Let's say I'm a competitor, and I find that Niel (randomly picked) is someone I want to hire. All else being equal, I offer him $100k (website says he's making $88k). He comes to his boss to say "I like it here, can you match it?"
What does his boss do? Especially, if he's valuable to the company...
What if I have a very specialized skill that doesn't fit nicely into your matrix? Let's say market pay for my skill is $200k. Do you create a new category for me? Do I get dirty looks from all of my co-workers because I have a valuable skillset that most people don't?
I'd hate it, as an employee, as a boss or as an investor. But that could just be me.
> Let's say I'm a competitor, and I find that Niel (randomly picked) is someone I want to hire. All else being equal, I offer him $100k (website says he's making $88k). He comes to his boss to say "I like it here, can you match it?
This happens all the time anyways, hiding the salary of the employee isn't going to make any difference in most cases.
And is it so hard to guess what some (say iOS engineer) earns? The salaries that Buffer pays are in the range of what I expected them to be anyways.
> What if I have a very specialized skill that doesn't fit nicely into your matrix? Let's say market pay for my skill is $200k. Do you create a new category for me? Do I get dirty looks from all of my co-workers because I have a valuable skillset that most people don't?
I'd expect the founder of the company should be able to justify paying someone $200k to his employees when he can justify this to himself and his investors.
I mean it's not like anyone will be blown away by the fact that there are people (VPs, managers) that earn 3x to 100x of what they earn themselves.
What is your fear? That the employees will seize the property of the company and turn it into a communist collective?
Of course on the other hand it could mean your salary haunts you during future interviews and at future jobs. Salary Negotiation 101 is, don't tell them what your old salary was, right? But now the cards are all on the table, and they'll try to say "Well, I see you made $X, we'll beat that by 4%"
There's a difference between salary history and salary expectations.
And if they had the nerve to Google your past salary, then I think you could turn that around and ask for a similar matrix to what you had at your last, more transparent company.
If they refuse, and you can't justify the salary to yourself given the situation, you're probably better off staying at the transparent company. There's more to a job than money, after all.
You can try this or that tactic, and you can say "If they googled your salary, don't work for them", but best I can tell there's no angle where this is better for the prospective job seeker. The seeker can always elect to divulge his previous compensation if he likes; in this situation that option is removed. He now has fewer options, fewer plays.
I think the fear is that it will create animosity by making the information so accessible. On some level, the junior-level dev knows he's not making as much as the guy with the PhD in an esoteric mission critical topic, but he has a kind of plausible deniability that lets him avoid thinking about it. If everyone's making 80k and everyone knows that Jane The Expert is making 300k, there's going to be friction. "Hey Jane, why don't you pay for the dinner."
Worked as an intern once, had one of the full-timers complimenting my work and saying I was just as sharp/skilled as him at the job. I knew he was getting paid a lot more than me. The multiplier was probably a whole number. Yes, he was on-call and I wasn't. Yes, there are always other good reasons too. But it still rankled to be doing close to the same work, and paid so much less. As you say I made sure to stay ignorant of the exact number to help ignore it.
I think you are trying to say that he made at least 2x what you were making. I would be very surprised to find an intern making more than half of what the person they are interning under makes and normally I'd expect it to be much less.
Typically you aren't working at an internship because you have a proven track record of skills in a certain area. That is kind of the point of doing an internship. And having a proven track record is something employers are willing to pay a lot more money for.
You don't have to justify it, I understand all the bullet points. I'm just corroborating the parent's statement that willful ignorance of someone else's wages can be a useful coping mechanism. Because no matter how many justifications there are, it still stung.
Do you think you would if you knew exactly why the other person was paid more, and how you could get to that level? I find the public table a lot fairer than not knowing how much the others make and why.
No, the fear would be that employees look at someone with a 3x salary differently than they would if they didn't know what his salary was. It's just a distraction. I don't know how much my boss makes. It could be half what I make, it could be triple. I don't really care. If I found out suddenly that it's triple what I make, then maybe I'd look at him differently. Does he bring in 3x value to the company compared to me? Maybe in my opinion he doesn't--do I talk to the CEO to say "hey, we can replace this guy cheaply"? It just seems like pandora's box at that point.
