I just took a look at your http://www.rethinkdb.com/jobs/ page and saw that you guys have open salaries. What type of feedback have you received from doing that? Are people resistant to it? Do they come around eventually?
So far we've received only positive feedback (see here, for example: http://news.ycombinator.com/item?id=1190533). Of course it could be that some people are so against it, they don't even bother voicing their concerns, but as far as we can tell all developers welcome this.
I have a slight problem with your 'open salaries': You don't define the ranks. Obviously if I took a job with RethinkDB I would be an "Engineer" rather than an "Intern"; but would I be an "Engineer I", an "Engineer II", or an "Engineer III"? Between them, the salary ranges stretch from 65k to 105k.
Presumably everybody inside the company knows what rank everybody else has, so to that extend the salaries are indeed open; but from the applicant's perspective, all you seem to have done is renamed "negotiate salary" to "negotiate rank".
The reason we didn't define it is that it's incredibly tricky. There are some people with no education and no track record with incredible skills, drive, and professionalism. There are others with long track records who are less skillful in some areas. After trying to write up clear definitions for a while, we realized that we can't do it right without writing fifty pages of legaleze, so we decided not to waste time on it.
In practice, when you have only three levels, most people have a good intuitive feel for where they fall, and it's usually in tune with our evaluation. I agree that this system has its problems, and we'll try to work out the kinks over time. It will be interesting to see how it evolves.
Have you considered defining the ranks based on the job responsibilities rather than the backgrounds of the applicants? e.g., "will need to do X without supervision" / "will need to supervise more junior people" / etc?
Along the sames line, if there is a variation, then write it down as the norms or minimums, at a minimum, they will be able to do 3 out of this 6 things, etc.
It seems like this system, necessarily works outside the laws of supply and demand. How will you handle adding a new member to the team in a couple of years, if the market price for that person is significantly higher then your stated salary?
To the contrary, I think the system is in tune with the laws of supply and demand. If your open salary range is so much lower than the industry average that you can't hire a new member, your existing employees will likely leave. That means you have to adjust your ranges periodically, to make sure they're in tune with industry numbers.
Of course the downside is that if one employee gets a raise, everybody gets a raise (unless the employee gets promoted to a higher position). From the POV of the employees this is a good thing, because that means everyone is fairly compensated.
Or does a different scale apply to you? If so, fair enough.
At a place I worked before, I was pretty embarrassed when I found out I was earning 15% more than a fellow colleague on the team who was just as good if not better than me, purely because I happened to join when market rates were X, whereas he joined when they were X-15%.
I suspect this is a big reason companies don't want employees to talk about compensation.
Though where I am now, we have an "everyone gets the same raise" policy, combined with hiring practices that ensure substantial variances in skill of employees. Not a great situation either.
So I think the fixed scheme really depends on getting your hiring absolutely right, if you screw up, you have to be willing to face up and let the person you screwed up with go.
Comments
I just took a look at your http://www.rethinkdb.com/jobs/ page and saw that you guys have open salaries. What type of feedback have you received from doing that? Are people resistant to it? Do they come around eventually?
So far we've received only positive feedback (see here, for example: http://news.ycombinator.com/item?id=1190533). Of course it could be that some people are so against it, they don't even bother voicing their concerns, but as far as we can tell all developers welcome this.
I have a slight problem with your 'open salaries': You don't define the ranks. Obviously if I took a job with RethinkDB I would be an "Engineer" rather than an "Intern"; but would I be an "Engineer I", an "Engineer II", or an "Engineer III"? Between them, the salary ranges stretch from 65k to 105k.
Presumably everybody inside the company knows what rank everybody else has, so to that extend the salaries are indeed open; but from the applicant's perspective, all you seem to have done is renamed "negotiate salary" to "negotiate rank".
The reason we didn't define it is that it's incredibly tricky. There are some people with no education and no track record with incredible skills, drive, and professionalism. There are others with long track records who are less skillful in some areas. After trying to write up clear definitions for a while, we realized that we can't do it right without writing fifty pages of legaleze, so we decided not to waste time on it.
In practice, when you have only three levels, most people have a good intuitive feel for where they fall, and it's usually in tune with our evaluation. I agree that this system has its problems, and we'll try to work out the kinks over time. It will be interesting to see how it evolves.
Have you considered defining the ranks based on the job responsibilities rather than the backgrounds of the applicants? e.g., "will need to do X without supervision" / "will need to supervise more junior people" / etc?
It seems like this system, necessarily works outside the laws of supply and demand. How will you handle adding a new member to the team in a couple of years, if the market price for that person is significantly higher then your stated salary?
To the contrary, I think the system is in tune with the laws of supply and demand. If your open salary range is so much lower than the industry average that you can't hire a new member, your existing employees will likely leave. That means you have to adjust your ranges periodically, to make sure they're in tune with industry numbers.
Of course the downside is that if one employee gets a raise, everybody gets a raise (unless the employee gets promoted to a higher position). From the POV of the employees this is a good thing, because that means everyone is fairly compensated.
Where do you as founders fall into this scheme?
Or does a different scale apply to you? If so, fair enough.
At a place I worked before, I was pretty embarrassed when I found out I was earning 15% more than a fellow colleague on the team who was just as good if not better than me, purely because I happened to join when market rates were X, whereas he joined when they were X-15%.
I suspect this is a big reason companies don't want employees to talk about compensation.
Though where I am now, we have an "everyone gets the same raise" policy, combined with hiring practices that ensure substantial variances in skill of employees. Not a great situation either.
So I think the fixed scheme really depends on getting your hiring absolutely right, if you screw up, you have to be willing to face up and let the person you screwed up with go.
Where do you as founders fall into this scheme?
As founders, we get the lowest full-time salary possible on the scale (currently $65K).
if you screw up, you have to be willing to face up and let the person you screwed up with go
Absolutely. That's one of the benefits of the open system - it prevents the company from keeping bad apples.
Publishing salary ranges in advance tends to be a very effective way of making sure that you never need to make that choice.