Struggling with how to do compensation in self-managing teams?
Here are three questions to think about before exploring transparent and self-set salaries.
Rethinking how you do compensation can open up new levels of trust and responsibility in the organisation.
But, it can also open up a can of worms. People are often hesitant to broach the topic of compensation for reasons like:
Won’t everyone just demand unreasonable pay rises?
(Interestingly, what more often happens is people asking for less.)
Other concerns include:
- Will people be angry or upset about how salaries were decided?
- How we will agree on a new framework?
- Won’t there be biases and inequity?
All of these concerns are valid. Fortunately, it is possible to navigate them and come up with something that works for everyone.
There’s no one-size-fits-all, but here are some possible steps.
Step 1: Create a safe space.
Money is a sensitive subject for many.
Ask people what they would need to feel safe broaching this topic together. They may not be ready for fully transparent salaries if there isn’t a solid base of trust and openness. Be patient and allow people to explore the topic at their own pace.
Step 2: Give people the information they need.
As Jan Carlzon once said: “An individual without information can’t take responsibility. An individual with information can’t help but take responsibility.”
Give people access to the information they need to make decisions about compensation. What training might they need to make sense of the numbers?
Step 3: Aim for principles.
Beyond formulae or frameworks, what principles are important to you?
Fairness is tricky because it’s subjective. Clear, transparent, values-aligned — these can be more helpful.
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