I have been working on finding a compensation plan for a ruby on rails company.

I am trying to formulate a model for compensation that aims to help
developers gauge their salary and benefits. Compensation is a vast
subject and I am just a newbie/ generalist in that.

we started with Joel’s model http://joelonsoftware.com/articles/ladder.html
tweaked it little bit to add "soft skills" as one of the parameters
(which includes attitude, client service, innovation, ownership etc).

The purpose of joel’s model is to create a single rate structure (all employees in the same job level receive the same pay) based on skills, scope and experience.

How do you create a desired mix of cash/benefits (like gadgets/flexi time/conferences)?

What your organization pays for – seniority or performance or
combination ?

How do you establish the pay ranges ?

or,How do you calculate base salary for developers in your
organization ? These are some of the questions I am trying to find answers for.

Finding the base salary is something which I am  interested in….which depends on some of the following factors

may be the internal equity(perceived worth of a job relative to other jobs in the company),  external equity(market rates/lifestyle and quality of life in other organizations ), individual equity ( developers perception of how they are being paid compared to others) , process equity( how every employee consider the fairness of compensation system) are some of the very important factors.

One of the most important factors I learnt, from the employee/employer perspective,

Even if the company goes for single rate structure like joel’s model , the model can fail when a level 9 developer will bring substantial more revenue than level 14 developer irrespective of scope, experience and skills

If your company is small enough, the most important factor might be revenue. If you earn the company money, there will be more available for you. Even in larger organizations it can be very valuable to show how you generate value and (hopefully) revenue.The very foundation of capitalism is that you pay people for what value they provide you.

Any help or inputs on compensation plan will be highly appreciated.

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