> The firm starts to underpay those better workers who kept their jobs, akin to making them pay for being “chosen.” Consequently, profits do not decline and may even increase.
> “Firms now essentially can threaten the remaining employees: ‘Look, I can let you go, and everybody’s going to think that you’re the worst in the pool. If you want me not to let you go, you need to accept below market wages,’”
This is exactly what unions are for. Any time there are enough skilled workers avilable that a company can let good employees go as a warning to others not to complain about substandard wages it's clear that the imbalance of power has resulted in exploitation. There is strength in numbers though which is why companies go to great lengths to convince people that you all alone negotiating with a huge corporation of people who have more money and resources than you'll ever see in your lifetime and who can replace you with someone else easily is somehow totally fair. No matter how special they might make you feel, you are almost always disposable to them and they will drop you at any time and for any reason, even if it's just to make an example out of you to keep your ex-coworkers in fear.
For the very few employees out there who actually are totally indispensable, any sane company would be looking for your replacement immediately because there's no telling what might happen to you or when. No company should fail because one employee dies in a car cash or gets a cancer diagnosis. Until you are also replaceable the company isn't safe. They'll pay you handsomely to keep you, right up until the moment they don't have to.
For whatever reason collective bargaining is wildly unpopular on HN, which is ironic because tech workers are exactly who should be organizing their labor.
No, I don't care about being in a unicorn and I'm not a embarrassed billionaire. But I don't idolize unions either.
I don't want to be paid the same as all other workers with the same title, I like getting personal bonuses based on performance. I don't want to be in a union.
Historically in the US, American devs have done a tremendous amount to undermine their own bargaining power by (a) starting bootcamps and other "learn to code" initiatives which flood the market with new devs, and (b) creating AI tools which automate away jobs for devs. Any software developers' union almost necessarily needs to take an anti-AI position at this point. Got to move fast before it is too late.
I don't think it's wildly unpopular, I think that starting a union is wildly hard and paints a target on your back, but once someone does the hard work I think we'll see that there was sufficient support to make a play.
I also think if you do a text embedding on the recent years of HN post and you look for conversations on unions, you'll find a plurality of support.
And when has a union ever stopped a multinational company from just closing shop and opening up overseas? If a company making physical things can do it, how hard do you think it would be for a software company?
And this is where the union threads die, every time.
Top post is essentially saying Americans/SWE are dumb for not being in a union, then comparing to other countries. As soon as someone companies US SWE salaries to these union countries it falls apart quickly.
Yes, to get rich in Sweden you have to start a company. Wages are terrible.
But this is, I think, a result of a historical government strategy to favour exports by keeping the Swedish krona weak rather than a result of unions. This whole business with alignment between the Swedish social democrat party and the big industrial export companies are a thing which simultaneously allowed Sweden to develop but which also brought enormous problems. The immigration madness of, 1990 to now is probably also a result of this alignment.
Story time: Berlin in Germany is pretty left leaning. So there was / is a MC Donalds which regularly formed union for employees, MC Donalds just closed the restaurant and reopened later, several times lol
I’m not familiar with that particular story, but it’s worth noting that there is a nationwide union for franchise restaurant workers called NGG. They negotiate standard wages with the franchise restaurant association BdS which all the big names adhere to (McDonald’s, Burger King, KFC, but also, for example, Starbucks). Your story sounds like it’s about a “Betriebsrat”, which represents workers within a specific workplace, complementary to wider unions.
Ideally there'd be laws against this, and public backlash as well. Even non-unionized Workers in Germany will be better off than their American counterparts, but they still deserve strong protections for unions.
It's not as if companies aren't shipping non-union jobs overseas or importing labor from overseas anyway. There's also a certain amount of irrational sentiment around silicon valley and the west coast generally. There's little doubt that companies could move shop to places in the US that aren't so insanely overpriced and without the high cost of living, especially with work from home being so popular, but for whatever reason (the weather, the "scene", the culture) companies are happy where they are and I don't expect that to change so quickly. It sure is nice having a lot of money and having a lot of nice options on where/how to spend it anyway, which might not always be the case in the overseas neighborhoods filled with unionless sweatshops.
While they cannot stop something like that (a Union never gets to control the business), they can at least negotiate good terms for the departing employees, and help ensure everything is in order.
I don't think anyone's saying unions can do that? They can protect workers and provide some balance in the power dynamics, but there absolutely are limits.
If it is indeed easy to move operations wholesale, I think we would see far more and quicker cases (not just arbitraging differences in labor organization, but also e.g. tax and regulatory regimes). It certainly happens, mind you, but my read is that different forms of institutional inertia puts a damper on the willingness to "re-home".
Ideally, there would be stronger and enforced labour regulations since the government can serve as a neutral third party. That said, I also realize that we don't live in an ideal world and governments tend to be more in touch with the needs of businesses than the needs of the people they are supposed to represent. There are many reasons for that, without resorting to conspiracy theories (but you are welcome to believe in conspiracy theories if that's your thing).
Unions are low on my list to address labour issues. They create a whole slew of problems, but I also recognize that collectivized bargaining is one of the few tools workers have to represent their interests so I see them as a necessary evil.
Isn't startup culture known for ripping off their employees before they sell and disappear? Sounds like there would be no space for unions or social aspects in that.
I can only speak for myself, but I think there is a naive idealist view of (modern, American) unions that gloss over the tradeoffs. I don't want another bureaucratic layer that tells me what to do, and run by yet more HR admin-types. We aren't working in the coal mines or steel mills here in the 1920s. Sorry I'm not interested in that for office jobs. I'm glad they still work in some countries and cultures.
> I don't want another bureaucratic layer that tells me what to do, and run by yet more HR admin-types.
That new bureaucratic layer would be designed to benefit you, and if it were to stop doing that and suddenly no longer served the interests of it's members you'd have the power to replace the leadership of that union or to leave it and start a new one. This is a huge improvement from the current bureaucratic layer of HR admin-types which you have zero say in how they operate and which is absolutely not looking out for your interests at all.
It's hard to understand the mindset of "I'd rather just be powerless in the job I have because that seems easier."
I don't care what kind or style of job - if the balance of power in any labour relationship is overwhelmingly on the employer side, collective action is the only way labour can regain a modicum of negotiating power. To think that the style of job has any bearing on this relationship is naive.
I don't see the HR layer really existing in this alternative universe. Why would they? If they still existed it wouldn't be filled with lazy dim witted karens it would be lawyers with shark teeth.
I don't think you know what you're talking about, or you are omitting western Europe. In Germany/Austria most workers are on collective bargaining agreements (different and specific for each industry, incl IT) which is regulated by unions plus org-specific councils (Betriebsräte in AT/DE, similar in other countries). Similar for Switzerland, also Collective labour agreements in Netherlands. Seems to be similar in Spain and France but these I didn't have experience with. So yeah, your comment is at least misleading or ignorant and bullshit at most
Isn't it a regular complaint that American tech workers don't get the kinds of benefits they would in Europe, especially healthcare? Even someone with a very nice American salary can be bankrupted by medical expenses very easily in America. When Americans do end up bankrupt it's usually medical debt that is to blame.
It seems like there should be room for a happy medium somewhere where some workers in the US maybe don't get the same salaries but are also not having to spend so much on healthcare, get more time with their families, get better just protections, etc. Once you make enough money that you're not really worried about meeting your bills and can pretty much buy what you want the peace of mind is more important than the bragging rights you get over who has a bigger paycheck.
No, I don't see those complaints anywhere. US workers are paid so much more that the lower salary + higher taxes are not worth it. Especially due to the fact that many of the high paying SWE jobs include very good health insurance.
The vast majority of IT jobs pay pretty meager here. There are some exceptions but not that much. You gave to be "manager" to get any decent pay most of the time.
Hmm most people I know earn well above median and whenever I look at my regions statistics it confirms that... Joining an union would mean cuts to these people. I am a fan of unions for low pay jobs but not in tech.
Why do you think unions would mean salary cuts? Unions don't set maximum salaries. You are absolutely free to negotiate your salary, raises, promotions, and so on.
In the Nordics quite many tech workers are in unions. For most people it's perhaps just about habits and solidarity, but they do offer tangible benefits like free consultation and legal representation in a case of dispute with your employer.
Because companies are going to base salaries on collective agreements with the union which are usually lower compared to the salary high paying jobs have. At least that's how unions work in my country.
Unions are powerful because they can call for protests and employees who are in a union cant get laid off due to joining the protest. But its not worth if the job already has way better working conditions than like 80% of jobs out there.
I don't think your salary negotiation position is diminished by having some kind of a lower bound. Skilled employees should be able to get a higher salary if the employers value their skills, and that does happen all the time also in countries with strong unions, like those Nordics.
Even without unions Europe wouldn't have US tech salary levels, those numbers come from other market dynamics.
So play it out with me. Use Faangs as an example please.
Say all the engineers in all the top engeering companies by pay were suddenly in a union, how does the collective bargaining work on pay. You don't think pay would be lowered for high level engineers?
"unions dont set max salaries" you are free to negotiate better salary. fact that union had agreed with company on minimum salary, does not change anything for you. yes the company can say "hey you asking too much, we talked with unions" but company can say the same either way "hey you asking too much, market is tough". so unions just the lower bar.
Unions of low wage jobs have extremely limited bargaining power compared to a much smaller group of people with far more specialized skills that are in demand.
In Europe you can make a lot of money in consulting given you also work a ton. With a regular 40h/w job it usually comes over time or with leadership roles. But entry level jobs are often well above median already. Not 6 digit silicon valley numbers but more than enough for my locals cost of living. Pretty company independent in my experience.
There are software engineer or tech unions, you're welcome to go work at one of them and reap the "reward" of far less money, vacation, perks, and more than if you'd work at one of the non union big tech companies.
1) HN being associated with a startup incubator, and thus attracting a large contingent of people who see themselves as the boss doing this, not the workers affected;
2) tech attracts a certain kind of gullible person who's easily seduced by tidy little systems like the pop-capitalism of libertarian tracts; and
3) tech workers (until recently) had more economic bargaining power than a typical worker, so could delude themselves into thinking they do better by going it alone.
I kinda disagree with #2, even ignoring the adversarial wording - at most it's an extension of "HN isn't All Of Tech"
From people I've spoken to personally, I've seen it as primarily #3 - "Why do we need collective bargaining when we have negotiating power from being in high demand with lower supply?" - despite IMHO that is when you should be using that power for such, as that power will never last forever.
Don't need politics/a "type of person" to be only looking at the short term, and thinking the current status quo will last forever. It seems pretty much a constant in every demographic.
Tech people would obviously be well served by being in the union. If you make a cartel with other people who can do the same job as you, and you don't profit from that, you're doing something terribly wrong.
The reason I'm opposed to it isn't because it wouldn't be good for tech people. I'm opposed to it because in general I think it would be more bad for everyone else than it would be good for tech people. I expect they would see fewer products, higher prices on the products that they have, and lower quality products. Additionally, I expect the union to advocate for the interests of the tech workers, which would generally be for tech workers to make more money, and not in the interests of broader society.
You can see a great example of this with the AMA, which did a great job advocating for the government to reduce the number of new doctors. It's probably great for existing doctors, but the rest of us should not be happy that we're paying more for our healthcare because of it.
why do you think maximising profit for company is ok and everyone is cheering about that, but when employee tries to maximise profit then "oh noes the society will collapse "
I don't have an issue with an employee maximizing profit. I do have an issue with employees banding together and bargaining collectively. Exactly the same way I don't have an issue with a company maximizing profit, but I would have an issue with companies banding together and negotiating collectively.
