Netflix famously takes this approach to the next level by paying top of market for the person in question. This is an individualized approach also known as “paying the person.” It uses three questions to determine the top-of-market value for a member of their team: (1) What could this person get elsewhere? (2) What would we pay for their replacement? (3) What would we pay to keep this person, if they had a bigger offer elsewhere? The goal is to consistently keep each employee at the top of their own market value. Sometimes that means large or frequent raises.
