No salary negotiations? Not so fast…
This article, well worth a read, mentions how startups like Buffer and SumAll avoid salary negotiations entirely by having a culture of open salaries:
“The negotiating process is very alien to us at Buffer—because there is no negotiating,” CEO Joel Gascoigne previously told Quartz. “We have a really high focus on cultural fit to the point that if they didn’t know about the formula before they applied, they probably wouldn’t be a good fit.”
There is something slightly misleading in this. In a transparent culture, it’s true that there are no traditional salary negotiations, by which I mean the closed-doors, one-on-one, “I deserve to earn more and I’ve got better offers, so give me a raise” types of conversations, because it is simply impossible to act on them – secret pay packets are just not possible. If someone gets a pay raise, there needs to be a viable justification for that.
However, our experience is that there are, and in fact must be salary negotiations, but they happen in a group, in the open.
Much like with hierarchy, however, it is misleading to say that the “new model” of building companies has no salary negotiations – they just adopt a radically different, much more open and transparent and fair format. If they never happen at all, though, you’ll have a lot of problems with staff retention.