Whimsical Guide to Compensation | Hacker News Reader

Whimsical Guide to Compensation

whimsical.com

65 pointsAlphaWeaver83 comments

> Salaries are 100% based on merit. Everybody doing the same job at the same level is paid the same

Paying everyone doing the same job no matter how well they do it seems the opposite of basing pay by merit doesn’t it?

I also don’t get how you can not negotiate? Isn’t it a market? If you need to hire someone and you aren’t offering enough to close the deal what do they do? Let their business die on a hill of no negotiation?

It seems like they're wrapping up merit into the leveling system.

I don’t think no-negotiation is a selling point here for candidates. If anything, it’s a filter. People willing to accept less vs not.

Yeah I've not understood this approach. People who are willing to negotiate should get a higher salary.

Preventing negotiation seems like a bandaid approach to equality that should be fixed by teaching female candidates (or other candidates who are less likely to negotiate) to negotiate and feel confident in their worth much earlier in their careers and education.

Preventing negotiation seems like it gives less freedom to the candidate.

It's not that women candidates (or anyone) are necessarily less adept at negotiations, it's that those that they are negotiating with could potentially be less apt to pay more to that specific person due to their identification or any other reason. This gets rid of that bias.

> People who are willing to negotiate should get a higher salary.

Most people's take is that people who perform better should get a higher salary. While negotiation helps prevent you from being underpaid, it very often[1] is the reason people who perform poorer are getting a higher salary.

[1] As in, every single place I've worked.

> People who are willing to negotiate should get a higher salary.

Why? What is the merit? Do you infer they will perform better because they are good negotiators?

Because it benefits themselves.

Because they won’t take the job otherwise.

If you want them to work there, then you need to match their requirements.

You could also give everyone else a pay rise every time you struggle to fill a position I suppose.

They are just upfront about how much "requirements" can be met. They don't waste anybody's time if someone seeks hidden salary ranges.

> They are just upfront about how much "requirements" can be met.

Right... but if you just refuse to meet people's requirements then you won't be able to hire them, or you're only be able to hire desperate people with no other options. Surely this is damaging to your business, and the careers and equity of everyone working there.

Because everyone should have the right to try and extract as much wealth as they can from a company who is extracting as much value as they can from an employee.

Whenever there’s a pot of money that people of a special group inexplicably fail to pick up, it’s worth wondering if teaching them to pick it up is the solution. I am no expert in gender discrimination, for instance, but even I have come across research that suggests that (1) people are less impressed with a resume if the name attached to it isn’t the right kind (by gender or other characteristics) and (2) people interpret identical behavior differently when coming from people of different characteristics (e.g. a male negotiator is viewed as “tough”, where a female negotiator might be viewed as “overly demanding”).

The approach in the parent article may not be ideal, but from where I stand, it’s as valid as waiting for someone (who?) to teach groups of interest to negotiate, and having the problem fix itself.

> People who are willing to negotiate should get a higher salary.

Why? You seem to be saying that willingness to negotiate is something an employer should value and therefore remunerate more. Why should they value that particular skill?

After talking to some friends about this, I'm not so sure about my opinion. Take it with a grain of salt.

It would be a selling point for me! It's not about "accepting less", it's about the fact that a company committed to transparency and equitable treatment sounds like it could be a great place to work. Individual negotiations and secrecy over compensation clearly don't produce desirable cultural results.

This policy sends the same kind of signal as a restaurant which replaces tipping with a fixed service charge: that's the future I want to live in.

What should the company do if they need to hire an expert and just none of the experts available are interested in the value of the non-negotiable compensation? Just give up and not build the thing they need? It’s in everyone’s interest to attract the right people. If a new person joins and is paid more but it increases the value of my equity by improving the company I’m still happy.

Invest in the people you have. If they don’t have the cycles then hire someone you can invest in. Ultimately if it’s temporary expertise that isn’t core to your business you can still contract it out.

This system is similar to what a co-op would use, and there are successful (and unsuccessful) co-ops.

In some situations that's just not an option because once you've acquired the skill you now need to be paid for the skill in order for this system to be at all fair.

