I've always felt the culture of hiding salaries was doing a significant disservice to employees. It creates a significant and largely artificial information disparity, giving a major market advantage to the employer. In turn, this makes the entire labor market less efficient for the employee.
This also makes the employer less accountable to the employees. The employer can easily pay somebody significantly more or less than they contribute, and the rest of the team cannot really say anything about this.
Now, there are some cultural reasons to do this--preventing jealousy, hiding inequality. But it really feels like a social band-aid, a temporary solution hiding the symptoms but not the underlying problem. Besides, everyone ends up having a reasonable guess as to who makes more and who makes less anyhow! The same dynamics develop, just with more uncertainty.
On the other hand, making salaries public takes these problems head-on. Inequality isn't bad in and of itself; some is basically necessary. But hiding that fact doesn't really help anyone. Instead, forcing people to see it head-on, deal with it and talk about it is probably a better solution.
I really applaud Buffer and the general movement towards transparency. I think it's a very healthy cultural progression and hope it catches on more widely, so that people stop having knee-jerk reactions to salary information.
EDIT: As an interesting additional note, all salaries (beyond a token minimum) at Berkeley (and the whole UC system) are publicly available at http://ucpay.globl.org/.
I've looked up various professors at the ParLab (where I did some undergraduate research). The fact that their salaries range from ~120k to ~350k did not change my perspective of anyone and did not seem to affect the lab's culture at all.
Essentially, I'd be perfectly happy to see this outside of public universities.
> It creates a significant and largely artificial information disparity, giving a major market advantage to the employer.
Absolutely.
Having employees not discuss salary is all about the employer having more power/control, and the employees having less.
I've always thought it's a little like an adult giving candy to a child and then say "Now, don't tell anyone I gave you this!".
Why doesn't the adult want anyone to know about the candy exchange? Because they benefit from keeping in concealed.
EDIT: I also think this is a generational thing. Everyone I know over 40 wouldn't dare talk about their salary, or how much they paid for their house, etc. Everyone I know under 30 will happily talk about it to anyone and everyone. Give it a few more decades, and this will be the norm.
I suppose it is true that when we turn 40 our brains rot. All we care about is keeping kids off of our lawn and catching the early-bird special.
Many people don't like to share their salary - not because they wouldn't "dare" as if they are cowardly or not as enlightened as you. Some people find talking about personal salary or wealth to be distasteful - like a braggart yammering on about his expensive possessions. If you have no economic diversity in your group of friends then it's probably no big deal, but otherwise you likely are making people feel ashamed and unsuccessful. Some people might feel it's rude and unnecessary to discuss your salary unless there is some reason to do so.
I don't personally have a problem with a fair and consistent formula for salaries within a company, and people within my company may be able to deduce what I make. It's not a power trip thing. But I don't really want my salary mandatorily posted on the web for every random friend or stranger to investigate. Unless I'm working in the public sector it's my own choice and my own business.
Hehe, no worries. It probably is somewhat due to our generations, but it may also be that as you age your salaries naturally will begin to diverge. And with a certain amount of success it's not exactly smart to go around broadcasting your wealth. I personally am self conscious about coming off as a rich jackass when I go to my hometown and visit my high school friends who are working for minimum wage.
For a venture funded start-up, over-sharing finances seems somewhat ill-advised to me. I guess maybe I am old and I just don't get it!? According to their blog they have a payroll burn rate approaching $2 million per year. Maybe they are grizzled veterans who have been in startups that run low on money and they have tricks up their sleeve. Maybe not - maybe they're just a bunch of kids who have never done this before and think that the money will keep flowing no matter what happens. Maybe their over-sharing will not put them at a serious disadvantage when negotiating because everybody will know their level of desperation for cash. Maybe their employees will not become very nervous and start leaving when the funding situation becomes scary? I only just took a really quick look that them and I don't know the answer to these things, but it doesn't seem like it really benefits them that much to share their corporate finances.
>I personally am self conscious about coming off as a rich jackass when I go to my hometown and visit my high school friends who are working for minimum wage.
I agree 100%. There is a fine line to be walked between "sharing" your salary and "bragging" about your salary.
For me, I find it easy to share with people in a similar-ish scenario/career/position in life. It's not so easy to share with someone in a very different life situation, like working a minimum wage job, as you say.
> It probably is somewhat due to our generations, but it may also be that as you age your salaries naturally will begin to diverge.
That right there. I'm nearer forty than 20, and I remember a time when I freely discussed my salary, or the price of anything I'd purchased with anyone who'd asked. Now, not so much.
>> The word I was looking for is taboo. I believe that the baby boomers find talking about money to be a social taboo, while younger generations do not.
I'm the tail end of Gen X. Talking about your income is gauche, it inevitably leads to comparisons between peers (even unspoken ones) and can sow discord in a group.
It might just be that the next generation grows up knowing about this incredible range of renumeration that exists and has less personal self esteem caught up in that number. A grocery bagger knows his doctor neighbor makes more than him. But perhaps his personal self worth is less tied into that and doesn't really care. I think such information is much more transparent than it's been historically.
> Having employees not discuss salary is all about the employer having more power/control, and the employees having less.
You seem to imply that just because the employees know all the salaries, they have more control. This is not accurate.
They have more knowledge but certainly not more control.
If anything, the fact that the salaries are the result of a simple equation means that the employees have close to no control over the money they make. Also, a lot of factors contribute to the productivity of an employee, most of which cannot be accounted for in a simplistic equation, things such as working long hours, working on weekends, good attitude, willing to take on unpopular tasks, etc...
>They have more knowledge but certainly not more control.
Knowledge is power, as they say.
Industry wide wage negotiation is basically a collective action problem; publicizing your wages lowers the barriers/cost for negotiating for higher wages. Most people are, by definition, paid less than their marginal value and thus have some leeway for a raise to begin with.
This isn't true. In the posted numbers, there aren't any major discrepancies between people doing the same job. But imagine if you saw two programmers with roughly the same background and experience with a $20k+ difference in salary. The reason you don't see that is precisely because the salaries are public.
Your error is assuming that the same formula would be used if the salaries weren't public. The employer is forced to use a simple, consistent formula. They would be under no such pressure if all salaries were secret.
I disagree they don't have more control. If the salaries are out in the open, then pay disparages would need to get addressed. Those who are severely underpaid would look for another job, so the company would need to give them a raise and fix the situation. I've known plenty of very good employees who were severely underpaid simply because they didn't know any better.
> No. I'm saying that because the employees know all the salaries, the employer has less control.
How does the employer have less control when he is unilaterally deciding what the formula is and he can stonewall any request to discuss salary by hiding behind that formula?
"You know what, Dave, I know you want more money but I just decided to add a negative 'is disrepectful of superiors' factor' and your salary just went down $5k. Isn't transparency great?".
> How does the employer have less control when he is unilaterally deciding what the formula is and he can stonewall any request to discuss salary by hiding behind that formula?
Once everyone knows the employer is doing that kind of BS, they will go elsewhere, and the employer will be left with no employees.
Employment is not some kind of privilege we should be thankful for. Remember that.
> Employment is not some kind of privilege we should be thankful for. Remember that.
So someone is compelled to provide me with employment? By what force and why? Am I automatically entitled to employment at any company of my choosing? Can I decide that you, Grecy, are responsible for employing me?
The employment contract is a business arrangement. Describing it in such value-laden terms does a disservice to all parties.
One is employed presumably because the arrangement is mutually beneficial; if it stops being mutually beneficial the arrangement is renegotiated or terminated.
It is not beneficial to the company over individual wage negotiation. Suppose V_i is the amount of value the ith employee contributes to the business (V_i = revenue from employee i, minus non-salary costs). For the business, the hire makes sense if the salary is anything in (-inf, V_i) - but with the lower the better.
Presumably, the company believes that their computed salary (call it S_{f,i}) is such that S_{f,i} < V_i for all employees.
However, there are things that the formula doesn't take into account - for example, an employee might be bad at negotiating, and be willing to accept a salary below S_{f,i}, or they might have something in their history (e.g. a conviction) that means that it is hard for them to find alternative work and they are willing to work for less if told to take it or leave.
Similarly, a very good prospective employee might be currently paid S_{c,i} in (S_{f,i}, V_i), or an existing employee might have received a counter offer S_{c,i} in (S_{f,i}, V_i) - it is rational for the business to offer S_{c,i} (or another number between S_{c,i} and V_i) to gain / keep that employee, but it isn't in their interest to give every employee the same pay rise.