A difference is that there's not necessarily an inherent size limit on companies while there is an inherent size limit on individuals because you can only be one person. One person can only be so economically valuable.
However, that's why we have the whole system of antitrust to say when a company gets too big, as soon as we can show that it's having some kind of negative effect on consumers, we split it up. And that's exactly what we should do. And we definitely should prevent more mergers as well. What I would do differently w.r.t. antitrust is say that instead of only looking at harm to consumers (those who a company sells to), we should also look at harm to workers (aka those who a company buys from).
> I don't have an issue with an employee maximizing profit. I do have an issue with employees banding together and bargaining collectively. Exactly the same way I don't have an issue with a company maximizing profit, but I would have an issue with companies banding together and negotiating collectively.
One flaw in your logic you seem to thing "an employee" and "a company" are peers. They're not. A company is an equivalent level of "banding together" as a union. A company and an employee union are peers, an employee and a company are not.
> However, that's why we have the whole system of antitrust to say when a company gets too big, as soon as we can show that it's having some kind of negative effect on consumers, we split it up.
And you're mixed up here too:
1. The employee-company relationship is entirely different than the customer-company one. Talking about consumer prices in the employee-company context is nonsense.
2. You're neglecting that all companies have certain interests in common as employers. So even if you break them all up, you're not going to solve the problems a union solves.
Your point 2 is such a condescending take. I read it as: "Everyone who does not think the same way as I do is gullible and has been seduced, because I am obviously right and they must be weak." This kind behaviour convinces me even more that I dont really trust union people.
To me (and it’s my personal experience) I read it as tech people have a bias for systemic thinking, and usually lack skills and/or experience in human social dynamics, especially when young, which makes laissez faire capitalism / libertarianism attractive. I’m a bit on the spectrum and to me it has a video game like quality (e.g. humans that are robot like rational actors) that was appealing and reassuring when trying to make sense of the world.
In short don’t find it condescending to say a bias exists, independently of the agreement with the political line of thinking.
In fact when I was younger I was condescending the other way: surely if you are not into libertarianism your systemic thinking must be limited.
> To me (and it’s my personal experience) I read it as tech people have a bias for systemic thinking, and usually lack skills and/or experience in human social dynamics, especially when young, which makes laissez faire capitalism / libertarianism attractive. I’m a bit on the spectrum and to me it has a video game like quality (e.g. humans that are robot like rational actors) that was appealing and reassuring when trying to make sense of the world.
That is exactly what I meant.
Also tech people are often intelligent (in a way) and identify as such, but then let that get to their head and get really overconfident about whatever clicks with them.
If you felt personally attacked you’ve let your biases win over rational thought. Tech obviously does attract libertarians (see bitcoin maxis for a single example of a significant cohort). Libertarianism is also blind towards the obvious failure mode of an organized group overpowering the egoistic as a virtue libertarians. (Think barbarians… or HR.)
Ironic considering that tech attracts people with rational thought and less emotional decision making. Is it surprising that I can be rational and not naive?
I don't feel personally attacked. However, I find the particular wording of the post I initially replied to condescending and reeking of elitism. Calling someone--or a group--gullible and seduced is not going to win them over. Besides, while we are at wording. I dont usually pull that card, but... I am blind, in a literal sense. Seeing my disability being used in a rhetorical way makes me sometimes sad. It kind of shows--on a meta level--that inclusion will never happen.
More ideal solutions than unions are: 1) Employee owned businesses with low levels of hierarchy and fast vesting in ownership; 2) Enough competitors in a hot enough labor market that employees jump ship themselves before they can be let go.
But yes, unions are great particularly when the labor market is tough.
Unions are mostly extortion schemes to benefit the union leaders.
My read is that they're getting paid in prestige rather than money. The worker can turn that prestige into money further down the line by saying "I worked at so-and-so for five years" at their next interview.
No. The reason top firms part ways with good workers is usually political. Either the manager doesn't like the person regardless of their work abilities, or the manager is not politely savvy enough to ensure their team is being recognized for work that grows or is valuable to the business. Or they get caught up in the endlessly popular reorgs (again management failure). It's a failure of management. Nothing more. Nothing less. A healthy market would encourage good workers to move around freely (through compensation, opportunity, benefits, location, etc..), not force their hand. And healthy organizations would recognize talent and retain/retrain as needed.
I think the other thing that's perhaps missing is that some companies have so much momentum (with thousands of people) that it probably doesn't matter when they lose people. The company will continue to thrive because there is demand for the product.
You're thinking of a different kind of company than the paper is talking about. (The headline, presumably written by the university's PR team, is a bit misleading about this.) The paper is about a certain kind of firm (e.g., the Big Four accounting firms, management consultancies like McKinsey, some elite law firms) that explicitly uses an "up or out" model, and explains why this kind of firm's business model (in particular, renting out the services of a particular employee to each customer) leads to this. The findings don't apply to other kinds of firms; e.g., in a typical big tech company, most engineers don't work primarily with a single customer, so the preconditions don't hold.
>>the manager is not politely savvy enough to ensure their team is being recognized for work that grows or is valuable to the business.
Actually in most companies, no ones watching whats happening, no ones watching who performs, who slacks, or anything for that matter.
Companies are basically a kind of a loosely assembled random crowd, where no one cares a thing about anything. In this kind of a set up both hardwork and laziness go unnoticed, which is why a persistent level of mediocrity is all pervasive. People do the bare minimum needed to keep lights on.
Getting rewards, or not getting punished in this kind of set up, largely depends on who you know, how they view you and what they are willing to do for you.
The problem is that as you go further up in hierarchy, people by definition have less specialized, and more general knowledge. This means that there are things that lower-level employee understands but their manager doesn't. This in turn means that it's impossible for the manager to tell whether the employee is doing a good or a bad job because the manager simply doesn't understand the details of the job. This is open door for slackers and low-performers, because from certain perspectives, they're indistinguishable from hard workers.
I used to be a hard-working high-performer, but then I understood that because of numerous management problems that are beyond my control, the reward is very loosely correlated with my efforts, and given an existing job contract, the best way to maximize the reward/effort ratio is not to put more effort hoping for disproportionately higher rewards, but to put significantly less effort because the reward will drop just slightly. Do you want to up your hourly salary 5 times? Simply take 5 times as much time to deliver same feature. You might not get the 0.05x salary bump but that doesn't actually impact the calculation that much.
That has never been the case in my career. Perhaps things are different in the C suite or a startup but at the director level and below of an established company it’s always about money and headcount.
>Either the manager doesn't like the person regardless of their work abilities, or the manager is not politely savvy enough to ensure their team is being recognized for work that grows or is valuable to the business. Or they get caught up in the endlessly popular reorgs (again management failure).
This strikes me as 1000% accurate from my work experience. I see people who do amazing work but get unrecognized and then move on while other people do mediocre work but put a huge effort into self-promotion and end up being promoted despite the work not being great... The reorgs also seem like a way to kneecap the employees and lower expectations.
As I understand it, the process is known as up or out (https://en.wikipedia.org/wiki/Up_or_out) and exists due to a the known corporate structure required to do consulting work. I have no clue about its effectiveness, but all the work I've ever seen done by Deloitte, McKinsey, or PWC was mediocre at best which to me would signal that the process probably rewards a different incentive set than they intend it to. For the rest of us its likely a lesson in the power of branding. To quote Matt Damon: "(they are charging you for) an education you coulda got for $1.50 in late fees at the public library"
The only other thing I have to say about it is I have noticed a high correlation with the reports produced and the things employees have been telling management to do for a long time - that is to say, there is some utility to having an outsider provide the information... even if that information isn't novel at all.
Anecdotal: consultancy gig in the 90's, when you could still smoke in the building. My boss shmoozed their bosses, I spent most of my days in the smoking room talking to random employees. After a week we presented a report that was hailed as "brilliantly insightful" and the client was amazed at how we'd managed to grasp the problems the company was facing in such a short time, and come up with brilliant, workable, solutions.
Literally what you said: getting paid to tell management what every employee knows and has been trying to tell them for years.
> there is some utility to having an outsider provide the information
That shouldn't be happening. This is managerial incompetence normalized. Why does the management of a company not trust its own people? They should have hired their people from "the outside" already. The correlation you're seeing is people who are not leaders but bosses in charge of teams. Good leaders don't need external validation, they either trust their team or make the problem fully outsourced to an external team like a consultant firm.
> all the work I've ever seen done by Deloitte, McKinsey, or PWC was mediocre at best
That tracks with my experience. Everyone I've met whom I know are competent at what they do have had similar remarks on these firms.
From my observation, they are part of a larger endemic issue of metric-chasing. They come up with a list of check boxes where if you follow them like a formula you'll achieve measurable results. Everything they do revolves around measurements and meeting measurement targets.
The problem is, when targets aren't met, then their method and advice is put into question. Therefore there is a perverse incentive at play where on one hand they do really want you to succeed, but on the other hand getting into the weeds and figuring out why you can't meet the targets deviates from their check-list approach. It will look like they advised you to do something, and now they're telling you you should do something else, it will look like they don't know what they're doing, and the one cardinal rule of consulting is you never say you don't know (or appear like it). The result is they water down what needs to be done, and they'll be flexible with interpretations of what counts as measurable.
In summary, I would like to say there is a place for these firms, but I won't, because I don't know if that is even true. I'll say that an outside firm will never have your company/team as their #1 priority; there will absolutely and without exception be scenarios where it will be a conflict of interest for them to do something that will benefit your team/org.
And using these companies to justify decisions, or back up decisions.. that again is part of the leadership endemic. People who do that are not leaders. They're bosses covering their own you-know-what. My opinion is that they facilitate poor/weak management culture.
Talent-wise, there is no doubt they hire the most talented and experienced people. But it almost feels like hiring a navy seal to be your personal trainer, but if you do what they say and you're not seeing results, they're not allowed to figure out what really is happening and correct their own advice. And to start with, they won't even aim to make you look like a navy seal, but work out some formula most people can work with, so the whole navy seal thing is just for show anyways.
Sorry for rambling on, maybe I'm too biased with my own experience here.
EDIT: I just wanted to add: If any company is firing the bottom performers, their management don't understand the problem of perverse incentives. Actual performance no longer matters, performance that can fool the measurement system sufficiently enough is what matters. The metrics will look good, revenue will be mediocre and long term sustainability will degrade. Good or bad, metrics and measurements shouldn't be used to make decisions, they can only be used to ask questions! An employee can have bad metrics if they're spending all their time helping other team members or solving yet-to-be-measured problems. Matter of fact, I would even dare say that metrics/measurements/KPOs shouldn't even be considered at all unless goals aren't being met. If your golden goose is laying bigger and bigger eggs, don't perform explorative surgery on it.
This ignores everyone else's agency in this decision.
The top employee is probably getting noticed and headhunted by the clients.
The top employee is probably getting pissed off at the mediocrity surrounding them, and annoyed at constantly having to share credit for their hard work with their bad manager who did nothing.
The top employee quickly realises that this is a badly-paid gig, and plans to spend the minimum time doing it that will confer the necessary Resume points.
The worst employee has no other options, is scared of losing this gig because they struggle to find other gigs, enjoys being able to hide their mediocrity in the team, and will stay as long as possible. They'll probably end up being promoted.
The wiki page doesn't do it full justice, as I understood it it is:
* A firm can easily end up in a situation where weak performers stay as long as they can, and strong performers leave because they can operate independently. This can have a very strong effect because the partners or permanent management starts seeking out work to keep the bulk of their remnant people busy, which is not the high end work that builds the firms reputation.
* Instead, make offers every year to the top 3 people from each Ivy League law school, but the offers are for 18 months only.
