Open Salaries: When

Once I started playing with the idea of making salaries at Lunar Logic transparent, the question that popped up almost instantly was: when? Well, one thing that I should probably start with was to ask whether we want to do that at all.

If I simply ask the latter out of the blue I would likely get mostly negative feedback. This is a huge change and one that may make people uncomfortable.

The answer for “when” question would thus likely be “whenever we are ready.”

I started with sharing with everyone that there is an idea to go transparent with salaries at some point in the future. I got some early feedback on that, including concerns on what would happen once we have open salaries.

This gave me confirmation that transparency alone is not enough and there has to be an accompanying mechanism that allows people to influence how salaries are set.

Then there was a question of how fair we were with salaries at that moment. Well, from my perspective it was fairly fine of course. However, the moment of making salaries open to everyone would mean that we are suddenly taking into consideration everyone’s opinion, and not only mine.

I asked a few people at the company to prepare their abstract salary list. They could use whatever reference point they wanted, either they own salary or just a completely abstract number, like 100. Then they were supposed to relatively set other employees on the scale. I wasn’t very strict with that. “No opinion” was a perfect option, as well as an incomplete list or partial information, if someone decided to use a whole set of factors.

I gave that task to a few people in different roles and of different characters to get a possibly broad set of data. They were working individually.

The outcome was some sort of an abstract, and partial, verification how my views on salaries differ from opinions of others.

One result of that was my further work on flattening the salary scale – a process that was in place for some time already. There were a couple of cases when I realized that someone should have gotten a raise already and fixed that too.

Open Salaries - When

Concurrently more and more informal chats around the idea were happening. Given a well-thought approach to the process, more and more people were buying into the idea. At some point, I felt that majority of us were supporting the idea.

The last missing bit was figuring out how the change to transparent salaries would happen and what will be the mechanism of influencing salaries from that point on. On one hand, this part wasn’t easy. On the other, stories from companies that are already doing that are available. A few examples that come to my mind would be: Buffer, Semco, and a few case studies covered in Reinventing Organizations.

I used these stories more as an inspiration than a recipe. Eventually, I ended up with an idea that was ready to put under the scrutiny of the whole team.

We were ready.

By the way, if you are interested, the whole preparation process took 9-10 months.

  • Kuba T.

    Did the salaries changed after you introduced the open salaries?

    Do you plan to mix the salaries with kudos? :)

  • Paweł Brodziński

    @Kuba – We’ve already had one change in salaries after going transparent, and the discussion started just after going live with open salaries.

    We still have kudos. It’s not a part of remuneration system. It never was. I don’t really see a connection between the two. They serve completely different purposes.

  • Kuba T.

    @Pawel – thanks and congratulations on the brave move :).

    What I meant by salaries+kudos was that if you received, or there is a mechanism, where somebody can say ‘X did so well on the last project and grew and he should be paid as much as Y’.

    I suppose that this is much better move, leading to real pay equality (and fairness of course) than what Reddit CEO lately did (forbidding the salary negotiations).

  • Paweł Brodziński

    @Kuba – Doing well on a project team is only one, and not the most important factor that we take into consideration when discussing salary. It’s more about how much value someone generates on many accounts, project work being one of them.

    At the same time kudos is often received for something that is one-off type of an event. Kudos (how frequently someone gets it) was never a relevant part of a discussion about salaries, and going transparent hasn’t changed anything on that front.

  • Łukasz Lichota

    @Kuba,
    isn’t what you’re saying merely an assessment of someone’s seniority/competence in particular role? E.g. Jurgen in Management Workout when discussing salary formula mentioned experience level within given job category as possible input to salary computation. He did not mention how this level would be assesses but I would bet that also on some peer feedback system.
    @Pawel Do you have something similar in Lunar Logic are something very different? Do you have a concept of promotion from e.g. regular to senior developer and is there are compensation change involved?

  • Paweł Brodziński

    @Łukasz – Heavens forbid, we don’t have an algorithm. While I don’t say algorithms can’t work, I’m yet to see an idea for one that would address things that are crucial for us: cultural fit, empathy, emotions, etc.

    We don’t have a concept of promotion either. Everyone decides what their position is called. What ultimately matters though is how you are perceived by your colleagues. From that perspective the title doesn’t matter at all.

    We luckily avoided any rigid mechanisms in our approach. You can get a raise as often as every month and as rarely as never. It’s all possible. And the only trigger for a discussion about a raise is when someone, not necessarily yourself, feels that you deserve one. It doesn’t guarantee that you’d get one, yet it triggers the discussion and decision making process.