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A few questions. Doesn't this create a culture of constant value fixation and envy? People think in terms of comparisons rather than absolutes, doesn't this e

A few questions. Doesn't this create a culture of constant value fixation and envy? People think in terms of comparisons rather than absolutes, doesn't this encourage comparison thinking? Doesn't this create an odd culture setup where you can't promote superstars without getting clearance from everyone else (or at least creating drama), even those who are in no place to judge, or even understand what the superstar does for the company? Does this work as a sort of mob-justice system for keeping employees from asking for more money... because now they have to do it in public and get labelled / deal with the politics of it?

swombat 14y ago
> Doesn't this create a culture of constant value fixation and envy? People think in terms of comparisons rather than absolutes, doesn't this encourage comparison thinking? The way this manifested itself is that after the first salesperson earned their first bonus (pretty substantial), there was certainly a bit of envy. The solution to that was to create a relevant bonus scheme for the operations/client management side that enables them to earn bonuses as well. For client management, instead of being based on new sales, the commissions are based on client retention and getting referrals. This way, client managers know they can earn good money too - they just need to do stuff that brings income to the company. > Doesn't this create an odd culture setup where you can't promote superstars without getting clearance from everyone else (or at least create drama), even those who are in no place to judge, or even understand what the superstar does for the company? Bearing in mind we're a relatively young company, this problem hasn't occurred and I don't see it occurring any time soon, for two simple reasons: 1) the "superstars" can see what the benefits of this open, transparent system are, and they want it to continue, so they don't want to break it for their own personal benefit, and 2) if they're superstars, then they're already earning a good bit of money in commissions. > Does this work as a sort of mob-justice system for keeping employees from asking for more money... because now they have to do it in public and get labelled / deal with the politics of it? I guess you can see it that way. The way I look at it is not that anyone is afraid to ask for more money - in fact, I would hope everyone wants more money. But they know what the answer will be. There's a known, proven way to increase their base salary quite substantially every 3 months if they put in the effort, and there are known, proven ways for them to earn commissions. So if someone wants more money, it's there for the taking. Why break the system by asking for an exception, when there's ways to achieve the same result relatively quickly within the system, that don't break the transparency culture?
- MetaCosm 14y ago
  So, is the structure of your company such that you are able to constantly adjust these carrots (commission, bonus and pay) on an as-needed basis? Would an adjustment down be possible (sorry sales, had to move 1% of your commission to ops to stave off a revolt!)? Do you find the "boil the frog" method to help with this transparent structure? Giving someone 5x 2k raises over 15 months is far less of an event than giving someone a 10k raise after a yearly performance review. Was this something you guys thought of intentionally, or just the way you wanted to run the company regardless of the transparent structure?
  - swombat 14y ago
    > So, is the structure of your company such that you are able to constantly adjust these carrots (commission, bonus and pay) on an as-needed basis? It is privately owned, by me and my cofounder, with no external funding, so we can do whatever we want. Bearing in mind the company is less than 3 years old, there will still be a lot of adjustment to do before we arrive at a configuration that I would call "final" (though I suspect it will continue evolving... after all, it's made of people!)... > Would an adjustment down be possible (sorry sales, had to move 1% of your commission to ops to stave off a revolt!)? We could, but I wouldn't... that would seem unfair. Sales do give up part of their commission but only when the sale is heavily dependent on ops, for example when it's a referred client (they were presumably referred because they got great service) or when it's an "enhancement" client where we go in and increase their claim size (there's a lot of technical work in that). > Do you find the "boil the frog" method to help with this transparent structure? Giving someone 5x 2k raises over 15 months is far less of an event than giving someone a 10k raise after a yearly performance review. Was this something you guys thought of intentionally, or just the way you wanted to run the company regardless of the transparent structure? I hadn't thought of it that way. From talking to our team, I think they're happier being able to earn smaller pay raises regularly, rather than having to wait a whole year to find out if they "made it". That was intentional - I don't like the way many companies wait a whole year to tell you whether you're doing well enough to deserve a pay raise, and right from the get go I decided it would be a six-monthly process, and then made it quarterly.

swombat 14y ago

> Doesn't this create a culture of constant value fixation and envy? People think in terms of comparisons rather than absolutes, doesn't this encourage comparison thinking? The way this manifested itself is that after the first salesperson earned their first bonus (pretty substantial), there was certainly a bit of envy. The solution to that was to create a relevant bonus scheme for the operations/client management side that enables them to earn bonuses as well. For client management, instead of being based on new sales, the commissions are based on client retention and getting referrals. This way, client managers know they can earn good money too - they just need to do stuff that brings income to the company. > Doesn't this create an odd culture setup where you can't promote superstars without getting clearance from everyone else (or at least create drama), even those who are in no place to judge, or even understand what the superstar does for the company? Bearing in mind we're a relatively young company, this problem hasn't occurred and I don't see it occurring any time soon, for two simple reasons: 1) the "superstars" can see what the benefits of this open, transparent system are, and they want it to continue, so they don't want to break it for their own personal benefit, and 2) if they're superstars, then they're already earning a good bit of money in commissions. > Does this work as a sort of mob-justice system for keeping employees from asking for more money... because now they have to do it in public and get labelled / deal with the politics of it? I guess you can see it that way. The way I look at it is not that anyone is afraid to ask for more money - in fact, I would hope everyone wants more money. But they know what the answer will be. There's a known, proven way to increase their base salary quite substantially every 3 months if they put in the effort, and there are known, proven ways for them to earn commissions. So if someone wants more money, it's there for the taking. Why break the system by asking for an exception, when there's ways to achieve the same result relatively quickly within the system, that don't break the transparency culture?

MetaCosm 14y ago
So, is the structure of your company such that you are able to constantly adjust these carrots (commission, bonus and pay) on an as-needed basis? Would an adjustment down be possible (sorry sales, had to move 1% of your commission to ops to stave off a revolt!)? Do you find the "boil the frog" method to help with this transparent structure? Giving someone 5x 2k raises over 15 months is far less of an event than giving someone a 10k raise after a yearly performance review. Was this something you guys thought of intentionally, or just the way you wanted to run the company regardless of the transparent structure?
- swombat 14y ago
  > So, is the structure of your company such that you are able to constantly adjust these carrots (commission, bonus and pay) on an as-needed basis? It is privately owned, by me and my cofounder, with no external funding, so we can do whatever we want. Bearing in mind the company is less than 3 years old, there will still be a lot of adjustment to do before we arrive at a configuration that I would call "final" (though I suspect it will continue evolving... after all, it's made of people!)... > Would an adjustment down be possible (sorry sales, had to move 1% of your commission to ops to stave off a revolt!)? We could, but I wouldn't... that would seem unfair. Sales do give up part of their commission but only when the sale is heavily dependent on ops, for example when it's a referred client (they were presumably referred because they got great service) or when it's an "enhancement" client where we go in and increase their claim size (there's a lot of technical work in that). > Do you find the "boil the frog" method to help with this transparent structure? Giving someone 5x 2k raises over 15 months is far less of an event than giving someone a 10k raise after a yearly performance review. Was this something you guys thought of intentionally, or just the way you wanted to run the company regardless of the transparent structure? I hadn't thought of it that way. From talking to our team, I think they're happier being able to earn smaller pay raises regularly, rather than having to wait a whole year to find out if they "made it". That was intentional - I don't like the way many companies wait a whole year to tell you whether you're doing well enough to deserve a pay raise, and right from the get go I decided it would be a six-monthly process, and then made it quarterly.