This week my attention has almost entirely been focused upon the business end of year performance reviews and the calamitous fallout that has ensued.

I just simply cannot believe the stupidity of it all. It’s stupid to the point where, I’m not entirely sure if it isn’t all self-sabotaging in nature - and the true nature is to either (a) shake things up or (b) run things into the ground.

I have often griped, here and elsewhere that many of our ills stem from the fact that we are living in a dictatorship. In Silicon Valley terms, this is more frequently referred to as Founder’s Syndrome, there’s even a Wikipedia page on it.

In principle, during the early days of a business it is a great thing - especially when your founder has a strong vision. Decision making is centralized to a single point, so decisions can be made quickly and without any reversion to the norm or the dreaded decision by committee.

However, this single point of all leadership and decision maker inevitably also leads to a single point of failure.

Further, the “leadership” of the organization becomes at risk of simply becoming sycophants. Empty suits at best. Yes men at worse. As the old saying goes - it is hard to get a man to understand something when his salary depends upon him not understanding it.

The first slight

Why do I bring this up? In my previous post, I ended discussing the in-person, quarterly, all-hands meeting where collectively the company began to realize the true reality of the company finances.

Whilst, I was still rather annoyed about my own performance review, I, myself had largely moved past the anger stage and into the acceptance stage. Acceptance that my future no longer remained at the company - and unlike last year where I had only dabbled with an exit - and I should therefore take seriously an exit plan.

However, certain other members of staff failed to maintain their stoic poker faces’ and walked as if followed around by a cloud. Somewhere between checked out and ready to grab the knives and start stabbing.

When two of these individuals - let’s call them Geoff and Mike - met in a communal area, with faces like thunder. Invariably, the first that arouse was something like “Oh yeah, how’d that performance review go?”

Because you see, both Geoff and Mike are both something of veterans of the company - part of the elite few remaining that joined before I. Both of them, due to their early sign on, knowingly paid much below market rate. Both, talented enough to take jobs elsewhere in a heartbeat.

Both of these guys, have been playing the role of a team lead for almost 18 months. Due to the ridiculous company policy, that all promotions are retroactive (in that you must play the role, before you are officially awarded it), they had been running a project for something like 177 of the previous 180 days when the promotion cycle occurred last year. “Sorry guys, too bad, it’s just too soon.”

For reasons, that only our CEO knows, we don’t do mid-cycle promotions either (except when we obviously do). So no promotion for these guys in November either.

The clock, finally, rolls around to June. And after nearly a year and a half in the role - the guys are finally to be tapped.

For the last 2 years, the guys have been told that team lead is worth $150k. When they were thinking of leaving the company for better compensation, or should hang around and fight for promotion - the fact that the step up to team lead would be worth ~25k has a big variable in that equation.

The guys have been DOING THE JOB, delivered projects, for paying clients, who paid for a team lead, for 18 months. 18 months, the promise was that next summer it would be worth 150k.

When I made team lead, 3 years ago, it was worth 150k. Ignoring for a second that there has been absolutely no inflation in the last couple of years. In the interim, all of the cohort behind me made 150k for team lead.

Geoff and Mike didn’t get 150k.

No. They were some TEN THOUSAND DOLLARS short.

However, as Geoff and Mike are a talking in the kitchen, they quickly realize that not only have they been slighted. But they haven’t even been consistently slighted. It turns out that these near identical folks, identical backgrounds, identical projects, identical performance saw a gap of 10k between them.

What. The. Actual. Fuck.

I’ve previously stated that a trivial pay bump I almost find to be more offensive than no pay increase at all.

The only possible reason for not giving the guys the promised amount, must be that the amount couldn’t be found given the envelope for the department that the VP had to work with. No?

I’m sure that given the option of sacrificing a rounding error pay bump for making the new promotions get what they deserve - most of the veterans would have chosen the option.

But no. Instead, I find myself counselling two talented engineers and blossoming managers about a decision I can’t myself get my head around.

There’s nothing to say. They got screwed. I don’t know how or why. But they got screwed. And they didn’t even get screwed fairly.

In that moment, the three of us knew that this was the beginning of the end.

The second slight

A long weekend

The all-hands meeting, bled into an unproductive Friday in anticipation of the long weekend. Upon the Tuesday return from the long weekend, around lunch the engineering leadership gathered for their weekly session.

