Good food for thoughts, to reflect on a company compensation framework, and I’d like to augment with a few points …
As context, this is not a new problem, and it does not require a ton of creative solutions. Every company face the same, and most have found a good mix and solutions — so do share with others — especially the dreaded “corporate” , because they’ve perfected this and can teach a young entrepreneur a thing or two :)
First I think one has to move away from thinking “salary” and consider “Compensation and Benefits” — it’s a mix that need to be adapted. If you are in a team of <25yo, then to have a good pension mechanism might not (or might) be considered a critical item. If your employees median age is more in the 30–35 then you are guaranteed having a baby caring solution (creche d’enterprise) would be a huge attraction. Some compensation/benefits item often forgot : Public transport allowances, Paid Training/Certification, Conference Tickets, Your product discounts (if consumer), Work from Home policies, Equity share.
Second, on the matter of pay scales — aside sharing that firms exists that have local market information for each and every job you can think of — it’s critical to recognize that you must have a STRATEGY about it. Are you going to pay your base in the median? (forget averages in salary !) , above it ? below it ? Depending on your company profile, the role, and your target hires it’s critical to DECIDE what your position will be. Variable compensation : will you tie it to your company success (which measure ?) , shall it have a personal/team multiplier (based on what measure ?)
Lastly, when someone ask you a raise it’s already too late — it means your system is putting them behind the market. Take it as a warning telltale that you must do something about it … even if it’s ensure all the benefits you have deployed are being used (Think Employee success in the same way as Customer success in SaaS , if the employee is not seeing value in a benefit, then it’s like you were not giving it.)
Sabine, look forward to see other of your explorations on People Ops — let me know if I can contribute !