
What If Companies Shared Exactly How They Determine Salaries? - LeonW
http://www.theatlantic.com/business/archive/2015/11/buffer-pay-transparency/417744/?single_page=true
======
duncan_bayne
I work for a company ( Cogent - [http://cogent.co/](http://cogent.co/) ) that
does just that. In my experience there are many, many benefits. Not only is it
fairer, more transparent and less stressful, it also provides people with
clear guidance on career development and alternative career paths.

Here's our CEO, Marty Andrews, talking about it at a conference:

[https://www.youtube.com/watch?v=sf5r4yLTc9k](https://www.youtube.com/watch?v=sf5r4yLTc9k)

~~~
alexandrerond
That's interesting. I'm inclined to agree, but on the downside, doesn't it put
everyone publicly on a scale, which shows really how good/bad you are in
respect to people around you? That must kind of suck for those surrounded by
people with higher scores.

Scoring systems are never perfect for everyone, or adjust to everyone
contributions, so someone's always going to feel treated unfairly.

Also, unless you bend the scoring rules (which is opposed to the spirit of the
system), you have probably reduced capacity of negotiation to attract talent
(can't really pay a higher salary just because you got someone that is
prospectively good), and also probably reduces your capacity for retention
(increasing someone's salary when they hold a key position for the company
and/or they progress faster than normal before someone offers a higher
retribution somewhere else).

So in the end, while solving many things which are fucked up with secret
salary calculations, it probably also brings in some problems? I'd appreciate
if you can give some more details on these aspects...

~~~
duncan_bayne
"That must kind of suck for those surrounded by people with higher scores."

My experience has been the opposite: you know who has higher scores than you,
yes, and that they're paid more. But you also know what you need to learn,
practice and do in order to raise your scores. It makes the entire system
transparent, comprehensible and above all means that your pay is essentially
something that's entirely under your control. I found this very liberating.

"so someone's always going to feel treated unfairly."

At some point that will happen, yes. This comes back to the value of
transparency: we strive to create an environment where, if someone feels hard
done by, he or she can have that conversation openly and safely with the
people involved. And it'd be a lot more objective and constructive than if
salaries and their computations were closed.

"I think Joe is being paid more than me, but I don't know for sure, and I
don't know the reasons ..." is a fast-track route to (justified!) resentment.

"Also, unless you bend the scoring rules ... you have probably reduced
capacity of negotiation to attract talent ... and also probably reduces your
capacity for retention"

So far that's not been my experience. What I've seen is that the open salary
model is a really attractive proposition for candidates, because they know
they'll be paid fairly. The salaries are adjusted annually based on market
changes, CPI, etc.

In terms of being able to compete against companies with higher salaries,
there are two approaches. One: raise the levels for everyone. Two: compete on
culture and other perks (of which we offer a _lot_ ).

One thing we definitely don't do is make exceptions to the model. I wouldn't
recommend it for anyone else taking the same approach, either: in addition to
being the wrong thing to do, my gut feeling is that backing down on an
approach like this would be catastrophic for staff morale.

 _Edited_ : Oh, and we try not to use or think in terms of 'good' and 'bad'.
It's not a scale of moral judgement, but a measure of outcomes. Also, we try
to keep it as concrete and observation-based as possible. E.g. we don't say
"we think this person is a level 4 Fooblerizer", we say "this person has
Fooblerized for several clients successfully, and is now leading a team of
Fooblerizers on-site".

~~~
alexandrerond
Thanks, glad to hear it's working right in your company!

~~~
duncan_bayne
It is, very nicely. In only a short while I've come to regard the usual
practice of paying people different amounts for the same work as vaguely
horrific.