As is tradition, the VP kicks off the meeting with the standard “I haven’t prepared anything for this meeting, is there anything you want to talk about?”. Forgetting that this is (a) his meeting (b) could be canceled at any time and (c) these are some of the most in-demand people in the company and (d) just recently made us sit through a 4-hour professional development seminar on the need for effective communication.

Collectively, we glance at each hoping that we might get some time back from this could-have-been-an-email hell.

An olive branch is offered, with a dignified, “You must be feeling pretty good now though. Performance reviews done. All-hands done. Just got to look forward to the summer vacation now?”

Fool!

Some bad news

The VP says that, no, it won’t be a great week. “I’m going to have to have four very uncomfortable conversations this week.”

Oh! Go on, say more.

He goes on to say, that there’s been some sort of mix up somewhere, and our beloved CEO has gone over the pay adjustments and promotions and decided to make some adjustments.

Apparently, people shouldn’t be rewarded for simply doing their job - no matter how valuable. Further, some of the increases were too much in absolute terms, regardless of what that means in percentage terms.

In short, half of the engineering team is affected and will be losing some of the money they’ve been promised. But “that’s okay because most people will be affected by less than $100, and almost everybody less than $500, that includes everybody in this room”.

Ahh! Cool! Thanks for letting us know. But what was that about almost everybody?

“But there are 4 conversations I’m going to have to have where it’s over a thousand.”

Well quick math, I’ve just had an engineer promoted to senior on my team, and I’ve been mentoring Mike and Geoff for the last couple of years. What’s the chances that this affects all of my guys?

There was only one other real promotion in the department announced at the all-hands meeting, so I’m pretty sure I can guess who candidate number four is going to be.

Mum’s the word

Obviously, mum’s the word, circle of trust, lose lips sink ships and all that. Us folks are supposed to just sit on this information until these horrible conversations can take place. Fuck that!

I immediately leave that meeting and call Geoff on his cell.

“You might want to sit down for this one buddy. I’ve got some bad news, and if I was in your position, I’d want to hear about it now so that I’ve got a chance to react to it. I’d rather you be angry at me, now, then we can come up with a plan of what you’re going to say and do when it all goes down.”

I proceed to tell Geoff, that despite him having already been screwed out of the 150k that was his birthright, he’s about to have some of what he did manage to get, clawed back for unclear reasons by the CEO. My guess, $5,000.

I said to expect a suspicious one-on-one meeting to appear on his calendar. The VP will use phrases like “out of my control”, but then will try to pivot the conversation to empty promises of “we will make you whole”. Some combination of additional pay adjustment next year, perhaps something mid-cycle, perhaps some disguised “retention bonus” next year.

I then proceeded to give a playbook for everything that I’d be demanding. Namely, lose of income over the next year, as well as compensation adjustment next year, should be done against the 150k number that he should have been on from the get go.

After 30 minutes on the phone, I hang up, I message Mike on Slack “Can you send me your cell number? We need to talk and I don’t want to do it on official company channels.”

I call Mike and practically word-for-word have the same conversation for a second time.

Geoff took it well. Calm, calculated. Mike wanted to start throwing haymakers.

An uninvited meeting

My Thursday morning begins with messages that mysterious one-on-one meetings have started appearing on people’s calendars for later in the day. Personally, I’m surprised that they took so long to appear - being more of a rip-the-bandaid-off sort of guy. But perhaps there was more back-office drama than I was aware of.

I remind the guys that we have a plan, they know the way it’s going to go down and to call me afterwards.

Geoff

Geoff goes first, and the call sounds to have played out exactly as expected. A minute of pleasantries, before getting down to business. Share screen. PDF displayed with new numbers. “I have some bad news…” blah, blah, blah… “we’ll make you whole”.

There is a surprise though. They are taking TEN THOUSAND DOLLARS back. Not the five that I had anticipated.

But Geoff, isn’t dumb, and Geoff has had time to prepare. Screenshots the PDF before it can disappear into the ether again. Immediately starts screen sharing, opens a spreadsheet and starts calculating exactly what “made whole” looks like. To. The. Penny. Including a 5% interest payment on the lost income to account for what could have been made on a government bond in the meantime.

