Marissa Mayer decided how much to pay employees at Yahoo based on a lesson she learned from Google

Her strategy was to ‘meet, not beat.’ Stephen Lam/Getty Images
  • Yahoo‘s former CEO Marissa Mayer said in an interview with The New York Times that she used the same strategy for determining compensation at Yahoo and Google, where she was an early employee.
  • It was to “meet, not beat,” meaning she’d pay them enough to stay competitive but not so much that they were attracted to the job only because of the salary.
  • Google’s salaries are on the higher end of those at tech companies, though a former recruiter says it generally doesn’t negotiate compensation with job candidates.

“Meet, not beat.”

That was Marissa Mayer’s strategy for determining new employees’ compensation.

Mayer was the CEO of Yahoo until Verizon bought it last year, and she was also an early employee at Google. She shared this tidbit about salary-setting in an interview with The New York Times’ David Gelles for an instalment of the Corner Office column.

When Google hit the 1,000-employee mark, the company’s strategy for setting compensation changed, Mayer said.

“You really want somebody who’s coming for the right reasons,” Mayer told Gelles. “To get the people who are really aligned with the mission, you want to make sure that they’re fairly compensated, but not necessarily motivated by that compensation.”

Hence the “meet, not beat” tactic, which Mayer said she used at both Google and Yahoo. Presumably, that means she’d pay them relative to similar companies, but not so much more than they’d get elsewhere.

“It’s the trade-off between mercenaries and missionaries,” Mayer said.

In a report by Business Insider’s Rachel Gillett on how Google determines compensation, she pointed to a Quora answer by Bob See, who was a principal recruiter for Google Engineering from 2005 to 2014, saying that Google generally doesn’t negotiate compensation packages with candidates but that it could revise their offer if the employee brings a competing one to the table.

It’s also worth noting that according to PayScale data, Google’s salaries are higher than those at most other tech companies – at Google, the median pay for an early-career employee is $US106,900, and for a mid-career employee it’s $US151,600. (Yahoo isn’t among the 18 highest-paying tech companies, according to PayScale.)

Other tech companies have similar stances on salary negotiation. Janelle Gale, Facebook’s vice president of human resources, told Business Insider’s Aine Cain, “We don’t want to get into a negotiation, because that basically means whoever is the best negotiator wins.”

Gale added: “We’re not hiring you for your negotiation skills, unless you are in a negotiation role, like business development.”

Read the full interview at The New York Times »