Managed Services Salaries and Raises: Treat Everyone the Same?
At Fog Creek Software, every worker at the same level is paid the same salary. And when one gets a raise, they all do, according to Inc.com. I certainly support equal pay for equal work. But I wonder if Fog Creek’s system works. And I wonder if managed service providers are willing to give it a try.
According to the Inc.com article:
“In Fog Creek’s system, every employee is assigned a level. Currently, these levels range from 8 (for a summer intern) to 16 (for me). Your level is calculated formulaically based on three factors: experience, scope of responsibility, and skill set. Once we determine your number, you make the same as every other employee at that level.”
I’ve been hearing more and more buzz about this type of pay scale formula. To be sure, many Americans are tired of unfair pay policies and/or pay systems where you earn less than a peer even though you’re doing a better job. Of course employees should be paid at equal levels for equal work.
But is it that simple?I’ve always been of the opinion that pay systems are self policing: Work hard and bring value to the table, and your employer will ultimately pay you a fair wage. I always was motivated to know that I could earn more than a slacker down the hall because I was working harder and smarter.
Of course, my view of the world is flawed: Some lesser employees may still receive a better paycheck than you, based on their years of experience or previous achievements that are now very dated. But you have the freedom to look for another job at a better salary. Or better yet, you have the freedom to start your own company.
Still, I am simplifying matters here. And my views could be way off the mark. I wonder if Fog Creek is onto something with their approach to salaries. And I wonder if MSPs are considering similar moves.