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.""

Comments

Norway

[lxs]

The nation of Norway does this for every citizen. It seems to work out for them.

Re:Norway

[Anonymous Coward]

No it does not work out well for us.

It is a gross violation of privacy and it is being used by criminals.

Re:Norway

[drinkypoo]

This is incredibly stupid. Criminals use it to pick out who to rob

Perhaps the Norwegians feel it's incredibly stupid to create a culture that creates criminals by promoting wealth inequality.

Re:Norway

[Anonymous Coward]

This is incredibly stupid. Criminals use it to pick out who to rob, and the news has a feeding frenzy every year where they single out people who actually contributes.

I hope this system will be gone and buried soon along with the whole envy culture that we have in this country with the new government.

Fellow Norwegian here, this is actually a myth. There isn't any evidence that this ever happened. After populist politicians kept repeating this claim, the police did the research, and came up disproving it completely (Google Translate). Criminals don't need tax info to seek up nice neighborhoods and look for houses to rob.

Re:Norway

[buddyglass]

Neither of those two things ("gross violation of privacy" and "is being used by criminals") necessarily implies that it is not "working out well for you". Perhaps the system creates benefits that (in some peoples' minds) outweigh those two negatives.

Re:Norway

[pijokela]

Fighting wealth equality should happen in policies, not publicly shaming those who work hard and actually contributes to the society.

It is hard to explain to foreigners often, but there is a deep rooted culture of envy that historically have been strong where someone standing out in a positive way is pulled down as hard as possible.

I live in Finland and we also have publis tax information. I think the rationale for having that information public is to make hiding income harder... if you have no taxable income and your neighbour sees you buying new cars every year, that may cause him to go and talk to someone at the tax office. I'm not sure if there actually is someone you can report a suspected tax evader, but that's the general idea. The shaming is bad, but that is mostly done by the press here and AFAICT there is no shame if you have some reason for the large income. E.g. people owning companies are treated more like heroes.

But, anyway, what I really wanted to say was that the "culture of envy" is a myth. We have the same myth here too. The envy is mostly inside the head of people earning a lot of money. The people earning less generally do not care.

Personally I am very much in favor of public tax information. I usually check the income of some of my coworkers every couple of years. Usually their wages are very much what I expect, but once I noticed that my previous employer valued writing design documents over creating working software - and after learning that I decided to change to another job. I did not start raving and frothing at mouth.

Usually, what you imagine without the information is much worse then the reality.

Compared to what Google and NSA are doing, I find the public tax information to not be a problem.

Contribution?

[smileytshirt]

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!

Re:Contribution?

[psperl]

This is not true, especially with software developers. I manage quite a few of them, and it doesn't take long to be able to determine their approximate individual worth, without metrics. Activities outside of writing code are hugely influential to an employee's value, such as educating other team members and communicating with customers or our business sponsors. Obviously I can't pinpoint an exact number, but its obvious as night and day who the real catalysts are within the group, and I can adjust accordingly.

Companies that don't link your wage to your individual abilities are trying to take advantage of you. Plain and simple. I say trying, because one day it'll backfire. The most profitable companies that depend on skilled labor (not Walmart or McDonalds) pay their employees well, and do not use a uniform pay scale.

It's more like a stunt to me

[Taco Cowboy]

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.

Re:It's more like a stunt to me

[SJHillman]

Most US states make available public employee salaries, and have been for quite some time. For example: http://seethroughny.net/

The government may not be run like a business, but when you're talking in micro terms of coworkers knowing the salaries of the people they work with, it's very similar.

Re:It's more like a stunt to me

[Anonymous Coward]

Transparency worked pretty well back in the 50's when most jobs were unionized. Everyone knew what everyone else was paid and everyone worked their fair share because the company wasn't focused solely on posting record profits.

People need leadership, not management. That's a distinction this generation has no concept of as it fell out of fashion back in the 80's. You manage boxes and machines, but you lead people.

Re:It's more like a stunt to me

[Baron_Yam]

I work in a unionized environment. All wages are in contractual 'bands', every job is evaluated and placed in an appropriate band based on required skill, risk, shift, education, etc.

This means that, within the band, we all know each other's pay if we bother to look up a job classification and leaf through to the most recent contract's appendix.

We all seem to continue working without being at each other's throats.

Re:It's more like a stunt to me

[WOOFYGOOFY]

I think transparency is intended to forestall the structural imbalances which create jealousy in the first place.

Re:It's more like a stunt to me

[penix1]

Disclaimer: I am a state employee whose salary is publicly posted...

That out of the way, most if not all those salaries posted are very, very misleading. It is gross salary+travel+incentives+any other state money that employee has received including payments made for health coverage and retirement. It doesn't include any deductions such as taxes, co-payments for health and retirement, garnishments, etc...

Re:It's more like a stunt to me

[PopeRatzo]

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.

And that is bad because...?

The art of managing is an ART and it's a very delicate task.