I’m super impressed.

We’re talking afterwards, and I’m just beaming, full of pride for expert navigation of terrible waters.

Mark’s turn

Mark goes next.

Mark runs a bit hotter than Geoff. And despite knowing everything that is about to go down, can’t control himself.

When the numbers are presented, he goes quiet for a second, the anger builds, and he drops from the call.

Mark as it turns out, used to be housemates and is still best friends with one of our engineers. With this current offer around 130k - with all of the responsibilities of management, leadership, politics and client interaction - he’s now being paid less than a mid-level engineer.

The aftermath

In debriefing the guys, one thing dawns on me.

Any promises that might be made now - are irrelevant. The precedent has already been set. The CEO at any time can come in and change anything that she sees fit. At any time.

The last numbers, went through 3 iterations with the VPs. The CEO went through a spreadsheet of every, single employee, line-by-line. Who is this person? What project did they work on? Why do they deserve this amount?

The numbers were okayed by the CEO. Confirmed with finance. Okayed by payroll. Approved by the board. And (due to our weird non-profit status) had the accounts signed off my the government minister for finance.

They were presented to staff - in a record breaking year, with $10M in the bank.

If this is a good year, what the hell happens in a bad year?

Furthermore, the unspoken rule of trust has been broken. Engineering was always the domain of our VP, a kingdom unto itself. Our leader might always have had to operate under a constrained environment. But his people, were his people.

That precedent is gone.

In one move, the trust is gone. The Founder has flexed her authoritarian muscle and proved that she is willing to undo any decision, at any time, without reason.

Some vague notion, that retroactively promotions shouldn’t be worth more than ten thousand, is a joke.

And to what end?

The amount of money saved in this equation is less than that which was spent on new MacBooks for interns this summer.

Who honestly did the cost/benefit analysis on this?

An underpaid, under market team lead leaves. We cannot turn down business or cancel a project in flight, so we need to replace them but…

The market has moved, so a replacement at market rate is now $200,000

The cost to the business, after benefits and taxes is approximately double the base. So now we’re up to $400k.

Except that, that person came through a recruiter, $50k.

And our company has a long history (I can think of at least three) of people being recruited into the role of team lead, departing the company within 90 days. The only successful transition, has been to hire someone with the skillset and have them as an individual contributor on a team for up to 12 months whilst they learn (a) consulting (b) our weird and special variety of consulting and (c) how our company works, before taking over a team.

So now you’re talking the best part of half a million before they even start to produce value.

And! And even then! There’s no guarantees. If they tank a contract with a client on their first attempt, you could be out of millions.

All of this, for the sake of a tricked out MacBook.

It’s insane.

It’s negligent to the point where I can only assume that it’s an intention act to force people out of the organization. Targeted or indiscriminately.

The third act

Mark eventually tells the VP that he has no interest in the promotion. In fact, he has little interest in staying at the company. He has offers in his inbox. He has an open offer from his previous employer to come back.

Only upon the brink of three promotions handing in their notice on the spot does the VP decide to act. He finds his big-boy pants and picks up the phone to the Founder.

One can only imagine how that conversation went. To my knowledge it started after I would normally be asleep and lasted two hours. One would like to believe that a business case was made, and that the lose of key players ahead of a busy fall season would see us having to refuse clients, and therefore the additional expense were to be pragmatic and ultimately would show a return on investment. One would assume that everything stayed professional and in no way was reminiscent of grandma off her meds.

Nevertheless, one whole week after the initial engineering leadership call where I found out about this tactical blunder, my guys are confirmed to actually being “made whole” and getting the original $150k that, until 2 weeks ago, was never in doubt.

The rest of the team, was still subject to the same ceiling function rounding everyone down. No official reasoning was ever given, only an automated, mail-merged Slack message saying a mistake had occurred, from a man that had already disappeared on vacation.

The other side of the coin

At this point, I have been pretty harsh in my judgement of the engineering leadership. However, none of this compares to what has been occurring within the data science team.

Over there, the VP used their discretion and leaning heavily into “bonus bonuses” i.e. a bonus on top of the regular fixed bonus. For example, a standard scientist might have a contractual 15% bonus. Given the constraints to the overall envelope, the VP rather than adjusting the base salary might have awarded an additional 3% bonus, 15+3 = 18% bonus.

