How to Get Pay Right with Matt McFarlane

Matt McFarlane and I met earlier this year on opposite sides of a debate about pay for performance. His team argued in favor and won the audience vote 62 to 38, and a week later he published a piece saying he had never been a fan of it. That opening carries the rest of the conversation: what pay for performance sets out to do, why the mechanism breaks at nearly every link in the chain, and what companies use instead once they stop treating an annual rating as the engine of everything.Matt runs FNDN, a compensation consultancy for startups based in Australia. He built the pay structures at Oyster that carried the company from 200 to 600 people across 70 countries, and he now hosts the FNDN Series podcast and newsletter and runs the Startup People Summit, a one-day APAC event for people leaders inside high-growth companies. We cover the companies that have taken negotiation out of pay entirely, the grip that benchmark data holds over compensation decisions, the tension between fairness and individual pay in collaborative work, what happens to the manager's role as AI absorbs more of the coordination, and the practical side of leaving a salaried job to consult.What we coveredWhy Matt argued for pay for performance in a debate and against it a week laterThe three percent merit budget, and what the annual salary survey roundups tell usRewarding a standout year with money, or using it to raise the standard across a teamWhy Matt left the job he enjoyed most in his career to build a compensation practiceHow his client window moved from 50 employees to 100 or 150, and what breaks at that sizeBenchmarking as a source of cognitive closure, and the living wage argument underneath itRunn's single rate per role, and the salary trajectory that made their people harder to poachCarta, 37signals, Buffer, and PayPal as models that remove the negotiationFairness as a relative judgment, and how quickly a good salary becomes an unfair oneWhy US companies resist narrow bands, and what wide bands say about trust in hiringThe bad hire label, the myth of the A player, and where responsibility for performance sitsThe player coach, the stretched leader, and ClickUp's million-dollar salary bandsWhat Matt tells anyone thinking about leaving a salaried role to consultPeopleMatt McFarlane, founder of FNDNRowan Savage, co-founder and CTO of RunnAndrea LaRowe of 37signals, a previous guest on this showBooksExtreme Ownership, Jocko Willink and Leif BabinArticles"How to Become a HR Consultant," Matt McFarlane, FNDN Series #7https://fndnseries.fndn.com.au/p/how-to-become-a-hr-consultantOrganizationsFNDN, Startup People Summit, Oyster, Runn, Carta, 37signals, Buffer, PayPal, Zappos, ClickUp, Buurtzorg, Gallup, RadfordFind MattLinkedIn: https://www.linkedin.com/in/matthewmcfarlane/FNDN: https://www.fndn.com.au/FNDN Series podcast and newsletter: https://fndnseries.fndn.com.au/Startup People Summit: https://startuppeoplesummit.com/Music licensed through Soundstripe. Code: DLQOKHPSWUMSTCMH.