Our Philosophy for Employee Compensation – Focus on Employee Value

Unless you just returned from a two month sabbatical from the Internet, you know that last month Dan Price at Gravity Payments announced a minimum salary of $70,000 per year for the entire company. Some people say it’s just a PR stunt. Many others applaud him for taking care of his employees, and others see some combination of the two. In one of the many interviews with Price, he asked other CEOs to join the conversation. So, thank you Dan for the opportunity to share my philosophy on employee compensation.

Ryan Woodings

Price’s move is definitely bold. Moving the minimum salary to $70,000, when their average salary today is about $45,000, will obviously have a huge impact to Gravity Payments’ expenses. It will also have a huge impact on their hiring, and has been a boon to their customer base. It’s impossible to predict how the combination of variables will impact Gravity Payments. The bottom line: I like Price’s willingness to take action and try something different. If this is successful we’ll likely see a growing number of companies taking similar actions.

Now for my philosophy. I believe that the traditional approach of annual raises based on employee effort has some fundamental flaws. Market rates for many technical jobs, like software engineers, don’t increase at the same rate as the typical raise of 3-10%. Under this model, loyal engineers that have been working at the same company for five to ten years are soon underpaid and are thereby incented to switch to a different company in order to get their salary back to market rate. For other positions, the standard raise may leave someone making a lot more at their current company than they could make anywhere else, financially handcuffing them to their job.

As CEO of a self-funded, privately-owned company, I am responsible for the livelihoods of thirty families. Determining the salary for each employee is a very subjective task based on myriad factors such as employee performance, culture fit, and market rate for similar jobs in our region and industry.

MetaGeek Team

At MetaGeek, we are trying a different approach to employee compensation. Our salary structure is based on the Top of Market Salary philosophy from Netflix. The Top of Market philosophy aligns everyone’s salary with the current market annually. The process is very straightforward; for each employee we ask the following three questions:

  1. How much would another company likely pay this person?
  2. How much would a replacement cost us?
  3. How much would we pay them if they had a higher offer from another company?

The answers to these three questions answers the primary question: how much value does this employee provide? Top of Market means that some people may not get a raise every year, while others may see significant raises. Some people have a hard time with this concept; the annual raise is a longtime tradition in many U.S. workplaces. However, it’s important to look at the person’s total compensation, not just the comparison to last year.

By changing the conversation from “annual raise percentage” to employee value, the focus is now on how an employee can increase their value to the company. While many jobs have an indirect connection to the company’s revenue and expenses, intuitively it is easy to connect an increase in employee value to an increase in our bottom line. Because we use Scrum across the entire company, the link between employee value and our company’s financial health is fairly straightforward. As employees increase their value to MetaGeek, MetaGeek’s bottom line improves.

As the company’s bottom line improves it is easy to increase the employee’s salary without a negative impact on the livelihoods of the other thirty employees. Focusing on the value provided by each employee is a win-win; it improves the company and it improves the employee’s ability to increase their salary. In the long term, it isn’t beneficial to anyone to artificially create way-above-market salaries, but I’ll gladly help each and every employee raise their market value. In this model we all grow together.

Best Places to Work in Idaho 2012, 2013, 2014, and… 2015!

Most of us spend a great deal of our adult lives at work, for better or for worse. We see coworkers and bosses as much or even more than friends and family members. Yet, it’s a common, and even institutionalized attitude for Americans to accept that “work sucks, it’s just a means to an end, and we just need to deal with it.” But really, does it need to be that way? What if working in Idaho was awesome, and something that you loved? Where should someone look if they wanted to work for a company where people love their job?

That’s what POPULUS, a third-party research firm, looks to answer every year when they compile their Best Places To Work in Idaho™ list. Each year a survey goes out to participating micro (10-19 employees), small (20-99 employees) and large (100+ employees) businesses in Idaho. Employees are able to fill the survey out anonymously and provide their honest opinions on their employers. The survey asks about work/life balance, workplace environment, compensation and benefits, employee growth, development and overall organizational management. Once all the data has been collected, a list of the top 10 employers is announced. This year, finalists were honored and celebrated at the awards ceremony on April 16 at Boise State University in the Stueckle Sky Center.

10 of us from MetaGeek were able to attend the event. Everyone enjoyed the ceremony, the food and most of all, the view. Craig, our HR director explains,

“It was great. We were in the Stueckle Sky Center so the view was amazing, and we were able to get a picture with the blue turf in the background.”

