The 3 things we look at when reviewing your salary

The no-nonsense explanation of what our company considers when we review your salary

⚠️ Pyn note to HR: You will need to update this Pyn with the criteria you use to review salaries within your company. We have provided an overview below with common salary review criteria. 

Salary reviews are coming up - this is an important topic that can be awkward to talk about. To help, we wanted to share more information about what exactly goes into the process and how we determine your salary. 

Once a year we review every employee's total compensation package. We do this because we believe no one should feel compelled to move along an organizational chart in order to receive a salary increase. We will always strive to proactively move you to a fair and appropriate market rate for your skillset ahead of you needing to ask for it. We believe doing this will help you do your best work! 

In reviewing your salary, we look at:

• The market-rate for your role
• Where you sit in your role’s salary band
• When you are up for a salary review

1. How we determine the Market-Rate for your role 

We pull market data twice a year to make sure that our salaries are both competitive and in line with what the market pays for a role. We obtain significant benchmarking data from a number of external surveys, our investors, and sister companies. 

Paying local rates

Market data is measured locally and varies by location. For example, a software engineer in San Francisco might have a different local rate than one in Chicago. Salaries would reflect that difference. 

There are a bunch of reasons for that; it’s the fairest way for our people, it makes economic sense for our business, and not doing so would mean that in some locations we may underpay folks - or overpay them (making them stay only for the golden handcuffs of a large salary relative to other people in their local area). 

What if there’s not enough benchmark data available?

Although we try to avoid it, we may have to resort to crowdsourced data (Glassdoor, Payscale, etc) when no survey data is available for a role. It doesn’t happen often.   

Also, when no data on local rates is available, especially for folks who work remotely in smaller regional areas, we use what’s called the Numbeo Rent Index normalized to our headquarters. For people who live within an hour of a larger city, we would take the Index comparison based on the nearest large city.

2. How we determine where you are in the Salary Band

With our market data as the guide, we’ve created salary bands for each role in our company. A band refers to the “salary range” for any given role. Say the market rate for a role is 80,000 (the median). The range for that role may be between 68,000 - 92,000. 

A person who understands all aspects of a role and who performs strongly should be paid at, or slightly above, the 80,000 median. A person who is still learning and building experience in certain aspects of the role may be paid closer to 68,000. A person who performs significantly beyond expectations may get paid toward the upper end of the range.      

How we calculate your pay

A typical salary range is 30%, or -15% or +15% of the median. For some roles, especially for more senior roles, the range tends to be a bit larger (e.g. 50%). The market benchmarking data generally provides an indication of the salary range, along with the median. 

When assessing where in the salary range you fall (in this example, with a 30% range), consider the following :  

• You are learning. You are newer to the role and may need more guidance from the manager to understand requirements and deliverables expected. Your pay should be at median -15% to -7,5%
• You are growing. You are no longer new to the role and have a clearer understanding of what’s expected. You may need some guidance with tasks to drive projects to completion. Your pay should be in the range of “median -7.5%” to “median”. 
• You are thriving. You feel very comfortable and understand all aspects of the role. You will need limited guidance even for the more challenging projects. Your pay should be at the “median” to “median +7.4%”.
• You are an expert. You need almost no guidance to drive projects of any complexity to completion and you are able to do so consistently.  Your pay should be at “median +7.5% to +15%. You are a likely candidate for that next promotion should that position be available. 

3. How often will we review your salary 

Everyone is reviewed on an annual basis. Depending on your start date, your compensation will be reviewed in either January (effective January 1) or July (effective July 1). If you are a new hire, you are eligible for a comp review after you complete at least nine (9) months of employment. After your first review, all future reviews will take place in the same annual cycle. 

While your compensation is evaluated once per year, off-cycle compensation adjustments may occur throughout the year. These may occur for a number of reasons, including promotion or a significant change in responsibilities. If you receive a promotion or off-cycle compensation adjustment within nine (9) months of your regularly scheduled review, your compensation cycle may be adjusted accordingly. 

Here are some examples: 

• If you started between October 1, 2018 and March 31, 2019 , you are on the January 2020 comp cycle. Your subsequent compensation reviews will be in January of each year. 
• If you started between April 1 and September 30, 2019 , you are on the July 2020 comp cycle. Your subsequent compensation reviews will be in July of each year.
• If you started between October 1 and December 31, 2019 , your first compensation review will be in January 2021 . Your subsequent compensation reviews will be in January of each year. 
• If you received a promotion between October 1, 2018 and March 31, 2019, then your compensation will be reviewed again in the January 2020 comp cycle. Your subsequent compensation reviews will be in January of each year. 
• If you received a promotion between April 1 and September 30, 2019, then your compensation will be reviewed during the July 2020 comp cycle. Your subsequent compensation reviews will be in July of each year. 
• If you received a promotion between October 1 and December 31, 2018, your first review will be January 2020. Your subsequent compensation reviews will be in January of each year. 

First Year “True Up” 

We “true up” your first compensation increase if an adjustment does not take place within 12 months of your joining the company. This back pay ensures you are not penalized by your start date if it falls between the company's scheduled compensation cycles. 

For example, if you started on November 1, 2018, and your first compensation increase was in the January 2020 cycle (14 months after your start date), you receive a one-time payment equivalent to the compensation increase retroactive to your one-year anniversary (in this example, you would receive a payment equal to two months of incremental compensation, for November and December 2018). 

When will salary increases be communicated? 

• All increases for January’s review will be finalized by Feb 1st. @manager.name will communicate increases the week of X
• All increases for July’s review will be finalized by Aug 1st. @manager.name will communicate increases the week of X.

What @manager.name will communicate to you 

1. The pay range for your role and how it was determined based on the market strategy and/or internal fairness.
2. Your position in the pay range and how it was determined.
3. The potential for additional pay increases or promotions and the main competencies the person needs to obtain to get there.