In many countries, salaries are a taboo subject. Almost no one talks about how much they earn. When they do, it's with close coworkers only. How do you know if you'll get a raise, and why? People often wonder how much another person makes or how much they could earn at another company.
We believe that the current salary model used in most companies is unfair and inefficient. Why? And how are we trying to do better here?
Let's talk about money! 🤑
The Problem With Secrecy in Pay Scales (And an Ambiguous Promotion System)
We've come across the notion of theory X and theory Y from Douglas McGregor by reading the (excellent) book Reinventing Organizations. Most companies think in terms of theory X, which assumes 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 getting a raise is complicated.
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, while 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.
We don't believe in paying everyone the same. While everyone has equal worth, not everyone has equal value on the labor 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 decided to make the Tech team salary process more transparent. In the end, the whole team agreed to reveal their salaries.
Talking about salaries and defining how they work is a big change that didn't happen overnight. In fact, it took more than six discussion sessions over several months to reach an agreement, and that was just for the Tech team, which was initially open to the idea!
How does salary transparency work?
Salary increases happen 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! ✊
Currently, only the Tech team and the Multimedia team (from the Learning team) have achieved fully transparent salaries. The rest of the Learning team is currently working on this, while the other teams are just observing.
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 planning, you can't expect to be considered a senior.
We also have more technical skills for each specialization. We have a list of skills you need to become medium or senior for back-end, front-end, iOS, etc. For instance, here are the technical skills for a medium back-end developer at OpenClassrooms:
I have a question, no, multiple questions! 😅
We know that salaries are a sensitive topic for many people and can lead to heated discussions in companies. We expect you have several questions, so 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 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 by the team. Decide which ones are related to junior, medium, or senior profiles.
Set up a system for evaluating each skill, using SMART criteria where possible.
Conduct market research into comparable salaries and job skills.
Use this information to define the salary range at OpenClassrooms.
Pinpoint your position and those of the other team members on a junior/medium/senior scale.
Reveal salaries once people are ready to ensure that everyone is in the appropriate range.
The team told us finding out other people's salaries was not a big deal. The best thing was that they started to understand how they could improve. As they say, "It's not the destination that is important, but how you get there that matters." 😉
What would happen if you discovered that someone was underpaid or overpaid?
This has not been the case up to now, but we are prepared for such an eventuality:
Underpaid people would get a raise to align with other salaries in comparable jobs.
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 up.
Thankfully, our salaries were already quite consistent. No problems appeared.
I've seen other companies that pay more. Why don't you?
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, the people did most of the work. 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 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.