Compensation is a complicated task that carries a lot of emotional baggage. While not all of that can be totally removed from the equation, Tofugu tries to put together a foundation for compensation that will hopefully help you to feel good about what you’re getting, and what you’re doing.
Tofugu sets compensation by role and role level.
Approximately once per year, usually at around the same time each year (starting in August on a rolling basis), Tofugu resets these role rates to current market rates. This takes into account not only demand for the role itself, but economic factors (such as cost of living, inflation, and the like) as well.
When a role’s rate goes up, so does the pay of the role owners.
If a role’s rate goes down, we won’t start paying you less, but there also won’t be a pay increase either.
Note that when we set role rates, we are setting the full-time salary for the position.
For hourly employees, we take the role rate and divide it by the average number of standard working hours in a year. For contractors we apply a multiplier with the salary—to compensate for the extra costs a contractor has, like employer taxes and the like—and then we divide by the standard number of working hours in a year. While hourly and contractor rates differ from the base salary compensation rate for the role, the formulas for how we get there from the base rate stay the same.
Determining pay rates can be a bit of an art, but we’re trying to make it into more of a science. We are currently using a private dataset from Radford Network to help us to determine pay rates. Although we have to pay for access to this data, it is more accurate and reliable than public compensation networks, such as Glassdoor.
When we need to, we branch out from and/or supplement the Radford data with other sources. But by starting with the Radford Network data first, we have more confidence that we are paying people fairly at market rates, and feel good about being competitive.
When we are researching compensation for a role, we start by looking at the US 75th percentile and The Bay Area 50th percentile. We also try to filter compensation rates to tech sector salaries when there’s enough data (which there is, a lot of the time). This helps us to begin our compensation search in a pretty competitive place.
Our goal is to be competitive in terms of pay when compared to other tech companies. We probably can’t beat Facebook, Google, & Apple, but we hope that when you take into account how we work, our Personal Time Off policies, and our Benefits & Perks, we can attract the right kind of teammate.
With role rates (and not individual people rates), we are better able to make sure that people who are doing the same work get paid the same amount.
This means paying people the same no matter where they live. The role rate is the role rate, whether you live someplace with a high—or low—cost of living. You’re doing the same work, so you’re getting paid for the role.
It also means narrowing pay gaps between genders. We’re not quite sure what this looks like at the moment, but later this year we plan to publish a report on pay by gender at Tofugu. That will be the first step in working toward reducing and then removing whatever gap we have.
We will publish role rates in individual roles in the ‣ page.