Disclaimer: this post represents my personal philosophy
toward pay and does not necessarily reflect the opinions or practices of my previous
employers. Also, I am neither a lawyer nor an accountant; I'm just a former
manager who has dealt with compensation issues (pay, stock, bonuses, and profit
sharing) for teams comprised of artists at every skill level.
Why you should learn about compensation
There are plenty of tutorials about developing specific
skills, but very few that help an artist become a happier, less distracted one.
This is unfortunate, because being focused is crucial to improving every skill,
and artists who misunderstand how they are compensated are unnecessarily
distracted. Reducing your non-creative concerns, such as worries over
compensation, will lead to better job satisfaction and faster career growth.
Your income is a tool that allows you be creative; it
shouldn't be a roadblock to happiness or career satisfaction. Despite this,
I've known many artists who suffered simply because they expected to receive
regular, sizable raises every year or immediately after shipping a title. They
mistook their annual salary update as a kind of high score tally – a measure of
the good work they performed – when it's really an incentive for future work, limited
by the studio's financial position.
Pay for future work
A raise is not a direct measure of your previous
achievements, regardless of the feedback received during an annual review (or
whatever review period your team uses). Although your work history is very
useful and important data, your compensation is actually based on a prediction
of the value of what you will do, not
the work you've done. This may be counter-intuitive, because a raise or bonus
usually follows an achievement in the past review period. But the salary and bonus
you’re offered is commensurate to the income your employer thinks you can bring
into the business moving forward. Your past contributions are an indicator of
your future performance and your raise represents that value.
Did you get a bonus after shipping the last game? Well
again, the amount probably wasn't determined by how much crunch you endured.
Instead, it was an incentive to encourage you to come back for the next
project. It's offered because you're the kind of employee who would work hard
to ship another great game and they want to keep you. That's also why you don't
usually get payouts after you leave a company, even if the game continues to
sell. Again, think of your salary and bonus as an incentive to keep you working
tomorrow, not as payments for the work you did.
If that still doesn't make sense, try this: recall when you
were last hired and the incentives offered to you at that time. You negotiated
a pay rate or salary. Perhaps your new studio also covered the cost of your
move, offered a stock grant or options, and maybe even gave you a nice signing
bonus? Was there an earn-out or vesting period associated with any of these
things? If so, there can be no doubt that your pay and bonuses were negotiated
in anticipation of your future work, not because you did awesome work in the
past. The same goes for your annual review; you’re essentially being hired
again for the next year.
When a big raise isn't a good thing
Even if it is not reasonable to expect a sizable raise every
year, it is fair to expect incremental raises as your performance brings
greater financial value to the studio. Be wary of companies that habitually
give employees big raises upon promotion. An irony facing managers who
consistently demonstrate the value of their team members to the company is that
their direct reports (employees) are always paid what they are worth at any
given time. In this scenario, when a company promotes an individual once she
has demonstrated a consistent ability to perform at the next level, she is
already paid appropriately. Most management groups will still find a way to
grant a raise, even a small symbolic one. But expecting a 10% raise with each
promotion is not realistic under these circumstances.
When a manager works with someone to develop her skills,
resources are used to cover the inevitable learning curve. That investment will
continue until the promoted team member is at the mid-point of her new role’s
performance and salary range. Let’s say a senior artist is promoted to a lead
position, because she consistently mentors new artists and helps her lead
perform quality-control work. But as a new lead, she often takes on other
people’s work, because it’s easier in the short-run to fix their problems,
rather than coach them. Her manager will have to spend time and money managing
her fatigue, diffusing team frustration, and supplementing her team’s training.
She went from being a fantastic senior artist to an average lead. That’s perhaps
why she may not get a giant raise the moment she’s promoted. This dip in
productivity is a natural, well-documented phenomenon in business and
technology cycles and it applies to individual careers as well.
On the other hand, if her manager was not paying her what
she was worth before her promotion, the company has room to reward her with a
nice fat raise. But, she’s probably still going to earn fewer total dollars
than if she were paid fairly throughout her career. Sometimes a big raise is
like a big tax refund. It means the studio was using money that an individual
could have had earlier. This doesn't change the fact that it’s nice to receive
a windfall, but the truth is an artist benefits more from small-but-fair raises
along the way, rather than a big one at the time of promotion. (Important
exception: good employers who recognize they were under-compensating an
employee will grant a raise and bonus
to “true-up” the employee.)
Growth yields
personal satisfaction first, then maybe dollars
New responsibilities, skill mastery,
and personal sacrifices occur routinely during a project. But did you ever work
hard on a game, only to receive a disappointing bonus or raise afterward? Before
you let that affect your morale, ask yourself what your extra effort
accomplished for the project above your core responsibilities, and how that
indicated your ability to increase studio profits in the future. If you can't
come up with a clear and substantial answer, then there is very little your
manager can do either. If you want a bigger number, then you and the studio
need to cut costs and bring in bigger numbers. This doesn't sit well with
artists, because they rarely define project scope, budget, or audience.
Nevertheless, they will often take things into their own hands by working even
harder or by broadening their skill set. If that decision was made without
working with the appropriate manager to align the effort with the team’s needs,
it’s a mistake to expect additional income for such work. Maybe your new Mudbox
expertise isn't what your studio needs.
