Stark HR Magazine Jan/19 - Page 10

N o one is ever happy

with compensation,

and compensation has never made anyone happy.

Compensation is never going to be the thing that makes people join or stay at a startup long-term (or any company), nor should it be. Compensation is not a healthy version of retention. I know it’s terrifying when someone has a huge counter offer, or you’re trying to recruit that senior leader from a big company, but you should accept upfront that it's better if they join for the people, buy into the vision, etc., and have to make a hard decision on compensation. They will stay longer. Your goal should be to get compensation off the table — make sure that they can live on their salary and have a fair slice of equity — so employees don’t think about it except maybe once a year. The

best way to do that is to be fair and transparent.

People always find out what everyone else is making.

Never build a compensation system that assumes people won’t know what their peers and teammates are making. They always find out. You might be living really well. You might be in the wealthiest 1%, but if there’s someone sitting next to you who makes twice as much, you’re going to feel insulted. It’s just a

fact. So take that into account when you’re creating your plan. You need to be able to explain (and defend) everything through a logical set of guidelines.

If you're leading a small, early-stage company, be as transparent about what people are making as possible. This will put out fires before they start, establish an honest environment, and serve as a nice forcing function for you:

You can't be transparent if you're not paying fair, and if you are, there's no reason to not be transparent.


No one is ever happy with compensation and compensation never made anyone happy