It’s Just Compensation

Allow me to sum up the latest column in Inc. Magazine by Joel Spolsky of Fog Creek Software:

  1. Intern comes up with an idea that nets Fog Creek Software $1 million in 99 and 44/100% pure profit.
  2. Spolsky rewards intern by doing nothing but offering him a job.
  3. Intern goes to work somewhere else.

In it, Spolsky concludes that paying out good bonuses is bad practice, because people intrinsically want to do good work, and giving them an extrinsic motivation (reward) for doing extra, million dollars we found good, is a bad precedent.

Let me give you guys a little heads up about the intrinsic vs. extrinsic rewards and a little dash of compensation thoughts.

For starters, Spolsky’s column really is sour grapes of a sort. The intern with the million dollar idea went somewhere else because the extrinsic reward was better there. You carry your own intrinsic drive to do good (which, for developers, is often to have a cool job doing cool things with little regard to actual quality or customer needs) goes with you, and what differentiates the workplaces is the extrinsic value. So if you want to hire and retain good employees, you got to pay them and reward them well or they’ll take their drive to intrinsic greatness to Google.

Now, then, what does just compensation mean to your humble director? For starters, it’s not DOE or DOA or market. If you’re an above average performer, having an HR flack lowball you is a bit of an insult, especially since their idea of market is often tied more to an internal budget than actual, you know, market research.

Now, if my efforts help the company, I want rewards based on it. If I come up with a million dollar idea, a couple crumbs would be nice. That’s less likely in QA than in development or customer-ginning roles. However, a good set of stock options or a solid employee stock purchase plan would help. If you’re not a public company, I’m afraid that’s going to have to be cash based on the company’s performance.

That being said, money is the motivator. Don’t tell me about the cool environment and hip workplace, okay? Because every company thinks its environment is quick and quirky, but it’s not worth $30,000 off market value. I’ll trade some of that money for stock options or whatnot, but not for the knowledge that sometimes team members go bowling together over lunch or for a foosball table (even if betting is allowed and nobody can defend against my pull shots).

Well, I warned you I’m a mercenary, did I not?

No Responses to “It’s Just Compensation”

  1. calkelpdiver Says:

    Typical story if you ask me. Bottom line is the bottom line, money. In some companies I’ve worked for they have been good about compensating people for their work and ideas, others have been “well you still have your job don’t you”.

    I guess if it was me in Joel’s position I would have told the kid he has a job when he gets out of school, given him a bonus of about $5,000, and finally told him that if he does hire on that after 6 months of service he would get another $5,000 bonus if the profitibility of the ad system continued to grow.

    But again, he was offered a job by Google. That in itself is a presitge thing and can lead to other higher end & better paying jobs down the road. Tough to compete with that, even if you do throw money at the kid.

  2. ftdcjp Says:

    I don’t know, Spolsky strikes me as probably intelligent enough to have done the right thing if he really wanted the person as employee. He must have known the offering of stock with no market value was a deal not-too-good-refuse.

  3. The Director Says:

    What really struck in my craw, though, is the whole column defends the practice of not giving monetary rewards. Not a situational thing where he didn’t particularly care if the intern hired on or not. That employees should just be happy making him millions for nothing more than a “Hey, good job.”


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