Perhaps this is a good thing? One of the leading factors in wage disparity between men and women (other than outright sexism) is a difference in negotiating style. Men ask for more, more aggressively, and more often. If a female employee sees that her direct counterpart is making 15% more than her for some reason, perhaps this would cause her to ask for parity. Or, better yet, by making salaries a function rather than the outcome of a negotiation (as much as one can) perhaps the disparity never arises.
I had the same thought. I think approaches like this would go a long way to closing gender disparity gaps. The bottom line is that this is simply more information.
Another side benefit of this approach is recruiting. I've always felt that "salary negotiable depending on experience" is such a waste of ink. Being transparent let's individuals who have expectations way out of alignment opt-out entirely. Then you get a nice clean signal for when your pay is out of alignment with the market...good candidates don't apply.
I remember hearing about a Brazilian company where employees could pick their own salary, and everything was totally transparent. The catch, of course, is that you have to continue to show you're "worth" that salary. And if you don't hit deliverables, well, maybe your salary or expectations should change.
Why is a Senior iOS engineer (Andy) on a "Intermediate: 1.1X" multiplier? - you can't be Senior and be intermediate in my book. Seems he needs his multiplier upped to the proper level. $107k is low for a iOS Dev in the Bay Area.
Could be seniority relates to breadth and tenure of experience whereas experience is related to skill at the particular position.
So an ios dev who spent the last 10 years elbow-deep in the innards of some database code or something would arguably be "senior" but not "experienced".
Just one way this could fall out, I don't know how buffer defines the terms.
That's the first thing I noticed too. Senior iOS Dev making 1k more than a CHO? Only their employees know the culture and value everyone provides but that sort of thing would make me uncomfortable.
He may have taken more equity for a lower salary. I might be wrong but publishing everyone's information like this seems so dumb....focus on your startup not on gimmicky unproven hr practices
In negotiation, typically the party with the most information has a better negotiating position. Posting salaries is a significant piece of information that will almost certainly help a competitor since it greatly reduces the cost of them acquiring the knowledge.
I think a big part of the problem is that people generally aren't good at judging the value of other's contributions unless they are working directly with them or managing them (and even then, hit or miss).
Having salaries be completely open invites comparison even when there is a lack of information. Bob the Developer in XYZ team makes 20k more than me, is that fair? Maybe, but I don't really know, and I can see that creating friction with the right (wrong?) personalities.
Let's say I'm a competitor, and I find that Niel (randomly picked) is someone I want to hire. All else being equal, I offer him $100k (website says he's making $88k). He comes to his boss to say "I like it here, can you match it?"
This sets a terrible precedent. I've been in places where people knew they had to get a better offer to get a raise, so the entire office was job-hunting. Much better to figure out some benchmark ("To get the best folks we pay in the top quintile and insist on no OT" or "We pay modest base salaries, but give double the usual equity to share upside and incent people to act like owners") and then stick to it. Top people will rarely leave for a small raise, though they will leave over disrespect or boredom.
>What if I have a very specialized skill that doesn't fit nicely into your matrix?
Oooh, or what if there's a dragon[1], and I need to be paid extra money so I can spend it on dragon-slaying gear? If you really deserve extra money, the conversation goes like this:
"Why do you make more than me?" "Because my job is harder."
Fun fact: you're not that special. Wage secrecy is good for skilled negotiators and bad for everyone else; being a skilled negotiator does not, however, ethically or morally entitle you to make more than other people. It just allows you to get away with it, and it's trivially unfair.
Dunno, if person A goes to gets a PHD in distributed systems and spends 40 hours a week furthering their knowledge of computing topics, while person B spends 6 years after university uninstalling viruses from windows computers, and spends their time after work watching cartoons, it seems very plausible there would be a significant difference in their worth to a company due to a significant difference in skills, even if they are both hired on as "developers".
To add on top of that, who says that this kind of transparency breeds trust? Transparency is great in some areas, terrible in others. Take away bathroom stalls to find an area where this isn't as true (extreme example).