This post might be better without the mathematical abstraction.
> An employer wants to pay their employee as little as they can get away with, as long as it is less then the value that employee provides. Presumably, this company set such salaries.
> However, there are things that the formula doesn't take into account - they lose the ability to screw bad negotiators and convicts out of money.
> Similarly, if people are offered higher salaries elsewhere, it might be worth it for the company to counter-offer with something still less then the employees value to them to keep that employee, but they don't want to do the same for everyone.
"Everyone I know over 40 wouldn't dare talk about their salary, or how much they paid for their house, etc. Everyone I know under 30 will happily talk about it to anyone and everyone"
That's because they (the <30's) grew up with FB and are used to sharing everything with the world.
I usually hide my pay these days. Last time I shared with someone I worked with, who it turned out made a fair bit less than I did, the guy got mad at me. I stopped sharing.
I disagree completely. You should, as the potential employee, be well aware of the market pay and what you are willing to be paid to perform the job that you're applying for. Not to mention their job postings actually list a salary window ($88-110k for Backend/Frontend). What the person sitting next to you is paid should bear absolutely no impact on your life or your work ethic. If you're happy to make $88k and the guy doing the same job next to you is making $110k, I don't see any problem. Maybe he has a few more years of experience than you, maybe he's a better negotiator, maybe his suit looked nicer. The point is that you accepted it and were willing to take that salary for that position.
I can't fathom what being aware of your coworkers salaries could possibly do for positive team building. Somebody is going to be upset, egos will be triggered. Yes, in day to day business we're typically aware of the fact that an engineer or programmer makes more than a customer support or cashier. But here it's thrown in the employees face. "John sits next to me, he takes 3 hour lunches and he's paid $110k! I can't believe it. Screw John!"
Show up to work in a new Porsche sometime and while some people will think it's the coolest thing ever and give you a pat on the back, jealously may rear its ugly head with others.
I just don't see how this is a positive thing in the least.
>If you're happy to make $88k and the guy doing the same job next to you is making $110k, I don't see any problem
One problem is that the first person is often female, not white or foreign.
Another is the demotivational effect when the first person eventually does find out they are underpaid versus colleagues or the market - and they generally do. And then they will leave.
It gets worse when the lower paid person is clearly outperforming the higher paid person, or where the higher paid person is clearly under performing.
And finally it's just not the right thing to treat people unfairly versus their peers. If the lower paid person is being underpaid then quietly fix the issue.
I absolutely hate salary systems that give an advantage to people who are pushy, jerky, entitled, or privileged. Some of the best developers I know are pleasant, friendly, modest, don't like confrontation, and pay more attention to the work and the team than how much they're pocketing. Those people shouldn't be paid less.
There is so, so much more to this story that I don't even know where to begin. People "asking for what they want" takes on completely different contexts depending on their situation, background, gender. The system you are advocating will always pay more to the privileged, encourage a competitive, low-trust culture, and disadvantage many skilled people for reasons out of their control. Ultimately, it's the company that will miss out on the best talent.
Asking for what you want isn't necessarily pushy. And yes, people should learn to ask for what they deserve.
But knowing what you deserve is a complicated art that involves measuring yourself against your coworkers and your industry, and having a good working knowledge of the current market. For the people who don't know what they want, some of them are going to err on the side of asking for too little, and some will ask for too much. I would much rather spend my time bringing the shy up than battering the arrogant down to something reasonable.
I was in the Army as well and have worked as GS. That has absolutely no bearing on this conversation. Why? Because you don't negotiate your salary in the Army. You're an E1, you make E1 pay. You're in combat? You make E1 + hazard. You didn't go in and negotiate for an extra $30k because you attended MIT over FSU.
>> You should, as the potential employee, be well aware of the market pay and what you are willing to be paid to perform the job that you're applying for.
Yeah, well, not easy when everyone is hiding it. All info I can get is too generalized.
How can you determine market pay when salaries are private?
You end up with what we have now: looking at what companies post publicly for salary offers. Some companies don't publish those numbers publicly, and that's only 'new hire' salaries. So it's inaccurate.
You as the employee with that skill DETERMINE the market value. If every IOS developer refuses to work for $40k and want $80k the market will start having to pay $80k. Yeah there will be outliers, maybe someone desperate for a chance to prove themselves, or someone who was unemployed will take that $40k but that is not the market value.
It's not some vooodoo a company makes up, you yourself have a direct affect on the market value by turning down and taking positions. If I can't find anybody to hire at $40k I might start offering $60k and more until I get the amount and quality of applicants I desire.
Right, but it'd be easier, for example, for every iOS developer to not take $40k if they knew that other developers are being paid more.
Basically, keeping information private gives an advantage to the people who know the private info versus people who don't. If no information is private, that edge is lost, aka, a more level playing field.
There are plenty of people already aware of their coworker's salaries; government employees, including military. It isn't like you don't know some salary info, you know your boss gets paid more for example.
>You should, as the potential employee, be well aware of the market pay and what you are willing to be paid to perform the job that you're applying for.
And when you know what everyone makes you have a much better grasp of the market pay, and if what you were offered was fair. If they tell you "we only pay x" you can only take their word on it if they are keeping their salary data private. If not you have more room for negotiations.
And your example of unfair pay doesn't jive well with me. It is still wrong to take advantage of someone just because they let you take advantage of them. I think a lot of cases of grossly unfair pay fall into that category.
I have you ever thought that maybe human beings are not computer programs that you have written and so therefore there may be a reason someone may be unhappy someone sitting next them makes 20% more for the same work? You act as if it is some logical fallacy because you were naive enough to accept the smaller amount or something. I'm not surprised. This kind of reasoning is very common on here.
Exactly. I know precisely what I'm worth because I poll the market frequently. I don't need my employer to push mandatory transparency to know what I'm worth; in fact, I feel the informational asymmetry actually benefits me, because my employer doesn't know how much it'd cost to replace me (unless they're interviewing potential replacements as often as I'm speaking with recruiters / getting inbound interest from other companies, which they're probably not, because it's expensive and time consuming) yet I know exactly how much I can fetch elsewhere. So when I negotiate for a salary increase, the employer assumes all the risk in the transaction.
This can only be true in a mom&pop company size. Any company with a decent staff management know a lot more than any employee: they make constant offers that get accepted or reject, and see more candidates than you ever will, even if you are in 100% of the interviews.
The information asymmetry you think benefits you is only protecting you , at best, from getting something worse than other employees. Thats not a success. A transparent system would mean everybody gets the benefits of that.
If you dont have a problem with someone making more or less money than you in the same company as you, why would you ever mind to make it public.
Is it because you fear people will resent you if they know your salary? Are you getting bullied by your HR department because of it? I doubt so. If someone makes a decision because of he has more accurate information, i have to believe its going to be a better decision.
This is a very basic case of information asymmetry and it always benefits the one with more information.
Do I agree with showing salary by name? I dont, so directly. But the mindset on the policy is healthy and can only sin from being naive.
I had a boss bully his employees with fellow employee salary information. (i.e. bill took a pay cut because of the recessions, so should you...)
As far as I'm concerned, salary is a completely private matter that is no one elses business, and no good could possibly come from sharing it.
I see this openness at buffer essentially being a tool for management to deny raise requests, etc... with... If we do it for you, we have to do it for everybody... which is a just a BS excuse to not face the reality that every persons value and work situation is different, and should be treated differently.
Edit (add quote for clarity)
> I see this openness at buffer essentially being a tool for management to deny raise requests, etc... with... If we do it for you, we have to do it for everybody...
More likely, the response would be along the lines of: "You'll get a raise when you qualify based on the criteria that have been clearly explained to you and the rest of the world."
Who decides that? What makes it objective? Can you dispute it if your boss happens to be a bitter idiot who is completely detached from reality? What happens if your boss and their boss have different views? What happens if you are a perfect employee, but you were a bit of dick at the last Christmas party? And what happens if you are very nice and social and everyone likes you, but you are not really much of a programmer?
This whole thing is BS. The only model that can possibly work is the scaffolder model - you get a worker for a job. If they're shit they get sacked the net day. If they're good, you have to pay them more to keep them from running away...
