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They have since updated it slightly > Since originally writing this blog entry in 2021, we have increased our salary a few times, and it now stands at $207,264

They have since updated it slightly > Since originally writing this blog entry in 2021, we have increased our salary a few times, and it now stands at $207,264. We have also added some sales positions that have variable compensation, consisting of a lower base salary and a commission component.

ekianjo 1y ago
so basically everything converges to having specific reasons to have different salary schemes.
- liamkinne 1y ago
  Yes, but you aren't wasting time early on negotiating compensation.
- ArnoVW 1y ago
  One exception, for sales. I don't see how they could have done it differently. We have a "one rate per level" rule. The rates are published, and so are the definitions of the levels, and everyone's level (i.e. indirectly you can know everyone's salary) Worked great, untill we started to look for sales. Doesn't work. They only know incentive-based schemes. So now they have an incentive-based scheme just for the sales, which is (essentially) budgetted from their stock-option package (that everyone gets). I.e. they benefit from growth a little bit earlier and directer. If we hadn't done that, we wouldn't have a sales department.
  - abxyz 1y ago
    I argued this in the previous discussion about oxide’s compensation structure: I disagree that sales must be commission based. Yes, finding sales staff that are willing to work for a salary and equity shrinks the pool but the same is true of engineers willing to work for a flat rate across the company. Sales might seem mystical and magical to engineers but it isn’t. A small company with a small sales team can absolutely work without commission. Yes, it is harder, but it is not impossible. The carve out for sales undermines the ideas behind a flat salary structure. Just because we can measure a sales person’s contributions in dollar amounts does not mean we must measure it in dollar amounts. Sales is as much about the partnerships between sales people and product/engineering, why aren’t all the people who work on a deal getting commission? I’d go as far as to argue that oxide is in the perfect position as a big-ticket long-cycle business to abandon traditional sales commission structures. They take on all the negatives (sales people overselling to get commission) with no benefits. There are other ideas. Company wide bonus based on sales made during the year?
    - tock 1y ago
      > Just because we can measure a sales person’s contributions in dollar amounts does not mean we must measure it in dollar amounts. This is the fairest form of compensation. It's unfortunate that engineering contribution cannot be measured the same way. If we could engineers would all be getting a nice pay hike.
      - ghaff 1y ago
        And many would be getting let go because they weren't meeting some number.
        tock 1y ago
        Companies already do layoffs without commissions. They are always optimising to reduce salaries and increase profit margins. And its not "some number". Its the amount of $ brought in. Thats what companies care about.
        ghaff 1y ago
        Yes, but sales reps have very specific targets and sales managers have no problem routinely letting people go if they miss those targets. It really is a somewhat different situation from engineering--although projects, for example, certainly get canceled and teams let go. There's a more direct correlation to quarterly revenue/margin input in the case of sales.
        tock 1y ago
        But its a more transparent system. Right now no-one has any idea if they get laid off or if they are being underpaid. I think the overall compensation would likely go up if you are good at your job.
      - tshaddox 1y ago
        It's still just a market. You've got to make offers that people will accept. It's mostly silly to try to come up with some objective theory of value, except in the context of what potential employees will consider to be fair, which is right back at "you've got to make offers that people will accept." Basing compensation on supposedly objective things like "the dollar amount a sales person brought in" might be important to a given pool of potential employees, but resist the temptation to think of it as objectively determining the value of the employee's work. Remember that all you're doing is making offers that people will accept.
  - ekianjo 1y ago
    > One exception, for sales. either you have a rule or you dont. the moment you start to do exceptions this will call for more down the road. there is tangible reason for sales to be commision based. you could say its just like another regular position. An engineer can also be a sales multiplier if they improve a product yet they dont get a commission. Same thing. Having boots of the field is no justification.
IncreasePosts 1y ago
Why is sales special? Why not just have some performance bar for that, just like all the other positions?
- castlecrasher2 1y ago
  Because good sales staff make a ton of money through a ton of sales. Any other incentive structure is unlikely to attract high performers.
  - bobsomers 1y ago
    How is this not exactly the same in engineering though? Performance reviews at top tech companies are pretty much designed to identify the super high performers and shove massive bonuses and equity grants their way. And those equity grants are effectively as good as cash, since they are publicly tradable stock.
- hiddencost 1y ago
  Sales culture is heavily incentive and performance based. It sucks but they like to think that if they work harder they'll get paid more.
  - ghaff 1y ago
    It's not universal but B2B sales in particular have evolved to incentive/performance compensation to a large degree. Wasn't always the case but (most?) of those companies aren't in business any longer. Also extends to the sales hiring process. Not that companies don't look at track records but it's also the case that sales managers don't have any issue firing people who don't meet their numbers.
- sofixa 1y ago
  Because sales people are used to work on incentives, including going over and getting rewarded for it. If they have a fixed salary with a high objective to "make it" (e.g. if you sell less than $X, you get fired), lots of sales folks will skip on it because they can't go over, and most probably prefer to have a quarter or two or year at e.g. 70% salary while working on longer term deals, rather than losing their job for not being good enough within that arbitrary time period. And going over their quota can be wildly lucrative depending on the terms.