That's also not saying anything about the feasibility of turning the average engineer into, for example, a chrisseaton [0] in a few months.

The deal from the employer sounds bad: "Ok we need you to become an expert in X by Y to meet deadline Z. If you can't become an expert in X just do your best so we are able to hit deadline Z! Don't worry! You'll have a bunch of time in the future to maintain it!"

[0] - https://chrisseaton.com/

I would assume that means creating a new level with an appropriate level of compensation – perhaps a "technical specialist" or similar. I don't see why the situation you describe would be a barrier at all.

There’s no reason you cannot be both transparent about pay and still retain the power to define the terms of the relationship with your employer. I understand that it might feel “equitable” among a group of employees to be paid consistently, but it is not equitable at all between you and your employer. They don’t own you. Don’t let them.

Was at a company like that, no negotiation, take it or leave it. Turns out executives and desirable engineers/UX got to negotiate. Those that came in believing they hype were indispensable, plenty of 5-star glass door reviews about being transparent and fair.

GitHub got in trouble for this. When it was revealed that there were extreme disparities in pay across employees at the same level--particularly between men and women with the same job description--they adjusted salaries up by as much as $40K a year.

Wouldn't you just "negotiate" by offering to hire at the next level?

I think the idea is if someone works harder, then they're no longer doing the same job, and ergo get a new title (and increased pay).

I'm a manager of people and compensation is one of my levers (not my only) for both rewarding high quality work and retention. While on the surface role-oriented firm salaries seem like a noble idea, it results in a mess. I have a bunch of people who work for me who aren't ready for a title oriented promotion, and may not even be ready to level up, but are doing exemplary work within their band- why shouldn't I be allowed to financially reward them for their work?

what’s wrong with bonuses in this case? % based salary increases purely on performance compound out of control if you’re not careful, and lead to widely disparate pay. I’d prefer clearly defined salary banding and bonus structure, personally.

Doing “exemplary work within their band” but not ready for promotion or level up seems to describe somebody exactly meeting expectations at their level, so the compensation for the current level should be perfect.

Sure, if you have 1,000,000 different bands - that is far more bands than people. Otherwise you have someone who isn't good enough for the next band, but better than anyone else in the current band.

“better than anyone else” is not really how I think you should approach leveling, personally.

If a lower performing peer is getting the same compensation, then it is far from perfect.

Making promotion the only way to get a bump in salary can cause all sorts of problem when the responsibilities and requirements of the role change at the next level.

As an example, at big companies staff level engineer is more oriented around writing/reviewing and building consensus about technologies. This is a very different role to the level below and someone who is great at that role may not be great as a staff level engineer. They do however deliver a lot of value to the company.

Having a way to reward someone who’s doing an amazing job at their current level helps avoid this situation. I.e inventing projects to justify promotion to staff level engineer.

In most companies, the level below staff is a terminal position. I.e their isn’t necessarily an expectation that you need to get promoted to the next level. I think Facebook got the formula right with its performance based bonus that allows employees who go above and beyond to be rewarded.

This is a similar situation to when companies had career tracks that forced really good engineers to get promoted into management in order to get more comp. Just because you are an amazing engineer doesn’t mean you would be a good people manager.

I think you and most of the other commenters here are analyzing this correctly, but from a very different perspective than me - I've only worked at small companies (less than ~80 people) at varying levels (Junior Eng, Senior Eng, Founder), but in my experience at these companies, you solve the retention problem by giving engineers things to work on that they /actually/ want to work on, hiring people who are not strongly motivated by money, and doing work as a company that is ethical and progresses the world.

At least half of my coworkers could move over to a similar position at a FAANG with no difficulty and make over double what they are now, but I have no doubt in my mind that if any of them did that, it would not be for compensation.

Yeah, stuff like leveling and role changes become issues mainly at companies with large engineering teams. I.e FAANG, MSFT, etc.

In my opinion the main reasons to work at a startup are A) it’s growing ridiculously fast and you expect your equity to be worth something. B) your learning. I.e you like the technology or the space or your new to tech. C) you like the people.

Hence retention and recruiting for startups is a totally different ball game.

