Breaking Workplace Taboos: A Conversation About Salary Transparency

Joel Gascoigne’s salary is $118,000 a year and he doesn’t care who knows it. The co-founder of Buffer, a 10-person startup that allows users to schedule social media updates, Gascoigne is the proponent of a radical new way of doing business where there is no cloak and dagger, where every employee knows everything that is happening in the business.

It’s part of Buffer’s policy to “default to transparency” in all possible cases, a way of working that the company believes will become the norm rather than the exception. (And Buffer isn’t the only company that thinks radical transparency is the future of business.)

In American business culture, asking your coworker their salary is among the most taboo of conversation topics. An unspoken rule of information sharing within organizations is often: if it doesn’t pertain to your job, you don’t need to know about it.

Meanwhile, other parts of our society are becoming more transparent and our privacy less essential. We willingly let our friends know where we are with check-ins on Foursquare and Facebook. We use Airbnb to open our homes to total strangers. Such practices would have seemed unfathomable less than a decade ago. Now? It’s just the effect of technology on our lives, an acceptance of the way things are going. So why haven’t our working lives followed suit? And should they?

“We see no reason not to share everything,” says Gascoigne. And he backs it up. The company posts the salary of every single employee to an internal wiki, as well as the formula used to calculate it.

A screenshot of Buffer's internal wiki, featuring its salary formula (click to enlarge).

A screenshot of Buffer’s internal wiki, featuring its salary formula (click to enlarge).

Using a handful of variables like location, experience, and role, Buffer sets a standard salary for each of its employees. Additionally, each employee can choose to be paid an additional $10,000 or instead take more equity. Gascoigne’s formula is $118,000 = Founder ($80K) * Advanced (1.2x) +  San Francisco ($22K) and is listed with every other employee’s formula for everyone to see.

“We did have to take a little bit of a leap,” he says about nailing the formula. “If we wanted 100 percent confidence we would not have been able to do this.”

The company is even considering opening their internal wiki to the public, salaries and all.

At 99U, we’re always interested whenever anyone bends our normal interpretation of workplace norms so naturally we wanted to know how it worked. Gascoigne shares details below:

On Giving Raises:

“We haven’t had anyone ask for a raise yet,” says Gascoigne, “But we have introduced new levels and variables to the formula. As we grow we’ll need more team leads, for example.” If someone were to negotiate for a raise, they probably wouldn’t be a good fit, he says, arguing that paying above market rate as well as providing other perks should encourage people to stay for the long haul. If someone is simply chasing short-term benefits like money, there’s a culture mismatch.

Keeping It Accessible:

Most information, including salaries, equity information, and more is kept on an internal wiki. Other documents, like pitch decks to investors, are stored in Dropbox for any employee to see. “We tell people where it is but don’t require anyone to look,” he says. “This is in the background, we don’t throw it in people’s faces.”

Impact on Culture:

When the company first enacted salary transparency in January 2013, they had to “normalize” each employee’s salary. In every case but one, this resulted in a raise. The only subjective variable, experience level, was determined after meeting with each employee. No current employee is at the “junior” or “master” ranks. Buffer makes its revenue and other financials transparent to employees and routinely experiments with culture, something Gascoigne believes made this “just another step” and not a sudden (and jarring) change of direction.

Other Normally-Taboo Information Buffer Shares:

If someone is let go, the reasons are shared in detail with the team and are referenced to the company’s culture deck (below).

Fighting Jealousy or Animosity:

Gascoigne says he has a one-on-one meeting with every employee once a month. Team leaders have one-on-one meetings every two weeks. “If we ever see any friction, it will be brought up fairly rapidly,” he says. “It means we have a deliberate place for them to mention something to us. They don’t have to use any willpower or be afraid.”

Continuing To Incentivize Employees:

Buffer is willing to update the formula as it grows but hopes that its focus on work/life balance fosters employees that are in it for the long haul. “We believe in the Tony Schwartz way of thinking: it’s a myth that you get more done by having less balance,” Gascoigne says. And so far, he’s right. The company says it saw $130,000 in revenue in May and in January 2013 was charting a 300 percent year-over-year revenue growth.

“In Silicon Valley, there’s a culture of people jumping from one place to the next,” he says. “That’s why we focus on culture. Doing it this way means we can grow just as fast—if not faster—than doing it the ‘normal’ cutthroat way. We’re putting oil into the engine to make sure everything can work smoothly so we can just shoot ahead and that’s what we’re starting to see.”

How about you?

Would you work in a company where you salary is disclosed? Why or why not?

More insights on: Money, Office Dynamics

Sean Blanda

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Sean is the Editor-in-Chief and Director of 99U. Find him on Twitter: @SeanBlanda.
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