This is our third post in the series about installing a transparent, honest and efficient reward system at Kunlabora.
Our scope here is about how we should tackle salary increases within our company.
In the first post we talked about how you quickly end up with a bloated system and how we would like to avoid this by leveraging our open culture. In the second post we showed you some experiments we did, using ironing beads and a test group of Kunlaborants.
Since then, we have been doing a few extra experiments, and by February we felt comfortable to do a real session. In this post, we share the story of our first real run and we reflect on the good and the bad parts.
The idea is that we will do such an activity every 6 months, so every half year there is a budget that can be spent on salary increases. For each run, our managing partners (Jan and Nordin) will determine a budget up-front, which represents a percentage of the total salary mass for Kunlabora. This budget is divided into slices, e.g. 3 slices of €200, 4 slices of €150, … We slice the budget in a way that about 2/3rds of all employees would get a slice.
During a session, people will be asked to somehow “score” all other employees. For this they will be given some homework, meaning they should prepare how they grade each colleague. As a guideline for scoring your colleagues, we fleshed out a list of questions to answer about the following aspects: skills, working together, leadership, the company, the projects. We also provide data about the current salary of each employee. This is something that you probably won’t see at many other companies, but we feel this is important info: it’s not about simply rewarding employees with a raise, but it’s rather about trying to get everyone on a correct salary level.
Not all employees are allowed to vote and not all employees are eligible to get a raise. We believe you have to be with us for a certain time and get to know your colleagues well enough before you can grade them. And it would also be a bit weird to get a raise if you have just recently joined us. We decided that the threshold for this should be 3 months.
Alright! After we made sure everyone did their homework, we were ready for our first session.
We did 2 iterations in which all employees were paired. Each pair was handed a fixed amount of Lego™ bricks -yes, we switched from ironing beads to Lego™- and they had to divide these bricks over all employees.
The pairing was not done randomly. In the first iteration, we paired people with a lot of experience together with people that have less experience. In the second iteration, we focussed on pairing people from different teams. The pairs were given ample time to discuss and had to reach consensus on how the bricks would be divided.
After these 2 iterations, we counted the total number of bricks each person had been rewarded and we ranked the employees by their amount of bricks. We then mapped the top ranked people with the budget slices. If we stick to our fictional slices, this would mean the top 3 employees got a raise of €200, the next 4 employees got €150, and so on.
Afterwards, of course, we gathered feedback from everyone. We want to keep improving this system and purge possible bad parts.
In general, the feedback was pretty positive. People like the fact that this is a team effort and that everyone is involved. The concept of pairing was also much appreciated, since this generates some good discussion and you can challenge each others preparation.
Unfortunately, there are also some remarks for which we need to take action.
Looks like we still have some work to do. We will take this feedback and make the next run an even bigger success!
So that concludes the story about our first salary increase session. Does it feel to you like we gamified things too much? I can assure you we all took this activity very seriously. Reach out and discuss with us on twitter, facebook, linkedin, instagram or just send us an email.