Interesting... I never said that they would apply the rules fairly, I just said that the excuse would not be "If I do it for you I'd have to do it for x" but rather "I'll do it when you qualify according to standard y." I certainly never said that I agreed or thought it was objective.
I agree that the "seniority" and "experience" sections are unclear in OP. For true openness, they need to provide an objective scale for these two items.
I don't think that this ever gets to (or approaches) perfect fairness, but neither has any compensation strategy anyone has ever devised [citation needed]. Still, I think it's a good faith effort, and the real world ramifications will be interesting and potentially useful in answering the questions relating to objectivity in determining salary.
Perhaps... but this relies on an awfully idealistic view of real life.
What goes into a salary decision is much more personal than a universal formula can dictate.
This is a classic excuse to put different people into the same box.
I believe it to be completely inappropriate and unprofessional to be transparent with something as personal as salaries...and saying that were all in the same boat just doesnt excuse this behavior.
Something which doesn't seem clear to me is whether the team is able to properly evaluate the pay of their colleagues. Surely the people that are most friendly and fit most of the in-group traits of the group will benefit most? What about the creative and non socially-correct members that don't fit in - should they move to different companies?
In general, I cast doubt on the idea that employees really know what's important because of principle-agent problems and culture.
Private salaries are a benefit for those who know how to take advantage of them and push the boundary on their pay. They are a disadvantage to those who don't or don't want to. So it really depends on which type you are. Buffer will likely attract those who don't like to play this game, and just want fair pay for good work. It could even have the effect of attracting people who truly like and want to be at the company.
Neither approach (public or private salaries) is perfect.
> I see this openness at buffer essentially being a tool for management to deny raise requests, etc... with... If we do it for you, we have to do it for everybody... which is a just a BS excuse to not face the reality that every persons value and work situation is different, and should be treated differently.
Their salary formula accounts for experience, company performance, and role. Having the openness and formula makes it easy to say no to arbitrary salary-increase requests and also makes it easy to have a fair raise in place "automatically". Sure, the formula is not perfect, but as the zen of python goes, explicit is better than implicit. Changing the formula or the parameters to it may be a wise thing for the company to do at some point, but it will likely be clear what the change is and why is it beneficial to the company. That sounds a lot better than the way that salaries are typically negotiated.
"Having the openness and formula makes it easy to say no to arbitrary salary-increase requests"
It more likely makes arbitrary excuses to deny legitimate salary increase requests.
I think this forces unnecessary arbitrary restrictions on an already difficult process. I highly suspect this is simply an excuse for management to avoid uncomfortable conversations and very difficult decisions...
I can foresee about a dozen likely HR nightmares that can surface from this transparency.
Personally, I would never want to work at a place where everyone in the room knows how much I make...especially if many can't appreciate or quantify the value I create.
>EDIT: As an interesting additional note, all salaries (beyond a token minimum) at Berkeley (and the whole UC system) are publicly available at http://ucpay.globl.org/.
Fascinating, I had no idea this was public. Looking briefly at the results, it reveals a curious data point:
UC's highest paid employee is not, as one might expect, the chancellor or dean, but in fact the sports coach ($2,884,880 gross)
It also breeds malcontent and unethical behavior. My last employer gave me a very hefty raise while (unethically) telling everyone else that there was a pay freeze.
Unfortunately, the payroll person was a gossip - the incident undermined my leadership and put me in an extremely awkward position. I'm happy to have left that shady startup.
> Now, there are some cultural reasons to do this--preventing jealousy, hiding inequality. But it really feels like a social band-aid, a temporary solution hiding the symptoms but not the underlying problem.
The underlying problem is that our brains evolved in the Stone Age, and many of our instincts - particularly those to do with status-seeking, envy, thinking of life as a zero-sum game - are destructive and maladaptive in the present day.
This is a problem beyond our power to fix. We don't get to debug our DNA. All we can hope for is social band-aids, temporary solutions hiding the symptoms but not the underlying problem, so the fact that hiding salaries falls into this category is not a valid criticism thereof.
A slight problem with that thesis is that employees are generally not forbidden from discussing their salary.
Rather they choose not to. Some consider it personal info. Maybe they shouldn't, but they do.
From that perspective, this could feel like the company forcing a decision on their employees that they would rather make for themselves. I would be a little concerned about injecting a culture with that.. it's a bit paternalistic.
Employees are generally forbidden from discussing their salary. Most places I've worked, it has been told to me at promotion and raise time not to disclose my salary to other employees. It probably isn't enforceable however, just the goons trying to keep that info private that they want private.
The places where I have worked (all in India), the offer/joining letter specifically mentions that "You will not disclose your salary to any inside or outside person. If you do so then you could be/will be asked to leave the organisation."
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).
Seconded. Hard to imagine all employees signing off on this release for the sake of a HN article. But I hope that they did. I would be very upset if my salary were published unbeknownst to me.
You would only be upset because you currently work in a company with a culture that doesn't value transparency as a core value.
If you worked in a company like Buffer or GrantTree, you'd be wondering why others are so secretive about their salaries, and find yourself more and more disliking the idea of working for a company which is not transparent.
Habit is a powerful thing. Change your surroundings and you'll change your habits.
If you've never understood the idea of "privilege" before, your attitude of "oh what, this doesn't work for everyone else? It works for me!" is something that gets discussed a lot. Some examples of the many, many situations people can find themselves in where public salary disclosure would be a major problem:
- You have family members who have substance abuse issues. It's common for addicts to steal from family members who they rationalise can afford it.
- You're in an abusive relationship, and your spouse steals your money. Hiding part of your salary may help you feel independent enough to get out.
- Your kids' friends find out how much you earn, and bully them.
- All the rest of your family are part of a religious organisation that demands a tithe. You've lost your faith, but it would tear your family apart to leave.
- You have family who live in a country with a much, much lower standard of living. You support them financially, which is known in their community. Now their neighbours know _just how much_ you're worth, exposing your family to the possibility of kidnapping or extortion.
- Your name is Google-unique, and identifies you as part of a group that is stigmatised on the internet. If your identity leaks into your internet activities (e.g. via Google's real name policy), another major vector of harassment is exposed.
I understand your concerns, however there are so many people who already have their salary info public. For example government employees including military. There is already some idea if you know what someone does. If I work fast food, everyone knows I am going to earn around minium wage. Most people know a ballpark figure for most jobs, I have a doctor friend an administrative assistant friend, nurse friend, police friend, and someone who works in retail. I know about what they all make income wise and they know about what I make as well.
"Why don't you borrow money for a car from Cousin Ricky? I read online that he has a fancy job in San Francisco paying him $98,433, he can't say no."
"Why don't we break into this guy's apartment? I read online that he makes $98,433 and he should have some expensive stuff in there."
"Hello Sir, sorry to call at dinnertime but I'd like to offer you a once-in-a-lifetime opportunity to buy the timeshare of your dreams. You should be able to easily afford it on your $98,433 salary."
What a bunch of HacknerNews groupthink nonsense or at the very best, hippy dribble. You think it is just some sort of cultural problem for someone that they may not really want the whole world to know what they make? It's one thing for the echo chamber here to be way outside of reality ... it's another to think it is normal.
> "You would only be upset because you currently work in a company with a culture that doesn't value transparency as a core value."
You don't have anywhere near the information necessary to make that claim. Honestly that came across as pretty arrogant.
I'd also argue that a company can be transparent and still understand that some people more private than others. Whether YOU would share your salary with the world isn't material - your employer shouldn't do it unless you've signed off (and I'm sure these people have if anyone involved has a shred of common sense).
I wouldn't want all my love letters and emails published. I wouldn't want my thoughts tapped and broadcast to the world. There's a line somewhere where transparency for the sake of it is either not helpful to the company or a simple invasion of privacy.
I work at a pretty conservative company, and even I wish salaries were open, at least internally. I don't believe that salary should be determined by how effective of a negotiator you are, but rather what your skills are worth to the company. If you knew they were low-balling you compared to your coworkers, how would you feel?
I wish job postings more often had salary information, too. How am I supposed to know if an interview is worth my time when I don't know if the pay will be higher or even competitive with what I'm making now?
How much do you get paid? I don't see a blog post on GrantTree publishing employee's salaries. (I didn't spend a ton of time looking though, so apologies if I did miss it)
There are some posts describing our pay scale in my commenting history, and everyone in the company knows exactly how much everyone else is paid - though I'll grant you we haven't gone as far as writing a blog post about our pay scale, but perhaps we will some day!
