Slashdot Mirror
Tech Startup Buffer Publishes Every Employee's Salary, Right Up To the CEO
Hugh Pickens DOT Com writes "Paul Szoldra reports at Business Insider that Joel Gascoigne, CEO of social media startup Buffer, reveals his salary along with the salary of every single employee in the company, and includes the formula the company uses to get to each one. "One of the highest values we have at Buffer is transparency," says Gascoigne. "We do quite a number of things internally and externally in line with this value. Transparency breeds trust, and that's one of the key reasons for us to place such a high importance on it." Gascoigne, who has a salary of $158,800, revealed the exact formula Buffer uses to get to each employee's number: Salary = job type X seniority X experience + location (+ $10K if salary choice). Gascoigne says his open salary system is part of Buffer's "Default to Transparency" and says Buffer is willing to update the formula as the company grows but hopes that its focus on work/life balance fosters employees that are in it for the long haul. "In Silicon Valley, there's a culture of people jumping from one place to the next," says Gascoigne. "That's why we focus on culture. Doing it this way means we can grow just as fast—if not faster—than doing it the 'normal' cutthroat way. We're putting oil into the engine to make sure everything can work smoothly so we can just shoot ahead and that's what we're starting to see.""
Sounds like something they'd do to placate "dumb money" angel investors
The nation of Norway does this for every citizen. It seems to work out for them.
No respect for employee privacy, we never discuss salaries of other people here.
Salary = job type X seniority X experience + location
So I guess productivity and contribution to the business doesn't count. Great. Time to sit back and eat pretzels!
www.shortman.com.au - top shorted stocks on the ASX
Salary = identical for everyone.
The best world is one where everybody works voluntarily, doing what they want, and finding the challenges which suit them.
I am confident that humanity will eventually reach that point, once we've shaken off the religious legacy that is "Protestant work ethic", which just means people at the bottom misled into feeling proud about working hard (work macht frei, dontcha know?) while most of those at the top buy more yachts.
Sounds like something they'd do to placate "dumb money" angel investors
I do invest in startups and most of the angel investors that I know are not dumb.
That guy is running a publicity stunt.
Transparency can only work up to a point before jealousy creeps in.
There is no way to run an organization with 100% transparency - people will start comparing each others' workload (and/or contribution) with the salary figure.
The art of managing is an ART and it's a very delicate task.
Muchas Gracias, Señor Edward Snowden !
In some jurisdictions, salaries are considered private information and governed by privacy laws which deal with such information. Guess not in that jurisdiction? Must make it harder to bargain with other companies when moving on.
People expect privacy.
Do they also list the stock ownership ,stock options and bonuses of every employee too?
No snark, genuinely interested in how far transparency goes and how far it has to go before transparency is actually achieved.
And what is the goal?
I know some people that do the work of 4 of their colleagues, would it be wrong to pay them 4x more? Afterall, the company still saves on healthcare, parking spaces, and other redundant costs. What a person is worth is not always reducable to a position.
>>social media startup
*groan* Anyone else joyously awaiting when this bubble pops and all these paper millionaire/billionaire social media people lose all their worth?
Spending over $300k/yr on whatever the hell these people do. I wonder what they add to the bottom line (surely a better basis for calculating rewards).
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
Seniority is not always a good reason to give someone more money. There are new guys out there that can show up at the job and be 2X as effective as the guy that has held the position for 5+ years. And this assumes that the CEO is an honest guy and gives out raises every 6 months for cost of living.
Dishonest companies do not do the Cost of living increases.
Do not look at laser with remaining good eye.
So if I read this right then it doesn't allow for pay raises.
Why not?
Because pay raises are generally based on individual performance and change over time and thus do not fit into a formula per se.
Which could also mean that nobody at this company will ever get a pay raise.
Not a place I want to work.
Oh, so why is this important?
In 2 years time, when 2 or more annual performance reviews have been undertaken and thus at leas 2 opportunities for pay raises has passed then numbers will start to move and people aren't always happy with all that this would entail.
Short sighted maneuver. I'd never work here for the simple fact that I don't want my collegues judging me in part or in full by how much I do or do not get paid as that's not their role and with this information they will.
I know they are a startup and are all hoping for a big equity payoff, but I'm still surprised the salaries are as low as they are. I can't imagine any senior engineer in CA making less than 100k. Most I know make above 150k in the bay area even at startups. The risk they take at startups is unemployment in a few years if it doesn't get bought out by a big name.
I assume this is BASE salary that is public and merit/performance based bonuses/equity are issued in private. Without some variation in comp or more money, no one is going to a valley company where the CEO only gets 158k and they can expect less
Happiness Hero earns $76,000
Happiness Hero == Tech Support/Customer Service. At a social media startup?
This startup will burn up and disappear before Q3 2014. "I guarantee it." (TM)
I work for a state government agency. Every employee's salary is public knowledge -- anyone can request the salary information of any employee under the public information laws. In fact, a newspaper in one of the large cities within my state did exactly that for every single employee, and put the information on the web so people could search through it -- yes, down to the individual employee level.
There's nothing wrong with this IMHO; the taxpayers are our bosses, and they deserve to know what their employees are getting paid.
