Moving from traditional hierarchy to a role-based organisation
Back in 2017, we were aiming to transform our traditional hierarchical company system into the peer-2-peer organisation we have become and still are today, where individuals hold a collection of job roles instead of job positions. Nothing’s transparent salary system was originally implemented as the first milestone to evaluate our team’s maturity regarding change in organisational structure and processes.
Salary system 1.0: transparent and granular
The transparent salary system does not only provide information about how much each peer is making at the end of the month. Transparency in general promotes a culture of openness we value and takes salary negotiation off the table as a concern.
The skills matrix is at the core of the salary system, making the calculation leading to the salary palpable, with additional personal details that refine the calculation in the end. Like this, it enables peers to ask for a deserved raise that reflects their achievements.
Since we implemented the tailor-made salary system that we still use today before making the switch to a role-based model, the calculation isn’t based on roles, but on skills. Each peer assesses their skills on a scale from 1 (lowest) to 7 (highest) and the self-evaluation benefits from a peer review to assure their accuracy:
- Production competences and internal work: work done alone or collaboratively with other team members such as ideation, communication, creation and user research.
- Decision-making and knowledge-sharing: interactions with internal and external stakeholders on a conceptual level, such as presentations, strategy, leadership and consultancy.
- Education: past academic training and current educational efforts.
The skills matrix is first filled out by a peer during their embed days and serves as a basis for salary calculation before getting hired. After being hired, each crew member holds the responsibility to regularly assess their skills and review them with a peer before submitting the changes to the Salary Transparency Coach, who will in turn implement the changes. This process echoes our peer-to-peer organisation and puts emphasis on peer accountability.
There are many ways to consider experience (be it with criteria such as age, seniority, or loyalty) in a salary calculation. In our first transparent salary system, we decided to use loyalty (the number of years a peer has spent with Nothing) as our time-related metric: we value individuals who believe in our vision enough to stick around and are aware that their implicit organisational knowledge serves many purposes in the company.
Involvement and personal situation
The last elements of our salary equation are shaped by Nothing’s regard for each peer’s personal situation and appreciation for involvement.
- Freelancing: whether a peer works as a freelancer or as a company employee will have an influence on remuneration to compensate for risk, such as discontinuity of work due to project-per-project employment for freelancers.
- As our team appreciates full involvement in our mission, peers who choose to work at a percentage of 70% and above for Nothing receive a small incentive.
- Nothing offers a small increase to peers who support family members, investing for a healthy balance in professional and personal life development.
Explicitly outlining the values we, as a team and company, regarded as relevant to determine remuneration and leaving these elements open for discussion increased the trust in our decision to switch to a transparent salary system tailored to our organisation.
Evolving the system for a progressing role-based organisation
The model we built in 2017 was intended for a young, mostly junior team, which has now evolved into a more specialised and senior team working on strategic projects; calling for an iteration of the system. We aim to focus on the following issues in particular:
- The current salary system, which decouples salary from the roles and only bases it on skills, prevents the taking on of more “lucrative roles” where money becomes the sole incentive to pull more powerful roles. However, peers who have grown more senior and whose skills allow them to take on roles that go along with more responsibilities are not rewarded as fairly as we would like.
- Our current system favours T-shaped profiles and young generalists. The skills used in the calculation are also put into question when certain peers decide they want to evolve as an I-shaped profile (with deep knowledge in one area of expertise) or join the team with a high accumulation of expertise and seniority. For now, age and higher loyalty, are also not considered, reducing the chance to attract more senior talents.
- In addition, some of the aspects we wish to refine do not depend on the role-based organisational structure Nothing has implemented. Questions have arisen around why some metrics were chosen over others for the calculation and the biases they create: For instance, certain individuals are better at selling their skills than others, resulting in higher compensation at equal work.
At the beginning of 2022, our new transparent salary system is in the making. We are experimenting with different iterations to define which version will work best to keep the positive aspects of our first salary system, while incorporating solutions for the role-based organisation we have now become. Stay tuned for Salary system 2.0!