... when James Treybig was CEO of Tandem Computers (a company since merged into Ungermann-Bass), the company would not tell people their salaries before they were hired, even at the most senior executive levels. After extensive recruiting and many meetings, people would be told (if it were true) that there was a good fit between them and the company and that there was every expectation that they would be successful at Tandem and that the company wanted them to join. If they asked about their salary, they would be told that Tandem paid a competitive salary and offered a competitive financial package. If people insisted on knowing their precise salary, they would not be offered the job. To paraphrase Treybig, "if people come for money, they will leave for money."Look at the quotes from the book in my previous post. Now that I've had the idea of completely equal pay, I read points like this and wonder why it isn't a common concept. Admittedly, it's a bit revolutionary, but so, apparently, is the idea that incentive systems are predominantly counterproductive. Admittedly, if you're in higher management the idea of reducing your pay is disturbing at first, but if it means that you love your work in exchange, I'm betting you won't mind for very long (and there will probably be pay-hierarchy companies for a long time to come, so you can always go work for one of them).
What's the argument against a flat pay structure? Everyone below a particular pay grade will probably do better financially (as long as they're happy to ride along with the ups and downs of the company -- but they are also more invested in its success this way). The biggest argument may come in the upper echelons: how can we get top management talent if we don't pay the big bucks?
We don't want those people in our Tribe. We're trying to create a great place to work where, once you join, you won't want to leave. I'm pretty sure that the company will do very well for precisely that reason: that people love to work there. But if you want your rewards as money and you want those right now, up front, then you don't really get us. There are many places where you'll fit in better (but you'll always wonder, what if?).
Think about managing in such a company. When you tell people "we're all equals," it's going to be a lot easier for them to believe it. Most of your HR department can go away. Everybody can always know exactly how the company is doing, because they are all equally invested in the outcome. And when times get tough, you never have to feel guilty that you get a bonus for laying people off, while your salary and bonuses could keep at least part of those people employed (and retained as valuable company resources). Indeed, when everyone knows that they are truly "all in this together," I'll bet they'll be happy to tighten belts to prevent layoffs.
Somehow, I don't think getting good managers to work at a happy company will be that much of a problem.