Compensation in Holacracy

Compensation within Holacracy

So you've adopted the Constitution, defined circles, hold regular Governance Meetings, Tactical Meetings, etc. The whole shabam... The old, static, job profiles and employee handbooks are a thing from the past which has been replaced by this awesome system that allows the organization to be shaped from within. Cool, you're all set to go!

But then someone realizes the old compensation system might be due for an overhaul too. Because,  without job profiles, how are you going to establish salaries and secondary benefits? Does this apply to new hires, or is everyone's salary now up for review? Is that even allowed? And are we going to be as transparent about salaries as Holacracy is on the Organization itself? 

Above were the topics for a lively discussion hosted by OrganizationBuilders for the client community. The basic Holacracy system defines nothing related to compensation and different companies have adopted different strategies to deal with compensation in a new (and ever-evolving) reality.

Through several cases, Koen Veltman presented various options implemented elsewhere, the issues they resolved, and the questions they presented. Amongst these were the add-ons (Apps) that have been proposed to support decision making in a Holacratic organization, the ARCA Compensation App and the Badge Based Compensation App, but also alternatives developed and practiced within other Holacratic Organizations. 

Take away: Transparency was an important item: one company did indeed give maximum transparency on compensation, but only after aligning this through an ingenious internal alignment system. One participant was in the process of validating the legal situation of the new job profiles, both to the Company and the Employee. An interesting direction was the idea that equal salaries for everyone would be a great solution, to which several examples followed of (not necessarily Holacratic) organizations where at least bonuses and profit-sharing were fully equal amongst all employees. 

Wondering about compensation in relation to your Holacratic Organization, then feel free to reach out to OrganizationBuilders via email.