I’d perhaps argue that this is shortsighted, as the envelope for next year will be calculated as a percentage of salaries from the year prior. Therefore, to optimize, one should raise the base salary to the maximum of everyone that you think will still be around next year.

The Founder, decided that this bonus-bonus system was simply not kosher and axed it all.

Now think for a second. Who do you think, the VP would have awarded bonus-bonus to? Is it all of your natural leaders? All of your seniors? All of your folks that went above and beyond and truly delivered? How do you systematically piss off all of your most valuable employees?

Similarly, the Founder decided that certain scientists had received too much, but also that no scientist was worth more than a 3% raise.

I certainly know of one scientist that was stripped of their 3% cost of living and their 3% bonus-bonus. Leaving them exactly where they were a year before.

Insult to injury

As much as I lambasted the engineering VP for stalling and putting off the conversation, at least he had the decency to do it (virtually) face-to-face. Over in data science, the VP had jumped on a plane for vacation as soon as the all-hands meeting was over.

This meant that some of our best scientists were to find out that they were going to be TEN THOUSAND DOLLARS or more worse off than last week VIA EMAIL.

Let me repeat that.

Via. Fucking. Email.

No context. No rationale. Just a simple, “opps-a-daisy there was a mistake, here’s the new numbers” type message.

And, it gets worse…

When some of these folk go to reply to this message with a “What the hell? Where’s my money?” they are met with an out-of-office auto-responder.

Hope you didn’t spend that bonus already!

Exodus

Like rats from a ship, departures will be swift and numerous.

I have already had messages from friends in industry asking “What’s going on over there?”. One friend commented that he’s been flooded with applications from our place.

And once word gets out, every recruiter in the city is going to know. Maybe it already is.

The only bright side for the company is that if everyone is running for the door at the same time, then inevitably it’s going to flood the market a little.

However, my concern is that of momentum. It only takes one or two key players to resign and even those that have been living under the rock will wake up to the fact that maybe the grass is greener.

Rewarding bad behaviour

Last year, a meaningless adjustment to salaries was largely met with quiet grumbling but nothing more. The economy was slowing, big consulting firms reorganized cutting everything that wasn’t core business, whilst big tech was in full swing of the “year of efficiency” cutting tens of thousands per week. Many looked around, myself included, and saw no startups, and no green shoots.

The Founder learnt from this, that you can screw payroll and no one leaves.

Earlier this year, our health benefits went up greater than inflation, whilst providing half the coverage, with double the deductible. Objectively bad in every possible dimension. I heard that the entire executive team counselled the Founder to just make the premium - it wasn’t a lot of money. But if you’re a sociopath, it’s just another expense that hurts your bottom line.

No one left.

Simply. Our retention is too high.

Changing tides

Many believed that this year would make amends for last year’s poor performance. Those people are sorely wrong.

With two years of shoddy performance, even whilst banking millions, sentiment has tangibly shifted. People have had enough.

Will all of them leave. Of course not.

However, think who will be first. All of the best. All of the brightest. All of those that know their worth. They will have options.

In tech circles, I’ve heard this referred to as the Dead Sea Effect. The good employees all “evaporate”, leaving behind bad employees that further make the environment more toxic, more hostile to life.

Chain reaction

I’ve written [previously]((https://morganbye.com/posts/20240629/) on how, I as a “single project” team lead ended up running four projects earlier this year. Do we honestly believe that if a few key players leave, that we will take on less clients, do less projects? No. Of course not.

Anyone with any competency will step in. Temporarily. But then what? Burn out? Further departures?

In the event that all team leads end up working multiple projects - then what? It only worked for me in the past, because we had strong senior developers on each project to pick up the slack. But we are already short on senior developers. We weren’t able to hire any back around Xmas. There are few in the city, fewer on the market, and the limited number that we liked refused our offer when they saw the pay.

At the time, we had to pivot strategy and ended up hiring a bunch of junior resources that were all calculated risks. They had the spark of something. The potential to accelerate quickly.

But it means that the fabric of the department is already much more junior than you would hope. If the team leads, disappear to cover multiple projects, and we don’t have the seniors already to cover each project, what happens when they get stretched or leave? Who’s going to mentor the juniors?

Momentum is a dangerous thing.