As for me, my cofounder and I both take out the maximum we can without paying lots of unnecessary tax in the UK, which adds up to about £30k per person per year, net.
"You would only be upset because you currently work in a company with a culture that doesn't value transparency as a core value."
So you are saying that when buffer hires someone they are aware that transparency = "we may publish your salary some day"? And that everything is an open book?
Hard to believe that is the case. Or that people didn't feel under pressure to go along with (as some research has show) what they previous may have loosely agreed to (See Cialdini "consistency" principle).
"You would only be upset because you currently work in a company with a culture that doesn't value transparency as a core value."
This isn't the case (at least for me). The reason I wouldn't want my salary published publicly because people may treat me differently based on how much I get paid. The same problems may be true in a company, but at least internally you can control (through hiring) that people are mature enough to handle that information.
More importantly, I don't want other corporations (specifically their marketing and sales departments) to know how much I make.
I may want some people in my life (including corporations, perhaps) to know how much I make, but I want that to be my choice, not my employers.
Agreed. I think this should have been anonymized outside of Buffer.
There are so many possibly repercussions with family, friends, and outsiders, in addition to the things brought up by other posters re: poaching, etc.
I personally wouldn't want my salary revealed publicly because my family would treat me differently as a result (I know this from experience).
If this idea spreads, it wouldn't be long before someone comes up with a way to API this data into something like LinkedIN or Monster. "Joe makes $100k at CompanyX - is it time for a change?"
Internally to the business though, this seems to have a lot of positives. I'll be interested to see how this evolves at Buffer.
I think it's bad that they are essentially publishing whether an employee opted for additional stock or additional cash. Should it be a red flag that the CTO turned down stock in favor of more cash?
Statistically speaking, you're more likely to make more money by getting a bigger salary now instead of a big payday that may never happen. Statistically, very very few companies will be large enough for employees to cash out.
Federal Government employees have their pay publicly visible, at least many of them. Some Universities do the same. I'm not sure why this is so mind-blowing for some.
Also, keep in mind that they clearly set the opposite expectation about privacy with their employees and (from what they say), cleared it with everyone first.
Yes, but $120K, $240K, and $360K are all "a lot" to different people, are all plausible software dev total compensation numbers, and yet people would still perhaps think differently if they knew their friend made 1x, 2x or 3x $120K.
Seems unwise to have a CEO co-founder be the highest salaried employee at a startup.
That person's equity position is probably at least an order of magnitude higher than the other employees. As an investor or employee, I'd find this alarming.
Joel here. This is a really interesting point, I've thought about it a lot.
From the linked article:
"In Startupland, everybody should be working towards the same goal: that big juicy exit. That’s the only payday any CEO should be worried about (even though more than half of them will never get it)."
I can't agree with that, and this is a key reason I spoke with others in the team and we decided that my salary as well as other c-level salaries should be quite high at this point. We're not planning an exit anytime soon.
Until a day ago, my salary was $118,000. In the first year, my salary was zero and in the second year it ranged from $55,000 to $75,000.
We're at a point with Buffer where there's a massive opportunity, and I'm going into my 4th year now. At $2.3M ARR and being cashflow positive (revenues cover the salaries) we're in growth mode and this isn't investor money we're using to fund these salary levels.
I completely agree that in the early years this would be a big red flag. I think the further you go, the more that notion reverses. I've heard that it can be a red flag if the CEO is not paid enough.
Would love to hear any other thoughts here, it definitely was a tough decision to make and I'm glad that by putting this out there we get all this valuable feedback.
Like you said, you are in growth mode. To me, growth mode means reinvesting as much of the profits as possible back into the company. Paying yourself a large salary during this time is the same as taking money off the table.
There are some good reasons to take money off the table, like paying back personal debt or supporting family members. But paying yourself more because you're the CEO doesn't seem like a good one, because your equity position is so significant.
If you don't have a good reason to take money off the table, it signals to employees and investors that "Joel thinks the money is better spent going into his personal bank account vs. making the company's equity grow in value." That sort of logic doesn't work in a startup that is targeting high growth, where employees are hoping to receive some sort of payoff from their equity. Moreover, it casts doubt on your judgment in capital allocation, which is one of the most important responsibilities of a founder / CEO. *
Obviously, all of this logic falls apart if you're not working on a startup. Low growth businesses that have achieved much of their potential are a totally different story. But you aren't starting a restaurant. Even Uber, at its $4B valuation, is giving compensation packages that are weighted towards options vs. salary.
We're not planning an exit any time soon, and are in growth mode, and we, the founders, take salaries slightly below the company average.
Why? Fairness. Our employees produce value, and we pay them justly for it. Excess value is retained in the company, and used for growth. The company, whether or not we choose to exit, is an asset owned by us, the founders. It's not a liquid asset, no, but it can be used for secured debt (i.e. borrowing against the value in the company), should we choose (we haven't).
We've been cashflow positive since day one and have revenues somewhat higher than yours. We've never taken investment.
For the first three years, my salary was £6k. Just enough to afford to eat and live in a squat. For the next three years, it was £22k. For the last two, it's been £30k. Our highest paid engineer is at about £60k basic - and we're not in London or a big city.
I guess at the end of the day it's a cultural call, and a personal one, but from my corner, I wouldn't be comfortable earning more than the folks who're doing the on-the-ground production, as we're not here to earn salaries, we're here to grow value.
>> co-founders should be paid living expenses + 25%, even in a series-A funded startup
It's risky to comment without knowing the specifics of Joel's situation. But it seems that his $158k salary isn't outside those bounds if he lives in e.g. San Francisco or NYC. Hard to know someone's living expenses without drilling way into their personal financials, and again this is not unreasonably high.
Thiel, from the link you posted:
>> What’s the average salary for CEOs from funded startups? Thiel was hesitant to answer, but eventually said “$100-125k.”
That was in 2008. Adjust for rent inflation, and that should square the numbers for you.
Sure, that's a generalization. There are tons of exceptions where my generalization doesn't apply. But that isn't the core of my argument- its a postscript.
The math the company has laid out says that CEOs should be paid more than any employee in a company, even if they are founders and have a controlling equity stake. I'm simply saying that if I were an investor or employee, I would find that concerning.
$150k is middle class in NYC. If you work in Manhattan, it's a small place with a short commute or a normal-size place (by national standards) with a long commute.
If you don't work in Manhattan or can work from home most of the time, you can have a pretty luxurious lifestyle, yes.
Also, being single with no one to support isn't the average case. I'd argue we should assume that each working person supports one other person. That lines up with American demographics much better.
$150k is only middle class in NYC in the weakest possible sense of the phrase “middle class”. Even if we restrict to manhattan, $150k puts you in the top ~20% of household income (which often includes two wage-earners). Median income in Manhattan is right around $70k. I know that nearly everyone in America (except maybe for Bill Gates) believes that they are middle class, but at some stage one needs to accept that if you make whole-number multiples above the median wage, you are at the very least “upper middle class” or “well off”. To pretend otherwise is frankly a bit insulting to the actual middle class.
Yes, there are people making vastly more than $150k, but that doesn’t change the fact that it puts one solidly in the upper quartile.
Yep. For less than that amount I had a floor of a brownstone in Brooklyn, 20-30 minute commute via subway, paid off 10 year student loans in < 1 year, took my entire family on a vacation, and went out to dinner at a variety of nice restaurants on a fairly regular interval. I also saved up 30K in liquid assets (Although that includes some cash from 1-2 years before).
It's that's "only" middle class, the world is in serious trouble.
Sounds middle class to me. Having a few months expenses in the bank and a 30 minute commute. Checks out modulo crime rate and quality of local public schools, both of which vary a lot in Brooklyn.
I was referring to what that salary gets you in terms of standard of living and so on. Cost of living in all of New York, Manhattan especially, is high. $70k doesn't get you very far in Manhattan, especially if you don't have multiple roommates (which you wouldn't if you had a family).
Contrast that to what a family can do with $70k in Cleveland, San Antonio, or Raleigh. It looks closer to what $150k looks like in Manhattan, which is my point.
This is so laughable. The median salary in NYC is $50,000 per household. This includes tons of people who work in Manhattan (I've met more people who work in Manhattan and live in other boroughs than otherwise - the daily commute numbers back that up.) As another poster mentioned, even just Manhattanites make $70,000 a year for the household. I personally know many people living in Manhattan making far less.
