🧠 Compensation is Not a Vibe: Pay Your People Like You Mean It
A founder once told me, “We want to be competitive* and pay the best talent* what they’re worth.”
I asked, “What do you mean by competitive and best?”
He blinked. “You know… like, market rate. Maybe plus a little.”
Cool. That clears it right up.
Welcome to the swampy, unregulated backwater that is startup compensation. Where feelings run high, spreadsheets go unversioned, and no one knows what “fair” actually means.
If you’re scaling a company and haven’t put serious thought into your comp approach, congrats—you’ve got yourself a ticking trust bomb. It’s not a matter of if compensation causes drama. It’s when.
But don’t panic. You don’t need a 100-slide comp strategy or a six-figure Radford subscription (yet). What you do need is a system—a clear, coherent, and intentional approach to compensation that people can actually understand.
So let’s break it down.
💸 Step 1: Compensation is Pricing (But With More Feelings)
The best analogy I’ve ever heard: compensation is just pricing—with slightly more crying.
Would your VP Marketing walk into a strategy session and say, “Let’s price our product… competitively! To attract the best customers!” Of course not. That’s nonsense.
So why do we let this happen in HR?
You need to treat comp like product pricing. Which means:
Understand your buyer personas (aka the talent you’re trying to attract)
Decide what you're selling (mission? impact? equity? lifestyle?)
Know your competitive set (other startups of your size, sector, and stage)
And then build a pricing model (your salary bands, bonus plans, equity logic)
Otherwise, you’re just throwing numbers at candidates and hoping for the best.
🛠️ Step 2: Build the Damn Framework
Yes, even if you're only 20 people.
Yes, even if you’re not hiring anyone this quarter.
Yes, even if your CFO still thinks comp should be “negotiated case-by-case.”
Here’s a dead-simple structure to get started:
1. Compensation Philosophy
This is your "why." Are you paying for loyalty? For leverage? For market parity? Are you trying to be transparent? Are you optimising for retention, or agility?
Document it. Share it. Let it guide every pay decision you make.
2. Compensation Strategy
This is the how. Your philosophy says, “We believe in shared success.”
Your strategy says, “Cool, that means everyone gets stock options with a 4-year vest and 1-year cliff, benchmarked at the 75th percentile via Carta.”
Let’s say your philosophy is: “We want to attract great people and keep them for the long haul.”
Your strategy might be: “We can’t compete on cash or stock right now, so we double down on flexibility and predictability. That means remote-first roles, a 4-day workweek at full pay, and 6-monthly pay reviews using open market data. We skip bonuses because people value consistent income in uncertain times.”
That’s a strategy. It’s clear. It’s consistent. And it helps you scale decisions beyond “well, this candidate felt senior.”
I once worked with a scaleup that insisted they paid “above market” to attract top talent.
When I asked what market data they used, I was pointed to… LinkedIn salary estimates. From 2019.
Worse, there was no internal logic. Engineers were paid 30% more than product managers at the same level, but no one could explain why. Bonuses were handed out once a year based on “gut feel,” and raises only happened when someone asked—loudly enough.
By the time I got involved, half the team had figured this out, and we had a retention problem disguised as a morale problem disguised as a Slack snark problem.
Moral of the story: if your strategy is "we'll figure it out later," you're building a compensation system on hopes, hunches, and panic offers. That’s not a strategy. That’s a liability.
3. Compensation Policy
This is the “what.” The rules of the road. Salary bands, leveling framework, how often comp is reviewed (please, at least annually), and how geography, role, or performance affect pay.
Filmhub is a great example of a structured, scalable approach in action—complete with location-based pay, twice-yearly reviews, and transparent logic around equity and progression. It’s not perfect, but it’s light-years ahead of “vibes and peer pressure.”
⚖️ Step 3: Default to Transparency (Even When It’s Uncomfortable)
I get it. Publishing pay bands or your comp calculator feels terrifying. But here’s the truth: your team already has theories about who’s getting paid what. And those theories are usually worse than reality.
Transparency is an act of trust. It:
Builds internal equity
Reduces negotiation bias
Frees managers from making it up as they go
And helps you avoid the “my salary is a secret” Slack leaks
Start small. Publish your philosophy internally. Then your leveling framework. Then maybe a salary band or two. No need to go full Buffer on day one—but moving toward clarity beats clinging to secrecy.
🧮 Bonus Round: Don't Copy GitLab’s Calculator. Build Your Own.
One of the funniest trends in People Ops is startups adopting GitLab or Buffer’s calculators… with zero context. “If it works for them, it’ll work for us!”
Nope.
You need to build a model that matches your:
Stage
Structure
Geo strategy
Org design principles
Got a team of 12 generalists in Lisbon and a solo engineer in NYC? Your comp needs will not match a 300-person remote-first SaaS company with a unicorn valuation.
Take a breath. Build from your own reality, not someone else’s Medium post.
(Though, Whereby’s Way to Pay is a masterclass in systems thinking.)
🧠 Final Thought: Compensation Is Culture
Your comp system isn’t just numbers. It’s a signal. It tells your team what you value, how you make decisions, and whether they can trust you.
You don’t need perfection.
You do need a point of view.
So pick one. Document it. Share it. Review it twice a year. And whatever you do, please stop saying “competitive* pay.”
TL;DR (Because I Know You’re Scrolling on the Tube):
✅ Comp is pricing. Stop winging it.
✅ Define your philosophy → strategy → policy.
✅ Build for your org, not GitLab.
✅ Transparency builds trust.
✅ Review it. Systematise it. Own it.