legal, salary, business-methodologyWith a startup you are often confronted with the difficulty of answering the basic question of who can earn what and when? Is there a good measure stick that can help as guideline to match skill with proposed salary for each one on your team.
I am not really looking for a set price as much as method by which various factors from the local market, personal achievement and project scope can be used to estimate and ideal salary proposal for each person on a team.
This may be a silly question that has to many variables but one I think could even serve as a incredible tool if a well formulated answer could be found.
Strategically, you should start with an organization chart. Make a list of all of the positions that you think you need. Get an idea of what the hierarchy might look like, who will report to who?
Also determine the Job Title and Job Description for each position in the org chart. Then you can search sites like salary.com for average compensation in your area. Search for "salary estimator" and you should find a variety to choose from. I usually check the estimates from at least 3 different sources and average it. You could also find a local HR consultant that could provide this information. Make sure the salary data is relevant to your location. The U.S. Census Bureau also has a lot of great information for Job Title, Job Description and Compensation.
Once you have salary estimates you can develop a compensation scale. So for each Job Title you determine a min/max range for compensation. If there is opportunity for advancement you might have an overlap on the compensation scales. So the min for Engineer 2 is less than the max for Engineer 1. Then there would need to be some amount of penetration in to the next pay scale to be promoted. This would ensure that the employee advancing is fully capable of taking on the new job title/description.
Periodically (usually annually) you might do performance evaluations and rank and rate your staff. You might use a rating system like @vaibhav mentioned or develop a rating system that fits your business. Then you would verify that the performance rating is aligned with the compensation. Meaning that the employees ranked the highest are paid the highest. If there are discrepancies you'll know who should receive a raise. You would apply this to each Job Title. So an Engineer 1 is compared to all other Engineer 1's.
You could also take a look at companies like Buffer that have open salaries. Here's a link to a post that details Buffer's compensation plan.
Another great resource is the Society of Human Resources Management or SHRM.
Factors of skill level :
Give points(1 to 5/10) for each skill and calculate at the end to know where he/she stands.
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