$150k is most definitely upper middle class. I grew up in Queens my whole life and until I started working professionally, never met someone who made more than $150,000 a year.
Sure, upper middle class. What's wrong with a CEO making upper middle class wages? The point is it's respectable wages for a professional, but hardly as high-on-the-hog as $150k in Kansas City.
In the context of discussing a company that lets employees work remotely, it is precisely as high-on-the-hog as $150k in KC. Remote employees in NYC choose to live there, because they think it’s a good tradeoff. If employees A and B both make $150k in Kansas City, but A cooks all his meals and B goes out to eat all the time, that doesn’t make A high-on-the-hog and B middle class; it just means that they value different things. Ditto for remote workers who choose to live in NYC.
And a net worth of $500M is lower class when you restrict your population to that of all people with net worths >= $500M (there are many thousands of such people).
In SF, close to 50% in taxes, cost of living in SOMA, assuming you want to live right by your office (what is it, 3k for a studio?) and those 160k will not get you very far.
When I moved to SF from Alabama, I lost ~1->5% more of my paycheck to taxes. Note that Alabama is a dirt cheap place to live, and that I get so much more from that tax money in SF.
Yes, the taxes here are bad if you compare them to Washington or some other low-tax haven... but they're really not that bad here.
Also, yes, rent is insane in the city. More apartments must be built!
What if the company is profitable? Should CEO co-founders still be paid the bare minimum to live? (living expenses + 25% works out to living expenses after taxes) If they are burning investor money and will require 2-3 more rounds to become profitable, then it would be a pretty big negative.
I would agree that founders of a startup should be taking a relatively low salary. However, Buffer is no longer a startup (using Steve Blank's definition: http://steveblank.com/2010/01/25/whats-a-startup-first-princ...). It's generating significant revenue and is break-even from a cash-flow perspective.
Investors don't necessarily want founders to pay themselves the absolute minimum because they want the founders to be happy and focused on building the company, instead of being distracted by money worries.
Wow...the engineering salaries are significantly lower than I would've expected for a well known startup in the Bay Area...at least compared to the perceived range for such things.
Note: a less cynical take is this: GodDAMN buffer employees must be happy working there if they tolerated transparency to this level...which, really, is the best win-win for all kinds of transparency scenarios.
> the engineering salaries are significantly lower than I would've expected for a well known startup in the Bay Area.
While some of them do work overseas, Buffer employees should note they're drastically underpaid for Silicon Valley, NYC, or even LA salaries. If they didn't know this before, they should now. Any mid-level dev with decent skills would start around 110-120k before benefits in a highly competitive job market. I know because I hire and offer these salaries right now.
Anyone heading customer service would be in a tier within the rest of customer service, capped at around 90k. This is especially true for a small startup where their duties aren't managing a huge customer service team but rather playing the role of basically another customer service rep.
I know, this seems like an anti-recruiting blog post. Working at Buffer not only means you have to be a part of a hippy groupthink ideology that you have to share your salaries with the whole world (this is not a government institution) and it will be posted on a popular website in your field, you will also earn much less than expected.
* Names should be anonymous. Everyone knows where they are within the group and can determine if its fair without knowing exactly who makes what.
* It should include options and bonuses. In some companies non-salary compensation dwarfs salaries, and it's dishonest to point to a CEO salary and say "Look, he only makes 1.something X what regular people do."
* Keep it internal to the company. No point in giving the competition an exact target or requiring whole company buy in before you do it.
* Allow people to redact their own information, but display it as having been redacted. If enough people do that, or just management does it, everyone will sense that things are unfair.
> The vast majority of compensation in software companies is tied up in options...
That's absolutely not true. Most companies never have a liquidity event, a significant number of stock options never vest (employees leaving before they're fully vested is very, very common at startups) and even when a company delivers an exit, the vast majority of employees with equity will, at best, walk away with what amounts to a modest "bonus." Facebook and Twitter-like outcomes in which hundreds of rank-and-file employees become millionaires are the exception, not the rule.
Even in Silicon Valley, the "vast majority of compensation" is not tied up in options because again, statistically, most employees will never realize significant gains from their options.
Take a senior engineer at a startup with a $125,000/year salary. He has options that are fully vested after four years. Let's say his options represent a .5% equity interest in the startup after dilution and there are no liquidity preferences to deal with (a highly unlikely scenario). His company would need to have a $100 million exit for him to walk away with a pre-tax amount equivalent to his gross salary over those four years ($500,000). In 2012, according to CB Insights, over half of startup exits were less than $50 million, and more than 80% were less than $200 million.
And my point isn't about average engineers. My (corrected, I admit I was overstating things with the original phrasing) point is that, in some companies, the really huge comp differentials come from non-salary compensation. So just looking at salaries is not, in those cases, a complete or honest picture.
I'm not sure I understand the point you're trying to make.
If you're not a founder or in executive management, there is rarely any value in looking at equity "compensation" at an early-stage startup. Again, as can be seen in my example, when you're dealing with sub-1% equity amounts post dilution and liquidity preferences, as most employees are, the numbers simply don't work in your favor. To walk away with a meaningful windfall that is substantially higher than the cash salary earned over your vesting period, you will need an exit that is statistically very unlikely.
Any employee who expects his or her equity stake to be on par with founders and executive management is wet behind the ears, and any individual who has dreams of becoming fabulously wealthy is far more likely to realize those dreams by starting a company than going to work for one.
Not so sure I bet most (85-90%) UK medium to large companies have share save schemes which are v popular - share options in large companies can be quite lucrative.
And what equity do you get for giving up 10k - Whats the cap table look like
I know that one FTSE 100 co's basic share option scheme is going to turn out >£60k tax free next year (its a 5 year scheme so say 10k pa) so it had better beat that.
Aren't share save scheme's more like employee stock option programs? Most large companies offer them and they are usually pure profit for the employee since you buy the stock at a discount.
If its like equity/option grants in tech companies, I assume it can vary significantly on how much you are given and is pretty customized to your compensation package? i.e. junior dev only gets $10K in shares (over 4 years) vs a senior dev that gets $50K.
You get options at a 20% discount - its fixed anyone can participate at the same level AC to PCGS its the same deal
But yes it is a one way bet the BT 5 year one due next year is on course to pay out £60k tax free - the UK has also just doubled the max amount you can put in to an approved scheme to £500/month.
* It needs 16 (yes, SIXTEEN) people to run that thing
* They actually have revenue. In millions. $2.3 Millions!
* Their company values are based on How to win friends and influence people.
Aside from that, open salaries are pretty naive idea, if not completely dumb and dangerous. The lives you live everyday is in effect a game (as in "game theory" game). When you are talking to person, selling goods or buying one you are in the game. Like in any game, information is your advantage and your opponents weakness. This is exactly why privacy matters. If insurance company knows you eat too much pizza, they would want to get a higher premium from you. Similarly if a car dealer can look you up and figure out your salary, he can adjust his negotiation tactics. A plumber making half the money you do would want to charge you more than others. And so on. When all these people would look for their next jobs, their next employer would know how much salary to offer them.
I have a feeling you will regret this soon. There are certain benefits in having a firm salary structure sponsored by a transparent system, but the loss of flexibility will hurt in ways you haven't experienced. Also, letting everyone know what their peers make can cause disgruntled employees.
My company, GrantTree, is also run with open salaries (internally, though I posted the salary scale in an HN comment before). There was some disgruntlement when everyone was underpaid, but there's been remarkably little disgruntlement from individuals asking for more money for just themselves. This had been so for over a year now, so not conclusive, but starting to accumulate some data.
what if the salary is the only differentiator, and you really value them? What is your recourse to deal with compelling offers? (honest question, not trolling)
I work at a firm with a similar salary structure. Like every other thing, it's a tradeoff. Sure, I concede there are ways it hurts, but they are offset in my case by the ways it helps.
It’s one thing to have a transparent salary policy, it’s a whole another world to publicly blog about people’s salary with a link to their Twitter account.
I hope all employees agreed to have their salary published on the buffer blog.
Yeah, I think it would have been more than enough to simply explain the formula and provide some anonymized examples.
On another note, I am quite surprised at how underpaid some of their positions seem. Senior iOS engineer barely cracking 100k in a very expensive market...