* If the new people aren't going to make partner ever, don't keep them around. Let them know well before the 18 months are up, and have them pick the corporate clients they like and work with them so they can jump over to working for the client directly, and they will then always come back to the mothership when the giant, interesting, complex case comes along.
* Out of each "class" you make partner offer to only the best, maybe none, each year.
This differs from the article because the firm is keeping the best and sending out the rest.
But maybe most firms aren't like the Cravath, they prefer to over charge clients for a weak performer then charge and pay a strong performer ? Maybe this makes sense if you have a very short term view of the life of your firm and it's reputation ?
My experience with consulting firms is there are two paths for high performers. Either you move into a sales/relationship focused role (which there are fairly limited slots for) or you move client side and probably buy from your old employer.
The good workers do well either way (when I say move client side, I mean to high level positions - importantly one with control over a budget to afford consultants) and the consultancy makes money both ways.
This: If you want to climb the ladder, the no1 way to becoming a partner is .. SALES .. SALES .. SALES, regardless what you selll: As long as you bring in money to justify your business unit/cluster, everybody is fine. Just sell more hours - thats the only goal.
How to tell that some "researchers" spent too much time in economics classes and not enough time in ethics classes: they publish stuff like this (source [0]).
The article makes them look psychopathic. Underpaying staff, layoffs, constant churn and providing poor services is 'not a flaw' and 'makes sense' because they boost profits.
> In short, the “up-or-out” path of professional life may not just be a cultural phenomenon among top professional service firms but also an efficient response to how reputation is maintained and information flows. What looks like a ruthless system of constant turnover, the researchers argue, is in reality a finely tuned mechanism that helps the market discover and reward true talent.
For people who are fans of this system, I genuinely want to understand how one overcomes the common sense, humanitarian centric rejection of corpo speak like this. Is it about just drinking the koolaid?
Actually there was a discussion about cults yesterday and now that I think about it, I'm seeing all sorts of parallels here: inventing new words and using that to complete redefine reality and transform your fundamental understanding of how the universe works or should work, supplanting with your made up fantasy world and rules that rewards the best play actor.
>For people who are fans of this system, I genuinely want to understand how one overcomes the common sense, humanitarian centric rejection of corpo speak like this. Is it about just drinking the koolaid?
Economists don't work in the real world economy so they have no clue or idea what these things even mean. They work for the Fed, a central bank or in academia. Sometimes and only sometimes do they work for banks or as quants, but then they usually make enough money to never have to question the system. Bankers usually have MBAs that specialize in banking and finance. They don't need to understand economics, they need to understand how the businesses they allocate capital towards function.
Economists are insulated from the real economy, because economists are redundant to the real economy and I'm not saying that to denigrate economists, it's what economists tell each other all day in their research.
Purely theoretically speaking, they say free markets are self regulating and stabilizing and efficient. You don't need economists to steward or study the economy according to economics itself.
Weirdly enough, economists aren't historians either. They don't teach how economies have been run in the past, they just presume some sort of proto-market economy and that market economies have existed since the dawn of time.
McKinsey a top firm? The report seems to focus on consultancies which are notorious for leeching huge amounts of money from non-specialist organisations by selling "expertise" to low-calibre execs in their clients in what is essentially an entrenched political merry-go-round.
The premise here might have some insights, but is hardly paradoxical (missing from the title posted here); you'd expect low-quality firms to have low-quality practices.
The method used in all the big4s in India is this: You join and do well as usual. Your credit is shared by those above you. You continue to do well, your manager gets promoted or you get a manager who needs a promotion and needs the credit you generate. He gets promoted, aggregates your good work and shows it as his. You then get sidelined, PIPed, or leave in disgust.
It's political and I have begun to strongly believe that the best leave or are schemed against by the mediocre cabal. You cannot continue in a large firm in India if you are anywhere near good.
Why would a manager who’s able to claim the credit of their reports in order to advance their own career then PIP the best ones? Wouldn’t they keep them around to keep claiming credit from?
I’m not doubting your story (I’ve never worked in India) I just don’t understand the incentive to fire a good worker in this scenario.
They already got promoted and might not be managing the same team, plus it sells the lie better, and most people wouldn’t go along with this forever and might start claiming things so they have to discredit you first.
They don't care that much. Probably from their point of view the merit is theirs anyway and consider anyone below them easily replaceable. Also, good employees understand their value and will start asking to be rewarded adequately for their contribution- this is a problem, so getting rid of them or waiting until they give up and leave solves it.
Most CEOs and VPs in these companies are nepotistic and political. They are happy to take credit but will never allow their direct reports to become a threat to them. In general the structure looks like this
CEO
VP (usually a family member or a "chamcha" literally spoon, but means sycophant.)
Directors (all yes-men chamchas)
Worker bees
Not very different from most companies, in my experience.
Is sycophancy different there? I think in many places employees often praise their managers and agree with everything because it’s a survival strategy. Or maybe a misplaced hope to get recognized that way. I assume that’s all this is too?
In India loyalties run deep. It can come along the lines of religion, region, caste, family, color, class etc.
Many times novices to this game, work mad hours, only to realise a year or two down the lane, some guy who practically did no work but comes from the same state your manager does, is now promoted above you.
This is outright stupid to believe. I have been working for past 15yrs and worked across startups to Top 5(FAANG), and never seen or gone through this.
Happens in consulting more often than you think. Product firms run different or at least that's what I assume. I haven't worked in FAANG but have worked in the Big4s, and a couple of Fortune 50 manufacturing firms. The experience I talk of has to do with the Big4.
In all seriousness they mentioned India not mango fango. That said, my xp has been the same as you. Only time top performers get nixed is if a whole arm gets nixed and they get caught in the crossfire.
OP said "do well", not top performer. Thinking you're a top performer isn't the same as the company thinking you're a top performer. I've never seen someone put on a PIP that didn't deserve, even if they thought differently.
Most people struggle just to keep their head above water nonetheless come up with elaborate conspiracies of sabotaging other peoples careers. No one is thinking about you that much.
I suspect the root of the problem is an unwillingness to take ownership for their action (or inaction). I've never been on a PIP. Even when I've given my employers reason to give me a verbal warning, their response has been: "that's not like you, don't let it happen again," and it hasn't happened again. I suspect that is true for most of those who have never been on a PIP.
Now I'm on the flip side, in a place where I may have to put someone on a PIP. What can be done has been done. There is only so much support and positive guidance that can be offered before you have to provide them with a plan backed with consequences for not following through. It is an employee that I don't want to lose because of their contributions, but it is also an employee that I can't afford to keep because (without changes) they are a liability. Unfortunately, previous interactions suggest that I will have to cut my losses. Yet the ball lies entirely in their court at this point because they are the one who has to take ownership for the issues they create.
Case 1:
You're a high performer, one year into the role. A colleague, who's been around longer but struggled, gets promoted not necessarily on merit, but on their ability to manage up. Your early contributions are quietly absorbed into their promotion case. Once they step into a managerial role, the dynamics shift. Unless you stay quiet and compliant, you’re suddenly less welcome in the team.
Case 2: High Performers:
Some managers (even partners) feel threatened when team members build credibility with clients. I’ve seen situations where a client repeatedly requesting a specific consultant backfired on that consultant. At year-end reviews, client recognition turned into a liability, not an asset.
Credit Allocation:In some Big 4 setups, CRM credit allocation is less about contribution and more about visibility and tagging. Accounts are assigned to partners who may not actively engage, yet receive full credit. Technical sales teams, who drive actual deals but don't "own" accounts, often find their impact diluted. In some cases, partners even tag themselves as "owners" of said accounts mid-pursuit to claim credit post-close. At the year end, the actual deal closers are usually running around begging partners for credit. You might end up getting 30% of what you actually closed. This works well for partners as incentives outflow is reduced leaving money on the table.
Event Marketing Shell Game:
Large-format partner-led events in places like Goa or Dubai are positioned as knowledge exchange and brainstorming events. Behind the scene Sales teams are pushed hard to invite prospects where the engagement has been going on for months. When those deals close weeks/months later, the event organizers often claim the outcome; regardless of who did the heavy lifting.
>>You're a high performer, one year into the role. A colleague, who's been around longer but struggled, gets promoted not necessarily on merit, but on their ability to manage up.
Its honestly mostly like a queue, you can't see why people who came before should get a early exit. But those people had people before them too, and thought the same. Now that you arrived, you think your specific case be prioritised above them for merits you think count above theirs and not necessarily their place in the queue.
As much as we all think we are special, we mostly aren't, time and queue position plays a huge role in most things in the society.
Its pointless to fight the queue system, most events in life happen in an order, and its pointless to fight cause-effect sequences. Some exceptions to this absolutely exist, but this is the general rule.
>>At year-end reviews, client recognition turned into a liability, not an asset.
Do not outshine the master - 48 laws of power
Remember the system is a part of the game, if you threaten someone you will take their job, its in their interest now to see through the end of you.
The real cause of our dysfunctional system is the debris of nehruvian socialism (he was a covert communist masking himself as a Fabian socialist).
He didn't reform the British divide and control mechanisms but continued them and in fact made them worse. If you think your bureaucracy is bad, wait till you see ours.
These are "one exam wonders." They clear one exam, and with zero life experience at the age of 25 can sabotage almost any enterprise with their clerical behaviour.
Our own deep state.
It's much better in the private sector but this mindset is pervasive.
The one great commonality I've noticed about California Democrats and Online Indians is that each region's problems seem exclusively the fault of some long dead fellow.
Apparently this Nehru chap has been dead for 60 years. In fact, India has only been a country for 80 years so he's been dead for most of the time India has been around.
Likewise with Ronald Reagan. Supposedly he's responsible for all the woes of California since.
I've got to be honest. It's not that convincing.
It reminds me of those engineers who you hire and one month in they don't have anything to show because of "tech debt" and shit like that. It's always the fault of some guy who has long left. Then you hire other engineers and they just nail it. Such is life. There's blamers and doers and the two are not usually the same.
Believe whatever you wish. We live with this reality. At least you can move from CA to TX. We can't, it's the same clown show everywhere.
The fact is that for every policy the government introduces, the entrenched clerks find ways to sabotage it.
If you think you can handle it I invite you to come and apply for any government scheme of your choice.
True story: we once sent an NDA to a government ministry for review and it came back with one objection after 11 months. The objection was that the year was wrong in the document.
After that we no longer bid for any government work.
Oh I have no doubt it's miserable, and your story is pretty funny haha. I just don't think that a guy who has been dead for 75% of a country's existence is why something is a certain way. It's been 60 years without the fellow. It's not like he's an immortal god commanding you still.
>>The real cause of our dysfunctional system is the debris of nehruvian socialism (he was a covert communist masking himself as a Fabian socialist).
It has been 50 years since his time. And most of what he did now has largely faded out to nothingness. OTOH, his time wasn't all that bad either. Even till 2000s cities in South India were very liveable, with decent quality of life.
Most of Indias problem come from a brutal zero sum game society, where population is too large, and there isn't enough affluence going around.
Everyone, every community and sub group, down the individual has to do anything in takes to snatch, hoard and then deny as many resources they can. Even if it means wrecking everything that exists to get there.
Nothing good comes out of these things.
To begin with fixing India, you must work towards having affluence of a few decades atleast. A generation or two need to live through this to wash away behaviours of a scarcity game.
But this is how it should be. Very best of the best start their own startups. Second best, start their own consultancies. Next on, work independently. Next on, are principals in small firms - they are the irreplaceable singular employees that the owner of a small firm wholly depends on. And then the mediocre and the bad ones, that work in largest firms. This is how it's always been.
