Fair Pay Through Self-Management: Mindera's Salary Comparison Model

Mindera

Mindera is a software company with a global presence, operating in Portugal, the United Kingdom, the United States, India, Romania, Brazil, and Morocco. The company was founded in March 2014 by Paul Evans, who, along with friends Bruno Lopes, Guilherme Almeida, José Fonseca, and Sofia Reis, was inspired to create a workplace centered on happiness and excellence rather than financial gain alone.

Guided by principles of Care, Autonomy, Collaboration, and Agility, Mindera fosters a culture where individuality is valued, and work is balanced with play. Emphasizing care for each other, trust in autonomy, collaboration, and agility, Mindera has cultivated an environment where teams create exceptional software together, benefiting both themselves and their clients.

As much as we’d love to delve into Mindera’s radical approach to work, this post focuses on its innovative salary model, primarily implemented at its Portugal location, which employs around 700 people.

Evolution of the salary model

Before exploring Mindera’s current salary model, it’s essential to look back at the origins of its salary practices and how the model evolved over time.

Initially, salaries were decided by the five founders who were actively part of the teams. This was logical since they had in-depth knowledge and could naturally assess each team member’s capabilities. Being directly involved with everyone allowed the founders to understand each individual’s contributions.

Every 3–5 months, the founders would convene to assess each employee’s skills and capabilities. Salaries were reviewed based on three questions:

1. If we were hiring this person now, what would we offer?
2. What new skills or contributions has this person gained?
3. Can our business afford this adjustment?

At this stage, salary information at Mindera was not transparent.

As Mindera experienced rapid growth, challenges emerged in the founders’ approach to setting all employee salaries. After experimenting with different models to make salary-setting more transparent and empower employees to set their own salaries, they developed the ‘People Comparison’ model. Let’s explore this model in detail.

Mindera’s ‘People Comparison’ model

Mindera’s People Comparison model is a transformative approach to salary setting within the company, emphasizing transparency, peer assessment, and self-awareness. Instead of founders setting salaries in a top-down manner, self-managing employees propose their own salaries periodically, supported by reasoning that reflects their skill levels, growth, and impact within the company.

Here’s a brief overview of how it works: once an employee submits a self-proposed salary, an algorithm suggests colleagues for comparison who have similar roles, skills, and experience and have collaborated for over 90 days. This group provides feedback, creating “comparison stacks” where individuals are rated on a scale reflecting their development, experience, and overall contribution. Employees are then positioned on a scale based on this input, which aligns them with peers of similar roles and projects.

To finalize these proposals, the company has ‘reviewers’ who analyze the stacks to ensure that self-proposed salaries align with internal benchmarks, budgets, and market values. Reviewers manage comparison requests during the salary cycle and oversee feedback collection, ensuring fairness and transparency throughout the review process.

The Mindera salary model involves five main steps:

• Step 1: New salary cycle
• Step 2: Registration
• Step 3: Comparison stacks
• Step 4: Sense check
• Step 5: Decision

Let’s look at what happens in each step.

Step 1: New salary cycle

Three times a year, Mindera employees receive invitations to join a salary cycle, i.e., the opportunity to submit a salary proposal. They’re informed about the budget and timeline. Participation is optional; some join every cycle, while others choose none.

Recognizing that this process may be uncomfortable for some, Mindera implemented a safeguard: if an employee’s salary remains unchanged after a year, the system triggers a review to ensure fairness and address potential issues proactively.

Step 2: Registration

During registration, employees submit their proposed salary—a figure they believe reflects their worth. They can also include comments or requests in a free-form text box, which reviewers oversee.

An algorithm reviews the proposals, considering factors such as work relationships, skills, and experience. It then suggests comparison stacks (explained next) of five individuals for further evaluation, prioritizing those with over 90 days of collaboration and similar skill sets.

If an employee is dissatisfied with the algorithm’s selections, they can provide feedback or make referrals. For instance, if an employee receives a request to compare individuals she hasn’t directly worked with, she can suggest someone more suitable. This “Make a Referral” option helps improve the algorithm’s accuracy with each cycle.

This image helps to clarify this step.

Step 3: Comparison stacks

Employees receive the suggested comparison stacks and carefully review each individual within them.

Employees assign each person in the stack a level—above, below, or the same as their own. They consider the person as a whole, factoring in experience, knowledge, impact, interactions, and more.

This is what a stack looks like when it’s complete:

In each stack, there’s a percentage indicator. Employees use a slider to gauge their confidence level in each comparison, reflecting the depth of their professional relationship with the individual being evaluated. Higher confidence is represented by a higher percentage, while lower confidence reflects less certainty.

Employees can also add notes to their comparisons, offering insights into the reasoning behind their evaluations, which may include specific achievements, collaboration areas, or other relevant factors. This phase typically lasts two weeks.

Step 4: Sense check

During the sense check phase, reviewers critically analyze the stacks in which each individual appears, aiming to determine a fair salary range for each employee.

Reviewers ensure that salary adjustments are transparent and accurately reflect each employee’s contributions. Even individuals who didn’t propose a salary may still receive an increase if they frequently appear in comparison stacks, indicating their perceived value within the organization.

Step 5: Decision

After the sense check phase, participants receive notifications on the outcome of their proposals—whether accepted, rejected, or deferred to the next cycle.

Finally, reviewers share a cycle summary, typically resembling the following message:

“Hello everyone, Update on the current salary cycle. Cycle number 10! Initial budget: X€. Total value after process completion: Y€. 111 self-proposals on the platform. 105 accepted (below, proposed, or above value). 5 rejected, 1 deferred to the next cycle. 35 employees added for review. Average increase: Z€. 14 sense check sessions in recent weeks. Thanks to everyone who contributed with comparison stacks; this is vital to the process. For any questions, please talk with the salary group.”

And there you have it—Mindera’s ‘People Comparison’ model.

Let’s wrap this up

From founder-led decisions to the revolutionary self-proposal system, Mindera has redefined salary determination. By prioritizing transparency, fairness, and employee empowerment, Mindera has set a new industry standard.

Do not copy-paste

Mindera emphasizes the importance of designing a salary model that suits the unique culture and needs of the organization rather than simply copying others.

With that in mind, if you’re looking for inspiration on designing a salary model for your self-managing organization, consider joining our membership and exploring the new salary course, which includes nine other relevant case studies.