f 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.
Create a system that revisits compensation only 1-2x a year.
Startup HRs have so much going on that they shouldn’t burden themselves adjusting people’s pay on an ongoing basis. This is the logic behind annual compensation evaluations.
The single most important thing any employee can do is add value to the company, which will add value to the equity.
This should be the prevailing message around compensation.
transparent.
It gets harder to be transparent as a company grows, so take advantage of the moment while you’re small. Go that extra mile to bake this principle into your culture, even if you know you may have to ease away from it as you grow. Your most valuable employees will remember it, and it will help both recruiting and retention.
I
You can't be transparent if you're not paying fair, and if you are, there's no reason to not be transparent
alking about
compensation
more than once a year is a waste of time for everybody when you’re small. If you have a squeaky wheel on the team, you should have a frank, transparent conversation with them, and if they can’t get on board, maybe they shouldn’t be there. Build a system so you have a set time period to worry about this, communicate that system so people know when to talk to you about it, and you’re done.
On the spectrum between formulaic and discretionary compensation, be as formulaic as you can. It's really, really hard to predict the long-term at a startup. If you start using discretion too early about new hires or new performers, you’re going to set yourself up for long-term problems you can’t anticipate, such as:
• What if someone who is a high performer at 10 people isn’t quite as good at 50 people?
• What happens when you need to split someone’s job in 3 years?
• What if you can’t offer quite as much base salary at one point than you can at another?
T
COMPENSATION
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