Transparency and salaries

Last week I’ve had a chat with a friend that was thinking about leaving his current company. I asked him why is he thinking of it and the reply I got was this: I am not sure about the future here and also the salary I was proposed is bigger. I asked him then: how much bigger? Could you get the same value in your current company?

And he replied: I don’t know.

That was pretty amazing for me and as the conversation continued I found out he had no idea how his salary was decided, neither what is his current level and what is there to come. I asked him if in the next company he will know these things and he said he did not ask, but he thinks not.

Now, this scares me!

I’ve been to the Scrum Gathering this year and participated to a talk held by Christof Braun stating the we should start having transparent salaries. Slides can be seen here: http://www.slideshare.net/ChristofBraun/show-me-the-money-or-howto-payinanagile-organization

A few weeks ago I’ve stepped on this article by Joel Gascoigne about the same topic, already implemented at Buffer : http://open.bufferapp.com/introducing-open-salaries-at-buffer-including-our-transparent-formula-and-all-individual-salaries/

These reads are inspirational and are greatly related to the point I want to make:

I am not fully in favor of transparent salaries, yet, as it is very hard to introduce in an existing company and I think our companies are not yet mature enough for his, but what we MUST introduce is clear positions, skill levels and salary schemes. Joel Spolsky wrote about this a long time ago: http://joelonsoftware.com/articles/ladder.html and I think there are a lot of companies already having these schemes, but I am not sure if they promote their schemes or if we instruct our colleagues to ask for them and to know how their salary is decided.

At any point in time I should be able to answer these 3 questions :

What is my current position:  Developer

What is my level in my current position: Advanced

What is the scale for my position in this company: 1000-3000

After getting the clarity on salaries we must add clarity on positions and skill levels. What does an Advanced Developer mean? What differentiates him from a Beginner Developer and what does he need to do to become a Senior Developer? A mixture of experience, skills and results must be considered and made clear to everyone in order to get transparency in this area too. This way, each company member will always know where he stands and why he stands there.

If we could clarify these 2 areas I think transparent salaries will come naturally and with no damage.

So, please always ask : why do I have this salary? And if you cannot get a clear answer challenge your managers to get one!