Why I let my team decide my salary…and theirs

Paulina Sygulska discusses the 'open culture' ethos of her business and how it meant unusual but effective decisions could be made on remuneration.

I was about to meet with two of my team members. I still remembered interviewing the first one of them back when there were only five others in the company. He was young but he clearly impressed me with his ambition and potential. I also remembered when the other joined; she flew from halfway across the world as she saw us as an opportunity for an interesting career change. We were chuffed to have her.

Now, I was about to face both of them in our graffiti-clad meeting room in Shoreditch. Not to discuss anything to do with them; quite the opposite. These two were about to announce the first salary committee’s decision to do with pay across our company, and how it would impact me, specifically. I knew I would hear what the committee had determined my fair salary should be as a founder of the company, considering my skills, contribution, level of responsibility and level of replaceability. I walked into the meeting room with a feeling of excitement.

When I told some of my friends and fellow company owners about this new initiative, a lot of them were horrified. Losing the impact on your own pay as a founder is in fact a symbol of ultimate surrender of control. I looked at it differently. Yes, there was still fear; I was definitely stepping out of my comfort zone, but here was also incredible excitement. My team members were empowered enough to take on this huge responsibility of determining others’ pay, including that of their founder. And that felt incredible.

Had our company been structured differently, all the responsibilities would have been mine and my co-founder’s: to set levels of pay for different individuals, research the job market in our industry to make sure they are fair, and analyse the company’s financial situation in detail to know what it could afford to spend on salaries now, and in the next six months to come, to do it all over again.

Had our values been different, all individual pay conversations would be happening behind closed doors, a given person’s level of impact being owed mostly to their negotiation skills, as well as perhaps to what the company was going through financially at the exact moment they joined. There would have been no end to political games related to salary increases, with each individual being effectively on their very own pay scale, depending on their personal relationship with ‘the boss’, and how much energy they were willing to put into negotiating their own pay. Money would have been a taboo subject between people on the same team, with colleagues blushing when asked anything remotely related to remuneration.

A transparent company

One of the guiding principles of my cofounder and me is that we didn’t, and don’t, want to create a company we wouldn’t want to work for ourselves. This means elimination of the secrecy that always ultimately leads to power play and politics. We went all-in with this approach, starting with company financials and moving on to creating systems that allow team members to make and implement any kind of decision, potentially affecting the entire company, via our advice process. A hugely important part of this is an open salary policy.

What it means in practice is that every six months a randomly selected committee of five team members conducts a company-wide pay review, in an entirely open manner. They take into consideration the average pay levels in our industry, the financial situation of the company and the performance of pay scale model adopted by a fellow committee six months before, which can be adapted or entirely changed. Importantly, it’s the committee’s responsibility to seek advice from all of the other members of the team (who feel they have advice to give) and take it into consideration.

This is possibly the most challenging decision process of all, and possibly the most impactful on individual lives of team members. The fact that the team consciously takes on this huge responsibility and everything it entails continues to be a source of pride, and fundamental belief in human nature for me as a business owner.When individuals are trusted to step up to this level of responsibility, incredible things happen.

I often get asked if financial transparency and/or open salary can be implemented in any company. Theoretically, yes. But a better notion to explore would be what the particular business leader is actually trying to achieve, and then look at ways, open salary included, to make it happen. Financial transparency only works in the much wider context of a culture, values and purpose-driven work environment, and it’s often a good idea to examine these things in your company to begin with.

Be open to the idea of open salary

If you are at the right stage of your company’s development to explore open salary and are wondering where to start, I would firstly recommend breaking the taboo that surrounds people’s pay. This could mean initiating a discussion around how and why money motivates people, and how to go about implementing a fair salary model that would be in line with market rates in your industry, experience, capabilities and level of impact of different individuals, as well as what the company can afford.

Instead of allowing team members to focus on their own salary first (which is a very human thing to do!), help them consider the bigger picture of what is fair for their peers to be paid, and what is sensible for the company to pay. The next step useful to expand one’s ‘pay consciousness’ and sense of responsibility is researching the market, evaluating pros and cons of different possible pay models (of which there are plenty), and encouraging individuals to interview fellow team members to learn more about their professional background and day to day duties in view of placing them on a given pay scale.

If this strategy proves to be successful, you may one day discover that open salary has become a fundamental building block for your entire culture – as it is for us – and opened a whole variety of avenues for further development of your company. What will definitely happen, is that the workplace you create will stand out and attract all those – tricky Millennials included – who choose to work in environments that grow and fulfil them, both as professionals and as human beings.

Paulina Sygulska, is co-founder of GrantTree.

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Alan Dobie

Alan Dobie

Alan was assistant editor at Vitesse Media Plc (previous owner of smallbusiness.co.uk) before moving on to a content producer role at Reed Business Information. He has over 17 years of experience in the...

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