I trust co-workers when they do what they say they will, when they are respectful & smart, when they show up on time, when they tell me when I screwed up in a nice way, etc. I could care less what they make--to me it would be a distraction.
>I could care less what they make--to me it would be a distraction.
Are you 100% sure that you've valued yourself accurately?
I played "show me yours and I'll show you mine" with a coworker once and he discovered that we were both working the same position but he was paid $8K less than me. The difference was that I negotiated my salary like crazy and he didn't.
Information asymmetry is the best way for companies to ensure their employees are underpaid. While it could cause a bit of awkwardness between peers, at the end of the day I think it's better to know what others are making & let them know what I make, because it strengthens everyone's position.
It's my job making sure everybody is paid fairly. If Niel came to me and told me about a competitive offer, I'd say, "well, let's look at the market; maybe we've fallen behind." And then we'd sit down and refresh the data that drove our current pay levels. If things had changed significantly, then it would be time for raises. If not, then we'd talk about why a company might be paying well above market, and whether it's the right choice for Niel to go there.
For specialized skills, yeah, a new matrix category's the obvious fix. If co-workers are the kind of people that freak out at market economics, then it means we're not educating them well, so that's something worth fixing.
I think it's important to remember that secret salaries rarely stay secret, so the choice isn't between full knowledge and zero knowledge; it's between full knowledge and half knowledge plus substantial speculation.
You're giving me a choice between risking the company's failure and rooking some of the employees out of pay they could get if they were more self-serving?
I deny the choice. I think most companies that make a habit out of underpaying good people to stay barely in the black don't survive in the long haul. If I were faced with that choice, I'd be honest with everybody about the financials and we'd work something out. Either we're pursing something pretty lucrative, in which case it's a temporary deviation from market rates, or we're barking up the wrong tree, in which case the company isn't worth doing.
"All else being equal" is a huge assumption. Will your company offer the same environment, flexibility, openness, remote work? You should first assume that Buffer keeps their employees very happy to be able to openly publish their salaries.
That's great, but what if Niel has a kid? Suddenly priorities are shuffled in a big way. Maybe he needs a 5% raise to afford <whatever it is that the kid needs>? Is it worth it to the company to lose the employee over 5% of salary?
First, most recruiters/hiring managers ask for current comp (or at least a salary range) early in the discussion, so it should be easy for them to offer well over someone's current pay. This simply removes one bargaining tools (lying about current comp) for an employee considering a move elsewhere.
Second, matching outside offers very quickly becomes a slippery slope. Anyone who figures out that such a policy exists will quickly come to the realization that the easiest way to get a raise is to put themselves onto the market. That's toxic, not to mention unsustainable.
Finally, equity. The one-year cliff exists for a reason, and if you're playing for keeps with an early-stage startup, you're probably expecting (or at least hoping) for your ownership stake to be worth a lot more in the long run than your salary.
>First, most recruiters/hiring managers ask for current comp (or at least a salary range) early in the discussion, so it should be easy for them to offer well over someone's current pay. This simply removes one bargaining tools (lying about current comp) for an employee considering a move elsewhere.
Currently this screws "Niel" (to stick with the example). He wants to move someplace else and is convinced that he is worth $140k. He's convinced he's underpaid right now. He interviews at, say, Google (random example), who does a bit of research and hey, he's only making $88k. Suddenly they don't have to offer him market rate, they only have to offer him a raise on what he makes now.
Obviously this only works if one company (Google in this example) isn't as open about their salaries.
> First, most recruiters/hiring managers ask for current comp (or at least a salary range) early in the discussion, so it should be easy for them to offer well over someone's current pay. This simply removes one bargaining tools (lying about current comp) for an employee considering a move elsewhere.
"Lying about current comp" is not the only tool for an employee considering a move elsewhere. Nor is it, in my opinion, the best tool for that.
You can get pretty good results by refusing to disclose your current comp and it has an added benefit of keeping you honest. Open salaries would ruin that negotiation tool.
Also, matching outside offers is not necessarily a slippery slope. Not everyone who gets an outside offer and considers it is motivated by pure greed. Sometimes people's situation changes and they would prefer to stay at the same company, but the company needs an additional incentive to meet their new requirements.
