The former is open to much more interpretation than the latter, being that the latter has a documented set of predefined expectations, such as years of experience and daily duties. It's hard to be obscure about whether or not you lead a project, or whether or not you have 5 years experience. Joe in the next cubicle rates higher because he is either your - or your colleagues' - senior. This is self evident.

What you are left doing is saying "I lead my project better than Joe leads his project." This isn't a salary conversation, it's an annual bonus conversation. Annual bonuses are designed to measure performance in most cases.

On the Joel point: Joel runs a small-ish company and it’s become obvious in several HN threads that his employees are people who essentially worship the ground he walks on. That’s great for them, for him, and for that company and I’m happy for them all. But what that distinction means is that sometimes Joel’s advice doesn’t apply to the rest of the world outside his little utopia.

In my experience living in the rest of the world people don’t respond well to "your salary has nothing to do with your performance but you MIGHT get more 9 months from now." A bonus is great but it’s just that: a bonus. Salary is where employees are paid for their services and that’s where they expect to be rewarded for their performance.

Again, hopefully your employees are well off enough that they couldn’t care less about waiting 9 months. But in my experience the "wait for your annual bonus line" usually leads people to look for companies that pay their employees based on their performance.

P.S. You still didn't address my central point which is the fact that this method puts the focus on other people's performance in relation to the employee rather than the employee's performance alone

However, I think you're misunderstanding a Base Salary with a Performance Bonus - which may or may not be annual - and the notion of Total Compensation.

In most companies, including mine, the idea is a that a salary is what you earn in exchange for doing your job to the minimum expected standard. The only reason these salaries aren't equivalent to legislated minimum wage across the board is that there are market forces involved that companies must work within. Joel is simply stating that in most organizations, there is a drive to push this salary as low as possible, and that this creates problems. I see nothing in mine or other's experience that is contrary to that point.

His solution is to basically simplify this equation, and publish it. That's the exact same thing that every union workforce has. The only issue he has with this is that if he miscalculates the market value of a certain level, he'll basically create the conditions for a strike. He recognizes this and explains his workarounds in the article. He also retains the notion of a bonus to help him recognize those he chooses to.

Salary is where employees are paid for their services and that’s where they expect to be rewarded for their performance.

This is clearly where your opinion differs, but this attitude creates the entire situation that Joel is commenting on.

Compared to the situation at my old company where salary was determined by how well you negociated, I'm quite sure I prefer joel's version. And when reading the ladder http://joelonsoftware.com/articles/ladder.html, it's clear enough so that any disagreement are probably going to be minor (since he's using the average of skill and scope in a lot of cases a one point difference in the skill or scope won't make any difference to the level)

You've just categorized the money differently in your head at that point.

Of course it is, in that it's the result of an outcome and isn't guaranteed.

There is no company in the world that would mind you asking for a larger bonus. After a certain level however, you need to qualify the value you bring to earn that bonus. If I said to my employer: "If I bring in 200 new users this year, will you give me X more (where X is a percentage of the revenue generated by 200 users) in bonus?"; No competent manager would deny you this.

That said I certainly wouldn't want to work for that company. Basically what they're saying is "we don't trust you the employee to continue to perform optimally so we're going to make you prove yourself each and every (whatever the time period is) to get a bonus" while the employee has to wonder how much their pay check will be every month (or whatever)

That seems more cruel than anything

Most companies do this via your salary in a secretive ranking ladder - which is exactly what Joel is speaking against.

I think you agree with him much more than you you think you do. :-)