Team-Set Salaries: Let's make compensation fairer and more agile

Team-Set Salaries (TSS) is a next-generation compensation process that uses an elegant algorithm to solve the key problem in people management today: How do we set fair compensation for individuals in multiskilled, collaborative teams?

Come and learn about a compensation process which is:

Fair - Results are not only fair, but also perceived by the team as being fair. Actionable - TSS produces a precise numerical result for each person’s compensation. Collaborative - Appraisals are made by team members themselves. Easy-to-use - Team members take only 15 minutes each to carefully express their appraisal of their colleagues’ work. It is used to set salaries, share bonuses and even to distribute company equity.

Instead of asking "Who should get raises?", the question we need to ask team members is: “How much of the pie does each person deserve?”. Asking how we should share the compensation budget (how we should slice the pie) embraces its finite nature and is the only question that will give us a clear, actionable answer.

By using this approach, the company eliminates the review inflation effect of traditional peer-review processes. When someone states a certain colleague deserves a greater slice of the pie, they are also stating that others deserve less, and vice-versa. In this manner, the team can no longer decide that "everyone deserves a raise”.

TSS provides precise numerical feedback and does not interfere with the team’s qualitative feedback process for talent development. Companies can make use of any additional feedback and improvement process they desire. With TSS, talent development is a completely independent process, eliminating the constant temptation of tying it to remuneration.

TSS produces the distribution of slices of the compensation budget that is fair in the team’s collective opinion. Managers and flat organizations use TSS as a sound basis for compensation decisions, ultimately leading to a heightened sense of fairness, improved employee engagement and superior company results.

Learning Outcomes:

After this talk, the participants will know:

-The reasons why several compensation models used by agile companies do not work - Why we failed and remain "traditional" in this aspect even though we are agile companies - The model created by the author in 2002 to solve this problem in one of his companies and perfected in his practice (and others) during those years. - How to improve team engagement and reduce turnover with collaborative, fair and agile compensation.