As you progress through your career and work at a number of different companies, you realize that there are good companies and bad companies and everything in between. What’s the difference between a “good” company and a “bad” company? Quality of management, clarity of vision, opportunities for career development/advancement, work environment, treatment of employees, etc… There are no perfect companies, but some companies are clearly better than others.
I think it’d be interesting to try to quantify what the discount/premium is for salary when taking company quality into consideration. For example, a lot of techies would consider a company like Google to be an “A list” company. Google doesn’t need to overpay people in order to acquire high quality employees because there is so much demand. In fact, they can probably get away with underpaying their employees since for the employees, there are no better alternatives but for Google, there are plenty of people willing to replace anyone who decides to leave Google.
On the other end, there are a lot of companies that might be considered “F list” companies—companies that are poorly managed, lack vision, completely pigeonhole employees into niche roles, and treat their employees like slaves. It’s a miracle that companies like that find a way to stay afloat but they do. When these “F list” companies need to hire new employees, how do they attract sufficiently talented people when those people can choose to work at a better company? “F list” companies have to 1) overpay to make up for it being an “F list” company and/or 2) settle for less-than-qualified individuals.
If “A list” companies can underpay and “F list” companies have to overpay, what are those discounts and premiums? Have human resources professionals found a way to quantify those discounts and premiums?
Or maybe what most frequently occurs is that since there are also superstar and subpar employees, the superstar employees tend to end up at the “A list” companies while the subpar employees go to the “F list” companies. The interesting scenarios are when overall supply and demand for a particular job are completely out of whack, like what seems to be the current scenario for software engineers. Not that it’s always been great for software engineers—CS majors graduating in 2002, even from the top schools, had a tough time finding a job.
I’ve thought about this issue as I’ve considered a number of different companies and ranked them in order of quality as I perceive it. How much more would Company Z, which I rank last in my list, have to pay in order get me to go there instead of Company A, which I rank first in my list? Would I turn down a significantly higher offer at Company Z in order to work for Company A?
I decided that I would because money can motivate me for only so long. If I took the job at the lesser company, I would eventually become unhappy and unmotivated, regardless of how much money I made.