Other small non venture backed tech companies have a different set of challenges in this regard.

This philosophy would mean that there is no wiggle room in performance at a level. Either you're meeting expectations or should be demoted/fired.

Needless to say, I find that black and white thinking ridiculous.

When you start managing people, you quickly realize that things aren't so black and white.

Salary levels are discrete, performance is continuous... you can expect to lose high performers if you have rigid salary levels. I assume at larger companies that is less of an issue because the marginal effect on output of even the high performing developers is small relative to total output, with some outliers.

You do the next best thing, and give them the title. If the goal is retention, and the options are title and money, or no title and no money, you go with the former. If you can afford to lose the person, you do nothing. It's suboptimal, and the world is full of suboptimal decisions.

A title without money would make it easier for them to transfer somewhere else. It will buy you a short amount of time while they "gain experience" in their new title.

A title without money is valuable to the employee only because it gives them better leverage to find a job that gives them with more money.

100000% this. Sure, I’ll take the title bump because in X months I’ll be able to get a raise from another company using that title.

I don’t think so. Most companies in familiar with price their hires with respect to seniority and interview performance.

Changing the title without compensation sounds like a slap in the face. I'd probably accept the title change and immediately start looking for a new job where I can use it as leverage to increase my salary.

Good word, what a title. This is the guide to compensation as practiced by Whimsical, Inc. Not a light-hearted explanation of the hijinks that your employer keeps your wages down with.

What a disappointment, I was looking forward to a little payday fun!

I was fooled, too. But I suppose wordplay misdirection might be whimsical. :)

I admire this programatic approach to setting salary and the idealism of it, but the first time your competitor goes to poach your very best engineer and you won't bend due to it, I tend to see companies rethink it.

I've gone back and forth on this so much. At the end of the day, any top-down rule-based system is going to have the same problem. I've been at companies that have extremely strict, transparent rules for salaries with the explicit goal to reduce ambiguity and eliminate bias. To its credit, it was extremely transparent and impossible to game. The result? people with the same duties got paid VASTLY different salaries. I'd imagine the result here is that people with vastly different competencies and activities get paid the same (although, I'd imagine it takes the negotiation aspect of that away).

At the end of the day, I believe, we should just not interfere with the market - let market participants bargain and negotiate with each other until agreement is reached.

On a side note, has anyone ever had a job that fits into a job description? All of my jobs where the description might be as simple as "Software Engineer", whether at startups, govt affiliated research centers, or basic mid-size companies have been so idiosyncratic and varied. I guess this is a long way of saying that even if two people have the same job title, they might be doing vastly different work, and far outside the bound of the specific JD.

Let's applaud any company that tries different compensation methods as the more varying methods there are the more likely it is for a candidate to find the place that fits best for them. There is no blanket "best compensation method" - the best is variety.

Seems like they've invented a simplified version of the federal government's general schedule (and without restrictions based on degrees/years of experience).

https://en.wikipedia.org/wiki/General_Schedule_(US_civil_ser... https://www.opm.gov/policy-data-oversight/pay-leave/pay-syst...

I know plenty of individuals who have looked into government careers only to laugh at the offer they end up receiving though, and the inflexibility of the "no-negotiation" process. At least Whimsical would have the negotiation ability to bump someone up a level if necessary.

"For example, a senior customer experience specialist will make the same as senior software engineer."

Whoa. I don't understand how that's economically feasible unless their "senior CX" role is insanely high value.

Compensation is a hard problem, but this scheme doesn't seem to address one of the key reasons it's hard: you can have two people who, on paper, have the "same" duties and do the "same" work, and yet their output and net contributions are wildly different.

I hope it works well for them, but partitioning employees N discrete and fixed slots guarantees that at any given moment, some people will still be paid too little and some will still be paid too much for the work they are doing, relative to their co-workers.

When the contributions are "wildly" different you either promote one or fire the other.

Salaries are 100% based on merit. Everybody doing the same job at the same level is paid the same

If salaries are based on merit, and employees periodically get differing raises (I assume 'merit' will not remain identical across all employees), then before long everybody doing the same job at the same level will not be 'paid the same'.

