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.
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.