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My prediction is that this strategy will work out better for the companies than the article expects. Why? Because firms are actually often absolutely lousy at recognising which of their employees are high performers in the first place.

It is a tough job market. Minus the very top echelon of talent, switching jobs today is a lot more challenging than in the past. Management knows this and can shave a few pennies off the books by capitalizing on this moment.

it is management that is successfully convincing people that it is a tough job market - it is not - it is same as before. I am a contractor, have more work offered than I can take (same as before, maybe even slightly more). four friends/former colleagues got new jobs since the beginning of December, each had multiple offers and got decent to significant pay increases compared to previous positions.

14 months can’t find IT ops remote work

I think remote work peaked and is slowly declining now, for better or worse.

remote work is pretty much done, if you are looking for 100% remote work you'll have a very hard time finding it unless you get a job through a referral of a former colleague or something like that

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If we’re doing anecdata I haven’t been able to get w-2 work in over a year and have been taking sporadic contract work.

I’m several hundred applications in and have hired a recruitment firm to help me find positions. Multiple companies where I referred by friends of mine declined to even phone screen and then those respective friends reported that the position was closed and they were given zero info as to what was happening.

Yup, it's a bad feeling hearing that lower performers are getting payed more than you.

The risk-reward of over paying employees who are risk adverse is why this works for most employers.

Maybe that's because most jobs are Graberesque bullshit jobs where "high performance" is meaningless.

Most jobs shouldn't exist at all. The value captured by "firms" should instead be captured by the state and distributed peanut butter style to everyone.

How exactly should the state "capture" value generated by these firms? Would it pay the employees more? What would the competitive advantage be? If the jobs are bullshit, why wouldn't some other firm capture the same value without those jobs, making even more profit with less overhead?

I also found his thesis compelling, but it’s built on bad social science: https://open.substack.com/pub/gilpignol/p/bullshit-jobs-was-...

As top talent who received primarily ‘peanut butter’ raises for many years, I never much minded that. No amount of salary would have made me able to afford housing near work in sfbay, and I cared much more that my employer fire the incompetent (which, for a time, they tended to do) than I minded being paid less to work with a better crew. When I decided to leave, I did so because leadership had shifted so much that they had stopped enforcing competence as a matter of policy. Pay was simply not a factor so long as it covered the basics, and I refused to let it be used as a bribe.

> No amount of salary would have made me able to afford housing near work in sfbay

I assure you there are people who live there who can afford to do so because they make enough money. Switching from startup salary to bigco at the same experience level in the same location doubled my comp. A few promotions later and it doubled again. That's when housing started to look affordable.

> No amount of salary would have made me able to afford housing near work

Everyone who sells themselves short also sells everyone else short too by comparable TC.

I was hired IC5 $280k TC at Meta in 2020 with the help of a salary negotiator/coach and had an EDTX IP lawyer do due-diligence and walkthrough with me the hiring document terms. That would just barely qualify me for 50% D/I for the house I grew up in. It'd take a minimum of $470k to afford the house my grandparents bought in 1968 for $30k. And, unlike my parents and grandparents who pulled up the ladder behind them, I wouldn't get CA Prop. 13 like they did. But what's crazy is I could instead live in a car or on a boat for about 6-8 years and then buy an SV house with liquidated proceeds of investments outright.

> I cared much more that my employer fire the incompetent

This is magical thinking and not your problem. I don't understand why you think you're not worth being paid a livable salary.

As an alternative, move somewhere cheaper rather than futility compete with a surplus of rich people and NIMBYs whom prevent development.

> I don't understand why you think you're not worth being paid a livable salary.

I haven’t said that at all. I think I’m worth a two-digit percentage of gross revenue in the executive market and have a track record of strategic prediction, untapped market identification, proven competence at leadership, and the tech chops to working-prototype my own ideas to faster than I can explain and delegate them and to assess and address top-tier engineers trying to slack off under the hood on a formal implementation of same.

But this isn’t a conversation about how I value myself as an executive. This is a conversation about how I value being paid as a worker. Workers don’t get paid enough to be strategic visionaries. Workers can sleep at night and don’t usually have to submit to court interviews under oath. I like being a worker, I’m an excellent worker, and I stand by my above comments on the topic of peanut butter raises: so long as executives and strategists and workers all receive peanut butter raises without unfair bias towards the formers, they seem perfectly fine to me. When executives get double-digit raises and strategists get paid worker wages, I get offended and angry and find alternate employment or outright change careers.

