How to deal with variable pay as a developer?

Question

I am going to sign a new contract in a start-up. As we discussed the pay, they warned me a part of the pay was variable. They intend to pay it all the time and partly or totally remove it in case of professional fault, to paraphrase their wording. They implemented this after bad experience with previous programmer who came only when he wanted to and they had no possiblity to fire, and made it very clear they did not intend to use it as "motivation" or objective-based tool.

This seemed very odd to me. I am not a lawyer, but I tried to search if what they were planning to do could make it into the contract, but I found no similar case. From what I understood though, it seems that in my country (France), variable pay can only be made by objectives contract and can be claimed fully by the employee if the employer failed to provide an objective proof they were not fulfilled (this is mostly used for commercial commissions).

I want to make things as clear as possible and even warned them about the consequence of lack of objectives, but they simply assured me they would make it clear in the contract. They sounded like they didn't want to bother right now.

Should I pressure for more details now, while i'm quitting my job, or when the moment comes to sign my new contract ?

EDIT: What happened next

I see this topic is getting more answers so I'm giving a bit of feedback of how I am coping with the situation.

I asked them for more precision by e-mail before I sign the promise, knowing that whatever they answered had legal value and had high chances to be what would be in the contract. They wrote me back the objectives would be both qualitative (respect of processes, implication, motivation) and objective-based (features etc.), so their answer was different than what they originally stated.

That does mean they have a lever of pressure there, however, being confident of my own performance, not being in need of any penny of the variable amount which is pure bonus compared to what I currently earn, and considering I also have advantages regarding work time, place, and job interest, I am fine with these conditions.

I can see most of you consider having a variable pay as a symbol of distrust or poor management ability or both because you consider this 10% as a potential malus (and I think it's a mistake by them to have it presented to me this way the first time), while truely it is potential bonus, that they are, according to them, giving away for doing average. Devs might not be sellers, but bounties can be motivating to anyone, and I can understand a manager wants to keep his devs motivated. Giving money reward has nothing inhuman :). In itself, the money isn't a problem, if I never gain it it's still "OK" the problem would be the lie, not the money.

This is my POV and I'm 99% sure there will be a huge flow of disagreement, but my answer is this: is it better I make my own experience if this model fits me, or that I trust people that don't know me saying it wouldn't ?

Note that I made my own judgement on the employer, he look friendly/honest/fine. This was a two sides interview, I am not jumping on the first opportunity blindly.

Answer 1

Any innovations or complications in how you get paid is a red flag. I would get clarification first, or more probably look elsewhere for a job.

It's putting you in the same category as a fruit picker who gets paid by how many baskets of apples he fills (even when it rains). It's all about incentive, and it leaves all the power in the hands of the employer. So be very careful.

In terms of being a developer under this scheme, it really looks to me like they want the convenience of having a consultant, without the consultants pay and control.

Answer 2

French guy here.

A few years ago, I've been in the exact same situation you describe, and I made the mistake of signing.

The problem you'll find if you sign is not necessarily that you won't get part of your pay sooner or later. That contingency would at least prove manageable in some way.

No, the real problem here is that by offering this proposal to you, they do nothing but prove a serious and irretrievable lack of culture about what is a software developer and how he works. They pretend to be a startup, but they do apply fundamentally "agency-like" reasonings. They even confessed not being capable of managing and motivating developers (the last one, in their terms, came to "do what he wanted and show only when he pleased").

Knowing nothing about software development, they want to have a trigger to better control you and better pressure you, if only unconsciously, so that you'll be tempted to shut your mouth if problems arise.

And if you don't, they'll cut your pay, knowing that it would be an enormous pain in the ass for you to go legal about it (long procedures, nothing to be gained in the end...).

Been there, done that. Run from this toxic environment, and find a true "startup".

-- Responding to your update

Your update makes me think that they felt your hesitation and changed their discourse.

Remember their initial idea was of a punishment in case of professional fault. This is what they're really thinking about, even if they changed the wording afterwards. Otherwise, why would they have even mention this possibility in the first place?

Additionally, their criterias ("respect of rules, implication, motivation") are all subjective:

• Who judges implication and motivation?
• What are the "rules"?

Those criterias have no solid foundation at all, and are in no way related to the quality of the work you'll provide.

Lastly, you say:

I made my own judgement on the employer, he look friendly/honest/fine

Remember that as a recruiter/boss/manager, it's his job to look friendly/honest/fine in order to keep people coming to work at his place. In no case it means that he really is. Makes me think of people who buy something because "the salesman was nice and appeared honest". Yeah, it's just his full-time job to appear nice and honest.

Answer 3

I'm not a lawyer and this is not legal advice.

Paying salaries is a cost of doing business. When an employee doesn't perform up to the expected levels, the business can let that person go but in most Western countries, it's not legal to not to pay the salary. The business can sue the employee or report the employee to the police if they so desire but they're (usually) obligated to pay the full salary. Based on the actions of an employee, a court may decide that some of it must be paid back but that needs a court decision.

I'd certainly not sign a contract like this (unless being really pressed for work but then I'd start looking again right away). This sort of wording looks like a setup to cut salaries based on arbitrary rules. Whatever they promise is not written down, only their ability to not to pay you.

Answer 4

Should I pressure for more details now, while i'm quitting my job, or when the moment comes to sign my new contract ?

Your strongest bargaining position is now, before deciding to leave.

They sounded like they didn't want to bother right now.

This does not seem like an employer who is going to carefully follow a procedure to determine if you are at fault; it's an option for dealing with cash shortages or securing political leverage, neither of which work in your favour. Assume the actual salary is the amount advertised minus the 'performance penalty'. Does it still look like a good deal?

Before you decide, consider also how they've handled problems in the past:

They implemented this after bad experience with previous programmer who came only when he wanted to and they had no possiblity to fire

Their approach is to ignore problems, not solve them. They say they had a bad developer who took frequently took unauthorised leave. They didn't do anything about it. They will probably be recruiting other bad developers, and bad managers who avoid managing, and failing to either turn them into good developers/managers or to fire them. Their 'solution' is to threaten you and other hires with financial penalties. That won't make incompetent colleagues capable, but it might make people do stupid things to avoid penalties (like coming in when sick). So not only will you be stuck dealing with incompetent colleagues, your superiors might not be able to tell the difference between the good and the bad, and you might get penalised as well when things go bad. Or the dead weight of the bad staff and the culture of 'nobody else does a good job, why should I?' might destroy the business. Anybody who's any good is going to find it hard to change this culture because anyone who speaks up might be arbitrarily penalised. Is this somewhere you want to work?

On the other hand, if you are looking to leave your current job because you're a poor performer and your managers are starting to realise it, this might be worth the gamble.