Open Salaries: from employees to managing partners by Alexey Voronin at #AgileIndia2019
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Do you want to hire the best? I suppose yes. Do you want them to grow, to improve their skills continuously and to develop your company? Hope so? But what happens if people grow quicker than the company itself? That might be an issue and you need serious changes in your company to keep employees interested to stay, to grow and to develop your company. We are using open salaries, money transparency and an advice process in ScrumTrek company to retain interest, to have a new source of enthusiasm and motivation of our employees. We started our journey 2.5 years ago and we are happy to share how it feels from inside. More details: https://confengine.com/agile-india-2019/proposal/8090/open-salaries-from-employees-to-managing-partners Conference link: https://2019.agileindia.org
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Open Salaries: from employees to managing partners by Alexey Voronin at #AgileIndia2019
- 1. Alexey Voronin / ScrumTrek Open Salaries from employees to managing partners
- 2. About me - Managing Partner / Agile Coach at ScrumTrek - Producer of Agile Days & Agile Business Conference - Certified ICAgile Trainer (Agility in the Enterprise, ICAgile Professional, Agile Project Management ...)
- 3. What is ScrumTrek? —Established in 2007 —Largest Agile consulting company in Russia —40+ employees
- 6. Конференции
- 7. Our clients
- 8. But three years ago… —We were a small company made up of 6 employees —We started to grow rapidly - 12 people over 3 months
- 9. What could a solution be? Or
- 10. We decided to… —Decentralize a management function —Empower employees
- 11. We thought that … —To manage you need information about what you want to manage —Therefore, if we want to empower our people to manage our company we will need… —To open all information (including financial) to all employees in our company —But the most dangerous is to open … salary information ;)
- 12. Suppose you opened salaries. What will the result be?
- 14. How could we prevent this?
- 15. We decided to … —Align salary expectations —Remove unfairness in salaries
- 18. Employee Card Roles Salary Level Hot discussions about the salary ;)Voronin Alexey
- 19. Salary increase process —Everyone can request a salary increase for anybody —Requester must provide a salary increase explanation —Everyone can give a feedback about the salary increase request —The increase will be done if more than 50% of people voted for and nobody voted against request
- 20. What did we do next?
- 22. And next?
- 23. Advice Process —Everyone can create and implement any initiative in the company (hire somebody, attend a conference, spend their time developing a new product …) —Nobody (except CFO) can block your decision —But!!!! You need to ask for a feedback from several people in the company and do it transparently on special board
- 26. What do we have as a result? —We have 40+ employees and no managers - that’s very cheap by the way ;) —Only 2 employees left ScrumTrek in the past 3 years —We have developed more than 40 new customer products (trainings, digital-services, conferences etc) over 2 years —And some of them are conceptually new products for our market (okademy.ru, scrumtrek.online, agiletracker.ru, pimpmy.team) —Now we see ScrumTrek as a platform for creative people to create something amazing
Notas do Editor
- Hi, I am Alexey Voronin. And today we will talk about open salaries an approach that we are using in ScrumTrek for managing salaries and not only salaries as you will see later. It’s unusual case study. Because usually you see case studies from the companies which are adopting modern management methods, changing their structure, business models. But today we will be talking about a company that helps that previous companies on their journey. And I will tell you about process which we use in ScrumTrek. How it is looks like from the inside. And what management methods we using.
- Few words about me. I am managing partner at ScrumTrek. Also I am a producer of two largest Agile conferences in Russia - Agile Days and Agile Business Conference.
- ScrumTrek was established in 2007 by 3 co-founders as an Agile consulting company. Now it is a largest Agile consulting company in Russia and one of the largest companies in Europe. We have more than 40 employees, three daughter companies and several franchisee. And by the way - we have an office ))) in the center of Moscow. It is unusual for Agile coaching companies. Because they are usually very small.
- Here you is a major part of our team.
- And this is our main conference - Agile Days. Over 1 500 participants.
- We work with really large clients. In the past, it was mostly IT companies. But now we are working with large manufacturing, financial, insurance and other non-IT companies.
