Decoding the Dynamics of Compensation

A Journey Through Expectations, Realizations, and Strategy


4 min read

Decoding the Dynamics of Compensation

Let's delve into the topic of PAY, an aspect frequently overlooked in empirical discussions.

It took me nearly a decade to grasp and articulate my salary expectations and requirements clearly. Throughout this journey, my understanding of PAY has deepened and evolved.

The interpretation of what PAY means has evolved and will keep evolving.

Sources such as :

have helped me navigate this labyrinth.

Most of the articles I have read have been predominantly of US-based companies.

This helped me understand expectations and also confused me, because the pay structures and offerings in the US are different compared to other countries such as India & Australia, among others.

To discern whether I align with or deviate from industry norms, I've relied on statistical analyses, drawing from sources like the Stack Overflow Developer Survey and data on salary distributions, perks, and work-life balance from peers across tech companies in similar fields. Conversations with recruiters have also shed light on the job market, pay scales, and benefits.

Sources used for these calculations are :

  • Stack Overflow Developer Survey

  • Salary Distribution (including perks provided at a workplace + work-life balance), among peers across different tech companies in the same discipline

  • Inputs from Recruiters around what jobs are out there and pay structures + perks for those aforesaid jobs.

Assumptions are taken while making this analysis:


  • Not all opportunities are equal

  • One cannot just have an amazing career progression over some time, without being paid well. I have seen enough examples of it. You are free to disagree with this. You must not be an asshole/sexist/racist or any similar word or synonym.

P.S.: Work-life balance, while integral, transcends mere job perks due to its subjective nature.

Let's now just talk about the Skills because this is the one of key factors which affect your PAY, the others being :

  • Work Ethic & Attitude

  • EQ + IQ

  • Interpersonal + Intra Personal Skills & Intelligence

If Potential Future Pay (let's say PFP for ease) can be represented as a function, it could be described loosely by the below equation :

  • PFP current = Pay for Skills you bring to the table * relevance_factor of those skills * expertise_factor

  • The relevance_factor of those skills can also be termed as the Perceived value of those skills

  • Bargaining Power = expertise_factor(skills) * Relevance_factor(skills) * demand_factor of those skills

  • PFP future = PFP current * Bargaining Power + Perks at Job + Work-Life Balance

Things to consider while thinking about your PFP future :

  • Depending on the opportunity and your skills, you can deviate " + or - of 7.5 % "

  • When you think about Work-Life Balance, put a monetary value against it. Think of it as a $$ value you want to travel that extra 30 mins every day or whatever you feel is your work-life balance factor.

  • Luck is a small factor but not too small to ignore

  • It is easier to bring the skills from your initial opportunities & quality of those opportunities

  • Self Learning helps a lot, especially in cases where your job doesn't provide you with the kind of things you want to work on. If you identify yourself in such a situation then start doing the required remedial work, to ensure the quality of your skill improves over time.

  • Having a mentor helps, but isn't always required. Enough great role models/mentors on the internet to help out. You define your parameters for performance and own it.

  • Discussing your salary with people whom you trust in the same sphere of work helps, to know where you are. This is not always easy and you may get burnt sometimes. For me, it was a real eye-opening experience, mostly positive.

Market / Industry standards may not always help you in the negotiations. If you are getting paid below the "market/industry standards" you are severely underpaid, because I believe the standards in Software industry are skewed towards the lower end.

Conclusively, if you find yourself in a learning-rich yet lower-paying role, set a time limit on this phase. Continuous learning and skill enhancement are paramount. Always be collecting data, reassessing, and adapting.

Here's to navigating the complexities of compensation with insight and strategy. Cheers!

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