Stark HR Magazine Jan/19 - Page 15

eeping salaries the

same for senior

executives working in engineering and marketing/operations will help you address the desire for fairness, that salary information is never opaque, and the need to generate a feeling that everyone is working together to make the company a success. if you value the business side of your company differently from the engineering side, you are sending a cultural message. That doesn’t mean it’s wrong, it’s just good to be conscious of.

Compensation should occur on a formal basis once a year for the following reasons:

• It enables you to defer all compensation conversations to just this one time.

• It allows you to do the research to ensure that all salaries are still even with the market.

• It gives you all the data you need to decide whether to offer high performers more salary or equity.

Although most compensation reviews occur in December or January to help people reflect on the year before and look forward to the year ahead, startups should do whatever is right for their business. There might be different seasonality that dictates when this should happen — ideally when people and managers have the time and energy to be thoughtful about their peers.

Every new hire should be informed that compensation reviews only happen once a year. There should be no exceptions. The moment you break this system — even if someone has a higher offer from another company — you undermine yourself and teach people that all they need to do to get more money or stock is to ask for it or get another offer. Don’t do it.

The one core exception to all of these rules (and it’s a big one) is how to compensate sales staff. This is a different animal altogether because you have to build in incentives that impact base salaries and equity.

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COMPENSATION