It's not that way in practice, and I've worked at a lot of startups. IMO successful founders are street smart, cunning, and good at relationships and understanding the business. Most of the really wealthy founders I've met are incredibly ordinary or above average, not "best".
It seems that your claim is that “this is how it should be” and also “this is how it is/has been” - not sure if you are referring to a specific region, considering the parent comment, but assuming you mean the tech industry in general, this seems patently false.
This is not a description of how talented, or smart, or “good at something” someone is. You are describing how risk-averse someone is, as well as how able to survive failure. The latter is slightly different from the former, although related. Someone not able to survive failure at all (due to having no savings, for example, or perhaps someone who has high monthly fixed costs) ought to have a low tolerance for risk, but they might still have a lower threshold for what they consider risky relative to someone else.
I’ve met plenty of talented/smart/etc people in each of these groups, and also plenty of the opposite. To be fair, my experience is anecdotal and biased, although I would reasonably expect such a pattern to continue.
No. If you want to build big products, you need big organizations (i.e. companies). Big products have moats, often network effects or natural monopolies or whatever, but if nothing else then just the sheer investment required to build a competitor. Products with moats can extract wealth. So big companies are often extremely profitable. That's where the money is. Consulting is something talented people do in countries with no big tech companies.
Yes you are right, but it doesn't contradict my statement. Of course big companies are necessary and big companies are where the moats and thus wealth creation is. But it doesn't mean they need to hire the best people (market control/moats make them competitive even if almost all employees are disposable drones), or that they can do it (because of agency problem). Small companies both need the best people (they don't have those moats and also don't have division of labor deep enough to make do with more stupid people doing better granulated/formalised work, everyone has to wear many hats and be flexible), and can do it because agency problem there is less pronounced due to fewer layers of management. Yes as a result, they make less profit (can take less of market for having no/smaller moat, and have to pay more to people because they have to hire better ones), but this is the company's problem, not employees'.
You have clearly not worked in any major company in India, Or even other nations (since PIP is a common process worldwide in most companies).
Any employee can escalate to the company Ombudsman if they feel they are being subjected to unfair treatment or inappropriate processes. It is the job of the Ombudsman to be neutral and do an thorough impartial investigation.
PIP (Performance Improvement Plan) is a formal process, it even HR and senior management (skip level 1 manager at the very least) are involved in it. There is specific time duration and set of expectations given formally (under review process with HR, so there is full transparency) to the employee to improve the performance.
A top performer cannot be nixed via PIP, because the onus of performance proofs is on the employee and those evidences are visible to HR and upper management.
PIP is used to nix bad performers, not top performers.
Typically, even if an employee clears PIP, they need to get an "Exceed Expectations" (or equivalent) appraisal rating in the next appraisal cycle in order to continue in the organisation, but if they get lower rating instead, they are in hit list to be nixed during next round of job cuts whenever it happens.
Top performers may quit due to office politics and lack of growth, but PIP is not their way out.
PIP is a permanent black mark on an employee's record (which is maintained historically), so it disallows the company from hiring that person again if that person exited due to PIP.
Top companies in India and elsewhere have very formal processes, including Ombudsman and PIP, which get audited.
A version of the paper can be downloaded from SSRN:
Kaniel, Ron and Orlov, Dmitry, Intermediated Asymmetric Information, Compensation, and Career Prospects (February 4, 2020). Available at SSRN: https://ssrn.com/abstract=3532128
see also: discussion of the consulting business model from David Maister’s book Managing the Professional Service Firm
In the case of consulting companies like McKinsey, there's another very rational factor: a top performer with a strong ability to climb the corporate ladder might actually be worth less as a consultant than as a director at an external company who would then hire McKinsey. And of course, the partners there have industry connections, to get these to performers hired where they would be likely to generate the best future deals.
> ... in professions where skill is essential and performance is both visible and attributable to a specific person, particularly in fields such ... fund asset management ...
Was at a firm with a up-or-out policy. It doesn't sound like author has much real world experience with what they're studying...
The really good people have leverage so the can stay or go as they please. Meaning the people that get hit are average-ish (in the context of firm, not wider market). People good enough to make it to middle management but no further. You don't need to fire them either - they catch the drift when they don't get promoted, and those too stupid to notice were never "good".
>“Firms now essentially can threaten the remaining employees: ‘Look, I can let you go, and everybody’s going to think that you’re the worst in the pool. If you want me not to let you go, you need to accept below market wages,’” says Kaniel.
The below market rates are primarily an effect of CV-prestige rather some intricate machiavellian mind game. People tolerate it because "I was a senior role at X" has value long after you left.
What a ridiculous article. The author makes zero mention of politics. In many cases, you are forced to choose the least worst person to fire. Then, politics plays a huge role. If you are the manager forced to choose one (and you have no bad ones), then you choose the one who you like the least (personally). Big investment banks cut roughly 5% of their lowest performers each year. You always can see a few people that should not have been cut, but their politics was too weak to save them.
I've seen this written about before... roughly, after a few years into your corporate career, your job splits into two parts: the skill part (your effort and ability to get stuff done) and the political part (navigating humans in a corporate hierarchy). Say what you like about the political part, for most people, it is unavoidable.
Yes, re the gamesmanship on pay, but if you don’t have the specific ability to bring in new business, then you’re on your way out, no matter how good a lawyer (or whatever) you are
TL;DR
When workers start out, the firms know a lot more about their abilities than the clients do (they have an "information advantage") as the worker has very few ways through which to prove their abilites. Over time, though, as the employee's public performance increases (through successful cases, good investments, etc.) the information advantage the firm has becomes lower. Eventually, the firm lets the employee go in order because the worker now has proof of their competencies that they can show to clients to demand higher wages directly.
It looks (to me) like they're saying that the margin (amount that firms can charge clients less the cost of the employee's compensation package) is what's at stake.
As employees rise up the corporate ladder, their compensation packages increase, but the amount that the company can charge for that employee's work is limited (clients will be wanting to keep a certain margin for themselves too)
Either fired or just leaving by themselves. My theory: it has to do with middle managers, who mostly are less capable in technicalities, not smart enough, and aren't born leaders otherwise they would have been doing their own business, so they prey on those good ones since they have nothing to do all day except politics and scheming around compared to the others who spend most of their day building or doing actual work.
Every job I've ever had started great with a small team who was actually interested in the company and its goals. Then eventually the company scales up, gets acquired, or IPOs or some other sign of maturity and a new group of leadership is brought in from a legacy/Fortune 500 type of company. That new group of leadership brings their own cabal/clique and they only promote themselves and start slowly pushing out the original employees and workers who got the company to where it is... the smart people see what's going on and move on to other companies as it slowly becomes hijacked from within and at the same time 'matures' and becomes a slug and incapable of improving or adapting.
Are you sure you're not just seeing the transition of a company from a growth company to a value company? I.e. "there is no growth potential left. Let's dump it on the public", and then a new leadership team comes in slashing costs to juice profits, because there's no way to increase revenue. Because that's certainly a phenomenon as well.
That's definitely part of it, but I've noticed there's almost always a shift when companies get to a certain size and start bringing in leadership in waves from other companies and it really changes the culture and dynamics of how the company functions--usually not for the better.
Yes, this is one of the inherent contradictions in capitalism.
The quality of the work isn't as important as the margin between the cost of labor and the income earned by it.
To be the best and still pass that test you need to be so good that it makes up for your higher cost, which is a more difficult bar to pass than being good enough but being cheap. Also there's an upper limit anyway where no matter how good your margin is, your cost can't be justified, since "local market rates" apply downward pressure, as well as an upper limit on how much clients are willing to pay or the size of the market you're selling to or temporal factors e.g only a certain amount of widgets a country can consume in a month.
There is no labor under capitalism without significant profit margin, and always the profit extractor (employer) is trying to get the most profit for the least cost from the profit generator (employee), who is in the opposite position, but at a disadvantage since they are a human who is influenced by things like social pressure, a desire for recognition, and the natural human tendency to be good at something and do it well. The employer isn't human, it's just a profit generating algorithm, and so only cares about such things insomuch as it can leverage them to increase profits.
There's other factors in play as well though that corporations can't include in their algorithm since they're purely selfish actors which results in macroeconomic catastrophes, so for example if wages get too low then people don't buy things anymore which drives down profits from selling which forces wages down lower and so on until economic collapse.
My favorite example of why managers fire good workers:
- You are a manager of a team of 4
- You hear layoffs are coming
- You have one amazing direct report, 2 just ok and 1 awful
Who do you fire?
Most people say "Of course, fire the awful person"
I say: "When this actually happened, the manager fired their best person"
Other: "But, but why? That's not fair!"
Me: "You know layoffs are coming. You are the most expensive person on the team. If you fire the awful person there may be questions about why you even hired them. They then fire you and keep your amazing person as the manager (probably for less money).
You fire your best person, well then now you as the manager are the best person AND you can make the argument that that awful person needs 'more managing to be effective'"
It's not pretty or noble or heartwarming but this is how the logic goes in a lot of big firms (especially around layoff season).
I have never seen someone fired over hiring a dud. Reasonable people know that hiring has smoke and mirrors - everyone is putting on their best fake persona to get in the door. Maybe in some toxic, cut-throat environments, but this seems very particular.
Firing the best person because they outshine the master is plausible. One of the 48 Laws of Power.
> The firm starts to underpay those better workers who kept their jobs, akin to making them pay for being “chosen.” Consequently, profits do not decline and may even increase.
> “Firms now essentially can threaten the remaining employees: ‘Look, I can let you go, and everybody’s going to think that you’re the worst in the pool. If you want me not to let you go, you need to accept below market wages,’”
This is exactly what unions are for. Any time there are enough skilled workers avilable that a company can let good employees go as a warning to others not to complain about substandard wages it's clear that the imbalance of power has resulted in exploitation. There is strength in numbers though which is why companies go to great lengths to convince people that you all alone negotiating with a huge corporation of people who have more money and resources than you'll ever see in your lifetime and who can replace you with someone else easily is somehow totally fair. No matter how special they might make you feel, you are almost always disposable to them and they will drop you at any time and for any reason, even if it's just to make an example out of you to keep your ex-coworkers in fear.
For the very few employees out there who actually are totally indispensable, any sane company would be looking for your replacement immediately because there's no telling what might happen to you or when. No company should fail because one employee dies in a car cash or gets a cancer diagnosis. Until you are also replaceable the company isn't safe. They'll pay you handsomely to keep you, right up until the moment they don't have to.
For whatever reason collective bargaining is wildly unpopular on HN, which is ironic because tech workers are exactly who should be organizing their labor.
Most everyone is a temporarily embarrassed unicorn founder around here.
This is such a cynical unoriginal take.
No, I don't care about being in a unicorn and I'm not a embarrassed billionaire. But I don't idolize unions either.
I don't want to be paid the same as all other workers with the same title, I like getting personal bonuses based on performance. I don't want to be in a union.
Just one line of code away from being an alpha tech bro with Elon's number on their phone.
the line must be the Permenance Code.
Jeez, it was such a stupid movie ruining the franchise. Nobody needed a rushed sequel.
Historically in the US, American devs have done a tremendous amount to undermine their own bargaining power by (a) starting bootcamps and other "learn to code" initiatives which flood the market with new devs, and (b) creating AI tools which automate away jobs for devs. Any software developers' union almost necessarily needs to take an anti-AI position at this point. Got to move fast before it is too late.
I don't think it's wildly unpopular, I think that starting a union is wildly hard and paints a target on your back, but once someone does the hard work I think we'll see that there was sufficient support to make a play.