Yeah, that's pretty ballsy. Seems like they're exposing themselves to unnecessary poaching risk. And what do they do in that situation? What if someone has a competing offer and they want to keep them around? Offer a bonus?
It seems like they're ok with the poaching risk. I would assume most of their employees are happy enough, or they'd leave. I'm not sure having the salary posted is a big change from that perspective.
People don't work that way. There is quite a bit of discontent or discomfort people will put up with until they are sufficiently motivated to take action. The number of people who are underpaid by 30% and unwilling to look for another job is far greater than the number who would accept that offer once its in front of them.
Nope, you talk about transparency, fairness, etc. If you're sticking to that salary structure you're not going to win on price in this market.
Warm fuzzies are important to a lot of people, look at how non-profits retain people. Also, there are a lot of people who don't know how to negotiate that would probably benefit from something like this.
I know a few devs who stick around at places because they like the people, etc, despite having had multiple offers for more money. Not my style, but it takes all sorts.
> I know a lot of devs who stick around at places because they like the people, etc, despite having had multiple offers for more money.
Sure, but that's not the only consideration here. Employees don't always have the option of sticking around at a company. Not all startups make it, and people are terminated or laid off from jobs they love all the time.
If and when the time comes to find another job, a public record of your previous salary may not benefit you in your negotiations with prospective employers.
It seems like the bonuses for Senior and Lead are too small. The highest paid engineer is only making 20k more than the lowest paid, and 16k of that difference is because of location.
In general, it's seen as bragging if your salary is high, and mortifying if your salary is low, so it's usually just better to keep your mouth shut about it.
I've told a number of people my salary and regretted it every time. They seem to take a vicarious pleasure in telling other people how much money I make. "Oh, you should listen to delluminatus, he makes $xx thousand a year." Ugh.
Companies (especially large ones) don't like it as it limits their negotiation position it can also disclose indirect discrimination e.g. "oops all the females seem to be under paid by 10/20%" which can get expensive.
And it also limits employees when they want to move as the new employer knows how much they make now.
Yes, I understand why companies do it. They don't want people to know when they are under/overpaid.
What I don't understand is why people don't talk about it. If you tell and you learn you are overpaid then you feel good. If you learn you are underpaid, well, time to go negotiate/look elsewhere.
Do people think they ARE their salary? It's simply money that some people arbitrary decided to pay you...
I never saw someone disclose his/her salary in France. There seems to be an expectation that doing so would produce jealousy and bitterness. So it's not only an American thing.
Back when I was a really dumb undergrad, I did some work for a company & they asked me where to mail the cheque. I gave them the University address. So I was chatting with my professor & we walk by the mailboxes, and by pure reflex, I reach out into my mailbox & grab my mail & he does the same & we say our goodbyes & go home.
Now, I open the mail at home & am staring at my professor's salary! You see, the secretary had switched our mails by mistake because our last names began with the same letter. I was quite stunned by the number - it was a measly sum, and I did the math & worked out that the Professor's salary was about 60K. Now, I knew my Professor was an important CS scholar & had tons of papers to his name, but that low number irked me. After the PhD and all these papers, just 60K...why..?
At the same time, my Professor had also gone home & opened his mail & was staring at my salary! So much money for some dumb undergrad who was basically an average student & had no major publications or research! He was quite bothered.
The next day, we had a very awkward exchange of mails. But from then on, the student-teacher dynamic completely changed. I suddenly began getting B's instead of C's & even occasional A-. He probably felt, hey if this guy can get so much money in the market, he probably knows his shit. otoh, I began to respect him & the CS program less & less. So I still have to spend 3 more years & take 45 more credits & do the qualifiers to get the PhD & then write all these papers & for what..60K ? That was my attitude at the time.
Needless to say, I dropped out of the PhD pgm with a Masters & went to work full-time. That was the stupidest thing I ever did, but I just didn't know it then. Now, I look back & think...hey if I hadn't known about his salary, I'd have slogged it through & actually gotten my PhD instead of half-assing it out here :(
Can't say a lot of good things about a company that pays a "Chief Happiness Officer" more than most of its engineers. I know plenty of startups that seem to be doing alright in the customer service department without an overpaid exec heading it.
Does she really contribute more to the bottom line than any of the other 4 underpaid engineers?
A Chief Anything Officer should probably be paid more than engineers, or they shouldn't have the words Chief and Officer in their title.
And that seems like a very developer-centric viewpoint. Yes, good customer service can add a lot to a company's bottom line. Some companies have huge engineering issues and need engineers to solve them. Some companies have huge sales issues and need sales people to solve them. Some companies have huge customer service issues and need customer service agents to solve them.
I upvoted you, but now I regret it. Not because this was a bad comment, but because I realize now that I disagree.
"Chief" and "highly compensated" are not necessarily joined at the hip. It should be possible to have a C-level exec with most of their compensation variable and dependent on company performance or certain metrics, rather than a whopping base salary.
Disagree. The founders of my company (including me) are paid less than almost everyone else that works with us.
I know few rigorous investors that would stand to pay their CEO/founders more than ~80k a year, at least until it's clear the company is maturing. Also, as a founder with significant equity, I'd much rather put as much of my salary that I can spare (My wife and I need to eat, pay rent, etc.) to go towards bringing in (and keeping) top sales or technical talent. If you believe in my company, the math works out very well.
I also do the occasional angel investment, and frankly, I'd be pissed to see a business I invested in run like this. Two annual international offsite trips? What?! You're building an app to schedule tweets. This is not rocket science. Get to work!
Buffer is posting $2M annual revenue this year, if I recall correctly. Their paychecks aren't being signed by investors -- they're being signed by customers.
Given that the listed salaries total 1.7M, which ignores payroll taxes and benefits, and they presumably have at least some expenses beyond payroll, at least part of their paychecks are likely coming from investment.
Never mind the two international off-site trips they take everyone on each year.
Look, not saying they can't do it.. just saying as an investor, I'd wouldn't support it. Money is after-all fungible. It doesn't matter if sales are paying for 100% of the salaries or not... if there's money being left on the table that can be reinvested into the company by either bringing in new/better talent or retaining your top talent, I would be angry. The founders already have high incentive to stay as long as they can satisfy basic needs on their salary. Employees with little equity do not unless they are paid competitively.
I'm not sure you really understand what is involved in support positions. I make more than their "Chief Happiness Officer" and I'm nowhere near the top end of the pay scale for support at my employer.
Very humbling that no one at Buffer would call themselves a "Master", indeed many would probably but Joel at that level but he sits there on a 1.2x multiplier.
I once had a conversation with an old hat who said "If you call yourself a python master you better be fucking Guido."
One result from behavioral economics is that people care more about their relative standing to others than the absolute value of the salary. This is why transparency can be a double edged sword. If I think I deserve to be paid more than Joe, as long as I don't actually know how much he's paid I can believe that I'm being paid more. However, once you have transparency and I can see Joe is getting paid more than myself this will probably have a negative impact on my morale and performance.
One example I've heard discussed (I think by Dan Arieli) is how transparency in CEO pay has failed to bring CEO salaries down. One problem is now CEOs can see what other CEOs are getting paid and naturally every CEO will want to be paid higher than his peers.
I used to think open salaries would be a good thing but lately I'm not so sure. You definitely want to tread very carefully there as there are many implications and unexpected consequences.
i was thinking the same thing - i read about that in Dan Arieli's book Predictably Irrational. I suspect open salaries probably increases them on average.
Wow, these salaries seem to be pretty low. I mean a senior IOS engineer making $107K in SF? Id expect them to easily increase their salary by 30% by jumping ship.
I wonder in five years looking back whether Buffer getting hacked or their 'transparency' will have hurt them more. I am betting the latter.
Do they really think they can ban private emails between engineers? it would have been much easier to simply load eavesdropping software on their computer if management doesn't trust them.
I really like Buffer but I'm a little worried about them.
Seeing these pathetic salaries (and in the Bay Area!), I don't feel so bad about my boring enterprise development position at no-name established corporation anymore.
Many people here are picking on the senior developers salaries, hovering right around $100K. Maybe this isn't a particularly competitive startup salary, but note that salaries are tied to revenue.
If the company's revenue grows significantly, their salaries could become much more attractive. If, for example, revenues grow from $2M revenue to $20M revenue, senior developers would see their salaries increase by $54k or ~50% over this time.
It could be argued that 10X growth or an $18M increase in revenue is unrealistic for a tweet scheduler, but that's for the employees to determine.
