This is very nice of the owner, but extremely inefficient economically. Which means most companies can't afford to do something like that. Only if your profit margins are huge.
Now, without exact numbers, I can't say economically this or that.
But effectively this was not a zero sum game. The company was not paying more for the same outcome, they were paying more for more output.
The output of the company increased. This is how investments are usually supposed to work, you put money in, and reap profits.
What makes this a bit more difficult to gauge that it's likely the increased performance does not come from individual output, but from a better cohesion of the team which generally makes things always easier and efficient.
What people often get wrong is that they think about wages atomically - I pay this guy this much and he delivers this. Whereas when you are having a team of workers (whose job is not to be a mindless drone) and whose output depends on the co-operationnof the individuals, often the second order effects are more important.
For example: rewards. You give a huge reward to the single top performer in your company. What happens? Everybody becomes jealous of him, and some will feel cheated since they contributed heavily to the projects the individual participated in. Future collaboration will likely suffer.
In fields were output is purely of individual performance (some sales jobs, logging, etc) this calculus is of course different. In these situations the atomic cost analysis probably works.
An extreme example - there is a reason a SEAL team is called a team.
This is the problem with wage discussions. People equate a measurable commodity like gasoline to the number of hours worked at a specific job.
Sometimes this is a sufficient analogue, but often times reward mechanisms are more complex than that. There is a good reason rewards mechanisms in jobs are a lively field of academic study. People just forget this does not only apply to top managers.
I appreciate there is a bit of a difference with a team of people. But generally how else are you going to gauge the compensation of any individual reliably other than market rate?
If you were a business owner, what would be the correct referral market rate if the people whose compensation you are gauging is a tight knit team with years of experience on your specific business and customer needs?
Documentation helps, but people knowing their way around the code is better.
Software engineering is mainly knowledge work. This means the majority of work consists not of building stuff, but acquiring and organising knowledge. I've read somewhere that about 50% of the job is gathering information.
When a person leaves after having spent two years at a company, it might look like you get to keep everything they've been working on, but this is far from true. If the 50% assumption is correct, a person leaving after two years means you throw a full year of work into the dump. This is a huge cost, but it's hidden.
The code is there and (presumably) in source control. It really isn't that difficult for someone to get the source, compile it and fire up the debugger and carry on where the previous person left off.
Who’s consuming the code? Who are the stakeholders? How does this component integrate into the full picture of the application? How do I need to talk to that person that I really need to change something?
There is so much implicit knowledge that goes into the finals source artifact that is not spelled out.
I had an interview at a this week for my next contract where they made redundant most of their employees as the business decided to just go with turnkey applications.
They will get someone like me in for 3 to 6 months to do application maintenance on anything they can't replace. This will be stuff like implementing stuff from penetration-testing, upgrading the applications and documenting missing bits and pieces and letting the business know what needs doing and where.
I don't need a pension being paid, no HR overhead (they can just ask me to leave whenever pretty much). I will be able to gleen enough from the business and their IT to piece the bits together. This is literally my bread and butter.
How are you going to discover that from just the sources without any institutional knowledge? It sounds to me this applies only to a specific niche you've managed to find. I.e. you get only those gigs where institutional knowledge is not paramount as the employers who need deep domain knowledge are not even trying to hire you. I don't mean this in a deragoratory sense - it sounds to me you provide great value to your employers - but just in that you work in a specific market segment and what is true in your segment might not hold in others.
> I don't mean this in a deragoratory sense - it sounds to me you provide great value to your employers - but just in that you work in a specific market segment and what is true in your segment might not hold in others.
I've worked in many different sectors. Normally fintech though.
However unless building the tech is the business you are seen just as a cost to the business in most circumstances.
This approach has shown to substantially improve my quality of life.
> And places that pay everyone a reasonable wage at least tend to have that more often than other places.
I've seen almost no evidence of this other than at the real extremes. Maybe it is differences in the UK market vs elsewhere but typically you won't find a big difference in rate between one contract and another in roughly the same locale with everything else being equal.
Everything else being equal, an average business would be outcompeted if they did something like that.
If you still think what they are doing is efficient, take it further and further. Start increasing the salaries more and more. Very soon you will be able to afford one worker. A very expensive janitor maybe?
> Everything else being equal, an average business would be outcompeted if they did something like that.
You're operating using an oversimple mental model. For instance: you appear to believe a person will make a fixed contribution in a role, regardless of their wage. That's obviously false when you consider things like the demotivating effects of being underpaid or under-appreciated.
For Facebook, Google, Apple and Microsoft, not much would change, they don't employ that many people below the threshold, I think, unless you count the outsourced contractors that do moderation, annotation etc. This company's policy doesn't extend to the company they outsource the cleaning of their office to either, so that wouldn't be a fair comparison.