We shape our buildings and afterwards our buildings shape us.

– Winston Churchill

This is a reflection on a recent interaction. I feel self-conscious writing this post. Like most things I learn, it sounds like common sense when stated explicitly.

The insight struck me enough though that I’m going to share it.

I’ve typically designed comp bands to have even overlap between levels. If one level runs to $120K as a max salary, the next will start with a minimum of $110K.

Looking back, this is a product of organizations where budgets for raises are decoupled from budgets for promotions. You retain a great Software Engineer II and reward them for their contributions with a raise while standing in line for their promotion budget for several quarters.

Compensation in the software development job market, like pricing in the housing market, has recently come unhinged. In order to stay competitive, we took a pass at redesigning our comp bands.

The overlap described above makes sense when you have the budget constraints described. And that was informing my design.

However, our VPE (h/t @jondmatthews) suggested something different.

He said we should not overlap compensation on the lower levels of our career ladder and instead maintain tigher salary bands. This would force us to recognize strong performance in our less tenured engineers with promotions, not raises.

Inversely, we’d design our most senior levels to have broad overlap. This would allow us to reward folks who made great contributions as senior engineers but who may not be ready for the title of principal engineer and the associated organizational impact.

Let’s pause for a moment. We can debate the merits of rapid early career promotions, the tradeoffs of up-or-out roles, or the wisdom of a career ladder with N levels. I welcome the coffee we’ll share over that discussion some day.

My point is we shape our comp bands and afterwards our comp bands shape us (and our management). In my example above, our budgeting process shapes our comp bands. And something shaped the budgeting process. And…

Intentional organizational design matters. Consider it a corollary of Conway’s Law.

Design wisely.