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Show Me The Money
How to Pay Employees in an
Agile Organization
Christof Braun
Manage Agile! Network
Why do you work?
Would you work without pay?
If you won the jackpot in the
lottery?
If you received a monthly allowance
to cover your basic needs?
Why is an agile organization
different regarding salary?
Teamwork rather than individual contributions.
Flat hierarchy.
Transparency.
Embracing change rather than following a plan.
Trust rather than control.
Basically – it‘s a trade:
But instead of goods for goods
It‘s compensation for work.
com·pen·sa·tion
noun ˌkäm-pən-ˈsā-shən, -ˌpen-
: something that is done or given to make up for damage, trouble, etc.
: something good that acts as a balance against something bad or undesirable
: payment given for doing a job
-- Merriam-Webster Dictionary
Three categories of "compensation"
Fixed and unconditional salary.
Variable and conditional salary.
Bonus pay (variable).
Fixed salary is
Contractually assured.
Generally guaranteed.
Stays the same unless contract is
changed (e.g. pay raise).
Unconditinally payed.
because….
Pay is not a motivator.
-- W. Edwards Deming
but:
If you don‘t pay enough, people
won‘t be motivated.
-- Daniel Pink
Pay enough to take the issue of
money off the table.
-- Daniel Pink
… then do everything in your
power to help them put money
out of their minds.
-- Alfie Kohn
How much is enough?
Who is the judge?
Ask her!
Consult available stats for your
region and the position.
You must achieve fairness
across your organization.
Do it now:
Promises for later are risky
and mostly feel contingent.
Consider:
Age.
Tenure.
Role.
Family / social obligations.
Contribution to value generation.
To assume that fairness always
requires that people should get
what they earn, that the law
of the marketplace is the same
thing as justice is a very
dubious proposition indeed.
-- Alfie Kohn
Who decides how much?
(Line)Manager
Employee
Peers
Experiment!
Mock It!
Game It!
Transparency creates Trust
Salary Groups / Ranges
Complete Transparency
Variable Salary
Incentivizing: using extrinsic motivation
Do this – get that
"Do this and you'll get that"
makes people focus on the
"that", not the "this“.
Merit pay kills intrinsic motivation.
The work to be done is an
impediment to getting the money.
Doing something in order to receive
an extrinsic motivator makes us less
interested in what we are doing.
-- Alfie Kohn
Control
Merit pay is for the benefit of the person who
pays, not the recipient:
It is easy.
It makes people do what the payer wants.
It fortifies hierarchy.
Its purpose is to manipulate.
Threat
There is a stick in every carrot.
Abolish pay as incentive!
If you can‘t…
Use small amounts of variable salary.
Involve employees.
Use company, department or team
goals NOT individual.
No competition.
Frequent adjustment (agile).
No incentives on learning/self-
development.
Bonus pay
Lets employee participate in
success of organization.
Celebrate success
What about Failure?
Celebrate that too!
It helps you learn!
Make it unexpected
Make it frequent and small
Make sure it is not a reward
Consider:
Participate in organizations
earnings.
Participate in organizations
ownership.
Summary
Transparent, fixed salaries, ideally
determined by employee or peers,
take the money issue off the table.
Merit Pay/Incentives should be
abolished if possible.
Let employee participate in success
of organization via bonuses.
Christof Braun
christof @ manageagile.com
www.manageagile.com
@christofbraun

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Show Me The Money, or: How to pay in an Agile Organization