Fair compensation is a fascinating topic. When I had a role as Director of Operations I looked over RevOps, HR and Legal. Yap, that is start-up life. As you can imagine, I got invested in understanding compensation structure. Here I will share some of my learnings.
This article covers:
Poll results: 95% go beyond base
Lucy, a tale of an underpaid superstar
Responsibility and Impact on revenue, cost & profit
Everyone deserves a bonus.
Pool results: 95% go beyond base
95% of the participants agree that RevOps should go beyond a base salary. Half of the participants indicated it should be a bonus and a third would include a bonus and a variable part.
In most cases it should be a combination of both.
Pool results favor a some form of variable pay
Lucy, a tale of an underpaid superstar
The traditional view is that manager are getting paid more than individual contributer (IC). Why?
Just because of the title. That is what we learned when we were a child. To make money, you need to climb the corporate leader... luckily the world is changing.
Imagine you have Lucy in your team - a brilliant sales enablement professional. Lucy is an individual contributor (IC). The coaching skills of her increase team performance by 7%. How should you compensate her?
You want to compensate Lucy in away that she sticks with the company. She deserves a variable part and a bonus. The earning potential of her should be higher than of her manager.
Now, imagine she leaves because of a poorly designed compensation structure. What then?
I am not worried about Lucy, great talent is always in demand. I would be more concerned about the future performance of the company.
Responsibility and Impact on revenue, cost & profit
Responsibility (or seniority if you prefer) and Impact on revenue, cost, and profit form a relationship that determines compensation.
More responsibility means often that one has more impact on revenue, cost, and profit. But, certain roles have a higher impact than others. E.g. a systems admin vs. a sales enablement specialist. This would determine the amour of variable pay.
Variable pay
Revenue Operation's goal is to increase revenue, reduce costs, and increase profitability.
That is why variable pay for RevOps is important. They need to have skin in the game. The share of variable pay differs on the level of seniority and the impact the role has on revenue, cost, and profit.
The table below can be used as an indication.
Everyone deserves a bonus
A bonus based on the company's performance should be paid to everyone. This should not just be limited to revenue teams but the whole company.
People moslty leave because they want to increase their earning potential. Even an amazing culture can't compensate for low pay.
Or imagine two equally amazing companies but one of them is paying more. 37% of your top performers would leave you. Can you afford that?
