What Are You Worth?

What Are You Worth?

Who knows best what you should be paid? Your boss? Some HR goon? A company policy (aka an algorithm)? Your colleagues? Or you?

I have for a very long time believed that people should be treated with respect at work (and not just at work, of course). What would it mean to take that belief to its logical conclusion – to “turn it up to 11”, as the XP folks (and Spinal Tap) are wont to say?

At Familiar, everyone got to:
  • choose their own terms of engagement – from sub-contractor through to indentured serf
  • choose their own hours, place(s) of work, equipment and tools
  • choose their own salaries and payment rates

Most people I’ve mentioned this to over the years have shrugged it off as just something weird. Generally, too weird even to engage in discussion about. Weirdness bordering on random madness.

But there was a method to our madness. A very carefully considered method. Yes, I had a hypothesis, and it panned out well.

Hypothesis

My hypothesis ran like this:

We want folks to feel valued. And that their opinions are respected. And we’d like them to act responsibly – making good decisions without referring everything “upstairs” all the time. We want to build a community of trust and mutualism. (See also: our Credo).

Further, without excessive intrusion into their personal lives, how could we tell what people’s needs were with respect to e.g. income, free time, distractions, etc., at any given time? “From each according to their capabilities, To each according to their needs” seemed like a very reasonable (ethical) stance for a community to take (its Marxist roots notwithstanding).

So, how about we demonstrate trust, respect and mutualism by placing the “ultimate” questions into folks’ own hands? Questions like:

  • How much should folks be paid?
  • What hours should folks work?
  • Who should decide working conditions?
  • Who decides who gets to work on what projects?

Some doubted that folks could be trusted. I myself felt that if salaries and payments stayed secret and confidential, then that would be at odds with the trust and mutualism we were trying to foster. So we also instituted an open-book policy so that everyone (including clients and suppliers) could see all the accounting information, including payments to staff.

I’d just like to repeat: all this was a rational response to an ethical and practical conundrum. A conundrum that I have never seen any other business address adequately or effectively. A response invented from first principles (rather than a solution blindly copied from the playbook of the traditional management mythos).

Consequences

The most intriguing consequence we observed was that folks chose to be paid less that we thought would be the case. Most often, at or below prevailing market rates. Even with awareness of those rates.

The second consequence was that it encouraged open and healthy discussion about value – and in particular, customer value.

The third consequence, slower to emerge, was that folks began to consider and discuss their own self-image. This blossoming self-awareness was, of course, the real benefit – and very congruent with our declared purpose as a community.

Summary

In summary, I think the “experiment” proved – at least to my satisfaction – that “No one know’s what you’re worth – or what you need – better than you.”

– Bob

13 comments
  1. Semco! I recognise this. Or did they all collectively vote on their salaries?
    My favourite bit of the book Ricardo Semlar wrote about Semco is the extracts from the “survival guide” for newcomers to Semco who might find it all too strange and disturbing.
    It’s in cartoon form, as lots of their workers might have literacy problems, but anything in cartoon form gets my vote.

  2. Hi there,

    Thanks for contributing to the conversation.

    The Semco Survival Guide (text version) is here: http://www.semco.com.br/en/content.asp?content=3&contentID=567

    On salaries it says:
    “Salary Policy – The Semco Group seeks to involve people in discussions regarding what is a fair salary for each employee. Of course, there are times when people think their salaries should be higher and the company believes it cannot pay more. What is important is to always provide an opportunity for discussions regarding this type of issue.”

    – Bob

    PS Why is your blog anonymous?

    • No, I do not reject Marx. I am sympathetic to much of his work, although not to the Soviet and Maoist travesties thereof.

      – Bob

      • Oh, so I was right to ask for a clarification. How would you characterise your political philosophy? I wonder how that feeds into your views of software development etc.

        Since I’ve been reading you, I’ve been getting the picture that you’re an anarchist of some type. Proudon has come to mind while reading your articles.

      • “Labels are for filing. Labels are for clothing. Labels are not for people.” ~ Martina Navratilova

        My social philosophy contains elements of Anarcho-capitalism (Rothbard, Friedman), Pastafarianism (and hence, piratism) and non-violence (Gandhi). Whether these have anything to do with politics, I leave for you to opine.

        I guess this “feeds into my views of software development etc.” in that I believe in treating people respectfully and as adults and individuals. Consequently, my sometimes role as coach / host leader seems congruent?

        BTW Did you mean Proudhon (Pierre-Joseph)?

        – Bob

      • Thanks, Bob, that makes some sense to me. I’ve studied Rothbard too. It’s a fascinating field of thought. I wish more folks understood that anarchy isn’t about riots and bombs🙂.

        I did indeed mean Proudhon. I was thinking of “Property is theft”. I had pictured you to be more of a anarcho-communist or anarcho-syndicalist.

  3. ha, great thanks. I managed to find the full cartoon guide from that link too but it’s in Portuguese. A noble language I am sure but one I am 100% ignorant of.

    If you send me your email address the dull reality of why anonymous will be revealed. Completely unexciting but necessary.

  4. Bob,

    You’re exploring some interesting ideas here, I look forward to future updates.

    I’m not sure it is relevant but I’ve been involved in salary level decisions for many years now, and my working assumption is always that everyone knows how much money everyone else is on, whether this is the case of not.

    My main concern with the approach is about who will impose this open book policy? Something doesn’t feel right about that being a “management” decision. Would it not be down to the team to decide how they would like pay, conditions and hours to be set? With a complete open book policy outlined above being one option from many on a spectrum.

    It is great to see the consequences being a greater focus on customer value. I’d be interested to see how these ideas would scale as an organisation grows beyond a certain size, once the team is split by location or simply by scale, I wonder how that lose of the personal connection will influence the decisions being made?

    The concept of a team self-organising and deciding who gets to work on which projects, is going to be easy first step for most organisations, and feels a little odd mixed in with the other points.

    Andy.

    • Hi Andy,

      Thanks for contributing to the conversation.

      In my experience, self-organisation (of teams) and self-deployment are very difficult for e.g. Analytic-minded organisations to accept and adopt.

      – Bob

      • … I guess that is why it is so difficult to make the shift from analytic to synergistic … you certainly got my thinking on this fine Sunday afternoon!

  5. I’m in the process of working with my co-workers to implement the level of transparency required to make this work. It’s not as easy as you might think. It’s a leap of faith on the part of everyone involved, not just management. The only way it seems to be working for us is with 100% financial transparency, and even then, there’s still the issue that I have two decades of experience reading financial reports and almost a decade of experience managing budgets for my current company. By contrast, some of my employees have never given either a thought. Many of them don’t want the responsibility; they just want to come to work and code. Therefore, what we’ve done is to set no time limit on the transition and to make all budget and salary planning meetings open. Those who really want to be involved come, and the rest trust them. Lunar Logic is an outsourced software service provider, which means that payroll makes up over 90% of the budget, revenues are seasonal, and employment policies are transparent to our clients. These three factors make salary planning one of the most critical elements of both our budget and marketing strategies and so while I welcome the involvement of such a team of great minds, we’re all pretty nervous about the experiment.

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