(Yes, if you’re being paid less than seven or eight figures a year to provide long-term strategic vision and development to your company, you’re probably being cheated out of the wage they’d pay you as strategic consultant to do that same work. Study your written job definition more closely and stop donating unpaid-volunteer work to your employers. If they object, ask them to revise your job description and increase your pay accordingly. This is all bog standard corporate worker stuff that everyone here already knows.)

I was with you until the end.

This is a public forum and thus nothing is ever bog standard because presumably every week new people join with varied to no experience in the ways of the corporate world. Further, much of the software ethos is about being a worker/owner, which rarely comes true and takes some time to realize is incorrect.

Worker could mean IC only, or IC and managers.

Managers could include owners or not.

A worker is worth the least the employer thinks they'll stay for. I've heard one too many new, smart-ass line manager say "oh, I got her/him cheap".

To advocate for oneself as a worker, it requires continuous calibration, documentation of results, and well-timed initiative to expand within degrees of freedom that would be desirable to maximize bottom-line results directly or indirectly.

> Workers can sleep at night don’t usually have to submit to court interviews under oath.

Boundaries. Those aren't the problems of a worker. It's best to be an excellent worker if one is going to be a worker, but that's still not enough. It also requires communication: advocacy, persuasion, and showcasing results to get the job, keep the job, and then to periodically justify and negotiate more income above the rate of inflation. Below the rate of inflation is a pay cut.

Be exceptionally useful, helpful, and professional.. just don't help managers find ways to pay you less or work yourself out of a job unless you already have a thriving side-hustle. ;) 996 and crash schedules are for the birds.

Well, after all most people would rather live in SF in 2026 than 1968.

would they? height of California Dreaming counter-culture.

now it's a corporate dystopia

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Isn’t this almost the same? In both cases, it feels unfair that you are paid the same as someone lesser. In your case, the lesser is a -1X developer, and in the article, I guess the 10Xer compares themselves with a 1Xer. I’m at least thinking that a 10Xer wouldn’t mind a similar bump in pay compared to a 7Xer, but somewhere you draw the line as unfair.

In my opinion, management should cull -1Xers, while also trying to reward top talent, even if it has it’s downsides.

It doesn’t feel unfair to be paid unevenly to me? I guess one upside of the whole prosociopath thing is that I don’t feel cheated by that particular circumstance. I feel cheated when someone is given authority without proper skill and experience, to the degree that I suspect other people do about pay, though. A lot more harm is done by assignment of authority to incompetence (in a non-training context, anyways) than is done by decoupling pay and competence.

However: I’m extremely hostile to overall wages as a fraction of revenue being held artificially low to increase the imbalance of payouts in favor of executives and shareholders. I think it’s appropriate to pay executives more because they bear a higher proportion of legal exposure than non-executives; I do not think it’s appropriate how most executives treat workers raises as a “cost center to be minimized” differently from their own pay as a “profit center to be maximized”. Similarly, I think that there’s a solid argument for paying your company’s long-term strategy cross-functional team according to having to bear the long-term responsibility and awareness of risks and so on. You can’t ask a base wage worker to care about your company; that’s a lot to ask, and requires an additional share of payment than just a day job would.

No disagreement about the harmful-when-present workers, though!

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Impressive, very nice. Now let's see the c-suite comp packages.

They're the ones that get CRUNCHY PB raises, or the Nutella raises.

Standard across the board percentage raises have been the case where I work for the last 5 years or so. Nothing for merit. You can get a bump if your job title changes but not simply for good performace.

It doesn't motivate anyone to do anything above and beyond expectations, obviously.

Which is why this needs to be paired with performance incentives. Base pay increases to address attrition, and perf comp to drive engagement and retain top talent.

Does this mean that year over year people actually lose money to inflation if the only way to get an increase is with a job title change? That sounds pretty damn horrible to me.

Yes. My raise each of the last two years was 2%, same as everyone else's. That's less than inflation for most things so I'm slowly backsliding.

That’s been the norm for most jobs forever. It’s why the average software job tenure has been ~2 years for over a decade. You only get an increase in salary by finding a new job where companies have to actually compete for talent(sans the past 2 years of this market).

Getting a new job is onerous in tech with how we interview and companies made the bet that they’d do better off not increasing their labor costs across their employee base and dealing with a higher per position recruitment cost for a smaller number of roles.

This is just what happens when it's an employer's job market. A lot of people got used to good raises when talent was in high demand, but that's not where we are now.