I also think if you do a text embedding on the recent years of HN post and you look for conversations on unions, you'll find a plurality of support.
And when has a union ever stopped a multinational company from just closing shop and opening up overseas? If a company making physical things can do it, how hard do you think it would be for a software company?
sweden has unions and sweden has software companies. could it be that reasonable approach that benefits both parties can be achieved?
Sweden isn't famous for good tech salaries and stock grants though, even among the best/high profile engineers.
And this is where the union threads die, every time.
Top post is essentially saying Americans/SWE are dumb for not being in a union, then comparing to other countries. As soon as someone companies US SWE salaries to these union countries it falls apart quickly.
Yes, to get rich in Sweden you have to start a company. Wages are terrible.
But this is, I think, a result of a historical government strategy to favour exports by keeping the Swedish krona weak rather than a result of unions. This whole business with alignment between the Swedish social democrat party and the big industrial export companies are a thing which simultaneously allowed Sweden to develop but which also brought enormous problems. The immigration madness of, 1990 to now is probably also a result of this alignment.
Or close the location and just reopen later on.
Story time: Berlin in Germany is pretty left leaning. So there was / is a MC Donalds which regularly formed union for employees, MC Donalds just closed the restaurant and reopened later, several times lol
I’m not familiar with that particular story, but it’s worth noting that there is a nationwide union for franchise restaurant workers called NGG. They negotiate standard wages with the franchise restaurant association BdS which all the big names adhere to (McDonald’s, Burger King, KFC, but also, for example, Starbucks). Your story sounds like it’s about a “Betriebsrat”, which represents workers within a specific workplace, complementary to wider unions.
Ideally there'd be laws against this, and public backlash as well. Even non-unionized Workers in Germany will be better off than their American counterparts, but they still deserve strong protections for unions.
It's not as if companies aren't shipping non-union jobs overseas or importing labor from overseas anyway. There's also a certain amount of irrational sentiment around silicon valley and the west coast generally. There's little doubt that companies could move shop to places in the US that aren't so insanely overpriced and without the high cost of living, especially with work from home being so popular, but for whatever reason (the weather, the "scene", the culture) companies are happy where they are and I don't expect that to change so quickly. It sure is nice having a lot of money and having a lot of nice options on where/how to spend it anyway, which might not always be the case in the overseas neighborhoods filled with unionless sweatshops.
While they cannot stop something like that (a Union never gets to control the business), they can at least negotiate good terms for the departing employees, and help ensure everything is in order.
> a Union never gets to control the business
This varies. e.g. Sweden: if there are over 25 employees, the union gets a seat in the board.
https://bolagsverket.se/en/foretag/aktiebolag/startaaktiebol...
A seat at the board is great, but that won't stop a company making major changes like those described.
I don't think anyone's saying unions can do that? They can protect workers and provide some balance in the power dynamics, but there absolutely are limits.
If it is indeed easy to move operations wholesale, I think we would see far more and quicker cases (not just arbitraging differences in labor organization, but also e.g. tax and regulatory regimes). It certainly happens, mind you, but my read is that different forms of institutional inertia puts a damper on the willingness to "re-home".
Ideally, there would be stronger and enforced labour regulations since the government can serve as a neutral third party. That said, I also realize that we don't live in an ideal world and governments tend to be more in touch with the needs of businesses than the needs of the people they are supposed to represent. There are many reasons for that, without resorting to conspiracy theories (but you are welcome to believe in conspiracy theories if that's your thing).
Unions are low on my list to address labour issues. They create a whole slew of problems, but I also recognize that collectivized bargaining is one of the few tools workers have to represent their interests so I see them as a necessary evil.
Isn't startup culture known for ripping off their employees before they sell and disappear? Sounds like there would be no space for unions or social aspects in that.
I can only speak for myself, but I think there is a naive idealist view of (modern, American) unions that gloss over the tradeoffs. I don't want another bureaucratic layer that tells me what to do, and run by yet more HR admin-types. We aren't working in the coal mines or steel mills here in the 1920s. Sorry I'm not interested in that for office jobs. I'm glad they still work in some countries and cultures.
> I don't want another bureaucratic layer that tells me what to do, and run by yet more HR admin-types.
That new bureaucratic layer would be designed to benefit you, and if it were to stop doing that and suddenly no longer served the interests of it's members you'd have the power to replace the leadership of that union or to leave it and start a new one. This is a huge improvement from the current bureaucratic layer of HR admin-types which you have zero say in how they operate and which is absolutely not looking out for your interests at all.
It's hard to understand the mindset of "I'd rather just be powerless in the job I have because that seems easier."
Again, this is all very idealistic and not reality. Specifically for US SWE workers, this would not happen.
I don't care what kind or style of job - if the balance of power in any labour relationship is overwhelmingly on the employer side, collective action is the only way labour can regain a modicum of negotiating power. To think that the style of job has any bearing on this relationship is naive.
>collective action is the only way labour can regain a modicum of negotiating power.
Does collective action mean everyone gets paid the same? If not, how does that work exactly?
I do agree collective action specifically can help, but not via organizing with a modern American Union.
I don't see the HR layer really existing in this alternative universe. Why would they? If they still existed it wouldn't be filled with lazy dim witted karens it would be lawyers with shark teeth.
Tech salaries are too high for people to do that. At least in Europe. Having an union will fuck with peoples salaries.
I don't think you know what you're talking about, or you are omitting western Europe. In Germany/Austria most workers are on collective bargaining agreements (different and specific for each industry, incl IT) which is regulated by unions plus org-specific councils (Betriebsräte in AT/DE, similar in other countries). Similar for Switzerland, also Collective labour agreements in Netherlands. Seems to be similar in Spain and France but these I didn't have experience with. So yeah, your comment is at least misleading or ignorant and bullshit at most
Yet isn't it a regular complaint that European tech salaries are half of what they would be in the US?
Isn't it a regular complaint that American tech workers don't get the kinds of benefits they would in Europe, especially healthcare? Even someone with a very nice American salary can be bankrupted by medical expenses very easily in America. When Americans do end up bankrupt it's usually medical debt that is to blame.
It seems like there should be room for a happy medium somewhere where some workers in the US maybe don't get the same salaries but are also not having to spend so much on healthcare, get more time with their families, get better just protections, etc. Once you make enough money that you're not really worried about meeting your bills and can pretty much buy what you want the peace of mind is more important than the bragging rights you get over who has a bigger paycheck.
No, I don't see those complaints anywhere. US workers are paid so much more that the lower salary + higher taxes are not worth it. Especially due to the fact that many of the high paying SWE jobs include very good health insurance.
So I so 0 benefit for me to join a union.
Half? Most folks would be eternally grateful for half
The vast majority of IT jobs pay pretty meager here. There are some exceptions but not that much. You gave to be "manager" to get any decent pay most of the time.
"decent" is undefined, IT is far above average in most countries, and it's nice work in warm office.
Hmm most people I know earn well above median and whenever I look at my regions statistics it confirms that... Joining an union would mean cuts to these people. I am a fan of unions for low pay jobs but not in tech.
Why do you think unions would mean salary cuts? Unions don't set maximum salaries. You are absolutely free to negotiate your salary, raises, promotions, and so on.
In the Nordics quite many tech workers are in unions. For most people it's perhaps just about habits and solidarity, but they do offer tangible benefits like free consultation and legal representation in a case of dispute with your employer.
Because companies are going to base salaries on collective agreements with the union which are usually lower compared to the salary high paying jobs have. At least that's how unions work in my country.
Unions are powerful because they can call for protests and employees who are in a union cant get laid off due to joining the protest. But its not worth if the job already has way better working conditions than like 80% of jobs out there.
I don't think your salary negotiation position is diminished by having some kind of a lower bound. Skilled employees should be able to get a higher salary if the employers value their skills, and that does happen all the time also in countries with strong unions, like those Nordics.
Even without unions Europe wouldn't have US tech salary levels, those numbers come from other market dynamics.
So play it out with me. Use Faangs as an example please.
Say all the engineers in all the top engeering companies by pay were suddenly in a union, how does the collective bargaining work on pay. You don't think pay would be lowered for high level engineers?
"unions dont set max salaries" you are free to negotiate better salary. fact that union had agreed with company on minimum salary, does not change anything for you. yes the company can say "hey you asking too much, we talked with unions" but company can say the same either way "hey you asking too much, market is tough". so unions just the lower bar.
Who is free, individuals or the entire group?
Unions of low wage jobs have extremely limited bargaining power compared to a much smaller group of people with far more specialized skills that are in demand.
Those individuals with those skills already have negotiating power because they are in demand.
Doesn't seem like tech jobs are in demand given the current job market.
What companies are they working for?
In Europe you can make a lot of money in consulting given you also work a ton. With a regular 40h/w job it usually comes over time or with leadership roles. But entry level jobs are often well above median already. Not 6 digit silicon valley numbers but more than enough for my locals cost of living. Pretty company independent in my experience.
There are software engineer or tech unions, you're welcome to go work at one of them and reap the "reward" of far less money, vacation, perks, and more than if you'd work at one of the non union big tech companies.
Tech attracts the radical independent types.
they become leaders and there is no room for two
> Tech attracts the radical independent types.
No. I think it's a combination of:
1) HN being associated with a startup incubator, and thus attracting a large contingent of people who see themselves as the boss doing this, not the workers affected;
2) tech attracts a certain kind of gullible person who's easily seduced by tidy little systems like the pop-capitalism of libertarian tracts; and
3) tech workers (until recently) had more economic bargaining power than a typical worker, so could delude themselves into thinking they do better by going it alone.
>tech attracts a certain kind of gullible person
This is incredibly condescending. This is exactly the type of elitism speak that tells people how to vote because they know whats better for them.
I kinda disagree with #2, even ignoring the adversarial wording - at most it's an extension of "HN isn't All Of Tech"
From people I've spoken to personally, I've seen it as primarily #3 - "Why do we need collective bargaining when we have negotiating power from being in high demand with lower supply?" - despite IMHO that is when you should be using that power for such, as that power will never last forever.
Don't need politics/a "type of person" to be only looking at the short term, and thinking the current status quo will last forever. It seems pretty much a constant in every demographic.
Tech people would obviously be well served by being in the union. If you make a cartel with other people who can do the same job as you, and you don't profit from that, you're doing something terribly wrong.
The reason I'm opposed to it isn't because it wouldn't be good for tech people. I'm opposed to it because in general I think it would be more bad for everyone else than it would be good for tech people. I expect they would see fewer products, higher prices on the products that they have, and lower quality products. Additionally, I expect the union to advocate for the interests of the tech workers, which would generally be for tech workers to make more money, and not in the interests of broader society.
You can see a great example of this with the AMA, which did a great job advocating for the government to reduce the number of new doctors. It's probably great for existing doctors, but the rest of us should not be happy that we're paying more for our healthcare because of it.
why do you think maximising profit for company is ok and everyone is cheering about that, but when employee tries to maximise profit then "oh noes the society will collapse "
What? I try to negotiate maximum profit every time I apply for a new job, don't you?
I don't have an issue with an employee maximizing profit. I do have an issue with employees banding together and bargaining collectively. Exactly the same way I don't have an issue with a company maximizing profit, but I would have an issue with companies banding together and negotiating collectively.
A difference is that there's not necessarily an inherent size limit on companies while there is an inherent size limit on individuals because you can only be one person. One person can only be so economically valuable.
However, that's why we have the whole system of antitrust to say when a company gets too big, as soon as we can show that it's having some kind of negative effect on consumers, we split it up. And that's exactly what we should do. And we definitely should prevent more mergers as well. What I would do differently w.r.t. antitrust is say that instead of only looking at harm to consumers (those who a company sells to), we should also look at harm to workers (aka those who a company buys from).
