The Tinder of pay

Written by Hugo Chatel, on 09 April 2018

The question of recognition and remuneration is always tricky... It becomes even more so when working remotely and with full autonomy. How can one provide a representative feedback and adjust salary bonuses in a fair and transparent manner under these conditions? The 60 employees of HE:Labs tackle this puzzle in a rather original way...

The entire team agrees: their traditional system of salary revisions and bonus evaluations needs to change. As Sylvestre, founder of HE:Labs, puts it, if employees negotiate their own salary increases directly with the HR team, then they are not remunerated based on their value but rather on their negotiation skills...

For evaluations to be representative, they must be conducted by the people each individual works with every day. And if salaries are indexed on these evaluations, they will inevitably be fairer!

No sooner said than done. The team sets out to define their new evaluation and remuneration system based on peer review. It will be done in two steps.

Firstly: feedback collection. Every 3 months, each collaborator must nominate at least one colleague they've worked with during the previous period. In addition to a quantitative evaluation, the collaborator can also add constructive textual comments to help the person being evaluated progress. The objective of these feedback sessions is to share one's personal opinion with colleagues about their contribution to the company and to identify areas for improvement. One of the questions asked pertains to remuneration: "I believe this person should earn more, the same, or less than me."

To avoid tensions as well as unspoken issues, they choose to allow employees to provide their evaluations anonymously. They believe that this way, all feedback (both positive and negative) will be communicated during this collaborative feedback process.

The collection of these evaluations will be done through an internally developed application - this is the advantage of being an IT consulting firm with the necessary skills to develop in-house applications!

Next, the evaluation of remuneration. By physically meeting every 6 months, the founders of HE:Labs can rely on two annual feedback sessions to decide whether to grant salary increases or not. But beware, feedback is not sacred and remains primarily an indicator: it cannot trigger salary reductions, for example.

If this system works well, a year later, some improvements become necessary. Thus, the APPRAISE application is born. Inspired by the Tinder swipe system, feedback is now collected not every 3 months but every 4 months, and employees are required to evaluate not just one but all their colleagues by swiping left or right. For example, on the question of remuneration, you swipe right if you believe your colleague should earn more, and left if not. You can still provide a more detailed textual comment. This way, feedback is more representative of the entire company's sentiment.

However, not all employees necessarily collaborate with each other regularly. That's why at the end of the feedback, a final question appears: "How confident am I in my response?"

An algorithm then ranks employees, visible to all, excluding individual comments, which remain private and only visible to the person concerned. Obviously, the algorithm has been designed so that our own choices cannot influence our final ranking. So, swiping left on all your colleagues in hopes of earning more than them won't be effective.

Another important change: it is no longer fixed salaries that are re-evaluated based on the ranking results. Now, individual bonuses are indexed on this ranking.

While this practice allows for quickly gathering comprehensive and representative feedback, it is not sufficient to address some points in depth. Therefore, each collaborator has a monthly meeting with the "buddy" (mentor) they chose upon joining the company to assess their progress. The frequency of these meetings is, of course, adjustable according to needs.