Paying people too well can lead to all kinds of social and motivational problems. Of course, you can also run out of money, but I’m not going to talk about that problem. I’m talking about salaries that are maintainable but significantly above the market norm.
Clark Ching recently blogged about something I’ve seen a couple of times. He worked for a company that paid developers very well. You’d think that would be good for morale, but it wasn’t. Clark puts it this way:
It was horrible. Everyone who worked there agreed.
People who hated their jobs stayed just because of the money. This meant that everybody had to work with people who hated being there, and that meant that nobody wanted to be there ;)
Good pay reduces turnover, which is generally a good thing. But some turnover is good turnover, so too much pay can actually hurt you. Beyond that great pay keeps people around, but bad experiences with managers and coworkers can do more to kill morale than you can ever replace with money.
The long and short of it is that you can’t paper over morale problems with money, and you can’t fix them by instilling a sense of urgency. Paul Graham suggests one solution — do something good. If you’re doing something good for the world people want to help you. I’d extend that to say if you’re building something people can be proud of, you’re far more likely to create the kind of positive morale which lasts through hard times.
Case in point, this story of a couple of apple employees worked on the graphing calculator that was shipped with the original Macintosh computer. The interesting part is not that they were excited to work on the project, but that they kept working on it under-cover for months and months after they had been laid off.
Why would they do that?
I had long been proud of the elegance and simplicity of our design…. I had designed it for all users, even those who know little about computers and hate math.
I wanted to make mathematics as easy and enjoyable as playing a game.
They did because they were proud of what they’d done, and because they wanted to make mathematics more accessible.