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How to set salaries

Some ways of thinking about setting salaries:

Market Rate

You pay the lowest price that the market will bear. The bigger the market (the more appropriate candidates that you can reach), the lower the price is likely to be. This is commodity pricing: an average sort of price to attract average (or cheapest possible) candidates.

Market-plus

You pay the market rate plus a bit, fishing for better-than-average candidates or at least that your recruits will work better for you as a result of higher pay.

Market-minus

Sounds silly, but it’s quite common in the world of non-profits. You pay a little below market rate to filter out people who are in it for the money, as opposed to those who value the work itself, share your vision, are committed to the cause.

A living wage

You come at the pricing question the other way round – not “What’s this job worth?” or “What’s the lowest wage I can get away with paying for this work?” but “How do I think members of my team should be able to live?” This could end up being below market, in which case you end up with another values-filter, or above market, in which case you risk looking wasteful or attracting people who want to work for you for the wrong reasons.

I like the idea of starting from a living-wage – and if it looks too generous:
a) It’s a better mistake to make than being stingy
b) You’ve got the interesting problem of helping your recruits to be worth it.

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Responsibility

Whether you’re improving your own work or helping others improve theirs,* it pays to spend time talking about who is responsible for what – and what you hope people will take responsibility for as they grow into their roles.

There are layers of responsibility.

1) Given all the necessary inputs…

Do you take responsibility for getting your job done?

2) If an input is missing…

  • Do you shrug your shoulders and put down your tools?
  • Or do you take responsibility for passing the problem to the relevant person – a colleague, supplier, manager?
  • Do you take responsibility for chasing up the solution?
  • If needed, will you work with the relevant person to make it easier for them to fix it?
  • Will you give thought to whether this problem is likely to happen again – and think about what you can do on your side to fix it (by, say, allowing more time in your process)?
  • Will you take responsibility for the breakdown in communication or process – by talking about it, asking for help, trying something new?

3) If the inputs are fine and the process is working…

  • Will you ask how it could be done better?
  • Will you think about whether you could entirely replace the process, or do away with it entirely?

4) Above and beyond the level of processes…

  • Will you take responsibility not just for the defined outcomes of the process, but for what those outcomes are actually supposed to achieve?
  • Will you set an example of excellence in the quality of your work…
  • Including how you treat people while you do it, both in and outside your organisation?
  • Will you take a degree of responsibility for other people do these things – that is, for setting and improving the culture?**

Basic competence in a defined task is just the start – taking that as given, members of your team become more valuable the further down this list they go.

There’s a world of difference between managing someone where you responsibility for their work, and working with someone who takes responsibility to make sure the right things get done in the right way – and helps you and others to do the same. Find more of those people.

*it’s usually best to think about both at once

**No-one likes a meddler, but most of the time most of us make the mistake of not taking enough responsibility for making things better.

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Seth Godin on recruiting: raise the average

That next person you hire – are you lowering the average, or raising the average? ‘Cause if you’re lowering the average of your team because you’re in a hurry, when are you going to stop lowering the average of your team? How low does the average of your team go before it’s over?

On the other hand, anytime you can raise the average of your team, it’s probably a smart move.

Seth Godin – Entreleadership Podcast, Ep. 266

This applies to technical skills, but I think it’s even more relevant to team culture.

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Ben Horowitz – The Hard Thing About Hard Things

This is a great cut-the-crap book about management and building a company. It’s most relevant to the the tech world, but there are plenty of gems here that are relevant to anyone – he’s especially good on shaping your culture (hint: yoga at work is not your organisational culture).

Here’s the introduction:

Every time I read a management or self-help book, I find myself saying “That’s fine, but that wasn’t really the hard thing about the situation.”

The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is laying people off when you miss the big goal.

The hard thing isn’t hiring great people. The hard thing is when those “great people” develop a sense of entitlement and start demanding unreasonable things.

The hard thing isn’t setting up an organizational chart. The hard thing is getting people to communicate within the organization that you just designed.

The hard thing isn’t dreaming big. The hard thing is waking up in he middle of the night in a cold sweat when your dream turns into a nightmare.

The problem with these books is that they attempt to provide a recipe for challenges that have no recipes. There’s no recipe for really complicated, dynamic situations. There’s no recipe for building a high-tech company; there’s no recipe for leading a group of people out of trouble; there’s no recipe for making hit songs; there’s no recipe for running for president … and there’s no recipe for motivating people when your business has turned to crap.

That’s the hard thing about hard things: there is no formula for dealing with them.

Nonetheless, there are many bits of advice and experience that can help with the hard things.

I do not attempt to present a formula in this book. Instead, I present my story and the difficulties that I have faced.

…

I share my experiences in the hope of providing clues and inspiration for others who find themselves in the struggle to build something out of nothing.

Ben Horowitz – The Hard Thing About Hard Things

Highly recommend.

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The soft option

Your desire to be generous to others is a great motivator to excellence: if you’re serious about ensuring that the externalities of your project are consistently positive, you’re going to need to be doubly good at what you do.

You need emotional energy and time to spare to listen well, to be gracious under pressure, to be the kind of employer or customer that helps your team or partners to do their best work.

It takes discipline to do this kind of emotional labour day in, day out. You need to be clear about what you’re doing and how and why, plan for it, and be deliberate about doing it consistently. You need to find ways to articulate your values to people inside and outside your project.

You need to be hard-headed about being soft-hearted.