For example, if you really like working at company Foo, but you just had a kid and you're noticing that your budget is too tight for your peace of mind, you might need a raise. Now, you might be an asset to your company and your boss genuinely understands your situation, but he or she simply doesn't have enough leverage to give you a raise outside the regular process. If you have an outside offer, that gives your boss the leverage and you might be able to negotiate a raise that would allow you to stay. And if they truly can't afford it, you have the choice of accepting the outside offer.
Serious question: I've never quite understood the "what if you have a kid" argument. Is it the company's fault you had a kid? Why are they obligated to pay you more because you had a kid? If you were worth $100K and you negotiated for that, then that's what you make -- a kid has nothing to do with it.
Put another way, let's say we both make 100K in salary, and then, all other things being equal, you have a kid. Do you get a raise to 120K just because you had a kid? I didn't have a kid. Don't I get a raise too?
I think you're looking at this wrong. The kid is an example for why the budget gets tight, it could be anything (buying a house, deciding to pay off your credit card), you're correct the company has no obligation. Hence why you're asking, not informing that they'll pay you $20k more.
"If you were worth $100K and you negotiated for that, then that's what you make" was true at the time of the initial negotiation. This is a separate negotiation, with a source "hey, company X will pay me 20% more"
No, you don't deserve $20k more as you didn't ask for it, you might if you reopened negotiations.
No, you don't get a raise, because you didn't ask for it. The difference you should be focusing on, in your scenario, is not that I had a kid. It's that, for whatever reason, I renegotiated my salary. If you can do the same, then you get the same results.
See, whereas you never quite understood the "what if you have a kid" argument, I never quite understood the "don't I deserve the same as that other guy" argument. The way I see it, the magical answer is always the same: maybe you do. Do something about it and you might be surprised.
This matrix makes sense if you hire your team to be of roughly equal performers (within the seniority range) who value honesty. I doubt they will ever hire a 200K person, because they made a business decision that they don't need one. Even if they need one, they can always review the matrix and add flexibility. It takes a specific approach to hiring when using this structure.
There are some significant advantages in building an open team like this. People know what's their pay-grade and what part of the company they actually represent. If they don't think their cut is fair they can signal it. Many companies have confidential salaries so even when you know you are underpaid you can't argue it without throwing peers under the bus for revealing their salary to you.
I would assume your real reason for objecting is that you employ people and like the information asymmetry that lets you pay someone less than they could get
Another way would be to look at it from the perspective that I don't want to be backed into a corner. One of the things that I hated about working at a big company was the "compensation matrix"--you plug your factors into a matrix and the formula told you what you were worth. To a company, some people are worth more than others: "work ethic" is a tough one to plug into a matrix.
I don't find that there's a lot of information asymmetry, at least as an engineer. Beyond a first job, is there really that much? I know what I made at my last job, I know approximately what I'm worth, and I argue from there. If a company won't pay me what I think I'm worth, I look elsewhere.
Every situation is unique: how desperate is the company, how desperate is the employee, how many roles will a person fill, how many intangibles does the person come with (i.e. work ethic, contacts, what-have-you)...
A possible approach by the boss would be to 1) see if there is flexibility to provide more within the current system (maybe Niel is more "senior" than we had recognized?), and 2) see about tweaking the formulae so everyone (or at least everyone with overlap with Niel) gets more. You may not be able to make up the whole difference, but you might not have to, and I expect very different social results than "we're paying him more to stay".
I've no particular confidence this would work well, but it seems a consistent approach that has some potential.
I don't really care for it myself but I think one thing is that they are creating a culture that is disinclined to acting as you describe (ie, salary pumping).
When you run a company, you just assume that your competitors know the pay structure. It's trivially easy information to discover (through interviews).
What does his boss do? Especially, if he's valuable to the company...
What if I have a very specialized skill that doesn't fit nicely into your matrix? Let's say market pay for my skill is $200k. Do you create a new category for me? Do I get dirty looks from all of my co-workers because I have a valuable skillset that most people don't?
I'd hate it, as an employee, as a boss or as an investor. But that could just be me.