> I don't have an issue with an employee maximizing profit. I do have an issue with employees banding together and bargaining collectively. Exactly the same way I don't have an issue with a company maximizing profit, but I would have an issue with companies banding together and negotiating collectively.
One flaw in your logic you seem to thing "an employee" and "a company" are peers. They're not. A company is an equivalent level of "banding together" as a union. A company and an employee union are peers, an employee and a company are not.
> However, that's why we have the whole system of antitrust to say when a company gets too big, as soon as we can show that it's having some kind of negative effect on consumers, we split it up.
And you're mixed up here too:
1. The employee-company relationship is entirely different than the customer-company one. Talking about consumer prices in the employee-company context is nonsense.
2. You're neglecting that all companies have certain interests in common as employers. So even if you break them all up, you're not going to solve the problems a union solves.
> I would have an issue with companies banding together and negotiating collectively
Use of "would" implies you believe they don't.
Your point 2 is such a condescending take. I read it as: "Everyone who does not think the same way as I do is gullible and has been seduced, because I am obviously right and they must be weak." This kind behaviour convinces me even more that I dont really trust union people.
To me (and it’s my personal experience) I read it as tech people have a bias for systemic thinking, and usually lack skills and/or experience in human social dynamics, especially when young, which makes laissez faire capitalism / libertarianism attractive. I’m a bit on the spectrum and to me it has a video game like quality (e.g. humans that are robot like rational actors) that was appealing and reassuring when trying to make sense of the world.
In short don’t find it condescending to say a bias exists, independently of the agreement with the political line of thinking.
In fact when I was younger I was condescending the other way: surely if you are not into libertarianism your systemic thinking must be limited.
> To me (and it’s my personal experience) I read it as tech people have a bias for systemic thinking, and usually lack skills and/or experience in human social dynamics, especially when young, which makes laissez faire capitalism / libertarianism attractive. I’m a bit on the spectrum and to me it has a video game like quality (e.g. humans that are robot like rational actors) that was appealing and reassuring when trying to make sense of the world.
That is exactly what I meant.
Also tech people are often intelligent (in a way) and identify as such, but then let that get to their head and get really overconfident about whatever clicks with them.
If you felt personally attacked you’ve let your biases win over rational thought. Tech obviously does attract libertarians (see bitcoin maxis for a single example of a significant cohort). Libertarianism is also blind towards the obvious failure mode of an organized group overpowering the egoistic as a virtue libertarians. (Think barbarians… or HR.)
Ironic considering that tech attracts people with rational thought and less emotional decision making. Is it surprising that I can be rational and not naive?
bad take.
I don't feel personally attacked. However, I find the particular wording of the post I initially replied to condescending and reeking of elitism. Calling someone--or a group--gullible and seduced is not going to win them over. Besides, while we are at wording. I dont usually pull that card, but... I am blind, in a literal sense. Seeing my disability being used in a rhetorical way makes me sometimes sad. It kind of shows--on a meta level--that inclusion will never happen.
Unions often end up decreasing productivity due to added bureaucracy, leading to ultimately worse compensation in the long run.
Let’s talk about how HR increases productivity
Unions remove the need for HR?
More ideal solutions than unions are: 1) Employee owned businesses with low levels of hierarchy and fast vesting in ownership; 2) Enough competitors in a hot enough labor market that employees jump ship themselves before they can be let go.
But yes, unions are great particularly when the labor market is tough.
> This is exactly what unions are for.
Unions are mostly extortion schemes to benefit the union leaders.
My read is that they're getting paid in prestige rather than money. The worker can turn that prestige into money further down the line by saying "I worked at so-and-so for five years" at their next interview.
> Unions are mostly extortion schemes to benefit the union leaders.
Did daddy teach you that?
> saying "I worked at so-and-so for five years" at their next interview.
Oh yea, I worked at Amazon I brought my own shiv want to see it?
No. The reason top firms part ways with good workers is usually political. Either the manager doesn't like the person regardless of their work abilities, or the manager is not politely savvy enough to ensure their team is being recognized for work that grows or is valuable to the business. Or they get caught up in the endlessly popular reorgs (again management failure). It's a failure of management. Nothing more. Nothing less. A healthy market would encourage good workers to move around freely (through compensation, opportunity, benefits, location, etc..), not force their hand. And healthy organizations would recognize talent and retain/retrain as needed.
I think the other thing that's perhaps missing is that some companies have so much momentum (with thousands of people) that it probably doesn't matter when they lose people. The company will continue to thrive because there is demand for the product.
You're thinking of a different kind of company than the paper is talking about. (The headline, presumably written by the university's PR team, is a bit misleading about this.) The paper is about a certain kind of firm (e.g., the Big Four accounting firms, management consultancies like McKinsey, some elite law firms) that explicitly uses an "up or out" model, and explains why this kind of firm's business model (in particular, renting out the services of a particular employee to each customer) leads to this. The findings don't apply to other kinds of firms; e.g., in a typical big tech company, most engineers don't work primarily with a single customer, so the preconditions don't hold.
>>the manager is not politely savvy enough to ensure their team is being recognized for work that grows or is valuable to the business.
Actually in most companies, no ones watching whats happening, no ones watching who performs, who slacks, or anything for that matter.
Companies are basically a kind of a loosely assembled random crowd, where no one cares a thing about anything. In this kind of a set up both hardwork and laziness go unnoticed, which is why a persistent level of mediocrity is all pervasive. People do the bare minimum needed to keep lights on.
Getting rewards, or not getting punished in this kind of set up, largely depends on who you know, how they view you and what they are willing to do for you.
The problem is that as you go further up in hierarchy, people by definition have less specialized, and more general knowledge. This means that there are things that lower-level employee understands but their manager doesn't. This in turn means that it's impossible for the manager to tell whether the employee is doing a good or a bad job because the manager simply doesn't understand the details of the job. This is open door for slackers and low-performers, because from certain perspectives, they're indistinguishable from hard workers.
I used to be a hard-working high-performer, but then I understood that because of numerous management problems that are beyond my control, the reward is very loosely correlated with my efforts, and given an existing job contract, the best way to maximize the reward/effort ratio is not to put more effort hoping for disproportionately higher rewards, but to put significantly less effort because the reward will drop just slightly. Do you want to up your hourly salary 5 times? Simply take 5 times as much time to deliver same feature. You might not get the 0.05x salary bump but that doesn't actually impact the calculation that much.
Cynical! (and probably true too)
I work for a small company (~10 people), solving reasonably interesting problems, earn peanuts, and am happier than I was at big tech.
That has never been the case in my career. Perhaps things are different in the C suite or a startup but at the director level and below of an established company it’s always about money and headcount.
>Either the manager doesn't like the person regardless of their work abilities, or the manager is not politely savvy enough to ensure their team is being recognized for work that grows or is valuable to the business. Or they get caught up in the endlessly popular reorgs (again management failure).
This strikes me as 1000% accurate from my work experience. I see people who do amazing work but get unrecognized and then move on while other people do mediocre work but put a huge effort into self-promotion and end up being promoted despite the work not being great... The reorgs also seem like a way to kneecap the employees and lower expectations.
As I understand it, the process is known as up or out (https://en.wikipedia.org/wiki/Up_or_out) and exists due to a the known corporate structure required to do consulting work. I have no clue about its effectiveness, but all the work I've ever seen done by Deloitte, McKinsey, or PWC was mediocre at best which to me would signal that the process probably rewards a different incentive set than they intend it to. For the rest of us its likely a lesson in the power of branding. To quote Matt Damon: "(they are charging you for) an education you coulda got for $1.50 in late fees at the public library"
The only other thing I have to say about it is I have noticed a high correlation with the reports produced and the things employees have been telling management to do for a long time - that is to say, there is some utility to having an outsider provide the information... even if that information isn't novel at all.
Anecdotal: consultancy gig in the 90's, when you could still smoke in the building. My boss shmoozed their bosses, I spent most of my days in the smoking room talking to random employees. After a week we presented a report that was hailed as "brilliantly insightful" and the client was amazed at how we'd managed to grasp the problems the company was facing in such a short time, and come up with brilliant, workable, solutions.
Literally what you said: getting paid to tell management what every employee knows and has been trying to tell them for years.
> there is some utility to having an outsider provide the information
That shouldn't be happening. This is managerial incompetence normalized. Why does the management of a company not trust its own people? They should have hired their people from "the outside" already. The correlation you're seeing is people who are not leaders but bosses in charge of teams. Good leaders don't need external validation, they either trust their team or make the problem fully outsourced to an external team like a consultant firm.
> all the work I've ever seen done by Deloitte, McKinsey, or PWC was mediocre at best
That tracks with my experience. Everyone I've met whom I know are competent at what they do have had similar remarks on these firms.
From my observation, they are part of a larger endemic issue of metric-chasing. They come up with a list of check boxes where if you follow them like a formula you'll achieve measurable results. Everything they do revolves around measurements and meeting measurement targets.
The problem is, when targets aren't met, then their method and advice is put into question. Therefore there is a perverse incentive at play where on one hand they do really want you to succeed, but on the other hand getting into the weeds and figuring out why you can't meet the targets deviates from their check-list approach. It will look like they advised you to do something, and now they're telling you you should do something else, it will look like they don't know what they're doing, and the one cardinal rule of consulting is you never say you don't know (or appear like it). The result is they water down what needs to be done, and they'll be flexible with interpretations of what counts as measurable.
In summary, I would like to say there is a place for these firms, but I won't, because I don't know if that is even true. I'll say that an outside firm will never have your company/team as their #1 priority; there will absolutely and without exception be scenarios where it will be a conflict of interest for them to do something that will benefit your team/org.
And using these companies to justify decisions, or back up decisions.. that again is part of the leadership endemic. People who do that are not leaders. They're bosses covering their own you-know-what. My opinion is that they facilitate poor/weak management culture.
Talent-wise, there is no doubt they hire the most talented and experienced people. But it almost feels like hiring a navy seal to be your personal trainer, but if you do what they say and you're not seeing results, they're not allowed to figure out what really is happening and correct their own advice. And to start with, they won't even aim to make you look like a navy seal, but work out some formula most people can work with, so the whole navy seal thing is just for show anyways.
Sorry for rambling on, maybe I'm too biased with my own experience here.
EDIT: I just wanted to add: If any company is firing the bottom performers, their management don't understand the problem of perverse incentives. Actual performance no longer matters, performance that can fool the measurement system sufficiently enough is what matters. The metrics will look good, revenue will be mediocre and long term sustainability will degrade. Good or bad, metrics and measurements shouldn't be used to make decisions, they can only be used to ask questions! An employee can have bad metrics if they're spending all their time helping other team members or solving yet-to-be-measured problems. Matter of fact, I would even dare say that metrics/measurements/KPOs shouldn't even be considered at all unless goals aren't being met. If your golden goose is laying bigger and bigger eggs, don't perform explorative surgery on it.
This ignores everyone else's agency in this decision.
The top employee is probably getting noticed and headhunted by the clients.
The top employee is probably getting pissed off at the mediocrity surrounding them, and annoyed at constantly having to share credit for their hard work with their bad manager who did nothing.
The top employee quickly realises that this is a badly-paid gig, and plans to spend the minimum time doing it that will confer the necessary Resume points.
The worst employee has no other options, is scared of losing this gig because they struggle to find other gigs, enjoys being able to hide their mediocrity in the team, and will stay as long as possible. They'll probably end up being promoted.
