If you are really serious about being fair. Ask yourself this question: Why would a guy who can easily get 6K+ USD per month by working on Upwork, Toptal work for Gitlab for 1/3rd of that money and that too Full time?
Regarding using the rent index; that was a data-driven decision as described on https://about.gitlab.com/handbook/people-operations/global-c...
but as I mentioned, it is a work-in-progress just like everything else at GitLab always is, and I'm open to alternatives / ideas.
Why are we bashing GitLab when they're at least taking steps to make their pay public? Every company has some version of this formula, you just can't see how off it is.
If I ever apply for Gitlabs (which I'm often tempted to do) I'm afraid that my history of conversations on HN will betray my tendency to bring up uncomfortable issues... Oh well... ;-)
Maintaining the idea of fairness is often important in the eyes of employees, but I wonder if it's actually a good idea in practice. Really, you want to hire the best people you can for the money that you've got. So with the system you have in place, if you have 2 equally skilled people, then there is a pretty big incentive to hire the cheaper one.
The end result is likely to be a bit of a skewed culture. Very skilled people are more rare than less skilled people. They are hard to hire, so you will tend to hire whoever you can find. Less skilled people are much easier to hire, so you will find them in almost any geographical location.
The end result will be a company where only the best people will be hired in the expensive region, while the inexpensive regions will have a mixed bag. Because very skilled people are rare, you will end up having inexpensive regions being overwhelmingly represented by lower skill levels (low skill -> easy to hire -> available in any geographic location -> cheaper geographic locations will be hired first)
This will create a power imbalance in the company because the highest density of high skilled workers will be geographically close and therefore in the same timezone. High skilled workers in lower paid regions may have a stigma attached to them because they come from a lower paid region -- and hence are associated with the higher occurrence of lower skilled workers. This may result in considerable friction over time.
I think you can mitigate this problem by creating a second tier pay system for your most skilled workers. This should be a harmonised pay scale and you should pay attention to trying to evenly distribute positions in this pay scale across geographic boundaries. To make it obvious which pay scale people are attached to, you can create new titles for the positions.
You will still have an "Us vs. Them" problem, but at least it will be people you have consciously decided that you want to promote in the company. It is explicitly not fair (in that not everybody is equal), but it makes a clear message of how you want the leadership to work.
It also makes salary negotiations a bit easier. Often people aspire to the highest level of compensation, even if their contributions do not warrant it. When people ask to be promoted to the special pay tier, it creates an opportunity for having a frank discussion about the person's performance. This can clear the air and set proper expectations -- or possibly indicate clearly to the employee that they aren't as valued as they wish to be. Even if someone leaves in this circumstance, it can often be to the benefit of all parties.
Hope you find this interesting/useful. It's always a tricky balancing act, so I wish you luck :-)
I think you make a great point. I do want to add some nuance:
1. We currently have great people all around the world. Many of them used to be in expensive locations but moved.
2. Because we're remote only the problem of concentration would be time zone only. But for practical purposes South America is a similar time zone as North America.
3. We have one career path (junior/intermediate/senior/staff/etc.) that is available to everyone based on performance.
Thanks for the comment, it is interesting and I'll share it with our Sr. Director of People Ops.
We have recently hired great people in Belgium based on the calculator rates. Of course there is no objective market rate, there are likely people getting paid more and less.
A quick google search will show you that people use 30% of their salary towards their rent: https://www.google.co.in/search?q=rent+as+percentage+of+sala... What does that tell you about computing salaries based off of rent?
You can see a lot of people discussing Gitlab's salary in a negative way on HN: https://hn.algolia.com/?query=gitlab%20salary&sort=byPopular... Most of them have fluff responses talking about being open and fair.