I think the page makes clear that everyone at the same level gets paid the same - even across different teams (UX and Design and Engineering get paid the same at the same level).

The S1 band gets re-calculated every year based on industry average (top 10% apparently) and then all higher paid levels will go up by the +25% modifier.

I'm not sure how that leaves room for "periodically get differeing raises" ?

I'm not sure how that leaves room for "periodically get differeing raises" ?

If salaries are '100% based on merit', then salaries will eventually differ because merit differs. Unless there's some alternate definition of '100%' I'm unfamiliar with.

I love the idealism here. I am very much in favor of transparency in wages and in setting a salary and saying this is where you start. It reminds me of that car company where the price was the price and you didn't have to negotiate. Saturn, I think?

I, like others who have posted, am unclear on how this is a merit based system. If everyone started at the same place and then you allowed for merit based increases to salary, I think this system would function better in the long run-- though it would definitely have introduced bias.

It sounds like a 'we sink or swim together' company. That can be a good thing. It can also be a bad thing. Like a codependent relationship. You end up working like crazy while someone else rests, knowing there is no additional compensation at the end of the rainbow-- unless you are promoted.

So what's the actual number for S1?

They have a job posting for a senior position offering $134,277, so by their chart S1 would be 134277/1.25^4 or $55k

Oof

Nothing to laugh at.

I agree. US Tech salaries are hugely inflated, the S1 posistion that doesn't even exist (55k) is more than I earn in the UK in a position that supports all of our companies services and I regulary work with senior engineers and tech leads.

I know this is ycombinator but I think SV salaries really have gone to people's heads. I've seen discussion on heere where people getting offered $125k straight out of university is considered low pay...

UK tech salaries are heavily bimodal I think. I don’t know anything about you or your situation but whenever I see a Brit say that they think 60k or whatever is all that’s available to them I point at job boards like oxfordknight.co.uk to help broaden what they’re seeing as possible.

SV salaries really have gone to people's heads

I make slightly over $200k and I cannot afford to buy an average house ($1.3M) where currently live (Santa Barbara). I've considered moving to San Diego, but the prices are about the same there. So clearly my income is inadequate, and I'm not even talking about Silicon Volley. I don't see why I should be lowering my salary expectations.

I think you may be leaving out significant bits of context on your existing financial commitments and/or constraints, which wouldn't apply to most people in your position, if that is true.

Take-home pay for a single earner pulling down 200k is ~10.5k/month (let's ignore for the sake of argument any insurance premiums or retirement plan contributions you make - strictly speaking the second are optional and the first aren't likely to swing the numbers that much).

A mortgage in today's interest rate environment, after putting down 20% on 1.3m, is maybe a hair over 4.5k/month.

Even if you're maxing out your 401k and have remarkably expensive insurance premiums after your employer's contribution, that's still ~4k/month left over. Unless you have an unusually expensive chronic medical condition, that seems like it should be more than enough to get by (considering people do in fact get by on that much pre-tax, not even deducting their own housing expenses).

And this is basically the worst-case scenario where you're trying to buy an "average" house as a single person, rather than a condo or even a cheaper house (there are homes listed under 1m in SB). If you're married, your spouse is likely earning an income as well; if they aren't, at least you benefit from a lower tax burden to the tune of ~1100/month, which maybe doesn't quite compensate for their "cost of living" but certainly gets you a fair bit of the way there.

And, as always, I forgot to calculate the tax benefits of paying a mortgage, which can be substantial and improve the numbers further.

Well, let's see: I have zero debt, I have enough savings to put 20% down (even for a 1.3M house), and my take home pay after taxes is ~11.5k/month. I don't make any significant deductions from my paycheck (no 401k, regular health insurance, no health problems).

I have talked to multiple loan specialists, and they all recommended I stay below 1.3M prices. I agree with them, because $1.3M house means ~$6k monthly payments (including property tax, HOA, and insurance, and assuming 3% interest rate). This is more than half of my paycheck, and I'm not comfortable spending more than half of my paycheck on mortgage.