ekianjo 1y ago

so basically everything converges to having specific reasons to have different salary schemes.

liamkinne 1y ago
Yes, but you aren't wasting time early on negotiating compensation.
ArnoVW 1y ago
One exception, for sales. I don't see how they could have done it differently. We have a "one rate per level" rule. The rates are published, and so are the definitions of the levels, and everyone's level (i.e. indirectly you can know everyone's salary) Worked great, untill we started to look for sales. Doesn't work. They only know incentive-based schemes. So now they have an incentive-based scheme just for the sales, which is (essentially) budgetted from their stock-option package (that everyone gets). I.e. they benefit from growth a little bit earlier and directer. If we hadn't done that, we wouldn't have a sales department.
- abxyz 1y ago
  I argued this in the previous discussion about oxide’s compensation structure: I disagree that sales must be commission based. Yes, finding sales staff that are willing to work for a salary and equity shrinks the pool but the same is true of engineers willing to work for a flat rate across the company. Sales might seem mystical and magical to engineers but it isn’t. A small company with a small sales team can absolutely work without commission. Yes, it is harder, but it is not impossible. The carve out for sales undermines the ideas behind a flat salary structure. Just because we can measure a sales person’s contributions in dollar amounts does not mean we must measure it in dollar amounts. Sales is as much about the partnerships between sales people and product/engineering, why aren’t all the people who work on a deal getting commission? I’d go as far as to argue that oxide is in the perfect position as a big-ticket long-cycle business to abandon traditional sales commission structures. They take on all the negatives (sales people overselling to get commission) with no benefits. There are other ideas. Company wide bonus based on sales made during the year?
  - tock 1y ago
    > Just because we can measure a sales person’s contributions in dollar amounts does not mean we must measure it in dollar amounts. This is the fairest form of compensation. It's unfortunate that engineering contribution cannot be measured the same way. If we could engineers would all be getting a nice pay hike.
    - ghaff 1y ago
      And many would be getting let go because they weren't meeting some number.
      - tock 1y ago
        Companies already do layoffs without commissions. They are always optimising to reduce salaries and increase profit margins. And its not "some number". Its the amount of $ brought in. Thats what companies care about.
        ghaff 1y ago
        Yes, but sales reps have very specific targets and sales managers have no problem routinely letting people go if they miss those targets. It really is a somewhat different situation from engineering--although projects, for example, certainly get canceled and teams let go. There's a more direct correlation to quarterly revenue/margin input in the case of sales.
        tock 1y ago
        But its a more transparent system. Right now no-one has any idea if they get laid off or if they are being underpaid. I think the overall compensation would likely go up if you are good at your job.
    - tshaddox 1y ago
      It's still just a market. You've got to make offers that people will accept. It's mostly silly to try to come up with some objective theory of value, except in the context of what potential employees will consider to be fair, which is right back at "you've got to make offers that people will accept." Basing compensation on supposedly objective things like "the dollar amount a sales person brought in" might be important to a given pool of potential employees, but resist the temptation to think of it as objectively determining the value of the employee's work. Remember that all you're doing is making offers that people will accept.
- ekianjo 1y ago
  > One exception, for sales. either you have a rule or you dont. the moment you start to do exceptions this will call for more down the road. there is tangible reason for sales to be commision based. you could say its just like another regular position. An engineer can also be a sales multiplier if they improve a product yet they dont get a commission. Same thing. Having boots of the field is no justification.

IncreasePosts 1y ago

Why is sales special? Why not just have some performance bar for that, just like all the other positions?

castlecrasher2 1y ago
Because good sales staff make a ton of money through a ton of sales. Any other incentive structure is unlikely to attract high performers.
- bobsomers 1y ago
  How is this not exactly the same in engineering though? Performance reviews at top tech companies are pretty much designed to identify the super high performers and shove massive bonuses and equity grants their way. And those equity grants are effectively as good as cash, since they are publicly tradable stock.
hiddencost 1y ago
Sales culture is heavily incentive and performance based. It sucks but they like to think that if they work harder they'll get paid more.
- ghaff 1y ago
  It's not universal but B2B sales in particular have evolved to incentive/performance compensation to a large degree. Wasn't always the case but (most?) of those companies aren't in business any longer. Also extends to the sales hiring process. Not that companies don't look at track records but it's also the case that sales managers don't have any issue firing people who don't meet their numbers.
sofixa 1y ago
Because sales people are used to work on incentives, including going over and getting rewarded for it. If they have a fixed salary with a high objective to "make it" (e.g. if you sell less than $X, you get fired), lots of sales folks will skip on it because they can't go over, and most probably prefer to have a quarter or two or year at e.g. 70% salary while working on longer term deals, rather than losing their job for not being good enough within that arbitrary time period. And going over their quota can be wildly lucrative depending on the terms.