The Company Where Everyone Knows Everyone Else's Salary (original) (raw)

Dane Atkinson is a tech entrepreneur who started his first company at 17 and has run almost a dozen more since. He's so friendly that he manages to sound cheerful while explaining the art of hiring workers for as little money possible.

"I have on many occasions paid the exact same skill set wildly different fees because I was able to negotiate with one person better than another," he says.

Some employees were worth 70,000ayear,butonlyaskedfor70,000 a year, but only asked for 70,000ayear,butonlyaskedfor50,000 a year. So, he says, he paid them $50,000 a year.

This works great for the company — until the employee finds out someone else at the company with the same job is making far more. "I've seen people cry and scream at each other," he says.

After enough of those painful moments, Atkison decided that at his next company, things would be different.

Three years ago, he started a tech firm called SumAll — a tech company where all the employees know each others' salaries.

When the company first started, there were just 10 people, and they worked together to figure out what everyone would be paid. But it started to get more complicated when they started hiring new people.

Atkinson would have to sit the new candidate down and basically say: Here's what everyone gets paid.

"I distinctly remember hiring an experienced, seasoned employee who has negotiated through her career," he says. "Her response was, 'This is unfair because I can't actually negotiate ... It's a car with an actual price, versus, talk to the dealer.' "

And, of course, a company where everybody sees each other's salaries creates new kinds of tension.

Earlier this year, Chris Jadatz took over the duties of someone who'd left the company. The person who had left was making 95,000ayear.Jadatzwasmaking95,000 a year. Jadatz was making 95,000ayear.Jadatzwasmaking55,000. "It made me feel definitely underpaid, as if maybe I was being looked over," he says.

So Jadatz went to Atkinson, the boss, and asked for more money. He got a $20,000-a-year raise.

Atkison has meetings like this all the time. He says it gives him a chance to explain why some employees make more than others — and to explain to employees how they can make more.

For a lot of employees, knowing what everyone makes is less exciting than it seems.

I talked to the CEO of another company that's open with salaries, and he said the reaction reminds him of Americans hearing they have topless beaches in Europe. Before you go to one, you think it's just going to be the craziest thing in the world. Then you get there and it's like, OK, nobody's flipping out because people are topless here. It's just how things are.