Their salaries are actually still fairly low. An engineer in SF can easily make more than $150k base per year.
Venture backed companies should pay their employees well though. If you're worried about food / shelter or constantly wondering if a shift in jobs would give you a disproportionate gain in quality of life then you're not focused on the startup. The biggest advantage of raising a lot of money is so that you can pay a lot of money and not have your team worrying about "I'd have loved to do that trip to Paris, but can't afford it. If I quit for Google, then I'd be good to go.
That said, I'm a believer that founders shouldn't be the highest paid employees.
Frequently, and I'm not saying it's Buffer's case, it's to offset the fact that founders have gone, possibly heavily, into debt over years of not paying themselves a salary.
Why wouldn't founders take such salaries, which are not outrageous?
Saying that founders shouldn't take a fair salary - comparable to what they might get elsewhere - puts them in a untenably risky position that would limit the pool of founders to the independently wealthy and the foolish.
That limitation would not be to the benefit of the backers.
To me, that's part of the trade-off that the startup founder / leaderships takes (for good or ill), and seeing salary in the absence of actual equity positions is only half the picture.
Hopefully they all know each other's equity positions internally and just chose not to share publicly... otherwise it would seem like a betrayal of the open culture if the actual ownership structure of the company wasn't openly known and discussed.
Imagine if you went to the store to buy bread, but you didn't know how much all the other people in line were paying for their bread. When you get to the counter, the baker charges you some arbitrary amount. Today you have enough money to buy bread, but the baker warns you that he may charge more tomorrow. Since you don't know what anyone else is paying for their bread, you can't have any idea if what the baker charged you is fair or not. All you know is that you need to work as hard as you can so that you can be sure you will be able to afford tomorrow's bread.
Of course, this doesn't work. Nobody is preventing you from asking your neighbors what they paid for their bread. Once you know what a "fair" price for bread is, then you know exactly how hard you need to work to afford bread, and you have little incentive to work any harder than that.
If you own a company, ideally you don't want your employees competing with each other. You want each of them to compete with themselves, pushing their abilities, growing, learning, improving. You don't want them to know exactly how much they need to do to earn that next promotion, because then they will have little motivation to do more than the bare minimum.
If you own a company, unlike the baker, you can have some amount of control over the flow of information. This control allows you to manipulate your employees motivations. Like any amount of control over anything, this control can be abused...but in capable hands it can also be wielded to great effect.
An open salary policy gives away that control entirely...
I've read dozens of the comments on this page so far. The thing that jumps out to me is the interplay between these factors: (1) internal transparency (2) external transparency (3) internal privacy (4) external privacy (5) human motivation and (6) company culture. There are many combinations here, and I can't help but think Buffer didn't do an effective "search" across the possible "parameter space", even according to their own goals and interests.
For example, Buffer could have easily added a policy saying that each employee's compensation may be adjusted by, say, +/- 20% based on individual factors. That would give some uncertainty, and thus a bit of individual privacy. Peers would still have some confidence that they were, more or less, in a similar range as others with their public performance characteristics.
Let's put ideology aside (i.e. do we want this to work, according to our theories of human nature) and focus on the actual effects. How do you know if you've succeeded? How do you measure this? How do you design the experiment?
Call me skeptical, but I can't help but think that Buffer is doing this, largely, to say "look at us!" and "this makes an interesting blog post!".
This post reminds me of Miley Cyrus at the MTV VMA earlier in the year. Pop singers are incentivized to be the first to break cultural norms for no practical reason in order to ride the wave of subsequent teen followers.
In the same way, posts like these are created to be the first to break a specific norm (i.e. do not post employee salaries publicly) in order to ride the wave of traffic (and hopefully a few additional users).
Just trying to compare here with my European salary.. How much of this do you get to take home, ie. what part of it can you spend on food, clothing, housing etc. after takes? What about health insurance, is it provided for?
Social security tax is 7.5%, with an annual cap of $113k (taxed)
Medicare tax is 2.9%.
Federal tax is very complicated but probably in the range of 20-25% for most people.
State taxes vary by state. In California it can end up being a third of your federal tax.
You really need to save about 10% for retirement.
Health insurance may or may not cost you money. Typically it will cost at least a few $thousand/year.
Having talked to a few Europeans about it, my impression is that both the raw salary and the % you keep are quite a bit better in the US, for professional workers, and that most goods cost less. But you are expected to work more hours with less time off and if you get sick or hurt or something really bad happens to your company/town/industry, good luck to you. There are "safety nets" for most of these things but they have a lot of holes in them.
Roughly - Expect someone making $100k in the SFO area (high state and taxes compared to many parts of the country) to pay about 20-25% in a few federal taxes, and 8-10% in state taxes. So the take home pay would be around $65k-$72k, before any retirement contributions etc.
In the US, healthcare is provided in a professional/fulltime position like these (maybe not the bootcampers). Figure $150-300 a month for healthcare if contractor or not-provided.
Okay, thanks for the info. I have health insurance (great nationwide social security, and additional health coverage for me and my partner provided by my employer), a company car (audi a6) with fuel card and make about the same as the CEO, but pay close to 50% in taxes.
Still, not that bad at all apparently... (Even though it's hard to compare. Cost of living, vacation days, all make a difference.)
It depends on a lot of factors, but most people making that level will probably pay a total of about 30-40% in taxes. Health insurance will almost always be provided at this type of job.
I actually love the radical transparency here, even after reading all the warnings in the HN comments.
What I like less is the salary formula. What's going to happen is that all of the negotiation is going to get packed into the experience and seniority multipliers. It creates the illusion of rigor and possibly does more harm than good.
I'd just drop the formula altogether, I think. If at the end of the day, the numbers are just worked out so that you and the employee agrees the salary is about right ("I want $x, so I guess I'd better get a 1.3x experience multiplier"), then just make "work out the salary such that you and the employee agree it's about right" the policy. The transparency keeps these negotiations simple and fair; for example, pushier people won't get more raises than their shyer colleagues because everyone will notice and act accordingly (including you, who will find it easier not to give pushy people those raises when they're posted on the company website).
Are you serious? I'd feel like a fucking idiot walking out of university with a brand new degree and demanding 100k off the bat. I guess the market is different outside SV though right?
Nah, that's pretty standard if not a little low. Without any change in experience, you could probably get up to $120-$130k with a little shopping around.
I always thought the best system would be to tell people what their boss makes, including options and other non-salary compensation.
This eliminates the problem of people comparing themselves to their nominal peers on incomplete information. It really tells you everything you need to know about compensation.
But the most valuable part of the buffer system is the formula. You have a framework for calculating what is fair.
One of the dangers at small busy startups with well-intentioned leaders is that you basically forget to give people raises and your employees don't get you to correct it until they are pissed enough to quit. That's part of why I left my original company and it cost me a good employee recently.
Interesting in many ways.
In particular, only the executives make what would be considered a competitive senior engineer/architect salary in NYC or SF. Perhaps they 'compensate' with equity?
The CEO of Buffer was asked by someone if he worried about this making it easier for his employees to be poached. His response: "if they do, they would be saving me time. Good to speed up that process. I don’t believe salary is the reason people would leave."[1]
I'm still baffled by salaries. In Toronto and surrounding areas (cost of living is not as high as San Francisco) I'm a programmer for web apps (php, js, and a bit of this-and-that). I see sallary ranges all over the map. Some make 40k, I've seen a 55k who wanted 60k, I've an 80k, and a few 90-120k.
One job I asked for 2x what I made at my old job.
I'm convinced you're paid what you ask for, so long as you can get shit done.
As someone who uses Buffer (free version) on a regular basis, I have to say that I'm fairly amused that it appears as though none of the commenters here have actually read much, if anything, about Buffer. They have quite a lot of information about corporate culture that would have answered some of the questions and concerns posted here. Further, they're a distributed workforce (which I don't think anyone picked up on -- this explains emails vs. face to face conversations).
I am the CEO, and my salary is lesser than all the key staff in my company. Reason, self-funded. And everyone in the office knows it. I am just astonished how a CEO of company like Buffer, can afford such an expensive package for himself. Are you making enough or just billing it to your investors?
This is only halfway to true transparency. And also halfway to the bureaucracy of most large companies.
The other half to get to full transparency is having clear, measurable definitions of experience, and clear milestones of how to advance in seniority.
