Seniority Ranges vs Self Determined Budgets

Comparing paying contributors based on seniority ranges or self selected budgets

Seniority ranges

The contributors present a budget based on their seniority within the provided role budget range. E.g. The development role could have a $35,000 (junior) to $50,000 (senior) budget range for a 6 month term.

• Providing budget ranges makes it easy for contributors to assign themselves a suitable budget.

• Seniority ranges require an ongoing governance process to determine what those budget ranges should be that also consider the other incentives involved for being a contributor (e.g. bonuses due to impact).

• Risk of reducing the amount of skilled contributors if they are deterred by a limiting budget range.

Self determined budget

The contributors get no guidance for specifying a budget and instead self determine the value they believe is fair based off any evidence provided.

• More time consuming and difficult for a contributor to decide and justify a given budget

• Contributor has freedom to be paid exactly what they believe they are worth

• Risks a contributor being underpaid if they adjust their salary based off their confidence in being voted on or are unaware what the value of their role is in terms of skills required and the responsibilities included.

• Risks a contributor is overpaid due a highly skilled professional background that justifies a higher budget but those skills not transferring effectively to the contributor role in a way that provides an effective return for the ecosystem. It would also be difficult to adjust their budget after it has been funded without high friction!

Summary

• Seniority budget ranges make it easier for contributors to justify a budget when proposing to be a contributor. There is a moderate chance of a contributor asking for too little or too much without having any budget guidance in place.

• The risk of deterring highly skilled contributors can be mitigated by using a bonus for impactful contributors. This better aligns incentives as the bonus is paid after that fact that a contributor has provided high impact rather than in a salary which is before any evidence of providing value from their contributions. An impact bonus could turn the contributor role into something far more lucrative that aligns incentives and is mutually beneficial for the community and contributor.

• A documented governance process will be needed at some stage for setting the role budget ranges between funding rounds.

• Beyond the approach of an impact bonus contributors are also welcomed to help with areas such as doing proposal assessments which would increase their total compensation.