Recently, we adopted a transparent pay policy at Agni (which you can read more about here) to help all teammates understand Agni’s philosophy around compensation, why they’re paid what they’re paid, and how they can continue to grow at Agni. In this post, we’ll walk through how we calculate compensation for each position that we hire.
We chose to use a pay formula to define employees’ salaries. Our formula pushes us to be fair (all teammates’ salaries are calculated with one formula) and flexible (we can adjust each formula input based on the individual we’re hiring).
Your Comp = Title Benchmark x Location x Level x Tenure x Company Stage
Our formula assigns multipliers to the following inputs to decide each employee’s compensation:
- Title benchmark
- We calculate this figure by researching the median salary for the role that we’re hiring for on 6 different benchmarking websites, keeping the boundaries of each benchmark as constant as we can (boundaries include: location, experience level, and company size).
- We have 3 location tiers to account for cost of living and preferred job location. We use a cost of living index (that includes rent costs) to help us classify high cost cities and low cost cities.
- Tier 1: Agni’s preferred job location (multiplier of 1)
- Tier 2: non-preferred location, high cost city (multiplier of 0.9)
- Tier 3: non-preferred location, low cost city (multiplier of 0.8)
- We use a 7-level-rubric to account for the different demands of each position. Levels are based on:
- Problem solving
- People management
- Role-specific competency
- Employees have the opportunity to suggest a new level or title for their role twice a year during a 6 Month Reflection conversation with their manager, similar to a performance evaluation.
- Levels reflect a combination of experience and aptitude in given dimensions of a role, as well as responsibility taken on in the role for Agni’s outcomes.
- Each employee receives a 5% raise after each year they spend with Agni.
- Company stage
- This input reflects Agni’s stage and financial health, and will apply to all team members. We assigned key milestones that are significant to the company’s overall health to each phase:
- Concept: (multiplier of 0.8)
- Launch: (multiplier of 0.85); this is where we are currently!
- Build: (multiplier of 0.9)
- Growth: (multiplier of 0.95)
- Scale: (multiplier of 1)
- Mature: (multiplier of 1.05)
- During this early stage of Agni’s growth, employees have a choice between 2 compensation packages:
- Choice A: more salary with less equity
- Choice B: less salary with more equity
- The exact number of shares offered in both choices is determined based on the level of the hire, size of the team, and stage of the company at the time of hire. It is Agni’s goal to be able to offer equity to all teammates, so what we are able to offer in this category will evolve over time.
- At this time, Agni does not offer bonuses. We may reconsider this as our team and needs change.
- The final number
- We round the final number to the nearest thousand.
How we share our compensation information:
There are different levels of pay transparency. At Agni, we’re choosing to implement transparency internally only, meaning that we will not share our pay information externally. We believe that our team benefits most from understanding our compensation philosophies. That said, we do want to make sure that prospective employees have a ballpark understanding of what we’re able to offer for a given position so that they can decide if they’re interested in applying, so we’ll share a salary range on the job descriptions that we advertise.
We’re so grateful that you chose to learn more about our transparent pay policy and pay formula. If you have questions or thoughts about it that you’d like to share, we’d love to hear from you. Feel free to reach out to firstname.lastname@example.org or @agniforall on Instagram to get in touch.