This article didn't make complete sense to me. However I think what it describes overlaps somewhat with the "Cravath System" https://en.wikipedia.org/wiki/Cravath_System
The wiki page doesn't do it full justice, as I understood it it is:
* A firm can easily end up in a situation where weak performers stay as long as they can, and strong performers leave because they can operate independently. This can have a very strong effect because the partners or permanent management starts seeking out work to keep the bulk of their remnant people busy, which is not the high end work that builds the firms reputation.
* Instead, make offers every year to the top 3 people from each Ivy League law school, but the offers are for 18 months only.
* If the new people aren't going to make partner ever, don't keep them around. Let them know well before the 18 months are up, and have them pick the corporate clients they like and work with them so they can jump over to working for the client directly, and they will then always come back to the mothership when the giant, interesting, complex case comes along.
* Out of each "class" you make partner offer to only the best, maybe none, each year.
This differs from the article because the firm is keeping the best and sending out the rest.
But maybe most firms aren't like the Cravath, they prefer to over charge clients for a weak performer then charge and pay a strong performer ? Maybe this makes sense if you have a very short term view of the life of your firm and it's reputation ?
My experience with consulting firms is there are two paths for high performers. Either you move into a sales/relationship focused role (which there are fairly limited slots for) or you move client side and probably buy from your old employer. The good workers do well either way (when I say move client side, I mean to high level positions - importantly one with control over a budget to afford consultants) and the consultancy makes money both ways.
This: If you want to climb the ladder, the no1 way to becoming a partner is .. SALES .. SALES .. SALES, regardless what you selll: As long as you bring in money to justify your business unit/cluster, everybody is fine. Just sell more hours - thats the only goal.
How to tell that some "researchers" spent too much time in economics classes and not enough time in ethics classes: they publish stuff like this (source [0]).
[0]: https://www.aeaweb.org/articles?id=10.1257/aer.20200169
The article makes them look psychopathic. Underpaying staff, layoffs, constant churn and providing poor services is 'not a flaw' and 'makes sense' because they boost profits.
Exactly.
> In short, the “up-or-out” path of professional life may not just be a cultural phenomenon among top professional service firms but also an efficient response to how reputation is maintained and information flows. What looks like a ruthless system of constant turnover, the researchers argue, is in reality a finely tuned mechanism that helps the market discover and reward true talent.
For people who are fans of this system, I genuinely want to understand how one overcomes the common sense, humanitarian centric rejection of corpo speak like this. Is it about just drinking the koolaid?
Actually there was a discussion about cults yesterday and now that I think about it, I'm seeing all sorts of parallels here: inventing new words and using that to complete redefine reality and transform your fundamental understanding of how the universe works or should work, supplanting with your made up fantasy world and rules that rewards the best play actor.
>For people who are fans of this system, I genuinely want to understand how one overcomes the common sense, humanitarian centric rejection of corpo speak like this. Is it about just drinking the koolaid?
Economists don't work in the real world economy so they have no clue or idea what these things even mean. They work for the Fed, a central bank or in academia. Sometimes and only sometimes do they work for banks or as quants, but then they usually make enough money to never have to question the system. Bankers usually have MBAs that specialize in banking and finance. They don't need to understand economics, they need to understand how the businesses they allocate capital towards function.
Economists are insulated from the real economy, because economists are redundant to the real economy and I'm not saying that to denigrate economists, it's what economists tell each other all day in their research.
Purely theoretically speaking, they say free markets are self regulating and stabilizing and efficient. You don't need economists to steward or study the economy according to economics itself.
Weirdly enough, economists aren't historians either. They don't teach how economies have been run in the past, they just presume some sort of proto-market economy and that market economies have existed since the dawn of time.
McKinsey a top firm? The report seems to focus on consultancies which are notorious for leeching huge amounts of money from non-specialist organisations by selling "expertise" to low-calibre execs in their clients in what is essentially an entrenched political merry-go-round.
The premise here might have some insights, but is hardly paradoxical (missing from the title posted here); you'd expect low-quality firms to have low-quality practices.
The method used in all the big4s in India is this: You join and do well as usual. Your credit is shared by those above you. You continue to do well, your manager gets promoted or you get a manager who needs a promotion and needs the credit you generate. He gets promoted, aggregates your good work and shows it as his. You then get sidelined, PIPed, or leave in disgust.
It's political and I have begun to strongly believe that the best leave or are schemed against by the mediocre cabal. You cannot continue in a large firm in India if you are anywhere near good.
Why would a manager who’s able to claim the credit of their reports in order to advance their own career then PIP the best ones? Wouldn’t they keep them around to keep claiming credit from?
I’m not doubting your story (I’ve never worked in India) I just don’t understand the incentive to fire a good worker in this scenario.
They already got promoted and might not be managing the same team, plus it sells the lie better, and most people wouldn’t go along with this forever and might start claiming things so they have to discredit you first.
They don't care that much. Probably from their point of view the merit is theirs anyway and consider anyone below them easily replaceable. Also, good employees understand their value and will start asking to be rewarded adequately for their contribution- this is a problem, so getting rid of them or waiting until they give up and leave solves it.
Most CEOs and VPs in these companies are nepotistic and political. They are happy to take credit but will never allow their direct reports to become a threat to them. In general the structure looks like this
CEO
VP (usually a family member or a "chamcha" literally spoon, but means sycophant.)
Directors (all yes-men chamchas)
Worker bees
Not very different from most companies, in my experience.
Is sycophancy different there? I think in many places employees often praise their managers and agree with everything because it’s a survival strategy. Or maybe a misplaced hope to get recognized that way. I assume that’s all this is too?
In India loyalties run deep. It can come along the lines of religion, region, caste, family, color, class etc.
Many times novices to this game, work mad hours, only to realise a year or two down the lane, some guy who practically did no work but comes from the same state your manager does, is now promoted above you.
This is outright stupid to believe. I have been working for past 15yrs and worked across startups to Top 5(FAANG), and never seen or gone through this.
Happens in consulting more often than you think. Product firms run different or at least that's what I assume. I haven't worked in FAANG but have worked in the Big4s, and a couple of Fortune 50 manufacturing firms. The experience I talk of has to do with the Big4.
Ur clearly not the top performer…
In all seriousness they mentioned India not mango fango. That said, my xp has been the same as you. Only time top performers get nixed is if a whole arm gets nixed and they get caught in the crossfire.
OP said "do well", not top performer. Thinking you're a top performer isn't the same as the company thinking you're a top performer. I've never seen someone put on a PIP that didn't deserve, even if they thought differently.
Most people struggle just to keep their head above water nonetheless come up with elaborate conspiracies of sabotaging other peoples careers. No one is thinking about you that much.
I suspect the root of the problem is an unwillingness to take ownership for their action (or inaction). I've never been on a PIP. Even when I've given my employers reason to give me a verbal warning, their response has been: "that's not like you, don't let it happen again," and it hasn't happened again. I suspect that is true for most of those who have never been on a PIP.
Now I'm on the flip side, in a place where I may have to put someone on a PIP. What can be done has been done. There is only so much support and positive guidance that can be offered before you have to provide them with a plan backed with consequences for not following through. It is an employee that I don't want to lose because of their contributions, but it is also an employee that I can't afford to keep because (without changes) they are a liability. Unfortunately, previous interactions suggest that I will have to cut my losses. Yet the ball lies entirely in their court at this point because they are the one who has to take ownership for the issues they create.
Doesn't make sense to me, if the manager is promoted, wouldn't he want to bring good talents along, so that they can help him to promote further?
Let me explain.
Case 1: You're a high performer, one year into the role. A colleague, who's been around longer but struggled, gets promoted not necessarily on merit, but on their ability to manage up. Your early contributions are quietly absorbed into their promotion case. Once they step into a managerial role, the dynamics shift. Unless you stay quiet and compliant, you’re suddenly less welcome in the team.
Case 2: High Performers: Some managers (even partners) feel threatened when team members build credibility with clients. I’ve seen situations where a client repeatedly requesting a specific consultant backfired on that consultant. At year-end reviews, client recognition turned into a liability, not an asset.
Credit Allocation:In some Big 4 setups, CRM credit allocation is less about contribution and more about visibility and tagging. Accounts are assigned to partners who may not actively engage, yet receive full credit. Technical sales teams, who drive actual deals but don't "own" accounts, often find their impact diluted. In some cases, partners even tag themselves as "owners" of said accounts mid-pursuit to claim credit post-close. At the year end, the actual deal closers are usually running around begging partners for credit. You might end up getting 30% of what you actually closed. This works well for partners as incentives outflow is reduced leaving money on the table.
Event Marketing Shell Game: Large-format partner-led events in places like Goa or Dubai are positioned as knowledge exchange and brainstorming events. Behind the scene Sales teams are pushed hard to invite prospects where the engagement has been going on for months. When those deals close weeks/months later, the event organizers often claim the outcome; regardless of who did the heavy lifting.
>>You're a high performer, one year into the role. A colleague, who's been around longer but struggled, gets promoted not necessarily on merit, but on their ability to manage up.
Its honestly mostly like a queue, you can't see why people who came before should get a early exit. But those people had people before them too, and thought the same. Now that you arrived, you think your specific case be prioritised above them for merits you think count above theirs and not necessarily their place in the queue.
As much as we all think we are special, we mostly aren't, time and queue position plays a huge role in most things in the society.
Its pointless to fight the queue system, most events in life happen in an order, and its pointless to fight cause-effect sequences. Some exceptions to this absolutely exist, but this is the general rule.
>>At year-end reviews, client recognition turned into a liability, not an asset.
Remember the system is a part of the game, if you threaten someone you will take their job, its in their interest now to see through the end of you.Why do you think this is special to India? Anywhere there are humans, you will see the same behaviour.
This definitely explains why India is so dysfunctional.
Yes and no.
The real cause of our dysfunctional system is the debris of nehruvian socialism (he was a covert communist masking himself as a Fabian socialist).
He didn't reform the British divide and control mechanisms but continued them and in fact made them worse. If you think your bureaucracy is bad, wait till you see ours.
These are "one exam wonders." They clear one exam, and with zero life experience at the age of 25 can sabotage almost any enterprise with their clerical behaviour.
Our own deep state.
It's much better in the private sector but this mindset is pervasive.
The one great commonality I've noticed about California Democrats and Online Indians is that each region's problems seem exclusively the fault of some long dead fellow.
Apparently this Nehru chap has been dead for 60 years. In fact, India has only been a country for 80 years so he's been dead for most of the time India has been around.
Likewise with Ronald Reagan. Supposedly he's responsible for all the woes of California since.
I've got to be honest. It's not that convincing.
It reminds me of those engineers who you hire and one month in they don't have anything to show because of "tech debt" and shit like that. It's always the fault of some guy who has long left. Then you hire other engineers and they just nail it. Such is life. There's blamers and doers and the two are not usually the same.
Believe whatever you wish. We live with this reality. At least you can move from CA to TX. We can't, it's the same clown show everywhere.
The fact is that for every policy the government introduces, the entrenched clerks find ways to sabotage it.
If you think you can handle it I invite you to come and apply for any government scheme of your choice.
True story: we once sent an NDA to a government ministry for review and it came back with one objection after 11 months. The objection was that the year was wrong in the document.
After that we no longer bid for any government work.
Oh I have no doubt it's miserable, and your story is pretty funny haha. I just don't think that a guy who has been dead for 75% of a country's existence is why something is a certain way. It's been 60 years without the fellow. It's not like he's an immortal god commanding you still.
>>The real cause of our dysfunctional system is the debris of nehruvian socialism (he was a covert communist masking himself as a Fabian socialist).