In short, killing yourself over work or learning a new skill
may lead to a false expectation that you'll get a monetary reward simply for
doing so. This will only happen if the next project will require the same kind
of work, you saved the team a meaningful amount of time and money (e.g. your
manager didn't have to hire another artist), or your assets had positive sales
effects (e.g. you set the industry high-bar, increasing media impressions,
metacritic score, and player interest). Otherwise, it's not reasonable to
expect an increase for taking extra steps that weren't necessary to ship the
game and didn't bring in additional profit – unless you and your manager agreed
to it in advance.
Going above-and-beyond the requirements of your role brings
pride, the admiration of your peers, the euphoria that comes with mastery, and
perhaps most important, recognition from your manager that you might be ready
for more responsibility. Just don't make the mistake of thinking those good
vibes will be converted into dollars immediately; it takes time for your
manager to work with every other discipline manager to ensure the company is
assigning value to everyone’s work fairly.
And don’t forget your current earning potential is only part of the
value you receive from work. You have compelling creative challenges, great
tools and coworkers, travel and training opportunities, and other fringe
benefits. Don't let your professional happiness depend on whether or not you're
receiving ever-increasing dollar amounts. There are too many external financial
and market factors that you can't control. Instead, if you seek creative
satisfaction by fulfilling the needs of your team, fair compensation will
follow.
Pools of money and
industry competition
Hopefully by now, you understand that your compensation
reflects the financial value you are expected to bring over the next review
period. But it’s not possible to draw your salary from a pool of profits that doesn't exist yet. Instead, payroll is taken from what's currently available to
the studio, minus amounts necessary to ensure smooth company operation over
time. Your office, hardware, software, insurance, snacks, travel, training,
holiday and ship parties – and especially a safety reserve to cover future
salary and studio expenses – draw from the pool of currently usable money.
Therefore, it would be a mistake to think you're guaranteed
a big bonus or raise when your studio ships a successful project. Think of the
aforementioned costs. Did your team grow significantly over the course of the
project? What if this is the last time your studio will be shipping a title
with that IP? What if the revenues from previous titles tapered off? How long
until your studio is paid its share of the profit by the publisher? What if
studios similar to yours closed recently? This last question is a tricky one,
because it isn't directly related to your studio. But it’s important
nonetheless. Not only do those studio closures indicate that games made by
companies like yours are risky, it means there's excess talent available.
Should your manager continue to pump up the cost of her team, while your
remaining competitors exploit the supply of talent and lower their average cost
per artist? Hopefully, your manager is going to ensure long term survival and
prosperity for the team and not overspend during periods of industry contraction.
Publishers are more interested in their portfolio needs
rather than the unique abilities and culture of your studio. If a publisher can
choose from a number of developers to fill a particular portfolio gap, they'll
select a team the same way people buy a gallon of milk. Do I recognize the
brand, is the store close to me, and is it cheaper here than elsewhere? Your
studio needs to compete in that environment. More studios have closed over the
years because of high overhead, rather than an inability to do good work.
The other guy
Angst regarding your compensation relative to everyone else
is a common morale problem that stems from not knowing if peers and disciplines
are evaluated against sensible common standards. If this is bothering you, ask
your manager how the review process allows her to offer fair incentives for
working on the next project. Don’t be nosy about your peers, but you should
feel free to ask general questions. If a reasonable system exists and you trust
your manager, there’s no reason to worry about the other guy.
During periods of transition or difficulty, misgivings may
occur when someone is asked to leave the company and rumors of an overly
generous severance package abound. Any such package is a private matter. Do
yourself a favor and keep in mind that continuing salary payments, promises of
future profit sharing, or stock vesting represents a smaller cost than keeping
that individual on the team. Your manager is trying to free up resources –
including your time and energy – by making it comfortable for someone else to
leave.
When things are tough, it may be tempting to start
slacking-off in hopes you’ll receive a sweet, sweet severance package too. But
the drag on your morale in the meantime, awkwardness at your next job
interview, and impaired friendships are not worth it. You’re better off
continuing to work diligently, even if you eventually decide to take another
position elsewhere. Leave them wanting more and better compensation will
follow, no matter where you go.
Talk to your manager
Request a meeting if you still find yourself distracted from
your work, because of compensation issues. Let your manager know in advance
that you’d like to talk about it, just as you’d like to know in advance when
you’re going to discuss your work with your art director. Compensation is a
complex problem and managers are only human; they need to prepare their
thoughts. Otherwise, you might put your manager in a defensive or adversarial
position, when you’d rather approach your concerns as a team.
Prepare yourself too. Think about why compensation is
bothering you. There are some insecurities or lifestyle choices that only you
can address. Define those and set them apart from the conversation. Your
manager can’t help you afford a new car or pay school loans. But she can show
you which roles within her organization command higher salaries and how you
might get there.
I hope this blog post helps you understand compensation
better, frees you to do your best creative work and achieve fair compensation
for it. Nothing beats being able to spend every day making beautiful art and
developing new skills without distraction. Good luck, and please let me know if
you have any questions or comments.
-Michael
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