That's the labor theory of value (see: Smith, Marx), which in theory sounds meritocratic but it can't really be measured or assessed.
In reality compensation either becomes a function of power, social currency and negotiation skills, which is the general norm in professions, or you have an institutionalized, perhaps even democratic process to determine salaries. Both of these variants generate overhead and are only approximations to what anyone would see as fair.
The variant here where everyone gets the same, generous piece of a pie seems refreshingly simple and honest. I would also assume that it attracts the right kind of people, who are intrinsically motivated (at least after the threshold of a very high level of comfort is reached.)
The idea that contribution "can't really be measured" is a cop-out. Contribution can't be measured perfectly but it can be estimated with some accuracy by people who are involved in day-to-day work. "Some accuracy" is really all that's required: as long as contribution is correlated with compensation to some extent, you have a functioning meritocracy.
> The variant here where everyone gets the same, generous piece of a pie seems refreshingly simple and honest.
I bet it works great if you have a small team, are extremely picky about hiring, and quickly fire bad hires. Otherwise it will be awful.
Even if you actually do measure and agree on metrics, then the measurement can easily become the goal for those who are not intrinsically motivated. Work ethic can't be taught by dangling carrots in front of people, because acquiring the carrot becomes the goal instead of moving the cart. This can be detrimental in a highly collaborative workplace.
Having a flat, generous salary might solve this problem, because you filter out carrot hunters and get cart movers.
> I bet it works great if you have a small team, are extremely picky about hiring, and quickly fire bad hires. Otherwise it will be awful.
Finding the right people to work with is difficult regardless. The same worker can be miserable in one place and flourish in another.
This is handwaving in the extreme. Anyone involved in software development knows that a single line of code can be critical to success or failure, as can a blob of 100k LOC, so product-quantity metrics are of almost no use. The "estimate" you're talking about generally comes down to general "feelings" about who works hard, which have repeatedly been shown to be poor metrics for actual contributions.
Besides, LTV as a theory is meant to be a description of the world as Smith, Marx, etc. see it, not a prescription for how things should be done.
But the underlying belief of paying someone according to their effort, is very much based on the same premise.
What I'm saying is that nobody is _really_ paid according to their effort, experience etc. because those things cannot be reasonably measured.
The typical process of determining compensation is based on negotiation and power. In some places the process is more democratized and rules based. Both of these are only to some degree related to actual effort, experience and so on. This discrepancy becomes larger the more people are involved as well.
The egalitarian way where a business can divide the share of revenue that is allocated for salary equally, no matter the role. This makes sense from a philosophy of everybody being a team and contributing equally to the results of the company. It can foster an esprit de corps and and a sense of fairness. On the negative side it could encourage companies to have more burdensome measures of fairness and contribution, and lead to resentment towards colleagues who don't pull their weight.
Then there's the other method, where a value-based salary is allocated to each employee taking into account their experience, ability and effort. Crucially, however, this salary is not adjusted for location. That's the case to which I was speaking, specifically, even tho the type used by 0xide is clearly the egalitarian one.