- But 3 years ago we were a small company which consisted of 6 people, 3 of them were co-founders. We had a great informal and dynamic culture. We started to grow rapidly. Our staff increased by 12 people over three month. 12 outstanding people! We tried to hire only stars (CTOs, high-level managers) - people who have a deep experience in making changes. It was great but it created some problems. It was easy to manage business when it was only 6 people in it. Simply, you don’t need to manage people at all at that scale. But now we have 18 outstanding people in our organisation. Everyone with unique background and deep management experience. There were many questions at that point of time. What will the motivation be for that people to work in the company for several years? How must processes and the company structure looks like to make that people happy, on one side, and to develop company and create profit, on the other side?
- Of course, simply, there are two options. First, the simplest option is departments, hierarchy, managers. But I can’t imagine who can manage group of stars, and what salary level that person would have :) It’s really expensive. And I believe, that if you started to manage people that would affect your company dynamics and decrease self-managing culture. Second, you can try to organise your company as a network. But it is really hard because there are few real cases in the world and a lack of experience in that topic.
- We don’t take easy ways. And we decided to choose a second option - to decentralize management function by empowering employees. Easy to say but hard to achieve. What will
- To manage you need an information about what you want to manage Therefore, if you want to empower your people you need… To open all information (including financial) to all employees in our company But the most dangerous is to open … salaries to all employees ;)
- Why? If information is closed to employees there would be a lot of unfairness hidden in it. For example, usually old employees earn lower salary than newcomers (especially in hi-tech industries). Is it true for your company?
- We decided to prepare to open salaries. We decided to align salaries expectations between employees and to remove unfairness in salaries.
- We discussed that ideas with all employees and got an agreement. We asked every employee to fill in such spreadsheet. Where they needed to provide their expectations about salaries of every or most employees in organisation. Next, CEO aggregated that information and increased salary level for several employees to meet expectations. Of course we only increased salaries, not decreased. For example, my salary has increased almost twice. After that it was easy to open salaries to all employees. And there were no conflicts about salary levels. But the most storming part was ahead.
- That’s our trello board which we are using to organize open salaries process. There are several columns which are illustrating our process. From hiring people to firing them. First column contains rules and roles description. Next, cards for candidates. Third column - cards for people which are on the trial period. Next, two columns contain cards for employees and managing partners. And there are several columns for salary increase requests and firing process. At the first stage we started open salaries process only with money making employees.
- That’s our trello board which we are using to organize open salaries process. There are several columns which are illustrating our process. From hiring people to firing them. First column contains rules and roles description. Next, cards for candidates. Third column - cards for people which are on the trial period. Next, two columns contain cards for employees and managing partners. And there are several columns for salary increase requests and firing process. At the first stage we started open salaries process only with money making employees.
- That’s how an employee card looks like.
- Of course we not only want to see salaries. Sometimes we want salary increase for different reasons. And that part of the process was the most storming at the start. Here are rules that we use for salary increase process. At any time you can ask for salary increase for yourself or for somebody else. And you must provide an explanation why do you think you or your colleague needs a salary increase. You do it on the special trello board publicly and ask for feedback. You request will be approved if you don’t have negative feedback in your request. There were a lot of difficulties in that process and many interesting stories happened during it. The first thing we encountered that it’s hard for several people to request salary increase. Because they used to the situation where their boss was responsible for their salary. Now it’s your responsibility. And it was really difficult mindset change for that people. In such situations there were cases when one employee created a salary increase request for another employee. And in one such case that employee refused request which was created for him. And said, «I don’t want to increase my salary right now, because I am not ready for it». Many people in our company are using salary increase requests as feedback tool. They create salary increase requests not for salary increase but for getting a feedback from colleagues to understand what they need to do or to improve to increase their salary level dramatically after some time. And the last interesting thing - that we didn’t have any criteria for salary increase at the start. And we developed and developing it in discussions in salary increase requests. It’s really difficult and storming discussions. But as a result we came to situation where you need to do a really good job or service for the company or your colleagues to get an agreement from others for salary increase.
- After we opened the most sensitive financial information - information about salaries. We opened all other financial information for employees. At the start it was manually made financial reports to employees. That contained information about Several month later we developed automated financial reports where everyone in the company can find information about … on a company scale, business line scale, personal scale At that moment people had all information needed to make almost all management decisions.
- We got several troubles at the company level after that step. Several people made incorrect decisions at some moment. For example, hired 4 people just before a low season. And it created a cash gap for the company. And what do you think we did after that?
- We started to tighten the screws. This is joke )
- This situation forced us to improve informing about current financial situation in the company. And we developed several Slack bots which are weekly informing people about account balances, expired receivables, self-sufficiency of Agile Coaches and so on.