[alexbrower]

"Although I know rationally that the size of the team is not something to celebrate, I feel that I slipped into that harmful mindset quite a bit over the last year. Not everyone is familiar with growth metrics like monthly recurring revenue, but team size is easy to understand. Sometimes it impressed people when I told them how big the company was, and I was proud to share it."

Correct. Headcount is a figure that represents a company's means. If you're tracking it as an end result, you end up having to make hard decisions or someone makes them for you.

The transparency is commendable. A couple other observations:

- Affected employees had an average salary of $58.5k (assuming your metrics is net of benefits and payroll tax). If this is annualized, it appears you let go of non-engineers. Set goals and performance expectations for those who remain, especially those who build your product.

- Stop publicly promising salary increases altogether. Promote people based on their ability, not an artificial loyalty policy. Some people deserve 10%+ raises, some you'll find are overpaid. Use a basic job ladder and put the burden on managers to justify comp changes.

- If the policy of granting vacation bonuses was for recruiting purposes, you've successfully attracted people who want to be paid not to work. Again, implement a corporate bonus program and set goals for staff.

Best of luck.

[slgeorge]

- Stop publicly promising salary increases altogether. Promote people based on their ability, not an artificial loyalty policy. Some people deserve 10%+ raises, some you'll find are overpaid. Use a basic job ladder and put the burden on managers to justify comp changes.

A guarantee of annual salary increases is problematic for three reasons:

a. An increase of 3-5% is going to increase salary costs rapidly as it compounds. He mentions that salary is 80% of cost, so it means that costs are going up for doing the _same thing_ by 3-5% every year. Employees aren't a fixed unit of production (particularly in a tech firm) but there's not unlimited new productivity either. It's fine if your prices are also growing at those rates ... but I don't think many people are in those situations at the moment.

b. It takes away the meritocracy Salaries have to keep up with inflation, but beyond should be a mark of performance.

c. It's going to suck when they have to change it Things happen, this is an example, and employee morale is a sensitive matter.