More than a decade of grousing about product management

Motivation: Why big corps can’t function like startups

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Working harder at a large corporation may not lead to more success due to lack of incentives and limited salary increases.

The Dude just got a missive from his Boss. The direct order was “Get the Dev team to work harder”. This was during a conversation where he mused that we should be more like a startup, where everybody sacrifices their lives, their marriages, and spare time for the company, working from 8:00am until 9:00 or 10:00 pm every day, comes in on weekends, and cranks out code as quickly as possible.

Groan. Where to begin.

First, at a startup, you are motivated to contribute at that level because if you are successful, everybody gets a payout. Of course, if you fail, you all walk away with nothing. Compare that to a 25-year-old product line, in a > $1B company: You have, by any definition, a successful product. You have oodles of customers (most who are loyal), and you have to continue to improve your product to drive sales and interest. Here is where slow-and-steady wins the race. Change too much too fast, and you will alienate your base. Try to be something you aren’t (do something orthogonal and new) and you will alienate your base. It may be boring to have a product that still is growing 6-7% year-on-year, but it is a damn good business.

Second, large corporations are notoriously frugal. The one I am at has no stock incentive plan. No options or restricted shares are granted (and this is at the Director level). Bonuses are reserved for senior management or higher. There is no profit sharing. So the employees who build the product, write the code, market the product have no incentive beyond their base salaries to put in 13-hour days. So, they don’t. Most of them are satisfied to do 8 hours, and leave. A 9-5 job how quaint. Some grumble that they don’t feel like they are doing enough. But in the end, doing more doesn’t equate to more success (money and/or other intangible awards).

Third, while not universal, it does seem to be a trend that large corporations are moving away from annual raises to something called “merit” salary increases. The reasoning sounds great, but the practice is a bit less so. As a mid-level manager with 5 employees, I had a budget of 1.8% to give out this year. 4 of my 5 employees are at or above the mythical “mid-point” of their job classification’s salary range. By HR policy, they cannot get a pay increase. Ever. Unless… The only way to get them more money is to change their job code. i.e. “promote” them. That takes an act of Congress here. Actually, that is too low of a bar. The US congress would have to all go camping, sing Kumbaya, and make each other s’mores before a grade increase will get approved here. So, I had one employee to give all my funds to. He was worthy. But no, that is too big of an increase for one employee, so 2/3’s of my budget was pulled and re-allocated. The truth is, this “merit” based salary mechanisms is a smokescreen for “we are never going to give raises, but here is why you should feel good about it”. Employees who have been at the same salary for 3, 4 or even 5 years begin to grow less motivated. They leave, or they just do the minimum needed.

Naturally, I am above the midpoint in my own salary scale, and my boss has had the talk that he thought was motivating. Essentially, I will never get a raise, and since he has no people in a job code higher, I have no future hope of getting a raise, or a promotion. If I am unhappy with it, I can leave. Yes, he really said that. What a great thought!

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A crusty veteran from the product management trenches. Plenty of salty language, references to cannabis, and a connoisseur of White Russian cocktails

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Written by pmdude