Jesus that all sounds so ridiculous to me. That's a funny shell game around admitting that someone was more valuable than you were paying them, and then guess what - lots of other people are.

If the argument is "But she isn't always this valuable.. she's just this valuable on this project" then attach a financial incentive to the project.

Sadly, I don't get the sense that Ben is suggesting that there's a problem with not compensating commensurate with value here or with depending on the employer-preferential taboo of the secret salary. He seems to just argue you should let this engineer walk and the project die.

This is just another reason why I love project based consulting more than FTE. The incentives are properly aligned. Adam Smith would smile.

Personal experience - in every single work I've done (roughly 10 customers/employers, perm+consultant) in 3 different countries, there was/is always room to grab more responsibility, more tasks etc. State of IT usually just a variation of a term MESS, with some technical debt here and there, everywhere. You work harder, solve more, take more responsibility and your career progresses along (or you go to place where it does faster).

But with this might also come 9-10 hours at work instead of 8 (plus lunch), company phone which is there just to remind you of the work when you're not in, maybe more weekends screwed up and so on. Even in otherwise very work/life balance oriented employers.

Want another advice? When having a formal talk with your boss, tell him you want a raise, but you don't want it for free, rather bringing added value. Define clear terms what is expected from you to get there, fulfill them and watch the magic happen :)

(Just imagine a project worth $X with two lynchpins, both of whose absence would tank the project. Both can cause $X in damage, but you obviously cannot pay each $X)

Either by increasing their title or pay as they are that critical, or by not distributing the key knowledge around so that everyone is dispensable.

This is actually a fantastic idea, for both sides.

Here's the thing. By the time someone is actively interviewing, you've already lost. Treat your compensation like you would any other product and try and figure out how to differentiate your product. Cash by it's very nature is interchangeable. Benefits, perks, camaraderie aren't.

EDIT: A previous boss of mine was unhappy I was quitting, and apologized that he couldn't give me $40k in cash to stay for another year. Me leaving meant they needed to search for a new, qualified person, and then spend the time training them, which was certainly close to $40k of time-money. Unfortunately, upper management didn't care.

You see, the problem with "good, ambitious people" is they want to (1) keep learning new things, (2) work on projects that expand their expertise, (3) continue on a monotonously increasing career trajectory. Sadly 85% of the coding out there is more like "IT" and keeping the lights on, fixing the CRUD apps, etc. Ambitious people are a major flight risk at such companies, and worse, they might bring in some new tech or complicated patterns that the drones that replace them don't understand, and then the firm has to chuck that code and go back to the former, easier to understand but far less performant code. I've seen it happen several times.

"The thing about this place... Everyone with get-up-and-go has already got up and gone"

Some time later, he honestly told me: "The only way they would give you a raise is to prevent you from leaving. At that point, if you already went through the trouble of getting another offer, you might as well leave." Several months later, I did. Money wasn't the only factor -- the big new project I was hired for got finished -- but it was a major one, they were underpaying me pretty badly.

I worked for a major institution's engineering group where we formally asked "We're getting recruited all the time for more, will you raise comp to market to prevent people leaving?" Answer, "No." Annual attrition was 25%. At a recruiting/replacement cost of ~$40K, raises would have made more sense, but then managers would have failed to wield their power to "constrain their budget."

Logic need not apply.

http://www.joelonsoftware.com/articles/fog0000000024.html

Basically he points out that heavy use of methodology will get you guaranteed results. But that result is of very mediocre quality.

Do the good ambitious people never realize that they won't actually accomplish anything worthwhile if they never stick around more than a year or two?

It's not that you achieve nothing in a year tenure, but can you really accomplish anything great? Can you think of any good examples of people who showed up January 1st, changed the world, and left by Christmas?

  50 Cent Talks Bitcoin: 'All Money Is Money' | | Observer
  observer.com/2014/12/50-cent-talks-bitcoin-all-money-is-money/
  Dec 22, 2014 - 50 Cent is happy he took Bitcoin for his album
  Animal Instinct, because "all money is money."

I'm always surprised at how companies can be so nimble in markets for their products but be so poor at working in the market for their personnel. Often times it seems like getting some counter offers is the only way convince them that the market for engineers has changed significantly.

Also, if the person given this raise is not amongst your top performers and now ends up out earning the rest of team, it ends up affecting overall team morale. Your star performers then start to feel short changed and think they have to leave to get a raise.

Failing to match when there is value to the company just means that every time you are faced with that choice, you always lose.

While the worst case with letting people know that that's a good way to get raises is that it puts upward pressure on wages until very few employees can get better offers that they'd be willing to threaten to quit for, and you still end up paying people not more than it is worth to retain them.

Actually, you're problem was forgetting that it's illegal in the US to prevent employee's from sharing compensation information. You can't require that in an employment contract and can't formally punish an employee for disclosing said information. :)

This off-course does not directly explain to what is being said above in the parent ... just want to share a thought.

If one non-manager employee is ever in a position to show other employees they are being undervalued, the employees may do something stupid like demand the company fix the situation. Can't have uppity employees. Employees exist to be subservient to the ever-changing, unanswerable will of the CEO, not set the rules themselves.

The CEO gets to fail upward and become investor-class while shitting downwards on lowly employees who would dare to try and be paid what they are worth. How dare they attempt to confront such holy and monied highness as a CEO. Know your place, employee.