And if you don't believe that, just ask a manager. His work is an ART and it's very delicate and that's why he's entitled to 500 times the salary of someone who works for a living. If you ask, he'll even write a book about his ART and the great delicacy and importance of his work and why he needs to get grandly compensated if he fails and gets fired.

Re:It's more like a stunt to me

[XcepticZP]

I call bullshit on this. Union membership was never "most" or a majority of the population. The highest it has ever been in the US was in the 50's when it was in the low 30s% range, and has been declining steadily ever since. Probably as a consequence of people realizing that unions have done all they can for worker rights, and all they're interested in now is keeping their power/income at the expense of workers' and the companies both. I didn't even have to look hard for this stat, as it's already on Wikipedia here.

From what I've heard union members negotiate salaries based on seniority, and not on any sort of merit. It may bring security/assurance to a lot of people, but it does not distribute fairly according to effort/skill.

Re:It's more like a stunt to me

[Daniel Dvorkin]

In the military, everyone knows down to the penny how much everyone else makes, or at least can figure it out easily enough. You look at their rank, their time in service, and various other factors such as their current assignment, whether they live on or off base, are married or single, etc., and the number is right there. And the reward for productivity is promotion, which leads to a higher salary. This never led to any problems that I saw; and while there are plenty of aspects of civilian life I like better than being in uniform, this isn't one of them.

Re:It's more like a stunt to me

[Immerman]

Well, I'll take umbrage to the idea that unions have done all they can - in the last few decades management has managed to undo virtually all the gains in profit distribution that the unions' ever managed to accomplish, with virtually all productivity gains of the last 30 years going exclusively into the pockets of management while inflation-adjusted worker wages have remained stagnant.

I won't argue that many unions have become part of the problem though. It's the same with any "government" - things can start out with the best intentions, but if you don't keep your representatives firmly bound to your will then it won't be long before they start taking advantage of the power you've given them to benefit themselves at your expense.

Re:It's more like a stunt to me

[PopeRatzo]

Middle management is not really management. They exist to give real management somebody to blame. None of the ART of management that Taco Cowboy was referring to enters into the life of a middle manager. They're just going down checklists and trying not to draw attention. They get paid as badly or worse than the bottom level workers. The 99%-1% model exists in corporations the same way it does in society generally. There are only two categories of employees.

Plus, I'd have to start taking responsibility for investor's greed, which I could never bring myself to do.

Nobody at the C-level takes responsibility for anything. Responsibility is an outmoded concept. Just look at the 2008 banking cock-up. The few criminal investigations there were took place at a level well below the C-level. Or, the fines attached to prosecutions were a tiny fraction of the windfall.

If you neglect to put $1 in the parking meter, you face a $75 fine. If a corporation steals $10billion, the fine might approach $1million, but no more. In this way, accountability is always shifted downward.

Re:It's more like a stunt to me

[AK Marc]

Let's say one of your unionized coworkers came up with and lead the implementation of an idea that would save your company $5M or increase revenues by 10% over the next year. What would their expected reward be? If a different company saw that result (or potential) in that same coworker, what might they be willing to extend in terms of a job offer to that person?

Have you ever worked? If you are at a job and had one of those ideas, do you know what your reward would be? I'll give you a hint. It isn't monetary (unless the company had a written policy before-hand, and almost none do). So unions don't make a difference in whether a single exceptional worker is paid for their exceptional work. Those types of bonuses are reserved for management only, so at best, your idea could make your department head some cash.

Re:It's more like a stunt to me

[bledri]

Let's say one of your unionized coworkers came up with and lead the implementation of an idea that would save your company $5M or increase revenues by 10% over the next year. What would their expected reward be? If a different company saw that result (or potential) in that same coworker, what might they be willing to extend in terms of a job offer to that person?

You're kidding right? I used to work for a huge hardware/software company back in the day. My "real job" was to work on the OS, but I was also sent all over the world to "save" $50-150 million dollar sales on multiple occasions. I busted my ass and did some pretty damn good work - if I say so myself. Know what I got? $500, a plaque and a pat on the back for going above and beyond. I also got to keep my job and got a minor promotion. Which is exactly what would happen to the union guy - he'd get a few hundred bucks, and a bump to his pay grade (aka, a promotion.)

What about the other stuff?

[rolfwind]

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.

Re:No respect for employee privacy

[SJHillman]

Is it respect for employee privacy or respect for being able to pay drastically different wages for the same job? A lot of times, company rules (official or unofficial) against discussing salaries protect the employer much more than the employees.

Re:Hmm...

[lxs]

When asked for clarification, employee number six said:"I am not a number. I am a free man!"

Re:No respect for employee privacy

[Anonymous Coward]

I don't care what others get paid, it is up to me to negociate a salary with my employer.

So you're perfectly happy to go into negotiations at a disadvantage, knowing that the employer has relevant information that you don't have?
You sound like a shitty negotiator.