How to Compute Wages

  1. Open the relevant role above or in the
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    Roles
    . Based on the skills ladder in the role description, place the person into a pay tier. Methodology:
    1. Typically if you rate the person in each skill and then average the ratings, that will work well.
    2. Sometimes someone will be in a lower tier for most skills, but a very high tier for the skill that they use the most. They deserve to be placed in a high tier. Other times someone will have a skill they are excellent at, but if the majority of their work does not involve that skill, they should be placed based on the skills they use the most.
    3. Within the placement, also provide notes on whether the person is towards the top, middle, or bottom, based on the skills assessment.
  2. Ascertain if the person is part-time or full-time.
  3. Decide on a final wage/salary offer within the tier based on:
    1. Communciation Skills. Do they regularly meet our communication guidelines?
    2. Leadership Skills. Do they help others on the team grow? Do they manage team members while also fulfilling their own work?
    3. Accountabilty. Do they take charge of their work? Do they continually deliver results by agreed-upon deadlines? Do they consistently respond to internal communication or do they sometimes miss it?
    4. Networking. Do they bring friends to Cantilever as potential clients or staff? Do they actively seek to grow our talent pool or find new leads, outside of work?
    5. Efficiency. Are they delivering work in a shorter amount of time than their peers in the same tier? This gives us more value so they should get paid more.
    6. Flexibility. Do they play multiple roles? This gives us value, so they should get paid more than they would in either tier separately.
      1. People who play multiple roles can be rated based on the Role they hold the most, then adjusted based on their other Roles, or you can compute wages for each of their roles independently, and then average/blend the wages.
  4. If they are not in the US, add 8% to account for the difference in taxation structure between US W2 employees and employees/contractors in the rest of the world. This addition is capped at $12,816 or $8/hr, which is the maximum employer tax that would be due in the US due to the FICA tax maximum.
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Example:

You are hiring a QA engineer in Denmark.

  1. You assess them in the L4 tier based on the relevant Role document.
  2. You determine that they will be full-time. This leads to a salary range of $61,500 to $75,500 per the document and table above.
  3. You believe they are average when it comes to skill level, efficiency, and flexibility relative to other L4 QA Engineers. This leads to a salary in the middle of the range, $68,500.
  4. You adjust the salary based on their location in Denmark, adding 8%. This leads to a final offer of $73,980, or $3082.50 per semi-monthly pay period. At the time of payment, this wage will be converted to local currency, DKK, and paid according to prevailing conversion rates.
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Example 2:

You are hiring a CEO in Denmark.

  1. You assess them in the L4 tier based on the relevant Role document.
  2. You determine that they will be full-time. This leads to a salary range of $216,000 to 258,000 per the document and table above.
  3. You believe they are average when it comes to skill level, efficiency, and flexibility relative to other L4 QA Engineers. This leads to a salary in the middle of the range, $237,000.
  4. You adjust the salary based on their location in Denmark, adding 8%. However, 8% of $237k is more than the limit of $12,816, so you use that instead. This leads to a final offer of $249,816.

Stock & Stock Awards

Shareholders have paid for their shares and are entitled to any profits from those shares regardless of other day-to-day compensation.

On a case-by-case basis, managers may invite some team members to purchase shares in the company, or to receive a part of their salary as stock. Once that stock is owned, dividends from that stock are not factored into ongoing compensation for regular daily work.

Executives such as the CEO may have their comp adjusted to account for the weight of their ownership stake and whether it is strategically preferential for them to take a lower salary to raise overall profits.