And if I get a better offer from another workplace, but you think the extra 10k I'm asking for will be more than offset by the productivity gains I'm bringing to the table? You'll happily turn me down and get a worse team?
It's a complex problem because there are feedback effects, but I think often that is a better decision for companies. Otherwise you end up with the situation where the people who are constantly threatening to leave get paid more, and the people who are spending their time doing actual work, rather than polishing their resumes and interviewing around, get paid less. This then incentivizes people who actually don't want to leave to go out and start collecting offers so they can argue better for a raise, which is a huge waste of their time and effort.
Taking one decision in isolation, it might be better to pay someone $10k more to keep them from leaving. But it might be better structurally to come up with a different policy for allocating raises than "allocate them to the people who negotiate most hardball". Unless, maybe, it's a sales job, where being good at negotiating is precisely the skill you want to reward.
I kinda meant negotiating a starting salary rather than a raise. I tend to have found in the past that raises happen with relative frequency when you're good at what you do, and I'm not the type to threaten to leave - if it's got that far I've made my decision.
> you think the extra 10k I'm asking for will be more than offset by the productivity gains I'm bringing to the table
Then your initial offer wasn't made in good faith. No-negotiation forces the person making the offer to actually consider what that hire would be worth, and offer accordingly.
Sure it was made in good faith, it was a perfectly reasonable offer, it just didn't work for me. This is a very soft, subjective and hard to measure area. That's basically the point.
You're misunderstanding what I mean by "good faith". If you don't allow negotiations, a good faith offer is exactly what that person is worth. This is why employees should prefer no-negotiation employers - either you're getting what you're actually worth, or the company is making lowball offers that can't be fixed by negotiation. This makes them vulnerable to market forces (and will presumably go out of business if enough possible employees are shopping around).
>> You're misunderstanding what I mean by "good faith". If you don't allow negotiations, a good faith offer is exactly what that person is worth.
As an employer, how do I calculate this ahead of time? It's next to impossible. This is not a hard science. We may find that gender biases exist here as well, as worth is very subjective.
If you mean "expected revenue potential for the company" then they pretty much have to try to lowball to some extent, because an employee that makes exactly what they bring in is not a net asset.
--edit-- I probably sound a bit pompous. Maybe there is a way to calculate this stuff ahead of time, I genuinely have no idea. I know in sectors unlike ours, where there is a shortage of positions rather than a shortage of people, that non-negotiable salaries are indeed used. In that situation you can easily say "We need a person to do X, this pays Y" and you'll get lots of worthwhile applicants.
> ">> [...] a good faith offer is exactly what that person is worth. [...]"
> "As an employer, how do I calculate this ahead of time? It's next to impossible. This is not a hard science."
Perhaps if the prospective employer guesses the prospective employees worth incorrectly, the prospective employee could politely correct them. ...wait, that's negotiation re-invented. ;)
"Then how do you decide how high to go in negotiations?"
You discuss it with the prospective employee. You make a guess at what they are worth to your organization. If they disagree, they explain why they think that they are worth more. Explanations may include new information about what other companies in the market believe that person to be worth.
Without negotiation, you make a guess, the prospective employee tells you that they disagree.. and you're done. You've wasted that entire recruiting and interviewing cycle.^ It doesn't matter if both parties want to work together; without negotiation if the hiring party makes an incorrect guess then they do not get to work together. Any correction or attempt to re-guess falls under the umbrella of negotiation. Perhaps they could reapply, go through the interview process again, and have you attempt to guess a good salary again, but that is nothing but inefficient negotiation.
You could publish the offered salary before the beginning of the interview process, making that information known during recruiting, but then any attempt to communicate with failed recruiting attempts would be again another form of negotiation. Recruiter contacts a developer, says "I've got an position for you to look at, it offers $120k/yr" and the developer responds "I am worth at least $140k/yr"? If the recruiter relays that information to the hiring party, the hiring party would not be able to act on that information and adjust the offer because that is just pre-interview negotiation.
"Make the initial guess the maximum you would be able to pay somebody in the most extraordinary of situations" is very obviously not a viable strategy. I hope I don't have to explain why.
-edit-
^ Note that while this is bad for the prospective employer, it will often be even worse for the prospective employee, who in many cases will be looking to become hired as soon as possible as they are either in an unsatisfying job (in which they are forbidden from asking for a raise...) or worse, unemployed. Without any negotiation, an unemployed person would be placed in the wildly unfair position of being forced to immediately settle for an unsatisfactory salary, or spend more time without income looking for and applying to another job.. hoping that that one doesn't accidentally lowball the salary. Most unemployed prospective employees would tend to settle immediately since some income is generally better than no income. In this way, bans on negotiation screw over individual employees and place unemployed people in an even tighter bind than they are in currently.
My company does the no-negotiation thing (and has done so for about 13 years now) so I'm surprised to learn that its a completely unreasonable model.
On a more serious note, the way we choose a salary is to look at various similar companies in the area and get an idea of what a competitive salary for the position/experience level is. If people are happy with this (they almost always have been, at least since I started) they take the offer; if they aren't, they don't. Its pretty simple, and avoids the issue of paying people for being good at negotiation, which as far as I can tell has no correlation with being a good developer.
Coincidentally my current employer does not negotiate either (well, not for standard developers...)
Our companies can safely refuse to negotiate because 1) they can let other companies in the area negotiate to set prices for them (without negotiation, determining the value of an employee becomes massively inefficient, mostly at the expense of the unemployed, who will tend to accept positions lower than they could negotiate for, lowering the overall regional salary), and 2) because generally for standard dev positions, they are aren't looking to hire a specific person. Any person that fits the roll will do, and there are plenty.
You want a college grad to start training on your software stack? Well sure then, figure out the regional salary for recent college grads, offer lots of college grads that salary, and take those who accept. So long as you have enough grads to choose from and eventually the positions get filled, who cares right?
You want recent Standford grad Joe Smoe who recently made waves online demoing that really cool shit that accidentally compliments [Top Secret Project]? Without negotiation, fat chance. There are no regional stats for Joe Smoe's expected starting salary. You either negotiate or your gamble.
If you are finding an employee to fill a position, you can get away with no negotiation if others in the industry still negotiate. If you are creating a position for a person, you have to negotiate.
If every company were forced to acted as our companies do, and for every position that they were filling, it would be catastrophic.
You may have missed out on some good people over the sake of a few k... especially if they (for instance) have domain specific knowledge that puts them ahead of other folks in the same sort of bracket?
Not really a world I want to live in.