Popularity in Silicon Valley

Lockstep salaries are in some ways hardly new in Silicon Valley. Almost all large technology companies have a sort of lockstep salary structure, built around salary bands that depend on specific title and years of experience. While there is some potential to negotiate larger salaries, that effort is probably better spent on transitioning to faster-growing projects where title advancement will be quicker.

The more important change is happening at startups. The intense competition for workers the past few years has encouraged startups to offer almost anything to get an engineer to sign paperwork, but now there is a sense among some founders that this approach has led to unfortunate side effects.

One example is Jet, the ecommerce startup launched by Marc Lore, which uses a form of the lockstep model. Lore described his company’s system in an interview. “Everyone at the same level makes the same comp. Everyone knows that no one is getting paid more at a similar level,” he explained. “We don’t respond to offers from elsewhere, since everyone at the same level gets paid the same.”

Lore is in the vanguard of founders addressing the female pay gap. “I do think that women do get the short end of the stick that they sometimes aren’t as aggressive about negotiating comp, and I don’t that is fair at all. Here, once they get pegged to the right level … no one can negotiate.”

That might sound like a nightmare to some zealous startup compensation negotiators, but it is well past time to consider how our current model has performed. Lockstep salaries are not just for Mad Men, but could be a model usable by very modern tech startups looking to bring more fairness to the workplace.

Scroll to top
Share this product!