What's funny is that within the agency, there was still the attitude among the management that systems (particularly databases) had to be designed so that no employee could look up the salary of any other employee (except for HR staff, and managers could see their direct reports). We in IT kept telling them this was public info, so trying to "hide" it was silly, but they just didn't get it. Finally in a meeting I got so frustrated, that I went over to the PC hooked up to the room's projector, fired it up, went out to the newspaper's website, and started bringing up the salary info (from the previous fiscal year) of the people in the room at the time. Then they got it.
Salary = job type X seniority X experience + location (+ $10K if salary choice)
He doesn't really explain, how the first multiplier "job type" is calculated.
Stock, stock options, vacations, automobile, life / health / disability insurance?
Too many CEOs think they are making a statement by announcing that they are only getting paid $1 / year all the while cleaning up on all the other perks...
It's comparing apples and oranges by using only one metric.
-- Karl --
Some metrics are much more important than salaries. Many startups desperately hide their desperate finances from employees. Silicon Valley startups tend to do better, mostly as a result of jaded employees ("this ain't my first startup rodeo").
The best startup I worked with in that regard had monthly all hands meetings where the CEO disclosed cash on hand, cash burn for the month and reasons (we were a hardware vendor, so major burn), anticipated burn for the next, a status update on closing our current round of funding and valuation, a status update on the next round, new customers, new hires, milestones reached, etc. It was awesome (and it still failed).
Many startups I have worked with are in serious denial over self-measurement.
Midwest startup example - a recruiting pitch from the co-founder and chairman of the board where he says the company has "lots of money", only to discover a week after starting that they can't order hardware because they can't pay their bills. And would you please sign this non-compete? Oh, you read it? It says you are prohibited for working with packets for a year after leaving? We had no idea!
I thought about doing this too a while back
The Replicator is partially here, for Digital Entertainment. And look at the fight to the death for it!
We can forgive T.O.S. for a lot of things being the first, and "being far enough back" they had a lot of ground to break and computers were 3rd generation ENIACS with better hardware. But it's interesting that Next Generation takes place in an updated time (including the early 90's) when enough of the early future of computing was clear enough ... ... and they still missed the Digital Rights theme. (Or else were told by the studios not to feature it!!)
Meanwhile, we're half way there on the physical printing side. "Everything is a file", and you become limited only by the "quality" of your "Replicator". The early days, all they could do is fill cheap plastic molds so you could make toy models and stuff. But slowly the surprises are coming.
Porsche Provides 3D Printer Blueprints for Scale Model Cayman
http://wot.motortrend.com/1312_porsche_provides_3d_printer_blueprints_for_scale_model_cayman.html
As a "Scale Model", that kind of thing could be an immense help for people like Indie Film-makers. Because a big limiting factor is props. Let's presuming the model car doors open, and you can get inside. Then it's 1982 Atari all over again, and you can just add CGI to the Windshield area to look like you are driving somewhere in your Porsche. Then you get out and go back to your film.
Or, as the homage itself, ... just print the props for a SciFi show!
So it's coming.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
It will be interesting to see if they keep this up when they're spending customer's money rather than investor's. A blank business with a set amount of money to spend is easy to model this way. Once you start to find the real value in your offering and determine how revenue is actually made, things get trickier. One or two stellar salespeople or engineers can be responsible for an outsize portion of the business. They need to be compensated appropriately.
-Chris
Isn't this the way the free market is suppose to work? In an open market workers (suppliers) can see what positions and skills are being paid the most (demand). I would think open salaries would make for a more competitive environment and assist in reducing the extreme income equality in America.
If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be-T J
Personally, I'd rather not work for a firm where the quality of my work doesn't equate in the least with the pay calculations. Do I look like some unionist drone (at least in Europe, they are usually paid along the same sort of gridded scale).
Yes, of course, anyone rationalizing it will simply say "well, we only keep exceptional people" - to which, after 30 years in the workplace, I call "bullshit".
In every group there are going to be achievers and slackers. Frankly, I want my compensation*/pay to be the highest I can compel the company to pay me, otherwise yeah, I will go somewhere else.
*note, compensation isn't pay - there are a host of other ways a company can compensate an employee that can be hugely beneficial that aren't cold, hard, taxable cash.
-Styopa
I see that location factors in. Do you get paid more for living close, or for living far?
There are so many things wrong with this method. First - privacy. If you don't understand what I mean, stop right there and move along, no need to read the rest. Second, "seniority" and "experience" are part of the forumula? Experience in years? If so, that's totally fakable and in fact I intereview people all the time who pass interviews by upper management who insist that they have a decade or more of experience and I when I talk to them there's no evidence of it. Seniority? Really?! In any kind of work, the only thing that matters is effectiveness. You're getting paid to do a job, and I've seen people who have less than five years experience who are A LOT better at what they do than industry "veterans". If you're using seniority as a consideration then you're making a mistake because seniority has no correlation to value.
I'm sorry, but it's hard for me to respect any firm that employs multiple people under the title "Happiness Hero". What exactly is it that a "Happiness Hero" does?
This is bogus if they don't also list the equity portion of compensation.