It has been 50 years since his time. And most of what he did now has largely faded out to nothingness. OTOH, his time wasn't all that bad either. Even till 2000s cities in South India were very liveable, with decent quality of life.
Most of Indias problem come from a brutal zero sum game society, where population is too large, and there isn't enough affluence going around.
Everyone, every community and sub group, down the individual has to do anything in takes to snatch, hoard and then deny as many resources they can. Even if it means wrecking everything that exists to get there.
Nothing good comes out of these things.
To begin with fixing India, you must work towards having affluence of a few decades atleast. A generation or two need to live through this to wash away behaviours of a scarcity game.
This is true. Minus the PIP part.. I have not heard of anyone being PIPed.
Source: current concluding my stint at Deloitte.
But this is how it should be. Very best of the best start their own startups. Second best, start their own consultancies. Next on, work independently. Next on, are principals in small firms - they are the irreplaceable singular employees that the owner of a small firm wholly depends on. And then the mediocre and the bad ones, that work in largest firms. This is how it's always been.
It's not that way in practice, and I've worked at a lot of startups. IMO successful founders are street smart, cunning, and good at relationships and understanding the business. Most of the really wealthy founders I've met are incredibly ordinary or above average, not "best".
Not sure what we are even measuring anymore in this discussion!
It seems that your claim is that “this is how it should be” and also “this is how it is/has been” - not sure if you are referring to a specific region, considering the parent comment, but assuming you mean the tech industry in general, this seems patently false.
This is not a description of how talented, or smart, or “good at something” someone is. You are describing how risk-averse someone is, as well as how able to survive failure. The latter is slightly different from the former, although related. Someone not able to survive failure at all (due to having no savings, for example, or perhaps someone who has high monthly fixed costs) ought to have a low tolerance for risk, but they might still have a lower threshold for what they consider risky relative to someone else.
I’ve met plenty of talented/smart/etc people in each of these groups, and also plenty of the opposite. To be fair, my experience is anecdotal and biased, although I would reasonably expect such a pattern to continue.
No. If you want to build big products, you need big organizations (i.e. companies). Big products have moats, often network effects or natural monopolies or whatever, but if nothing else then just the sheer investment required to build a competitor. Products with moats can extract wealth. So big companies are often extremely profitable. That's where the money is. Consulting is something talented people do in countries with no big tech companies.
Yes you are right, but it doesn't contradict my statement. Of course big companies are necessary and big companies are where the moats and thus wealth creation is. But it doesn't mean they need to hire the best people (market control/moats make them competitive even if almost all employees are disposable drones), or that they can do it (because of agency problem). Small companies both need the best people (they don't have those moats and also don't have division of labor deep enough to make do with more stupid people doing better granulated/formalised work, everyone has to wear many hats and be flexible), and can do it because agency problem there is less pronounced due to fewer layers of management. Yes as a result, they make less profit (can take less of market for having no/smaller moat, and have to pay more to people because they have to hire better ones), but this is the company's problem, not employees'.
The only one selling a lie here is you.
You have clearly not worked in any major company in India, Or even other nations (since PIP is a common process worldwide in most companies).
Any employee can escalate to the company Ombudsman if they feel they are being subjected to unfair treatment or inappropriate processes. It is the job of the Ombudsman to be neutral and do an thorough impartial investigation.
PIP (Performance Improvement Plan) is a formal process, it even HR and senior management (skip level 1 manager at the very least) are involved in it. There is specific time duration and set of expectations given formally (under review process with HR, so there is full transparency) to the employee to improve the performance.
A top performer cannot be nixed via PIP, because the onus of performance proofs is on the employee and those evidences are visible to HR and upper management.
PIP is used to nix bad performers, not top performers.
Typically, even if an employee clears PIP, they need to get an "Exceed Expectations" (or equivalent) appraisal rating in the next appraisal cycle in order to continue in the organisation, but if they get lower rating instead, they are in hit list to be nixed during next round of job cuts whenever it happens.
Top performers may quit due to office politics and lack of growth, but PIP is not their way out.
PIP is a permanent black mark on an employee's record (which is maintained historically), so it disallows the company from hiring that person again if that person exited due to PIP.
Top companies in India and elsewhere have very formal processes, including Ombudsman and PIP, which get audited.
I got a PIP because my manager mistakenly thought I was stealing equipment, and he just kept adding agile story points until I failed.
I was too pissed off to go to an ombudsman. It honestly didn’t occur to me. It just felt like “this guy hates me and wants me out.”
He called me two years after I was fired to inquire about missing equipment that I never had.
The deal about India is this.
Its a brutal zero/negative sum game, at a country level, but plays out in every individual's life, and at a punishing pace, intensity and frequency.
Anybody who doesn't prioritise their self interests at any and all costs, suffers.
Just stubbornly refuse to do a thing that isn't beneficial to you. You will come out fine.
A version of the paper can be downloaded from SSRN:
Kaniel, Ron and Orlov, Dmitry, Intermediated Asymmetric Information, Compensation, and Career Prospects (February 4, 2020). Available at SSRN: https://ssrn.com/abstract=3532128
see also: discussion of the consulting business model from David Maister’s book Managing the Professional Service Firm
https://commoncog.com/the-consulting-business-model/
In the case of consulting companies like McKinsey, there's another very rational factor: a top performer with a strong ability to climb the corporate ladder might actually be worth less as a consultant than as a director at an external company who would then hire McKinsey. And of course, the partners there have industry connections, to get these to performers hired where they would be likely to generate the best future deals.
> ... in professions where skill is essential and performance is both visible and attributable to a specific person, particularly in fields such ... fund asset management ...
Laughing out loud)))
Was at a firm with a up-or-out policy. It doesn't sound like author has much real world experience with what they're studying...
The really good people have leverage so the can stay or go as they please. Meaning the people that get hit are average-ish (in the context of firm, not wider market). People good enough to make it to middle management but no further. You don't need to fire them either - they catch the drift when they don't get promoted, and those too stupid to notice were never "good".
>“Firms now essentially can threaten the remaining employees: ‘Look, I can let you go, and everybody’s going to think that you’re the worst in the pool. If you want me not to let you go, you need to accept below market wages,’” says Kaniel.
The below market rates are primarily an effect of CV-prestige rather some intricate machiavellian mind game. People tolerate it because "I was a senior role at X" has value long after you left.
What a ridiculous article. The author makes zero mention of politics. In many cases, you are forced to choose the least worst person to fire. Then, politics plays a huge role. If you are the manager forced to choose one (and you have no bad ones), then you choose the one who you like the least (personally). Big investment banks cut roughly 5% of their lowest performers each year. You always can see a few people that should not have been cut, but their politics was too weak to save them.
I've seen this written about before... roughly, after a few years into your corporate career, your job splits into two parts: the skill part (your effort and ability to get stuff done) and the political part (navigating humans in a corporate hierarchy). Say what you like about the political part, for most people, it is unavoidable.
Interesting though one would think this is also an obvious finding.
Quantifying this would be interesting though.
Up or out.
Yes, re the gamesmanship on pay, but if you don’t have the specific ability to bring in new business, then you’re on your way out, no matter how good a lawyer (or whatever) you are
Thanks for the article - that was an interesting read. A creative take that I see some merit in
TL;DR When workers start out, the firms know a lot more about their abilities than the clients do (they have an "information advantage") as the worker has very few ways through which to prove their abilites. Over time, though, as the employee's public performance increases (through successful cases, good investments, etc.) the information advantage the firm has becomes lower. Eventually, the firm lets the employee go in order because the worker now has proof of their competencies that they can show to clients to demand higher wages directly.
I completely agree. I’ve actually had to let someone go in the past for this exact reason.
Too expensive for customers, can't be put on project sheet
Was this written by one of the firms trying to justify the practice?
It looks (to me) like they're saying that the margin (amount that firms can charge clients less the cost of the employee's compensation package) is what's at stake.
As employees rise up the corporate ladder, their compensation packages increase, but the amount that the company can charge for that employee's work is limited (clients will be wanting to keep a certain margin for themselves too)
Either fired or just leaving by themselves. My theory: it has to do with middle managers, who mostly are less capable in technicalities, not smart enough, and aren't born leaders otherwise they would have been doing their own business, so they prey on those good ones since they have nothing to do all day except politics and scheming around compared to the others who spend most of their day building or doing actual work.
Every job I've ever had started great with a small team who was actually interested in the company and its goals. Then eventually the company scales up, gets acquired, or IPOs or some other sign of maturity and a new group of leadership is brought in from a legacy/Fortune 500 type of company. That new group of leadership brings their own cabal/clique and they only promote themselves and start slowly pushing out the original employees and workers who got the company to where it is... the smart people see what's going on and move on to other companies as it slowly becomes hijacked from within and at the same time 'matures' and becomes a slug and incapable of improving or adapting.
Are you sure you're not just seeing the transition of a company from a growth company to a value company? I.e. "there is no growth potential left. Let's dump it on the public", and then a new leadership team comes in slashing costs to juice profits, because there's no way to increase revenue. Because that's certainly a phenomenon as well.
That's definitely part of it, but I've noticed there's almost always a shift when companies get to a certain size and start bringing in leadership in waves from other companies and it really changes the culture and dynamics of how the company functions--usually not for the better.
Evil
What a weird take. It's good for the employee to get fired because then the company doesn't have to pay them competitively?
Yes, this is one of the inherent contradictions in capitalism.
The quality of the work isn't as important as the margin between the cost of labor and the income earned by it.
To be the best and still pass that test you need to be so good that it makes up for your higher cost, which is a more difficult bar to pass than being good enough but being cheap. Also there's an upper limit anyway where no matter how good your margin is, your cost can't be justified, since "local market rates" apply downward pressure, as well as an upper limit on how much clients are willing to pay or the size of the market you're selling to or temporal factors e.g only a certain amount of widgets a country can consume in a month.
There is no labor under capitalism without significant profit margin, and always the profit extractor (employer) is trying to get the most profit for the least cost from the profit generator (employee), who is in the opposite position, but at a disadvantage since they are a human who is influenced by things like social pressure, a desire for recognition, and the natural human tendency to be good at something and do it well. The employer isn't human, it's just a profit generating algorithm, and so only cares about such things insomuch as it can leverage them to increase profits.
There's other factors in play as well though that corporations can't include in their algorithm since they're purely selfish actors which results in macroeconomic catastrophes, so for example if wages get too low then people don't buy things anymore which drives down profits from selling which forces wages down lower and so on until economic collapse.
My favorite example of why managers fire good workers:
- You are a manager of a team of 4
- You hear layoffs are coming
- You have one amazing direct report, 2 just ok and 1 awful
Who do you fire?
Most people say "Of course, fire the awful person"
I say: "When this actually happened, the manager fired their best person"
Other: "But, but why? That's not fair!"
Me: "You know layoffs are coming. You are the most expensive person on the team. If you fire the awful person there may be questions about why you even hired them. They then fire you and keep your amazing person as the manager (probably for less money).
You fire your best person, well then now you as the manager are the best person AND you can make the argument that that awful person needs 'more managing to be effective'"
It's not pretty or noble or heartwarming but this is how the logic goes in a lot of big firms (especially around layoff season).
I have never seen someone fired over hiring a dud. Reasonable people know that hiring has smoke and mirrors - everyone is putting on their best fake persona to get in the door. Maybe in some toxic, cut-throat environments, but this seems very particular.
Firing the best person because they outshine the master is plausible. One of the 48 Laws of Power.
the line manager is never gonna get that logic past their manager
This is why an org should have skip-levels. You can't put anyone on an island with that kind of unchecked authority and expect good results.