Salary & Bonus Systems in a 'managerless' ecosystem?

Andy
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- 2 min read

Hello Fellow Rebels,

I just had a fantastic conversation with Ellen at Corporate Rebels HQ about some challenges we are facing with moving towards a ‘managerless’ ecosystem.

For some context, we operate what we call our ‘team of teams’ whereby we have 7 small agile cross functional teams (maximum of 7 people per team). Each team has a team lead.

We have ‘tribes’ which are social groups of people who have a shared common interest group, e.g. SEO, where the tribes can socialise, share knowledge, best practices, attend meetups and conferences and generally geek out on things.

We have a mentor program, where everybody have someone whose job it is to support team members personal and professional development

Both mentors and team leads have no hierarchical connection and actually we have found it best if mentors are not from the same tribe.

We operate in weekly sprints and swarms, which are really cool and we do lots of retrospection to help us continue to organically improve.

We have retrospectives every week, every quarter and even after we have delivered some important piece of content. This is kicked off during our onboarding and new team members will have done at least 3 retrospectives before the end of their first week.

To be successful and thrive in our ecosystem you must be self-driving, you will not be successful if you need to be told what to do.

So, onto our current challenges, with our ‘managerless’ ecosystem, they are:

Salary Reviews
Bonus Systems (at team and ecosystem levels)

We have invested heavily in our culture and are looking for an experienced expert who can understand our unique culture and help advise and implement a salary and bonus system which complements it.

Any contacts or recommended reading (& viewing) would be extremely appreciated.

I am due to speak with Aaron Dignan (Brave New Work) tomorrow, so I will let everybody know his thoughts also.

Thank you for your time.

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Replies (18)

Balint

Balint

Hi Andy, I'm also interested in any update regarding this topic.

Cheers,
Bálint

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Balint

Balint

I have written up some guidelines for arriving at salary structure in absence of a traditional hierarchy. Feel free to contact me.

Here is the link to the LinkedIn article, titled "Choosing your own salary, the final frontier?":
https://www.linkedin.com/pulse/choosing-your-own-salary-final-frontier-jorn

Jorn

Jorn Verweij

Hello, Jorn,

I read your article and I found it very thoughtful, thanks for sharing it.

After reading it just occured to me, is a managerless system a prerequisite for achieving transparency in salaries? At the company I worked for many years, managers and HR seem to freak out when an employee gets to know anothers salary (or raise or bonus). The same is typical at companies where my friends work. Meanwhile, many colleagues I talked to said that they would appreciate if the compensation system would be more transparent.
Do you think that such a transparency is achievable in a more traditional, hierarchical company structure?

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Jorn_Verweij

Jorn_Verweij

Hi Balint,

Thank you for reading it. A more succinct explanation can be found in the following document (which also explains how Buurtzorg works, and the challenges to be found within Haier's system, and much more related to the Corporate-Rebels' book): https://decisionfreesolutions.com/wp-content/uploads/2020/09/DFS-The-approach-of-DFS-in-Action.pdf


After reading it just occured to me, is a managerless system a prerequisite for achieving transparency in salaries? At the company I worked for many years, managers and HR seem to freak out when an employee gets to know anothers salary (or raise or bonus). [...]
Do you think that such a transparency is achievable in a more traditional, hierarchical company structure?

Balint

First, I strongly believe that it is misguided to hang everything up on this idea that companies should be "managerless," or get rid of middle layers.

The problem is not hierarchy, but hierarchical decision making. Also in hierarchical structures work-related frustrations can be done away with by replacing "managing by decision" with "managing by approval". See e.g. in "Decision-free management is not an oxymoron, it is a paradox" https://decisionfreesolutions.com/wp-content/uploads/2019/02/DFS-Decision-free-Management-is-a-paradox.pdf

This idea that hierarchies must be flattened (and replaced by self-management) is a common misunderstanding about the new way of working (I have described 7 in an article which can be found on the decisionfreesolutions website under publications).

