They don’t have to worry that their work is being taken for granted - nor do they ever have to deal with the stress of preparing a case for a raise.Īll of that makes it easier for everyone at the company to focus on the present. With a transparent compensation policy, people don’t get jealous of one another over perceived unfair treatment. One study found that when employees know their colleagues’ salaries, they’re more likely to ask for help when they need it, leading to higher job performance overall (Source: Journal of Business and Psychology study, 2016). Instead, we have employees who aren’t overwhelmed by uncertainty regarding their next raise and who don’t have to wonder whether they’re being paid less than their colleagues. So far, we’ve been able to avoid that situation. Even with this policy in place, if one or two new hires fail to pull their weight, we see a drop in productivity across the board. Our policy works only because we’re extremely careful when it comes to recruiting and hiring. RELATED: 5 Tips to Compete for Top Talent When You Can't Pay Top DollarĢ. Transparency minimizes distractions. The more information you can offer upfront, the more likely potential hires are to trust your company. The top thing job seekers find dissatisfying in hiring processes is a lack of information about compensation and benefits (Source: Glassdoor survey, 2018). This also helps us more clearly describe our compensation policy to potential hires. With a transparent compensation policy, we’re able to remove those harmful incentives and create an inclusive culture that people want to be a part of. If employees see the work landscape as a zero-sum game, they’re incentivized to work against each other, rather than with each other. Perhaps that’s why 90% of workers think it’s important to work for a company that prioritizes transparency (Source: Glassdoor survey, 2016). When employees feel left in the dark, they lose trust in their managers and co-workers. In a labor market as tight as this one, companies looking for top talent often have to get creative to stand out, yet only 17% of private companies practice pay transparency (Source: Institute for Women’s Policy Research report, 2017).īy offering competitive, transparent compensation, we not only stand out from other firms for future candidates, but also boost productivity among new hires and current employees. Here’s why:ġ. Transparency creates a cohesive workforce. We’ve also found it easier to find and interview candidates for open positions. Is this a good thing? We think so, and since implementing the policy, only three employees have left Less Annoying CRM. If you make it through our training, you know you’re going to have a job, you know what you’ll make, and you never have to wonder when or if your next raise is coming. Obviously, we’re transparent about compensation. By the end of seven years, these essential employees are at the same compensation level. Developers’ salaries start higher - at $74,000 per year - while our CRM coaches start at $54,000. In short, we offer a competitive base salary with $10,000 raises guaranteed for each of the first five years for developers and each of the first seven years for customer-facing roles. That’s when we began formulating the compensation policy that we still use today. We also knew that it would take time to train him or her and that we’d have to offer competitive compensation to attract the type of talent we wanted. We felt responsible for and to that person. As founders, we all knew each other, and this employee was going to be someone we didn’t know. All of our other differentiators are a product of our employees, so having a compelling employment narrative is critical to attracting high-end talent that might otherwise be drawn to bigger brand-name firms.īack in 2013, the prospect of hiring our first full-time employee was stressful. Lots of companies will tell you that their people make them different.