And that relates to how this starts to resemble corporate salary structures -- the key difference being that these guys have a defined number instead of a "salary grade". but the idea of plugging positions and experience levels and seniority into a salary structure is key to almost every large company. And as a result, most of the corporate angst over salaries starts to boil down to questions like: "Why is he a programmer IV, while she is a programmer III.", "How do I advance from being a Staff Software Engineer to an Advisory Software Engineer?"
This structure doesn't necessarily remove questions (and sometimes conflict) over career advancement, it just moves the discussion away from money, and towards labels and definitions.
And as some comments mentioned, there are cases where you really want to hire someone whose salary requirements do not match your structure. You may get into sticky situations like having a great coder, but you would have to make him a Lead, or a VP to actually make him fit your structure. And maybe you don't want them to have that level of leadership, because that is not their skill set. So you end up having to decide -- Is this salary structure more important than making those hires, or are you willing to let potentially great hires get away because this structure is more important to the company than those people?
That decision is not one that I will second-guess - I would think that these types of issues and scenarios, as well as other issues raised in the comments, have probably already been debated internally before this decision was reached.
But that would be an interesting follow-up post -- to hear about what discussions and debates went on before making this decision, what the expected impacts will be, why decisions were made, and what levels of growth are expected to invoke changes in this structure.
I don't mean anything but these salaries are pretty weak. Honestly, they are sort of really weak for this kind of company it seems to me. Hardly gives the impression of high paid software developers, particularly in the Bay Area, wow. I dunno.
I think if you don't like the idea of closed salary (I don't), you should just go ahead and publish yours publicly (on FB or something), if you have the guts to do it and face potential conflict with your employer (I don't have the guts, I wish I had).
Because, quite frankly, it's your money. No one should tell you what to do with it, much less to count these, publicly. And if, as the result of this, you get smaller salary, it will be there for the others in the company to see. How motivational.
I think even with this unilateral action, you will get most of the benefits - good people around you are likely to respond back and tell you if you're underpaid or overpaid.
Not the smartest thing in the world to do, publish people's salaries and twitter accounts, especially in this day and age where privacy is virtually non-existent. I hope everyone agreed to publicly disclose the salary information.
If I were in HR then I would be reaching out to any employee that I see is under paid. Likewise I would not reach out to any employee that I think is over paid. Perhaps consider keeping this data internal.
It's great to see other companies experimenting with openness in salaries. We've taken a different approach and pay all employees (including founders) the same salary which increases as the company grows. Our team is now 8-people strong and it's working great so far. As long as you contribute to the bottom line everyone's salary goes up automatically. It's totally transparent, no negotiations required, reviews, etc.
One area where open salaries are not such a big deal - education. Many teachers are paid on an open scale of years of service X education level. It does create a culture of possibly too much higher education beyond what is useful or necessary for certain levels of teaching. That also creates teachers who don't want to switch jobs because they'll lose the years of experience pay.
Lesson - all people game the system for their own benefit.
I'm very much on the fence with this. If you follow a simple formula, it can work. If you need to use judgment (how to pay a superstar?) then it becomes very tricky. My general observation is that any time two people compare salaries, one is disappointed. And here you shared your salaries with the whole world. Bravo for doing this, and engaging the discussion.
Suspect the weak mean salaries in London are due to the fact that many (most?) senior developers move out of the permanent jobs market into consulting/contracting (which, I hear is not par for the course in other nations).
The only downside I see is that some people will be disappointed because the salary reflects their skills and the value the company puts in them. For some this is hard to take if they are in the bottom 20% of people in their peer group.
Said that, it's probably a good idea to start with this compared to introducing this later.
There are a lot of people bringing up edge cases and contingencies on this thread. The success of Buffer's culture is what happens when you stop being afraid of the edge cases and start deciding what kind of people you want to be. People will follow you if you stay true to that, as corny as that sounds.
I'm really happy to see companies offer equity vs higher salary. As someone is almost 30 (read: less willing to take the chance that equity will result in future money), I feel that's a great choice to offer employees.
But how do you deal with the newcomers? As you grow you keep getting more and more and that system they have will be harder to implement and eventually may end up just like other companies. It isn't something they shouldn't be thinking right now. It does make the current employee happy, but will this work when 10 more people are joining, 20, 30?
> Those unhappy with the changes can choose to stay or leave.
That's harsh. I am arguing that fantasying the success of this payscale doesn't mean the company is not responsible for the welfare of the employees as the company scales and grows.
>Every internal email sent between any 2 people on the team has a certain list cc’ed that is accessible for everyone: For example if 2 engineers email with each other, they cc the engineers list, if it’s people on our customer support team they have a support email list cc’ed. Stripe was a great inspiration for this. (More about this)
Openness and transparency and honesty are great. But this seems like it's removing privacy, which sounds very tiring.
Wouldn't this just lead to people emailing less and having private discussions face to face? We're humans and we have drama and we need to vent from time to time.
At one level, you are right...anyone with experience in covering gov't knows that employees have long since stopped using their official email for dicey business, e.g. Sarah Palin http://en.wikipedia.org/wiki/Sarah_Palin_email_hack
But an effect of this "you're being watched" is that you will modify your behavior to at least meet the spirit of the law, and this modificAtion can be I itself beneficial. Trivial example: I used to cuss a LOT...but volunteering in family friendly jobs forced me to not do that, or at least start using "gosh" and "shucks". I found out (as Orwell might attest to) that my mood overall improved without reverting to the negativity so reflexively.
In the case of Buffer...OK, some kinds of very important communication may be stifled. But a whole lot of non productive behavior (idle chatting via email) may be stifled. And then there are benefits of transparency, in which everyone realizes they have to start out in a consensus building mood.
And for the cases where you need to take someone to the woodshed, so to speak? Do it in person. That alone mitigates some problems that come from misinterpretation through the written word
And that's completely ignoring the shitstorm of emails one would recieve on any given day. Email is a drain on productivity and this seems like it would make it even more so. Having access to conversations between parties is nice but please don't send me meaningless emails all day long.
I would last 5 minutes with that policy. First order of business would be writing an email rule to delete anything that's not specifically sent directly to me.
It also seems like a bad use of technology. If any engineer e-mail also has to be CCed to the list then you should use a discussion board, or a chat room, or... anything that doesn't mean spamming everyone's inbox.
It's honestly stuff like this that makes me feel like the only sane person around. Why would you do this? If the CEO is pushing for it, the employees will all smile and nod and go along with the crowd, but all this does is breed resentment. The idea of open salaries sounds good on paper, but it's simply idealistic.
You can sing the happiness song and do all the lets-be-friends dances but at the end of the day we're people competing for resources. This will have lasting effects to all current employees for sure.
> It's honestly stuff like this that makes me feel like the only sane person around.
You're not.
> If the CEO is pushing for it, the employees will all smile and nod and go along with the crowd,
I don't know what to say. There are more kinds of working relationships than are dreamt of in your philosophy. Not everybody lives in fear of their CEO.
> You can sing the happiness song and do all the lets-be-friends dances but at the end of the day we're people competing for resources
Sure, but some of us cooperate with others in order to compete with everyone else, and that's good enough.
This also makes the employer less accountable to the employees. The employer can easily pay somebody significantly more or less than they contribute, and the rest of the team cannot really say anything about this.
Now, there are some cultural reasons to do this--preventing jealousy, hiding inequality. But it really feels like a social band-aid, a temporary solution hiding the symptoms but not the underlying problem. Besides, everyone ends up having a reasonable guess as to who makes more and who makes less anyhow! The same dynamics develop, just with more uncertainty.
On the other hand, making salaries public takes these problems head-on. Inequality isn't bad in and of itself; some is basically necessary. But hiding that fact doesn't really help anyone. Instead, forcing people to see it head-on, deal with it and talk about it is probably a better solution.
I really applaud Buffer and the general movement towards transparency. I think it's a very healthy cultural progression and hope it catches on more widely, so that people stop having knee-jerk reactions to salary information.
EDIT: As an interesting additional note, all salaries (beyond a token minimum) at Berkeley (and the whole UC system) are publicly available at http://ucpay.globl.org/.
I've looked up various professors at the ParLab (where I did some undergraduate research). The fact that their salaries range from ~120k to ~350k did not change my perspective of anyone and did not seem to affect the lab's culture at all.
Essentially, I'd be perfectly happy to see this outside of public universities.