How do you fairly compensate your employees for a job well done? It’s a question that often gets ignored in favor of the bottom line and one that not enough companies talk about.
We’ve never been shy about discussing some of the perks and benefits that come with being a Courier employee, but we’ve never detailed our approach to compensation. It’s time we changed that.
We recently received another round of funding and plan to grow our team quite a bit in the near future. And our compensation policy needs to be organized and fair in order to reach that goal.
We’ve also officially become a fully remote company. This affects how we fairly compensate employees—do we offer the going rate where our employees live? The going rate of the area where our headquarters is located? Every remote team approaches this issue differently.
Our compensation policy and leveling framework are critical for Courier’s success. Here’s how we make it work.
Salaries Stay in the 90th Percentile
Everyone wants to know how much a job pays before anything else. That’s probably never going to change.
At Courier, we know our employees make this organization a success. And salaries allow our employees to live and enjoy their lives. We also want to attract and retain top talent, so we offer new employees salaries in the 90th percentile of San Francisco’s local market rates. We also keep current employees in the same range to keep turnover low and retain our incredible people.
Our compensation philosophy at Courier has historically been to target the 90th percentile of market rates. That sounds great, but determining exactly what that means isn’t easy. It can be a complicated process, so we’ll walk you through the factors we consider.
First, market rates vary by location. The 90th percentile for a software engineer in California is different from Kansas. So, even though we’re now a fully remote team that hires employees around the globe, we had to choose a location to base our compensation on. Since we originated in the Bay Area, our employees are compensated based on San Francisco’s local market rates.
We also consider more factors like the job title and level, as well as our company’s stage—for example, small startups obviously don’t usually pay the same as large enterprises. We are currently in between these two stages, so we need to factor that in while we’re building out our team. We use datasets from our own company history to make comparisons against going rates for similar roles at other organizations.
Obviously, there’s room for error here, and the datasets we use from our own employee history are small. But we find that these factors help us keep the most important elements in mind as we decide on compensation going forward.
Salary Bands Help Us Reward Top Performers
When it comes to employee development and advancement, we want employees to be empowered at Courier. And we want everyone to pursue the track that works for them. Promotions are largely determined by individual performance but not just individual performance. The needs of the team and business as a whole are also large factors in our employees leveling up.
We review compensation for each level and role during the second quarter of each year. And every time we hire for a role, we try to review our compensation banding and update it to ensure we’re truly offering our candidates the 90th percentile of the market rate.
Many of our employees increase their level without becoming managers. We believe that excellence should be rewarded and that not every employee’s career path looks the same. There are many ways to contribute and develop as part of the team at Courier. That’s why we don’t require employees to be on a management track to get to a new compensation level.
Specific titles and expectations for each employee are decided by each team rather than at the company level. There are some nuances to each role and performance that only a supervisor or other co-worker involved in the day-to-day work can effectively evaluate. That’s why we leave the final say to the supervisors running the team.
Additional Benefits Sweeten the Deal
While salaries are very important—we all need to eat—we know it’s not the only aspect of compensation that matters to employees. Other benefits play an important role in attracting and keeping employees.
We offer unlimited paid time off (that includes vacation time as well as sick days). Of course, we also offer robust medical insurance benefits for employees, including vision and dental. For parents who’ve just welcomed a new child into their home, we offer 14 weeks of fully paid parental leave.
As we mentioned above, we have shifted to a fully remote company, so our employees can work from anywhere. That’s a major benefit that can attract serious talent. The most recent Gallup survey on the issue of remote vs. onsite work found that 34% of employees prefer to be fully remote, yet many organizations are still pushing their employees to return to shared offices. As a remote-first company, our potential employees know that we will never force them to go to an office.
To ensure our employees have everything they need in their respective office spaces, we offer a home office stipend. We also pay for a DashPass for all employees to make ordering lunch throughout the week a little more affordable. And on Fridays, we buy our employees lunch just to say thank you and start their weekends on a high note.
Company Culture Plays a Big Role in Our Compensation Philosophy
As we define compensation for roles and work to recruit the best employees for those roles, our philosophy keeps us focused on fair compensation and benefits. But we also want to acknowledge that there will always be a subjective element to salaries and the promotion process. This fact often makes people uneasy because it can easily lead to favoritism and competition between teams. In our experience, the best way to avoid that problem is by building a healthy, inclusive work culture.
Attracting the best employees to your organization and keeping them around requires a space where support and collaboration are normalized. We lead by example and share our leadership's decision-making process when we make big decisions.
What we’ve shared with you is an early framework for Courier. We will continue to iterate on this just like we do with everything else. Expect this to evolve as we grow.
And if you’re interested in learning more, you can read about what it’s like to work at Courier by visiting our careers page.
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