Currently doing Coursera's Dan Ariely's behavioural economics course... A couple of thoughts:
- You want the relationship with your employees not to be based solely on money. If the only reason they work for you is the salary then you have a problem already.
- It has been shown experimentally that larger incentives can negatively impact performance. This is more important for bonuses but salary probably shows some similar behaviour. In general when you worry about the money and the stakes you become less effective.
- What people are paid relative to their peers is important. People feel better when they're paid better relative to their peers. The actual amount is less important. This supports the "pay fairly" approach.
EDIT: An interesting observation that has been made is that requiring public companies to publish their CEOs salaries has not caused those salaries to decline. If anything it caused them to keep going up. A similar effect should be expected in VC backed companies if they publish similar data as prospective CEOs would always want to be paid better than said data.
- You want the relationship with your employees not to be based solely on money. If the only reason they work for you is the salary then you have a problem already.
- It has been shown experimentally that larger incentives can negatively impact performance. This is more important for bonuses but salary probably shows some similar behaviour. In general when you worry about the money and the stakes you become less effective.
- What people are paid relative to their peers is important. People feel better when they're paid better relative to their peers. The actual amount is less important. This supports the "pay fairly" approach.
EDIT: An interesting observation that has been made is that requiring public companies to publish their CEOs salaries has not caused those salaries to decline. If anything it caused them to keep going up. A similar effect should be expected in VC backed companies if they publish similar data as prospective CEOs would always want to be paid better than said data.