In the summer of 2021, Maya and Reuben wrote a document that laid out our philosophy of radical compensation transparency. You can find this document here: Salary Transparency @ The Marcy Lab School - FAQs. It is a reflection of the deep sense of accountability they felt for their founding team. It was an effort to cultivate trust by enabling open conversations about how the budding organization was taking care of its most precious resources: its money and its people.
While the philosophy was helpful in establishing a culture precedent of talking openly about compensation, there was no system to enable us to maintain this philosophy as the organization grew. The document below represents our latest efforts to upgrade and operationalize this philosophy of radical transparency. We intend for this newly designed system to not only provide you with more visibility into org-wide compensation but also to provide you with more clarity on your prospects for career and salary growth at Marcy in the future.
There are a few strongly held beliefs that have informed the design of this compensation system:
We believe that salaries should reflect the market value of a given role.
You should not be able to leave the Marcy Lab School to do similar work for a similar organization and be paid more to do so.
We set salaries with the goal of being at the top of the New York City market for a given skill within the non-profit sector. In this sense, reflects our best guess to the following question: What do most other non-profit organizations of our size pay in order to fulfill a similar set of role responsibilities? In other words, what's the competitive market rate for this position?
<aside> 💡 Note: If you’ve read our original Salary Transparency Memo, you’ll notice a slight update here. Here’s how this question was previously framed: What would it cost to hire someone away from a comparable company with the necessary background, skills, and/or experiences to fulfill the role?
Since then, we have come to believe that it is all but impossible to equitably value a set of “skills and experiences”. For one, publicly available data only tells us what particular roles get paid. It does not tell us the skills and experiences of the people who hold these roles. Moreover, we know a single role can be performed well by folks from a variety of professional backgrounds. As such, you will see that our compensation system does not place inherent value on prior experience, advanced degrees, certifications, etc.
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We believe that salaries should be transparent.
You should know how much your colleagues get paid.
Transparency and accountability go hand-in-hand. The more obscure the facts, the harder it is to hold leaders accountable. The more sightlines we have in process and outcomes, the easier it is to support our leaders to ensure that they are working toward their stated aims. Transparency and accountability lead to trust. Trust breeds safety, and safety is a necessary condition for us to do our best work together.
Our team’s salaries are not only the organization’s single largest investment in any given year, but they also represent our livelihoods. We hope that a radically transparent compensation system results not only in a greater sense of safety — knowing that our leaders are thoughtfully stewarding our organization’s precious resources — but also in more trust that you are being compensated competitively and fairly for the work that you do each day.
We now believe that salary decisions should also be transparent.
You should know how your pay is determined.
This realization was a major impetus behind the redesign of our compensation system. In our first two years of salary transparency, we simply provided access to earnings data for our entire team. We prioritized getting our team the answer to the commonly held question, “How does my pay compare to my colleagues’?” This initiative led to a number of sometimes challenging but always fruitful conversations in the earliest days that ultimately resulted in managers feeling a greater sense of accountability for their compensation decisions.
This approach was sufficient at this earlier stage when the team was smaller. However, as we grew, it became increasingly difficult to make salary decisions with consistency and fairness. Additionally, this philosophy alone did not afford us enough clarity to forecast how team members compensation might grow as their tenure increased. Thus, we are adding more rigor to our compensation system to provide more clarity into how salaries are determined and how they are projected to change over time. As before, we intend for this level of clarity to further empower and equip our team members to have proactive conversations with their managers about their compensation and career growth at Marcy.
We now believe that we should balance market competitiveness with internal equity.
Similar roles should get paid similarly within the organization.
In our earlier years, we established salaries for our first five to ten employees by pulling market data for each individual role. While conducting market research for individual roles allowed us to feel confident in the competitiveness of each salary that we established, it inadvertently led to discrepancies in salaries across similar roles on our team based on how certain skills were valued in the broader market. For example, because in most companies, revenue-generating roles such as sales, marketing, and fundraising tend to make more, it meant that folks on our team who were managing very similar levels of responsibilities but on different teams had salaries that could differ significantly. Not only did this feel inconsistent with our values, but we also worried that it would detract from team culture and cohesion in the long run.
Our new compensation plan remains informed by the market but not beholden to it. It mitigates inconsistencies and discrepancies by grouping roles with similar levels of responsibility and ownership into “salary bands” so that we can ensure that these roles are paid in alignment with each other.
Guided by the values and commitments above, we set out to create a salary band structure that would account for all of our existing roles and those that we can anticipate arising over the next three to four years. We began by organizing these roles into categories. We had a strong head start on this because of our existing job title structure. We arrived at a structure of seven job levels, ranging from our most junior roles (or, “coordinators”) all the way up to our Executive Director level. Informed by how we currently operate and our future aspirations, we then drafted a matrix of responsibilities, ownership, and expertise to define each job level. From there, we assigned each of our roles to a salary level.
With our job levels well-defined, we began the roundabout process to determine the appropriate salary levels for each band. We began with an intense period of market research. We leveraged our partners at Edgility to gather and analyze compensation data from a variety of sources. We reviewed four years of tax return data from 30 peer organizations. We leveraged Edgility’s proprietary database of approximately 700 verified role listings. Additionally, we leveraged three recently published non-profit compensation reports. In our research, ****we prioritized compensation data from non-profit organizations based in the New York City metro area, with operating budgets in the $5MM to $10MM range, as pay tends to vary most by industry, region, and company size.
Through this intensive compensation research, we developed well-informed opinions on potential salary levels for our bands, especially those at the higher end, since executive compensation is more widely available. To further address compensation at our entry-level, we elected to establish a salary floor to ensure that all Marcy Lab School employees are paid a New York City living wage. Leveraging the MIT Living Wage Calculator and applying a premium to account for New York City’s higher-than-average rents, we discovered that, in 2023, a single adult in New York City living alone in a 1BR apartment should earn approximately $78,000 in order to comfortably afford their basic needs, including food, health insurance, housing, transportation, and other basic necessities. You will see this figure reflected as the entry-level salary in our new compensation system. This represents a 30-40% increase over the average for comparable roles in our market.
Though this represents a significant financial commitment going forward, we are proud of what it will mean for our ability to attract, retain, and take good care of our early and mid-career team members. Not only will this group always represent the majority of our team but also, these salary bands house the roles that carry the burden of being on the ground, working with our school partners, recruits, and fellows each day.
With our living wage floor as the foundation for our system, we built the rest of the model by designing a trajectory of small annual raises and larger raises of 10-12% that take place as one gets promoted from one job level to the next. With our market data in hand, we then made adjustments to our levels to ensure that all roles within each band were paid competitively. In the end, we arrived at a compensation structure that places us squarely at the top of the New York City market for organizations of our size. Our analysis places our most junior roles at ~30-40% above market, while roles at the high end of our salary structure range from 5-10% above market.