WSJ: How to Get the Salary You Want

Our Summary:

  1. Research
  2. Don’t give out the first number
  3. Don’t lie
  4. Don’t take the first offer
  5. Go for benefits

Our take: this is only for people who want a steady “salary”.  We recommend that you focus on the value that you are bringing with a particular focus on the bottom line and impact on the business.  Also, address the question of “How are my peers/company going to work with me to reach our goals?”.  Granted, this advice is not for everyone, but what most outcomes-focused employers would like to hear in response to “How much should I be paid?” is “What is the value that I bring and how can it be maximized?”.  As an employer ourselves, we don’t want to hire someone who walks in demanding high base and no variable outcomes-based compensation.  We want people to work with us, not for us. Continue reading

How does FairSetup compare to: Salary, Hourly, Stock Options, Equity, Bonuses?

FairSetup offers numerous advantages over existing models:

  • Salary/Hourly pay for time, not impact.
    • A high salary doesn’t always translate into productivity.
    • Paying hourly creates an incentive to spend more time.
    • FairSetup: people accept a lower salary and participate in the upside.  This “skin in the game” results in employees caring deeply about the outcome.
  • Stock Options/Equity are a bad short-term incentive.
    • Hard to evaluate actual worth.
    • Require significant effort to deploy.
    • Equity is hard to take away – there is no divesting.
      • Dilution is not a good solution for large dynamic teams.
    • Stock options generally expire after an individual leaves.
      • Stock options can have reverse vesting, but it’s rare.
    • Tax issues…
    • FairSetup: impact-based compensation can be paid out as part of salary and an individual automatically divests over time after departure.
  • Bonuses – are not an effective way to manage people unless very carefully used.
    • Small bonuses – people are upset because they don’t make enough.
    • Large bonuses – people are upset because then the boss must make an even larger undisclosed amount.
    • FairSetup: the compensation is transparently connected to profits.

The New Yorker: “The More the Merrier” – Investing into Personnel Pays Off

Our Summary: Cost-cutting on staff in retail operations reduces long-term performance.  Companies that suffered consequences include Home Depot and Circuit City.  On the other hand, companies like Uniqlo and QuikTrip, which invest into training, are more profitable per employee.  The cause is misaligned incentives for managers who benefit from short-term cost-cutting even when it’s at the expense of future performance.

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