I recently read an article by First Round here. It’s a long article which basically talks about a ‘Counterintuitive System’ for employee compensation when starting up. The long post was worth it, really as me and my team are actually in the startup stage.
I’m actually thinking about putting some of these in our employee onboarding process. It’s also actually an article that ignited the idea behind our ‘Mechanisms with Teeth’ – which is the system we will be using in the near future to evaluate our team’s individual performance.
While the entire article is very important, a paragraph there resounded to me with a recent upset in the team. Here’s the paragraph:
These employees should be rewarded for their hard work, but that doesn’t mean you should ignore areas where they could develop more. “Junior people who are extraordinary often don’t get enough constructive feedback, and they end up with huge weak spots,” says Graham. “If people are always told they’re the best of the best of the best, and you reward them over and over again, they’ll begin to expect it. It will become the new normal. They will end up leaving the company sooner than you want them to because they can’t continue on the trajectory you’ve set up for them forever.”
I made the mistake of setting up some of the individuals in my team to expect an unsustainable trajectory. And primarily because of that, they are leaving. It’s a painful lesson to learn on my end. This post has painted it quite perfectly.
As we scale up, I hope that the new compensation system will help us avoid this. We’re structuring SEO Hacker for success for the future right now. It’s tough, but someday we’ll look back and say “It was all worth it.”