In many countries, salaries are a taboo subject. Almost no one talks about how much they earn. When they do, it's with close co-workers only. How do you know if you'll get a raise, and why?
Meanwhile, a lot of talk centres around salaries. People quickly fantasize about how much another person is making, or how much they could be making at another company.
Whilst salaries are a matter of secrecy of great importance to many, we believe that the current model on which salaries are decided in most companies is both unfair and inefficient. Why? And how are we trying to do better here?
Let's talk money! 🤑
The problem with secrecy in pay scales (and an ambiguous promotion system)
Confusion over pay has long been a way for companies to exert control over their employees. Do you remember the X and Y theories we talked about? Most companies think in terms of theory X, which postulates that employees:
Only work for money
Work for their own selfish interest
If you're an employer and you believe this, how will you behave? You're afraid that employees will ask for as much money as they can. They'll want big raises.
So you're going to avoid talking about it, and when you do it'll be to make people believe that "it's going to be complicated to get a raise".
As an employee, this leads to several problems:
You don't know how much other employees are making. You may become suspicious or envious when there is no cause to be.
It's not clear whether your skills will be rewarded or whether you need to improve your internal politics.
You're going to be highly stressed at your annual performance reviews, as you have no idea what to expect.
You may be unsure what people expect from you, and what you can do to improve.
The system is not always fair: some people deserve better, whilst others are overpaid for what they do. It's widely known that women are underpaid in the workplace, for example.
We believe this is not a nice way to deal with salaries. We must try to do better.
Our drive for more transparent salaries
There are various worldviews on salaries:
Everyone should be paid exactly the same, no matter what
Everyone should be paid a fair salary, tied to the scarcity of their skills
Paying everyone the same is not really something we believe in. While everyone has equal worth, not everyone has equal value on the labour market. Failing to recognize this could become dangerous: it would be very nice for some people to be paid more than they're used to, but it would be hard for us to attract the top talent we need.
We thought about it for a while and then started a process in the Tech Team to make the salary decision process more transparent. In the end, the whole Tech Team agreed to reveal their salaries.
How does transparency over pay work?
Salary evolution happens once annually, at the beginning of the year, no matter what.
You can aspire to a higher salary if you've got all the skills required for a higher seniority level.
The salary you earn is public. The rules are the same for everyone. Justice! ✊
General and technical skills
First, here is a list of general skills:
Remember: you need to have all the skills to aim for a higher level. For instance, if you have leadership skills but you aren't good at long term considerations, you can't expect to be considered a senior.
We have also more technical skills for each specialization. We've defined a list of skills you should have to become medium or senior for backend, frontend, iOS... For instance, here are the technical skills you would need in order to be considered a medium backend developer at OpenClassrooms:
I have a question, no, multiple questions!
We know that salaries are a sensitive topic for many people. It can lead to heated discussions in companies. We expect you have several questions. Here are some of the ones we are asked most:
How did you switch from non-transparent to fully transparent salaries?
We did this only with the teams who were ready, one team at a time. It took a while, even for teams that were already quite transparent with each other. We had several meetings, at monthly intervals.
The process was as follows:
Agree or disagree to participate in a transparent salary process.
List the skills required in the team. Decide which ones related to junior, medium or senior profiles.
Set up a system for evaluating each skill, using SMART criteria where possible.
Conduct market research into the usual salaries displayed on job offers and the corresponding skills required.
Use this information to then define the salary range at OpenClassrooms.
Pinpoint your position and those of the other team members on a junior/medium/senior scale.
Reveal people's salaries once everyone is ready, to ensure that everyone is in the appropriate range.
What the team told us was that finding out other people's salaries was not a big deal. The best thing was that they started to understand how they could improve. 'It's not the destination that is important, but how you get there that matters', as they say. 😉
What would happen if you discovered that someone was underpaid or overpaid?
This has not been the case upto now, but we are prepared for such an eventuality:
Underpaid people would get a raise to align with other salaries in their corresponding scale.
Overpaid people would have to focus on the skills they lack and would probably not get a raise for a while so the others could catch them up.
Thankfully, our salaries were already quite consistent. No problems appeared.
I've seen other companies that pay more. Why don't you pay more?
We'd love to pay everyone a million euros a year but we just can't. 😉
These numbers have been decided collectively by the people after extensive market research. We had to set lower and upper limits to ensure the rules were the same for everyone.
Did people agree on all this?!
Yes, we took the time to ensure that everyone was comfortable. We were surprised that people were eager to create a more transparent environment, even for salaries.
While there was always a leader in these meetings, most of the work has been done by people themselves. The groups agreed on the skills and salary ranges.
What you should do
It depends on whether your team has agreed on transparent salaries or not. If they have:
Look for the salaries document on Google Drive (or ask for it if needed). You'll get plenty of information in there.
Look for the skills you need to achieve a higher level. If you don't understand what they mean, ask questions.
Use the feedback process to understand if people feel like you are acquiring new skills or not.
If your team doesn't have transparent salaries and you'd like to move further, talk to them to see if they are open to the idea. If that's the case, you should ask our CTO Romain for help on starting the process.