It creates a great path for employees to follow as well. You know exactly what you need to demonstrate to make it to the next level.
Steve McConnell (or more accurately, I suppose, Construx) with the Professional Development Ladder (http://construx.com/Page.aspx?nid=244) was an early advocate for this idea, and Spolsky has discussed it a couple of times as well.
Cash has limited motivational power, but it's akin to the physiological layer on the hierarchy of needs. If you're getting a shitty salary it's harder to give a damn about the success of the product or company.
That being said, also brilliant is the idea mentioned to let people exchange one or more tiers of compensation for stock if they so chose.
Steve McConnell (or more accurately, I suppose, Construx) with the Professional Development Ladder (http://construx.com/Page.aspx?nid=244) was an early advocate for this idea, and Spolsky has discussed it a couple of times as well.
Cash has limited motivational power, but it's akin to the physiological layer on the hierarchy of needs. If you're getting a shitty salary it's harder to give a damn about the success of the product or company.
That being said, also brilliant is the idea mentioned to let people exchange one or more tiers of compensation for stock if they so chose.