At Hosted Graphite, we’re open about how we do things: both internally and externally. We publish the status of our internal systems (and share a full history of all incidents), we share our weekly Baremetrics reports on revenue and churn rate with everyone in the company and, most recently, we told all our staff how to ask for a pay rise.
For us, being transparent about pay doesn’t mean publishing everyone’s salary (though some companies do go that far). It’s more about making sure everyone has an understanding about how salary increases are decided on and what steps to take to prepare for a review. Every company periodically reviews and adjust salaries. We just make it clear to everyone what our approach is and how to best prepare.
To do this, we laid out a clear process for salary reviews and wrote down the steps involved to make sure everyone gets the best deal. It includes:
Preparing a list in advance with points on:
- What went well this year, and the impact this had on the company.
- What went badly, and what you learned from it.
- The salary range you think is fair, and why.
Remembering every project you’ve contributed to and every bit of impact you’ve had over a whole year is impossible. To help with this, we encourage everyone to write “snippets”— a short daily or weekly note about what you’ve done and what decisions were made. When it’s time for an annual review, often the only source of data needed is these short activity logs. The key is doing it at regular intervals.
Then we meet, discuss what’s been written, and talk about the proposal. The intention here is to teach every employee how to critically review what they’ve done in the last year, to identify weak spots, to think about how to counter those, and how to use this data to justify the salary they deserve.
Learning to negotiate a salary is a very difficult thing, and nobody is going to go out of their way to teach you. That’s why being clear on how to ask for an increase fits in with our goal of making sure we develop the people we have, especially those who come to us early in their careers. Most people learn to negotiate by getting a raw deal a few times early in their career, and that’s something we’d like to avoid.
It also ties in to our commitment to tackling the tech diversity problem (in our own small way). We think that just saying we’re committed to equality and diversity isn’t enough and have put considerable energy into being more inclusive in our hiring process and the way we operate. Being open about salary negotiations is another way we battle inequality. It’s our way of subverting the current system where women and minorities are more likely to be uncomfortable negotiating salary and therefore tend to be paid less. It’s about having systems in place to make sure everyone gets a fair deal.
Of course, it works in our interest too. If we don’t adjust salaries correctly, people will feel undervalued and will leave. We could be sneaky or strict about this process like other companies are, but that just leads to an odd and adversarial environment where people can feel undervalued for a long time, or where people who aren’t sure about the right way to justify their new salary won’t get a good deal. A very happy team is worth a lot more than shaving a bit off everyone’s salary and being Grinches about it. We’re convinced that if we teach our staff this skill, and generally work on developing the already fantastic people we work with, they’ll be happier, produce better work, stick around longer and invite their talented friends to work with us too. It’s not selfless, but we think being nicer and more human than other companies is going to benefit everyone in the long run, even if in the short term we’re basically telling our employees how to get more money out of us.