To finally address your question, in organisations which fully utilise everybody's expertise, someone's value to the company no longer hinges on hierarchy. This means traditional compensation schemes must be replaced.

In traditional organisations, where salary *is* related to the company's structure, there tends to be no such correlation between salary and "value to the company". Most, probably all, traditional organisations have no way of telling who is bringing what expertise to the company to what effect. They are unable to identify and utilise everyone's expertise (which is the underlying challenge to be resolved, and the fundamental underlying drive for all things related to the new way of working).

Traditional HR departments will be unable to substantiate why someone earns this or that, other than pointing to the hierarchical structure and perhaps age or number of years with the company.

Transparency is of course possible in traditional organisations. There are also many public organisations which publish their salary structures, hinged on "levels" linked to "position" and then a parameter linked to experience. This kind of transparency can be useful.

When organisations don't have such a salary table, yet are unable to substantiate why someone gets what salary, then offering transparency will only cause discussions the organisation will be unable to resolve.

Not offering any transparency on earnings within the organisation is a red flag. It almost always means the organisation is unable to identify and utilise expertise, resulting in a range of workplace related frustrations (lack of freedom, trust, autonomy to name a few).

Hope this helped a little.

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Balint

Balint

Hi Jorn, many thanks for the detailed answer. As a tiny (but rebellious :)) screw in the Eastern European labor market I'm new not only to the Corporate Rebels community but also to the ideas that seem to be well known here, so my sole intention is to learn and understand as much as I can. I'll do my homework (i.e. read the linked articles) and get back to the topic after :)

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Jorn_Verweij

Jorn_Verweij

Hi Balint,

[quote]As a tiny (but rebellious :)) screw in the Eastern European labor market I'm new not only to the Corporate Rebels community but also to the ideas that seem to be well known here, so my sole intention is to learn and understand as much as I can.[/quote]

I see what I did in my reply. Sorry. It wasn't my intention to critique your question. I was riding a personal hobby horse for a second: I was critiquing (or pointing out) that "managers" is not what needs rebelling against, and being "managerless" not a sign of "progression" (as gets mentioned on occasion — for example here: https://corporate-rebels.com/4-future-proof-organizational-models-beyond-hierarchy-and-bureaucracy/ ). Being "managerless" is what several pioneering organisations (not "progressive" organisations, as that falsely implies a continuous steady incremental direction other organisations should aspire to) have in common, in very different contexts, for different reasons, and with different dynamics. Managers tend to be associated with bureaucracy — which tends to create a lot of them — but if managers set out to create/sustain/communicate the conditions required to utilise the expertise of everyone being "managed" (in a hierarchy or in groups or circles) then hail the managers.

Enjoy the site/blogs/articles/community!

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Balint

Balint

Hi Jorn,

Sorry. It wasn't my intention to critique your question. I was riding a personal hobby horse for a second: I was critiquing (or pointing out) that "managers" is not what needs rebelling against, and being "managerless" not a sign of "progression" (as gets mentioned on occasion — for example here: https://corporate-rebels.com/4-future-proof-organizational-models-beyond-hierarchy-and-bureaucracy/ ).

Jorn_Verweij

No problem at all, I did't take your answer as if you're critiquing my question, sorry if it seemed so :) It is an important point that you made about how "managerless" is not an ultimate way of progression, again thanks for the explanation.

I guess when I wrote what you quoted it was based on my own frustrations about the Eastern European corporate culture and how I socialised in this environment. I was trying to come up with an excuse for myself for I ask so "basic" questions.

Anyway, I hope I didn't harm you or anyone else. As for me, no harm is taken. I hope we will have many similarly inspiring and thoughtful discussions like this :) Cheers!

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Nadine

Nadine

I am interested in how other companies deal with profit share for part time v full time employees and why. Is pro rata for part time standard like base salary?

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lukekyte

lukekyte

Good question - we calculate it pro rate, but everyone's earnings go towards a team (department) pot. That team then decides how to split it - 9 times out of 10 sharing equally.

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