Sure, I can buy a cheaper home - a small condo, or a house in a poor neighborhood. I can definitely afford a very nice house if I'm willing to commute for 1 hour (one way). But why should I? Why should I settle for a less than average home? We are talking average quality here (median, to be more precise), so those 1.3M houses are nothing amazing. They are just regular homes for middle class. I suspect a significant fraction of homeowners in SB wouldn't be able to afford their houses if they were to buy them today.

Sorry, I hope I didn't come off as aggressive or overly intrusive. I just wanted to point out that expecting to be able to purchase a (~median) home on a single income (even if that income is a tech salary) is not something I think most people would regard as a reasonable expectation.

To be perfectly clear I agree, given the facts I have available to me, that purchasing a 1.3m house on just that income would not be the most prudent financial decision; it's just not one I would regard as "totally catastrophic" - obviously there's the tail risk of both the real estate & SWE job markets going bust at the same time, but for reasons that are too long to go into here I don't think we'll see anything structurally similar to the dot-com crash ~ever again (though there may be other more localized bubbles that pop). I myself haven't purchased any sort of real estate despite pressure from family because I also live in SoCal and I'd be paying a significant premium over renting for basically no benefit, given my current lifestyle. But I also don't _want_ to own property, so it's mostly just convenient that renting makes more financial sense.

I don't think you should "settle", just wanted to clarify that it seemed like you could actually "afford" it in both the most literal sense and in the "how likely does this cause life-ruining financial catastrophe" sense. I don't want to own property myself so I don't totally understand the impulse, but often what someone calls impossible is possible, just not with whatever trade-offs they're currently making.

The post doesn't say. However, the one open job listing (https://apply.workable.com/whimsical/j/52B49C61AC/) says starting salary = $134,277 for a job described as "Senior Clojure Backend Developer - Remote". Senior = S5, from the post. We can derive from the post that S5 = S1 * 1.25^4.

134277/(1.25)^4 = 54999.8592 (exactly) so I assume S1 = $55,000.

It's kind of strange to phrase things in terms of this S1 value when they say nobody makes below S2. I guess the idea is that if they introduce lower levels they didn't want to force themselves into negative numbers.

The other baseline number they mention is E3 (the baseline equity) which is approximately equal to S3 = S1 * (1.25)^2 ~ $86k.

Don’t work in tech for a living anymore so no real horse. But wow. Market entry level pay in Low low COL (like not SV or Boston) 20 years ago when I got a job - about 55k. And this was no Microsoft or Apple. I’m aware FAANG and some unicorn packages are better than ever - but the other “half”, wow wages have really stagnated. Half the blog posts on this of course are intellectualization of why this isn’t sad.

55k for a posistion that doesn't exist.

The junior engineer posistion would be ~$86k. That seems extremely high to me. I think you forget how many people live in poverty in the USA. I expect some people who run their own companies aren't even seeing that a year.

Tech wages in the US are hugely inflated compared to the rest of the world too.

> I think you forget how many people live in poverty in the USA.

FWIW, I work in public healthcare in Appalachia. In any event, I have no idea what the relevance of this statement is.

I made a statement of fact.. market wages for engineer/software types were in the 50s in the low COL areas 20 years ago - this can be verified - if they're not in the high 80s now then real wages have not grown.

Honestly, the OP comp might not be too too awful. Of course even then it shows wages haven't really skyrocketed either outside of FAANG. 86k - if that's base? - if that is $55k + "equity" then no - especially, they're not public and an 8 year vesting period! The longer vesting period is especially troublesome when you're not paying amazing wages to begin with - that's just how it is. Also, the problem with the bimodal distribution of wages in the US, if you're in that lower mode, you are kidding yourself if you can really maintain any realistic retention - there are too many opportunities for people to jump ship and it doesn't take much to make it worth their while. Another thing not covered by this post - how is their promotion structure? Sure the pay is transparent - but the vast majority of cases if you want a raise at the employer you're at - the best way to maximize it usually to quit and come back later.

Edit: looking at that table in the post and doing the math, looks like ~68k. Where do you get 86k from?

> Tech wages in the US are hugely inflated compared to the rest of the world too.

