We're detailing the compensation philosophy MUI has today, and why.
Compensation aims to be at a competitive rate for your job family, your location, your level/skills, your experience, and your contract type at all times.
Why? Underpaying is as much a problem as overpaying.
We are paying local rates based on the cost of market (also referred to as cost of labor). The cost of living is not an input in our compensation philosophy (it only has second-order effects).
Why? The cost of market is what it is.
As much as possible of our compensation model is open.
Why? We're an open organization, transparency allow data-driven iterations, to find ground truth. However, we can't make everything open because it sometimes harms the goal of finding ground truth.
We do not disclose individual compensation. We don't advertise pay bands.
Why? Disclosing individual compensation makes it harder to fix compensation mistakes at scale, disclosing pay bands too early impact who applies and who don't.
Increases within the market pay bands are based on performance.
Why? The cost of market is what it is.
We hire across the globe, but we're not location-agnostic. Your timezone, the cost of the market in your region, and the vicinity to users, customers, and partners can all be factors. For example, we may favor one applicant over another because they live in a region with a lower cost of market or because we need someone in this region (e.g. US).
Why? We operate globally, we optimize globally.
All things being equal, factors such as whether a candidate is in an underrepresented group or a lower-cost market vs. a higher-cost market can help us come to hiring decisions. In this case, both factors are equally weighted, and business needs will inform the final hiring decision.
Why? The fit with the role matters above all else but when two candidates are indistinguishable, increasing diversity, improving locale presence in the market or lowering cost, helps separate candidates.
We want our compensation to be at a level where we can recruit and retain people who meet our requirements. Our requirements for all job families are at or above the average in the market per the nature of our business model.
We are building dev tools, it's common to have 100,000 engineers users for every 1 engineer at MUI. Engineers use MUI's open-source projects because they want to save time, they need to feel that even with more of their own time, they wouldn't be able to do it better.
Therefore, for the MUI business model to work, it needs engineers who perform much above the 75th percentile compared to their peers.
Today, we position the pay bands for engineers at the 75th percentile or higher (in case of doubt, or the margin for error is in the higher range) of the survey data gathered from providers like Comptryx, Radford, or AdvancedHR. We could target the 90th percentile, but we also want to filter for people who value the mission, the proximity to users/products, and its community.
Other function's pay bands are also at the 75th percentile minimum so we can better work as a team (higher trust between different departments).
We re-evaluate our pay bands at a minimum every 12 months to be aligned with Compensation review cycle.
Bands may go up, down, or stay the same. If our band goes down, we won't decrease our teammate’s pay but wait for the market to increase to match.