I worked in aerospace in the early '90s. After the Soviet Union fell you were really happy when your raise was large enough to cover inflation.

> Starbucks made headlines when it gave 2% raises to all corporate employees in an effort to reduce costs

Maybe I'm jaded, but I suspect this is the only reason.

Later points in the article about being more equitable don't seem valid, as companies generally did not care about that before.

Cost cutting seems to be the only idea executives have left.

I expect "Peanut Butter" level innovation.

I also expect best people to be more open to join startups, those that have a chance of overcoming the moats built in 2010s.

I expect the stock market to adjust their stock prices due to the reduction in growth by 2035, all the great people decided to leave between 2026 - 2030.

The impact for me was I quit and founded a company, got funded. I work with my friends and it's great.

Corpos are very sick right now, friends that stayed behind with +8y xp are very burnt out and annoyed having to deal with barely functional employees for a "peanut butter" raise.

AI has been an excellent excuse for holding back new hires. It might give me a 20% productivity boost, but that doesn't help if my workload increases by 50%.

Exactly this, if you stay on the ship you only get everyone else's job. It sounds like you're more valuable which is the trap, because there is no more money in the banana stand.

I'd rather make -20% less and work with people who don't drive me crazy while having an equity stake in the company. It may not pay off, but I'll tell ya what, my blood pressure is a lot lower!

Peanut butter raises? Probably past time to work your wage.

The term refers to across-the board raises "that are even and spread thinly, like peanut butter would be on a sandwich,"

It's a shit economy and job market, what are you going to do with a shit raise, quit? IMO this is all part of the larger trends with layoffs and RTO to head count, especially for the more "costly" ICs.

True, but... I get the feeling the job market is bimodal.

Anecdotal, but I see people out of a job for years on end, saying they applied for 2000 jobs in the meantime, while others still keep getting recruiter messages on LinkedIn and can get a new position in a matter of weeks.

Granted, people who quit because of a low raise are probably having other problems as well, which maybe is beneficial for companies. But I still feel like this is companies investing in mediocrity.

> while others still keep getting recruiter messages on LinkedIn and can get a new position in a matter of weeks.

many of those are blasts, and the jobs they are hiring for are vaporware.

i wasted a lot of time as a younger worker thinking that headhunter and recruiter chats on linkedin were worth the trouble.

make no mistake, sometimes they are, but for easily 50% of tech workers they're a waste of time

It is bimodal, but I am pretty sure almost nobody is getting hired cold in a couple of weeks.

They just keep their radar on and stay in touch. It's a whole job in itself.

Making things seem effortless is what makes them so attractive to begin with. Confidence and options come with the experience.

Meanwhile I'm considered a high performer at my company and I've been pushing for years to get our company to adopt flat percentage raises and flat dollar amount bonuses very literally against my own financial interest.

My company not only gives percentage based bonuses but gives a higher percentage to higher salary earners. It pisses me off every year that the people who would be most positively affected by the extra money get less. But worse with the "performance" based raises where they have a fixed number of annual raise percentages means the unlucky sods who have shitty managers get less than inflation every year while I get higher every year.

It's amazing how far companies will go to not pay their best talent appropriately.

I really tire of the cutesy newspeak that news writers keep coming up with to memify basic existing concepts.

This obviously incentivizes doing the bare minimum and not rocking the boat, but sometimes that really is what a company needs. Sometimes a company doesn't need to innovate, they just need to keep the money printer alive.

> “that are even and spread thinly, like peanut butter would be on a sandwich,”

Corporate America apparently can't even make sandwiches correctly.

> There’s always a tension in organizations of how to how to balance the needs of your high performers while taking care of the entire group,”

I don't need you to consider my "needs." Consider your profits then consider my work. Pay me what it's worth.

I moved to a new city for college. I made a friend, who I considered well-off (he was also a bit heavier). One time I went to his place, and he wanted to have some snack, so he grabbed a jar of Nutella and some sliced bread. On a piece of bread, he put on a layer of Nutella that was not thinly-spread at all, that I thought "Oh, I didn't even consider that it's actually possible to spread a thick layer of Nutella on bread. I guess well-off people are different!"

A few of my friends and I have joked about something similar. You can tell a lot about a person's family's financial status when they were children based on how they build a sandwich as an adult. Slices of meat, what style cheese, etc.

Nah that's dumb. I grew up poor. I make awesome sandwiches now.

Next step is to skip the bread and eat Nutella from the jar with a spoon.

I find dipping a cashew in is even better. The cashew becomes your scooper. The combination is divine.