1) Management and the product team often have some idea of how valuable a certain task is. The dev team is responsible for how long it will take. Often we will invest too much time in something that's not that valuable, since management is not aware of just how long it will take. Or we will under invest in something very valuable because management doesn't realize how easy it is to knock off. If management can just put a price on the stuff it wants done, then I think developers will be able to pick off the stuff that gives the most bang for the buck, which is what we want.
2) Paying for performance makes a big difference in developer productivity. That why startups get so much done - they live or die based on how hard and more importantly, how effectively they work. As we've grown from a couple developers to over twenty developers, I think our pace has slowed. I'd like to see it more like the early days.
3) The best sales people can make 2X what a developer makes. As a developer, it would be nice to be able to make that much money. But the company cannot do that right now, because it cannot accurately measure my performance.
20 developers has lower productivity for a lot more reasons than individual incentives. This has been widely recognized since The Mythical Man-Month.
Concrete data point for you that I ran across in Software Estimation by Steve McConnell. The average team of 5-8 programmers can get a medium sized project done in the same calendar time as a team of 20 programmers. As teams grow beyond 20 programmers, total throughput improves. This is from a study with project side measured in lines of code. There is every reason to believe that the larger team has more reinvention within their project, and therefore their project of equivalent size has less functionality.
The fundamental reason has to do with lines of communication. As you add a person to a team, the number of lines of communication you add is the size of the team. At some point people take up more energy from others than they contribute useful work themselves. There are a myriad of organizational techniques which try to mitigate this problem, but all suffer from the defect that they force people to use less productive forms of communication (for instance writing documents that can be read by many others), and therefore lower individual productivity.
Therefore if you've got 20 developers you should seriously consider going back to a small team, find a way to partition them into groups with minimal interactions, or scale your organization up until you have a lot more developers than that. The first two try to solve organizational problems that lead to low throughput, the last accepts the issues but lets you tackle problems that the small team couldn't.
Another random suggestion. If you're interested in productivity, pick up a copy of Peopleware and Rapid Development, read them, and pick a set of best practices to try.
We already have teams of 3-4 developers, working on separate projects with minimal interactions. If we didn't do that we would be thrashing. We're aware of the Peopleware/Mythical Man Month issue.
But still, I think we could do better. Working based on hitting external goals adds invaluable focus to a team.
1) I think this is just a symptom of bad management. Again, I'm not arguing that the market situation is optimal for individual companies, just that equilibrium is reached in the market as a whole, more or less. Sometimes this is accomplished by companies with poor management going out of business because they can't accurately judge the priorities of projects.
2) I think there's a lot of reasons that startups get more done, like just having fewer people.
3) If the best salespeople make 2x as much, it's because they're 2x as valuable. I also doubt that the best salespeople make 2x as much as the best developers, but if so, it's likely because they're twice as valuable. If you want to make that much, go do sales. And if you can't because you lack the skills, perhaps that tells you something about the value of salespeople :)
2) Paying for performance makes a big difference in developer productivity. That why startups get so much done - they live or die based on how hard and more importantly, how effectively they work. As we've grown from a couple developers to over twenty developers, I think our pace has slowed. I'd like to see it more like the early days.
3) The best sales people can make 2X what a developer makes. As a developer, it would be nice to be able to make that much money. But the company cannot do that right now, because it cannot accurately measure my performance.