From top left: Woody, Skay, Ryan, Craig, Maryn, Mike, and Lisa. From the bottom left: Marissa, Holli and Jay

From top left: Woody, Skay, Ryan, Craig, Maryn, Mike, and Lisa. From bottom left: Marissa, Holli and Jay

For the past three years, MetaGeek has made the Best Places to Work in Idaho Top 10 list, continuing to move up the ladder each year. After getting 6th last year, we’re proud to announce that we’ve moved into 3rd place for 2015! With perks including our vacation incentive plan,“You’ve got Plenty” paid time-off policy, and tuition reimbursement, it’s easy to see why. Lael, who’s been working at MetaGeek since 2011 states,

“The workplace perks are great, but it’s the attitude behind those perks that make me feel valued as an employee. The theory is that if MetaGeek provides you with any tool, book, paid vacation, snacks, etc. that you need to succeed, they trust that you will turn out amazing work. And because of that mutual trust, amazing work does get done around here.”

bestplacetowork

CEO, Ryan Woodings showing off award for 3rd Best Place to Work in Idaho

Our CEO, and Co-Founder of MetaGeek, Ryan Woodings, received the award on behalf of MetaGeek. He’s just another reason why we are one of the best places to work. Ryan, and our whole leadership team at MetaGeek, continue to develop and grow not only the company but employees. A big thanks to them for making MetaGeek one of the best places to work!

We are all very honored to be apart of a company that gets recognized for what makes us awesome.

 

Want to join our team?

Check out our current job openings at MetaGeek

For more information and the rest of the winners

Visit Best Places to Work in Idaho

Develop.Idaho 2015

dev idaho poster by @developidahoWith over 4 million acres of wilderness, rolling farmlands, rivers, and a statewide population of less than 2 million people, Idaho might not be at the top of your list when you think of the tech industry, but if you walked into the Stueckle Sky Center at Boise State University during Idaho Tech Council’s (ITC) Develop.Idaho (#DEVID15) you would have thought differently.
Nearly 500 tickets were sold for the event, with representation from dozens of Idaho companies in the tech community around the state.
Develop.Idaho is an annual event put on by the ITC that brings Idaho tech companies together to brainstorm, collaborate, and help each other grow the tech industry in Idaho.

hadi speech kids and codeThe theme for this year’s conference was “208: Code For Growth,” which focused on how software creates growth opportunities for Idaho companies. The event was held at the Stueckle Sky Center at Boise State University.
Keynote speaker Hadi Partovi, co-founder and CEO of Code.org, talked about the importance of introducing coding to school-age kids, especially girls, so we can prepare a future workforce that is increasingly technology-focused.

ryan's speech benefits copyFollowing Hadi’s keynote, our own MetaGeek CEO Ryan Woodings (also an ITC board member) kicked off the conference by challenging attendees with a simple question: “Are You Building Something Awesome”? Ryan discussed that to build a great company that does great things, you must first start at the “Why” level. Companies need to ask themselves not, “what does my company do”, but “why does my company exist?”
After your Why question is answered, you can use it to check the alignment of every single other thing you do as a company. MetaGeek’s Why statement is short and sweet, but speaks volumes: “We believe that work should be awesome; something that we love.” It seems simple enough, but how do you turn a platitude into a real statement of how your company is going to operate?

ryan's speech packed crowdCiting companies like Netflix and Apple, Ryan explained that companies must have an intentional and purposeful culture that only retains high-performance “A Player” employees, but treats those employees with respect and freedom (not to mention fun workplace perks.)

 

“Deliberately teaching company culture through actions”, as Ryan posited in his presentation, will rally your entire team so you can work together to build something truly…wait for it…awesome.

Following the main speakers, attendees then had the opportunity to participate in three breakout sessions, where panelists discussed everything from surviving the “Valley Of Death” (periods of financial stress in your business), to “Learning to Lean” (implementing agile development) and the Continuous Deployment model of software releases.

Ibrian paneln the breakout technical panel “What Differentiates Top Engineers”, leaders from MetaGeek, Clearwater Analytics, Bodybuilding.com, Cradlepoint, and Keynetics discussed hiring practices and how to source the best engineering talent. One audience member asked if, in this merit-based day and age, a degree in Computer Science was a mandatory requisite for consideration.

“I look for someone that’s committed to self-improvement.  That oftentimes coincides with a degree in Computer Science, but not necessarily,” explained Brian Tuttle, MetaGeek’s CTO. Other panelists agreed, and went on to discuss the necessity of writing actual code during an applicant’s job interview, degree or no, and emphasizing the word “Viable” in building an MVP.

After the breakout sessions, there were more social opportunities to round out the day, including networking sessions from local Boise meetup groups like Girl Develop It (led by our own Marianna Budnikova) and Startup Grind Boise.

The overall theme at Develop.Idaho 2015 wasn’t necessarily nitty gritty technical stuff, but addressing how to grow tech-focused businesses that face all the very same challenges that all businesses face – hiring talented people, keeping money in the bank, and building a great products. If the success of Develop.Idaho is any indication of the tech industry in our state, then 208 truly is “Code for Growth.” 

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