Sure, everyone knows this - well inflated not so sure - the market wages are higher. What's your point?

Edit: by low COL i mean, like Rust Belt, midwest.. as far removed from the coasts and SV as possible.

Using your numbers and their formulas, this is what I get:

    Base      Stocks     Total
  1 $55,000   $32,746    $87,746
  2 $68,750   $53,048    $121,798
  3 $85,938   $85,938    $171,875
  4 $107,422  $139,219   $246,641
  5 $134,277  $225,534   $359,812
  6 $167,847  $365,366   $533,212
  7 $209,808  $591,892   $801,701
  8 $262,260  $958,866   $1,221,126
  9 $327,826  $1,553,362 $1,881,188

Are there other companies where a CX Specialist makes the same as an engineer? Usually I see Engineering offset from CX, so an entry level CX employee might come in at Level 1, while an engineer might come in at Level 3. I don't think I've ever seen an Engineer and CX Specialist have the same corporate level, but perhaps that's just the companies I've worked at?

In my experience, such a rigid compensation system will fail to scale as a company grows. However, every company should do the first item:

> Full transparency. All salaries, equity, companies financials and so on are visible to everybody in the company.

It’s the only way to ensure that a company’s stated values are accurate.

I lived off $10 an hour for a few months and no longer care about compensation. It's great. Previously I was chasing over 200k+ type roles I hated. Now, like I said I don't care and am just grateful to be employed with compensation above survival.

While this works great for certain individuals who don't live in expensive parts of the world… $10 an hour with a family is going to be a tough time for many of the more expensive states. Of course nothing prevents one from moving but not everyone is willing to do that.

$10 per hour averages out to a little over $20k per year. If you aren't full time you probably aren't getting a lot of other benefits as well that will come out of pocket. Would be pretty tempting to work for 1 year at $200k and live off your savings for 10 years. If you even did a very modest investment it probably would stretch far further than 10 years.

Not trying to suggest you change anything if you are happy but your comment made me want to do a little math to compare scenarios and I figured others might find it interesting as well.

Oh I mean I'm not at $10 anymore, that was as a line cook. I'm back as a software engineer and most roles pay over $100k. I moved to a low cost of living area and am single with no prospects for family (not by choice).

> Now, like I said I don't care and am just grateful to be employed with compensation above survival.

> I'm back as a software engineer and most roles pay over $100k

I would say thinking of 100k as 'above survival' is kind of cheating. Technically it is, but... makes it easy to say you don't care about money when you alone already make more than most families

True, it shows I'm missing the 40-70k range experience. 100k is thriving money for sure.

Yeah. I had experience in the 3 ranges. Most of my life was in a 'good pay, but nothing too much' - which would probably translate as in the 40-70k. That was back in Brazil, so numbers don't just convert as easily.

For that range, you are glad you have a decent pay, and make more than MANY people, but still care for more money, as you will not have much left for extra spendings like travel, buying new shiny things, getting a new car (in Brazil), or in case of an emergency.

With 100k you can stop thinking about getting more money and at least not have that as a goal. Which of course is liberating and make life so much easier. The difference from 50k to 100k is way bigger than 100k to 150k.

“4 weeks of paid parental leave” — I’d change this to 4 weeks of paid caregiving.

Love your product, thank you! Whimsical team!

A lot of this "pay everyone the same, be transparent" sounds pro-employee but in practice its exactly the opposite.

These companies that tend to write these blog posts on their fair and equitable compensation strategies always pay worse, usually significantly so, then market.

It's easy to say "we pay everyone the same, we don't make geo-market adjustments", until you find out that the Bay Area company that reduces pay for remote team members actually pays that remote employee more than these companies that pay everyone the same. Spotify is a good example.

Let's Whimsical post their compensation numbers and see how it compares to averages on levels.fyi . Guessing it's much lower. And they can talk about other things like WLB, that's fine, there's more to a job than. money. But it's annoying that companies feel the need to write blog posts about their forward-looking compensation strategies that at the end of the day is bluster that amounts to "we don't pay very well."

Levels and Blind are what added transparency to tech compensation - not self-congratulating startup CEO blog posts.

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