Friends,

I had a great time speaking in Sydney last week, and I’m doing it all over again this week in Melbourne.

Public speaking is already hard, but my real challenge was trying to be more interesting than the incredible view behind me…

I’m looking forward to seeing more of you in person!

While I’m on the topic of events, I have a great one for you. In early March I’ll be part of The Great HR Debate, where myself and 5 other incredible HR leaders (many you will know) will be debating both for and against pay for performance. Join us here.

On that topic — this week I’m talking pay equity — specifically, three practices I’ve come to appreciate when it comes to helping both create and preserve pay equity.

Enjoy this week’s edition ✌️

Matt

In case you’re new here (or just missed it) here’s the past three editions of the FNDN Series:

Fixed onboarding doesn't work when every new hire's journey is different. The future of onboarding listens, learns, and reroutes in real time — detecting when someone's overwhelmed, when a manager's gone quiet, or when a support hire is ramping faster than expected.

It's the shift from managing processes to managing exceptions. HR steps in when someone's actually struggling or at risk, not when a calendar reminder fires.

Pyn already automates thousands of messages a year for teams like Carta, MongoDB, and Koala. Now it's building onboarding that adapts daily based on who the person is and how their manager responds.

"Pyn has saved our team so much time while unlocking new levels of equitable, personalized support." — Jaimie C., Senior People Process Designer (G2 Review, 5/5 stars)

Onboarding that knows what's coming next.

Interested in sponsoring the FNDN Series? Drop me a line!

Know a startup Head of People looking for answers 🙋 why not forward this to them for some instant karma? ✨

Pay equity isn't just a compliance issue — it's a cultural one — and for startups moving fast, it's easy to let compensation practices drift to a state of inequity without realising it.

The problem is rarely intentional discrimination. It's that many standard compensation practices inadvertently advantage certain employees over others.

Over time, these small differences compound into significant pay gaps between people doing the same work.

The good news? You can fix this by redesigning how you approach compensation from the start.

Below are three changes you can make to your compensation structure that will help you build pay equity into your system, rather than trying to patch it later.

These aren't theoretical — they're practical shifts that startups can implement now, before pay inequity becomes embedded in your culture.

Here's where to start.

Who benefits most from salary negotiation? It's not your best performers — it's your best negotiators.

Research consistently shows that negotiation advantages certain groups over others.

Studies have found that women negotiate less frequently than men and face social penalties when they do.

People from underrepresented backgrounds often have less access to mentorship on negotiation tactics.

Even personality traits like extroversion or comfort with conflict play a role in who walks away with a better offer.

The result?

Two people hired for identical roles with identical skills end up on different salary trajectories from day one.

Not because one is more valuable to your company, but because one was more comfortable asking.

This destroys pay equity.

Even if you hire perfectly fairly after that point, you've locked in a differential that compounds with every percentage-based raise, every equity refresh, every bonus calculation tied to base salary.

The fix is straightforward: stop negotiating.

Build compensation bands with clear criteria for where someone lands within that band based on experience, skills, and scope.

Define the pay, communicate it transparently, and hold firm.

Front-load transparency in your hiring process.

Share salary ranges early — even in job postings — so candidates can self-select out if you're not aligned.

This speeds up hiring and prevents wasting everyone's time when a company or employee have wildly different pay expectations.

Merit-based pay increases sound logical on the surface. Reward great work with more pay. But in practice, they're one of the fastest ways to erode pay equity inside your company.

Here's why.

When you give one person a 5% raise for strong performance and another person a 2% raise for meeting expectations, you've created a gap. 

Next year, both raises are calculated on a now-different base.

The year after that, it compounds again. 

Give it three or four years and two people doing the same job at the same level can be tens of thousands of dollars apart — not because the work is different today, but because of historical performance ratings that may no longer even be relevant.

The evidence backs this up. 

Research on merit pay shows that individual financial incentives have a limited and inconsistent effect on performance. 

You're creating a compounding equity problem for a motivational tool that doesn't reliably work.

The better approach? 

Keep base salaries anchored to the role, not the individual's performance history. If two people are doing the same job at the same level, pay them the same base. Then reward strong performance through bonuses.

Bonuses are discrete. They recognise great work in the period it happened without permanently inflating someone's base salary. If performance dips the following year, the pay structure self-corrects — you're not stuck overpaying for yesterday's output.

Take it one step further and normalise that bonus by level.

If two Level 5 employees (one in Marketing and the other in Finance) both receive a high performance rating, they should receive the same bonus amount. 

This removes another vector where manager discretion or unconscious bias can quietly widen the gap.

Most companies determine the value of an equity grant using a multiplier of base salary. On the surface, it feels proportionate. But it introduces the same kind of inequity we're trying to eliminate.

Let’s take a look at an example:

If you're a level 4 Software Engineer with a base salary of $180,000 and your equity multiplier is 0.5x, you receive a $90,000 grant.

A level 4 People Operations Lead at the same level on $130,000 gets $65,000.

That's a $25,000 difference in equity — not because one role has more impact on the business, but because the talent market prices one set of skills higher than the other.

Salary reflects supply and demand for a skillset.

Equity should reflect the impact someone has on the business at their level.

These are fundamentally different things, and tying one to the other means market dynamics — which are already uneven — flow directly into your equity structure.

The fix is to decouple equity from salary entirely.

Define your equity grants by level, not by individual compensation. If two people are both operating at a Level 5 in your organisation, they should receive the same grant — regardless of whether one is in Engineering and the other is in the People team.

This reframes equity as what it's supposed to be: a reflection of the contribution and ownership you're asking someone to bring at their level in the company.

Not a byproduct of which function happens to command a higher market rate.

If you want to take it further, apply the same logic globally.

A Level 5 in Sydney and a Level 5 in New York are doing the same size role.

Localise salaries to the market, absolutely — but keep equity consistent.

It sends a clear signal that ownership in the company's success isn't determined by geography or role type.

Pay inequity rarely starts with a bad decision. It starts with systems that weren't designed to prevent it.

The common thread is simple: remove individual variation from the places it doesn't belong.

None of these changes require a massive overhaul. They require a decision to build equity into the structure, so you're not constantly trying to fix it after the fact.

I’d love to know - which of these practices would you love to adopt (or have)? Hit reply and let me know.

If you enjoyed this post or know someone who may find it useful, please share it with them and encourage them to subscribe.

When you’re ready, here’s three ways I can help you:

1. Tools & resources
Resources and tools that give you what you need to build your own startup compensation practices.

2. Comp consulting
I run FNDN, a global comp consultancy that builds compensation practices that are clear, fair and competitive for startups.

3. Startup People Summit
I run the Startup People Summit, a one day annual event focused on creating the playbook for startup people practices. Grab recordings from past events, or subscribe to the newsletter to join the next event.