Transparency can only work up to a point before jealousy creeps in.
Jealousy is only a major factor when the salary determination is kept secret. If there is a set formula, like for public workers or other unions, the jealousy is not a big deal. Everyone knows that their coworker who has been there two years longer is paid a little more. Or someone with a Masters degree is paid a little bit more than someone with a Bachelors. And these calculations don't have to be as simplistic and questionable as most current unions as even complicated formulas that include performance metrics, salary at previous company, commuting considerations, etc. are okay as long as it is transparent.
But in the private sector your ability to negotiate has a big impact on salary. And I mean huge, I have routinely seen people make 20% more than their initial offer (at least $10k more) just because they were willing to walk away from the job offer. This means they are effectively making around 20% more than some of their equally qualified peers just because they negotiated from a position of strength.
Pay discrepancies because of this are what create jealousy.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
When sitting in that job interview with a prospective employer, you can't even be coy about what you used to make, since the new employer can just look it up on Buffer's site... "oh, you made $128k at Buffer. We'll pay you $129k"
In any case, it seems rather ludicrous to compare the economic policies of the second least densely populated country in Europe(Norway pop. 5m) with those of a highly successful and envied nation that has a population 60 times greater.
Well, I'm sitting in that nation, envying the Norwegians.
Dude, one of the countless benefits of being American is that you can go there without a Visa for up to 90 days. You can easily get a Residency Permit that allows you to stay indefinitely. Another benefit of being American is that you are a free man. You're free to leave at any time. Dude, no one is stopping you. Go to Norway, enjoy yourself.
Us freedom loving capitalistic pigs carved out our nation of like minded individuals, here in America. We're not interested in redistribution of wealth simply because the have-nots are most vocal.
What about Gold Pressed Latinum?
No sig today...
http://www.haven.net/live/beyond/mphillip.htm
Michael Phillips - GOOD BUSINESS AND OPEN BOOKS
Over the past twenty years many people have asked me to identify 'good businesses'. They usually mean 'good' in terms of socially responsible behavior. During this same twenty years I have seen a number of businesses promote themselves as New Age, Progressive and Socially Responsible. A large proportion of the self-promoted businesses turned out to be deceitful, litigious and in a few cases fraudulent.
I never made the mistake of recommending one of the companies that turned out to be a bad apple because I applied a very simple criteria: does the company have open books? If they don't, be careful. If they do, you're safe. The reasons become clear in the following material exerpted from Honest Business by myself and Salli Rasberry.
WHAT ARE OPEN BOOKS?
No single element defines the distinction between a simple honest business and one that is not than the issue of open books. Somebody who is new to business and enthusiastic about it will usually bring out whatever pieces of paper pass for their books to show a curious visitor without hesitation. Yet 99 percent of the people in the general business world will have a reaction of total terror at the possibility of some outsider seeing their financial records. (Corporations that sell stock to the public have to publish their financial information regularly).
Having open books means letting anyone look at your business records, especially your financial statements and the details necessary to understand them. "Anyone" includes part time employees, customers, suppliers and curious bystanders.
Emergency Services, a group of professionals in Washington, D.C. who help people in social action projects, keep their current financial statements on their office wall. At the Yardley Frame Shop in western England you will find the books in a folder hanging by a string near the cash register.
Several hundred businesses that I've dealt with have open books. In many cases you may have to ask to see them, because there is no obvious place to put or post them. The fact of the matter is that so few people can meaningfully read books that the public seldom looks at the material. However, suppliers and friends do read them. The issue of openness and willingness of businesses to show their books does not depend on how many people look at them.
WHY SHOULD A BUSINESS HAVE ITS BOOKS OPEN?
There are several good reasons for open books that directly benefit the business. It feels good, and openness generates openness.
Howard's openness helped him raise money. He publishes the finest (and only) bicycle repair manual for the six thousand bicycle repair shops in the United States. Howard was ready to print his second edition and ran into several problems. The first was that he had borrowed to the limit of his personal credit to keep his business going, and the second was that the printer still had an outstanding bill from the first edition. Howard had presold some of the new editions at less than $12, and that was the break-even point by later calculations. What was he to do?
Howard considered taking advertising, which would have bailed him out of his credit problems at the expense of credibility among his readers. (Do you feel comfortable patronizing a Triple A motel when its so-called impartial rating appears on the same page as a paid ad?) What he did, instead, was announce his problem and then described honestly the state of his business to some bicycle product manufacturers at a trade show and asked their opinion about his taking ads. The universal feedback was "No ads!" After his announcement, two people came to him and offered to personally co-sign on a loan for him. Openness allows people to trust you and your motives, which are revealed explicitly in your books.
Openness works in dealing with debts as well. Dr. Jimmy had put on a big conference on nutrition that was
You don't think that "gross violation of privacy" and "being used by criminals" is proof that the system isn't working well for them?
Wow! All I can say is, "Wow!"
I'd offer the logical argument against such a notion, but I feel it would be a knock against my own intellect to have to explain concepts such as why breathing is good and being ripped off is bad.
Wow!
Earning 150k for developing a facebook poster app...... I seriously need to reevaluate my current occupation.