The hard part about these tips is they will lead you to waste a lot of time. Most companies have no real perspective on if they are in the 60th percentile by comp or the 95th percentile by comp for a role. Some companies will also slot you at different levels based on a number of factors including different levels meaning different things at different companies. If you're trying to get your first FAANG job and generally haven't worked in other high comp roles the advice certainly applies, in that you're likely to underestimate what's possible and shoot yourself in the foot early. If you're already at near top of market compensation you might get a better offer in the end but you're also going to go through 25 entire interview processes you don't have time for because neither side wants to establish compensation.
In my experience hiring, we know the benchmark numbers for the roles. Because we have current employees in those roles and we want to understand whether we're paying them fairly. Not out of some kind of deep kindness, but because otherwise they'll at some point get a better offer and leave.
But it differs across the company where we aim to be. For some roles we aim for 50th percentile, while for other areas we deliberately pay 90th percentile and adjust current employee salaries yearly (after performance review) to match that. Because those areas are important to our strategy/roadmap.
May sound unfair to those that aren't in those areas. But this is business, we're spending our money where the returns are highest for this company. If a role isn't a 90th percentile role for us, it might be somewhere else, and we are willing to accept higher turnover on the 50th percentile roles to make money available to get the people we really need on those other roles.
I am curious. Given you have identified an underpaid employee and want to make sure to keep her/him. Do you actively approach the employee and set the salary straight or do you just watch closely and say yes to the next pay raise?
In my experience, every company sees what they want to see when it comes to benchmarks. I've seen companies that think FAANG compensation doesn't exist in the marketplace at all and I've seen other companies that target above that level for roles.
