Mark explains that candidate's need to know the thought process employers go through when making on an offer. He explains the employer's evaluation is processed using the following criteria in order of importance.
- (40%) Internal restrictions such as budget requirements, department parity issues, established pay bands
- (30%) The market value of the candidate as perceived by the employer, not the candidate
- (20%) The candidate's current compensation and compensation history
- (10%) The candidate's compensation needs
Certainly, this reminds me to add salary strategy to start up's list of areas where HR can help. It's a lot harder to fix these issues than it is to do some prior planning. Do you understand each position, the market range for that position in your area (industry and geography) - just roughly, that is (there is a lot of subjectivity here). More importantly, do you know if you pay above or below market? Is this part of your strategy? Do salary increases fit into the plan? Does salary mix with equity or other incentives offered?