With the changes in the times and business models, companies often adjust their salary structures with each major shift in the organization structure or remarkable increase/decrease in profits.
Creating fair salary ranges for developers, however, slightly takes a more practical approach. Employers will have to research what developers earn in the local market as well as what they earn as employees of similar organizations.
What companies consider
While the market value greatly influences the compensation ranges in an organization, other pressing issues like what the company can afford and how important that role ordinarily takes precedence. Even with these in mind, organizations still have to develop an edge to compete to get and retain talented developers into their employ.
Facebook and other popular companies use a structured pay structure that is simple and offers the same pay for a level of employment. For example, employees who come into the organization have the same pay across the board. If for example a programmer is set to take home an annual salary of $164,000, then there is no much room for negotiation upwards.
Curbing pay discrepancies
In a similar fashion, the firm will also not pay employees based on their previous salary. This happens to be sustainable and objective in the sense that companies end up paying for value added and not based on negotiation skills. It also curbs the discrepancies in the pay structure that may lead to dissatisfaction among members of staff.
Other companies have their salaries based on a formula for each level. However, they add onto the salary based on that individual’s work experience or potential value of what they could bring into that organization.
The need for a formulaic salary was arrived upon due to discrepancies in the pay between the two genders. For a long time, female developers have been paid much less than their male counterparts. With the changes in legislation and activism for equality, companies developed sensitive salary ranges based more on value than gender.
Employee salary history
Companies often fall into the trap of inquiring about the salaries their potential staffers earned while in their last job. In the US, this has been abolished in nine states. Employers in these states, therefore, offer salaries based on the original allocation of that particular position.
Left open, some employers would generally ask developers what they used to earn in their last job and add a few bucks onto that as a bargaining chip. These employers would then box these staffers into thinking they are getting a better deal. However, this may backfire at some point.
Just like employers, developers too research a company’s pay structure before they apply for a job there. If they find out in the course of the discussion that they are not getting paid according to the anticipated standards, they could leave at the earliest opportunity.
Finding a standard salary range for developers may be an arduous task. This s occasioned by the fact that all organizations have what they can afford to pay staff based on how important the role is to the firm. The other factor that comes into question is the size of the firm and its profitability.