resort to soliciting the staff at competing restaurants and offering them more money. They do the same to your employees. Average pay rises.
You and the other owners don't like this at all. Cooking and serving was a minimum-wage job not too long ago! This steadily increasing pay is eating into your profits. So you all get together and agree to put a stop to it: you won't try to hire away their staff, and they won't try to hire away yours. Pay stagnates, and you and the other owners get to keep more of your profits.
This is what happened with Apple and these other companies over time, only with computer people instead of cooks and servers. Is it immoral for businesses to collude to artificially hold down wages? I think most people would say yes. Probably more importantly, it's illegal.
Perhaps "corporations are people, my friend" but they're not buddies out on a camping trip with a girl. There's no Corporation-A-broke-their-word-to-Corporation-B - there's business and competition is a huge part of that.
"I know where Steve's head was. He wasn't doing anything to hold down salaries; it never came up. He had a simple objective: if we were working together on something, like with Intel, where we threw everything in the middle of the table and said, 'let's convert the Mac to the Intel processor', well, when we did that, we didn't want them poaching our employees that they were meeting, and they didn't want us poaching theirs. Doesn't it make sense that you wouldn't, that it's an OK thing? I don't think for a minute he thought he was doing anything bad. And I don't think he was thinking about saving any money. He was just very protective of his employees."
Ed Catmull of Pixar, a seemingly gentle person, is similarly unapologetic about the issue. Why is it that, at a certain level, intelligent company leaders seem to stop thinking of their employees as individuals and instead start thinking of them as company assets?
(I don't mean this as an anti-Apple comment. In fact, I want to give Jobs, Cook, and Catmull the benefit of the doubt, in the sense that they probably did approach the issue from the perspective of doing what's best for their companies, not as a quick way to save some paltry money. But that's kind of the underlying problem, isn't it? Once you've internalized the idea that your employees are company assets — that they aren't hard workers who make the company tick, but that they literally are the company — it's easy to slide down the slippery slope towards incredibly unethical and shady dealings like collusion. I wonder how this can be avoided.)