The following is adapted directly from a policy memo at Carta.
We use a First and Best Offer compensation framework where we:
Why First and Best
There is plenty of data that says negotiating offer letters disadvantages women and URMs. **And independent of academic studies, intuitively we know that negotiation rewards the aggressive over the earnest. If we negotiate with candidates, we are complicit in perpetuating pay inequality and rewarding those who come for money and penalizing those who come to be one of us.
Additionally, negotiation sets the employee-employer relationship up to be a distrusting one from the start. If we offer an employee $80K, the employee counters with $100K, and we agree on $90K, the employee will be happy for five minutes. Then they will wonder if they asked for $110K would they have gotten $95K?
For every future raise, bonus, promotion, the employee will wonder if we, as their employer, are holding out. We will have taught them that, at our company, they need to fight for what they get. They will never trust us to do right by them on our own accord. Why should they?
Earn their trust
To do this candidates and employees must trust us. With that trust comes responsibility. We must constantly be looking at every employee and make sure we are paying them our best. No one can be forgotten. Otherwise it becomes the employee’s responsibility to make sure they are being paid fairly. That means we broke our promise to take care of compensation for them.
We can never waver. If we make an exception for even one person we will lose the trust of everyone else. Employees must believe in our integrity and in the integrity of the system. Otherwise this doesn’t work.
Once we make an offer or give a raise, we can never change it. Even if it means losing the candidate or employee. There are no exceptions.
So let’s give our best offer first.
Living our values
Lastly, it is important to understand that this is not strictly a business decision. Critics may say this is a bad business decision. They’ll say that we’ll lose candidates we could have won or pay some more than we needed to, that we’ll overspend on compensation data and resources. They might be right, but we are not optimizing strictly for the business. We are living by our values — and if we do, we don’t have a choice but to give our best offer first.