Hiring & Retention

Why Equal Pay is So Important

echojason@gmail.com'

Jason Lemkin

Screen Shot 2016-01-30 at 9.32.03 AMIt’s great to see Marc Benioff focusing more time and energy on Equal Pay.  A sustained effort here should open more eyes.

Since this is SaaStr, I’d like to add a few more tactical thoughts here.

Now yes, I am a White Male who grew up On a Coast and went to a Top College and Had Two Decent Exits so who am I to speak on some of these issues. I guess.

But I do know two things:

  • One, the more diverse the environment I’ve worked in, the more successful I’ve been.
  • And at a more personal level, the two times I’ve had Unequal Pay — it was a disaster.

The first time I had unequal pay, in a year where I totally, utterly killed it — I handed my bonus check right back to my boss.  For whatever reason, the bonus was about 50% of what I’d expected — for what I’d pulled off.  Which was a miracle.  I told him to keep it all, that it wasn’t what we’d agreed to.  I saw in his eyes this was the first moment he’d ever even considered the issue.  The next day, he told me I was right, made the adjustment, handed me a larger bonus back.

The second time I had unequal pay, earlier in my career, nothing happened.  I didn’t know how to stick up for myself yet.  There was just deafening silence.  And it just festered and festered.  Until I was no longer there.
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The thing is, for most of us, a nickel here and a nickel there doesn’t matter to us.  We’ll take a better job on a better journey for a $100k salary over a worse job in a journey we don’t believe in for $120k.  We’ll work for nothing as founders if we have to.  We’ll work for less than any of the VPs on our team even once we are funded.

Most of us believe in both meritocracy and the greater value of our equity, and the value of our team effort on a great journey together.

But the thing is, along with that comes a social contract.  It says you’ll treat people fairly.  And folks will think the #1 most unfair thing in the world is Unequal Pay.  No matter how much, in absolute terms, you pay them.

So take a pause.  Review your payroll.  You don’t need Buffer-like transparency.  But make sure you have Equal Pay for Equal Performers.  Don’t let the “kid” you hired, who’s killed it since, no longer have fair pay compared to the senior engineers she’s now a peer of.  Make absolutely, 100% sure you aren’t paying female employees less than male.  Just think how this would feel.  Analyze the issue at all levels.  The cost of their payroll adjustments will be trivial.  Hey — salary vests.  Even a $10k salary adjustment only costs you $1k a month, even with taxes.  But the impact may be profound.

I know to you $5k here or $10k here doesn’t matter.  And that you probably didn’t even intend for there to be unequal pay, in many cases.  But don’t let that mean you accidentally, or unintentionally, let Equal Pay issues fester.

Equal Pay issues eat at the best of us.

 

Published on February 2, 2016
  • Steve

    Hello,

    What do you do with a sales rep that has a base salary and dont close anything, do you pay the full base salary or do the rep have some minimum requirements to acheive in order to get the base salary?

    • Jason Lemkin

      it usually doesn’t matter much. you fire them and then are just out a few months base salary (b/c never earned a bonus).

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