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Externalities

We’re familiar with the externalities of industrial production and consumption. They’re fairly predictable, and often visible. Even air pollution, the silent killer, is usually visible when it happens, before the poison spreads. It’s a perfect example of a negative externality – something put into the world that everyonepays for, not just the producer or the consumer.

What are the externalities of your project, program or product? What invisible outputs do you have?

  • What does your way of working with users, customers or clients say that your words leave out? How do they see you seeing them? Do they leave feeling smaller, more pressured, less competent – or with a greater belief in their ability to get better and to make a difference? (As you teach that vital knowledge and share those crucial skills, what else are you teaching?)

  • As you manage your team, how do they feel when they leave the office? What do they take home with them? What are your externalities for their families, friends and neighbourhoods?

    • What about your suppliers – the people who serve you as you serve others. What externalities do you have for the people in the photocopy shop, the electrician who comes to the office, or for your cleaners?

  • What about your suppliers – the people who serve you as you serve others. What externalities do you have for the people in the photocopy shop, the electrician who comes to the office, or for your cleaners?

Not polluting – ‘do no evil’ – isn’t nearly enough.

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Brian Chesky on culture and hiring well

Our first employee was our first engineer and I think we looked for him for four or five months. I probably looked through thousands of people and I probably interviewed hundreds of people.

…

Some people ask, why did you take so much time on hiring your first engineer? And here’s how we thought about it: I kind of felt like your first engineer is like bringing in DNA to your company. If we were successful, there were going to be a thousand people just like him or her in the company.

So it wasn’t a matter of getting someone to build the next three features that we needed to ship for our users. There was something much more long term and much more enduring, which was “Do I want to work with a hundred or a thousand more people like this?”

You want diversity of background, age, but you don’t want diversity of values. You want very very homogeneous beliefs or values – that’s the one thing that shouldn’t be diverse.

Brian Chesky, founder of AirBnB – How to Start a Startup 2014

Full video below

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Kicking cans: job descriptions versus culture

A few days ago I watched a schoolboy kicking a can down the road. He kicked it a couple of times and then miskicked, sending the can flying into the road, where it landed at the feet of an off-duty city cleaning worker, still in his orange uniform. These guys are fantastic: they put in the hard yards of sweeping the streets, cleaning out ratty drains and fetid canals doing a whole load of other stuff to keep Jakarta clean. This guy – in his uniform – trapped the can with his foot, bent down, picked it up, and looked at the kids with a grin that said “Don’t worry guys, I’ve got this.” Then he leaned back and tossed the can stylishly over his shoulder and straight into the… flowerbed.

This is a man who spends several hours a day sweating to keep Jakarta clean. He works in the dirt and grime, puts up with rats, cockroaches, heat and traffic fumes to clean the city up and to keep it clean. He’s part of the Orange Army transforming Jakarta – but he throws a piece of rubbish that lands at his feet into the flowerbed instead of the bin. Why?

Because that’s his culture. It’s what he saw his parents do, it what his neighbours do, and despite the best efforts of the school curriculum to teach another way, it’s probably what his kids do.

Job descriptions alone won’t solve this problem: you can hire all the street-sweepers you want, but you’ll never have clean streets until a large majority of people put their rubbish in the bin rather than throwing it on the ground. In other words, until keeping the city clean becomes the culture: “people like us, do things like this.”

Changing the culture is harder work than giving some people the job of cleaning up everyone else’s mess. Harder and slower, but in the long run more effective, cheaper and more sustainable. Changing the complex system of culture takes conversations, campaigns, and curriculum changes. It takes leadership: politicians, celebrities and parents who care enough to do what they say. And it does need street sweepers – people can’t see that the streets are dirty until they’ve seen clean ones.

Job descriptions are necessary, but they’re never sufficient.

*See also: Singapore, tree planting and the new normal

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Singapore, tree planting and the new normal

In 1960 Singapore was – in the words of its first Prime Minister, Lee Kuan Yew – a third world country. ‘Normal’ for many Singaporeans looked something like this:

Or this:

singapore slum 1960s

In 1965, when it separated from Malaysia, Singapore had a long way to go. It had no natural resources, faced several threats to its existence, and many people didn’t think it would make it as an independent state.

What happened?

The story of Singapore’s transformation is long, involved, and has its share of controversy. One key piece of the puzzle was the success of Singaporean leaders to change the culture.

From Garden City to City in a Garden

Here’s one example I hugely admire: the (re-)greening of Singapore. Lee Kuan Yew took part in tree-planting campaigns as early as 1963:

… but things really kicked off in 1971 when Singapore held its first Tree Planting Day. More than thirty-thousand trees were planted that day, and they kept it up for the next twenty years, planting more than ten-thousand trees every year.

Tree Planting Day was absorbed into a broader ‘Clean and Green’ day in the 1990s, but it’s still going. Today, Singaporeans are proud of their city’s greenery, and it would be unthinkable for any development or civic space in Singapore not to include plenty of trees, recreational space and features to reduce its environmental impact.*

Clean and Green is the new normal for Singapore, but it wasn’t inevitable – it took early steps (those first tree-plants), a big push (Tree Planting Day 1971) and more than twenty years of consistent work – with hundreds of thousands of trees planted – for it to become part of Singaporean culture (‘people like us, do things like this’).

The same goes for the Singapore’s strong culture of education, decent public housing, and quality infrastructure: people made it.

*I know, these things are relative

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The acid test

If my potential…

customer / employer / client / donor / partner / supplier

knew what I know about my…

product / last job / service / organisation / attitude / manners

would they still…

buy it / hire me / use it / give / join me / want my business ?

Better still…

Would they be eager to do so?

Hat tip: SG