- You're not broke
- You think the work would be more interesting/fulfilling than places that pay more.
Of course, I'm sure there's a tipping point where you don't care how interesting the work is. But in my mind you'd use the above criteria if someone is offering you $95k/yr when you're currently pulling $110k/yr.
And money is rarely the actual motivator. Often times, money is the mediator to the things that really motivate people, such as purchasing daycare and enrichment activities, splurging on medical care plans, financial security, etc.
There's definitely no necessary causal link here. We aim to pay enough that they won't leave because it's too little but not so much that they will stay just because of the salary is too high. It's a pretty hard balance to achieve... not sure if we have. We used to phrase it as "pay people fairly" but then "fairness" is so relative as a concept that it is essentially useless.
Having transparent pay does have a clear link with creating a good working environment, in our experience, however - and transparent pay doesn't mix well with having salaries basically based on people's negotiation skills (rather than a more open system like I've described), in backroom deals.
> And money is rarely the actual motivator. Often times, money is the mediator to the things that really motivate people, such as purchasing daycare and enrichment activities, splurging on medical care plans, financial security, etc.
I wish that were always true... my observation is that some people are in fact motivated by the money, and the status that comes with being paid more than others, more than by the things they can actually do with the money. I find it puzzling, but so it is...
Here's the disconnect. In this scenario, I'm not saying, "you're worth X". I'm saying, "I'm willing to pay someone $x to do this job." If someone else is willing to pay you more for the same job (all else being equal), I'd advise you to take the other job.
If I can't find anyone qualified to take the job for $x within a reasonable period of time, then I'm below market and should adjust.
The beauty of that analysis is that it ties to current employee compensation as well. If my offers are below-market, then I have a much larger people problem: either my current team members are below market skills (bad) or are at risk of being poached (also bad).
As a candidate, I might look at that and value the culture it represents: transparency, fairness, likely diversity, people-centric...
The "we like people who care about more than money" (the passion gambit) can be a a giant warning sign. And is at the root of the "why would I accept less money from you than my market rate, so that you, the founder, can make more money" concern.
But it assumes that the owner, is in fact, making more profit "off your back". This might be false. The owner might instead care about investing back into people and the working environment: an indirect "perk", if you will.
Everything's a trade-off. No one is forcing you, as a candidate, to act against your best interests. There are just different kinds of interests.
It's far from perfect, and it's often difficult and demanding of people (particularly those who are on the various pay task forces that assemble and disband to make changes or evaluate people), but it's working alright so far for us. It's also a huge learning opportunity for everyone involved.
> But it assumes that the owner, is in fact, making more profit "off your back". This might be false. The owner might instead care about investing back into people and the working environment: an indirect "perk", if you will.
There is no good idea humanity has ever had that cannot be twisted into a trap to fool people... unfortunately every good thought ends up being used by someone somewhere to screw someone else over. I like to think we (my cofounder and I) are on the good side of that assumption, but it's important for us to remember that if we shift to the wrong side of it then the whole system becomes polluted by this desire - or rather, this fear of not having enough.
I try to be very suspicious when my views about how the world works line up with some way that I'm benefited monetarily. For instance it's very hard for me to have a clear and accurate opinion of oursourcing and h1-b's.
For me this translates to happily walking the extra mile. It also means my wife is ok with me working a bit extra here and there because I love my job. And it means a whole less paperwork and talk about overtime or not.
But it sure helps when telling my wife I should work a couple of extra hours.
I can imagine a case in which a sufficiently high salary could lead to someone staying in a position for which they have no passion.
Still, like you say, it's a delicate balance, and on either side you of not getting good work out of your people. On the low end, you just wouldn't be able to secure high-value candidates. On the high end, you might keep people who have no interest in their roles.
I do think the latter case is less likely, though.
I think the sentiment you are seeing here (not necessarily taking a side, just playing devils advocate) is that it might seem a little hypocritical to portray a culture where compensation caps (and ones that seem a little below market rate judging by other comments) are expected when there is no limit to the upside you as the founder might see down the line or from a potential exit down the road. Startups are inherently risky for employees, and while Founders certainly shouldered more of the risk, employees are typically rewarded with equity worth the risk, market rate salaries, or some combination. To not compensate employees in such a way seems like it might be taking advantage of a mindset when you the Founder might not be held to the same standards.
Again, if addressing this very issue is part of the opening up of the shares to employees you reference, awesome. This is a very hard problem to tackle and one where it must be damn near impossible to get everyone on board, so I commend you for making the attempt. I'm making lots of assumptions that I hope are simply not the case. Just wanted to clarify and push a bit more on why there seems to be a consistent theme to these comments.
Now, is the inverse also true? If I take a job with you- can I work 4 day work weeks and stick strictly to the 8 hour workday?
Money is not your only motivator so I don't see why this would be a problem for your employees.
I'm in 100% agreement with you. So you do pay less to those who work 4 days a week. That's fine and it makes sense. Just confirming.
Then I don't even need to ask: you're also saying that for every hour over 8 hours staff is paid overtime? That would be consistent with paying 4-day a week folks less. And would be the nail in the coffin that profiteering isn't your main motivator.
If I'm understanding your argument right, I think you're saying that because we try to evaluate how much people should be paid in a rational way that includes some assumptions around time being correlated to amount of work, that means we are "profiteering". I'm not sure that's worth dignifying with an answer, but here goes:
GrantTree is a business. We need to make a profit in order to continue to exist, to grow, to be an exciting place to work, to have the resources to invest in our people, to be able to develop new products, and so on. We also need to compete against other businesses in the same market, some of whom are quite aggressive. If we get the balance between people's contributions and their compensations wrong, we'll be uncompetitive and won't survive. It's that simple and has nothing to do with profiteering.
Ultimately from your description it sounds like the increased non-profiteering wages would not come out of company profits. Thus in the end it's just like all the other businesses then. No need for all the flowery language about how there's other priorities than making money. If you had to ditch everyone and go to Malaysia to "be competitive" then you'd do it.
Our view of business is that, much like humans, it can achieve and balance multiple objectives. You want to make money: does that mean you want only that to the exclusion of or above other objectives like finding love, raising children, being a good person, etc? I assume not. We want to make money: does that mean we want only that to the exclusion of or above other objectives like having fulfilling work, working in an open organisation, being respectful of others, etc? No.
[1] Though opening up the shares to employees within the next couple of months... it's taken a while to put the right system in place. Options wouldn't work because we have no intention of ever selling the business.
Edit: Given your clarified question, I will also add that what we do is to help other tech businesses to raise government funding so they can develop cool tech. Many of them have raised money from investors - I don't think that necessarily means that their only purpose is money (though it's certainly true of some). See argument above.