Self-Set Salaries
Description
Chad Whitacre:
"The practice of letting each employee decide their own salary, known as "self-set salaries," has existed since at least the 1980s. Semco (a Brazilian manufacturer) and Morning Star (a U.S. tomato processor) are the two earliest companies associated with the practice. Both are still going strong, though a third early adopter, Gordian Engineering, is defunct.
Through the influence of Semco owner Ricardo Semler's 1989 book Maverick, and Frederic Laloux's 2014 book Reinventing Organizations, a fresh crop of organizations is now discovering this practice and making it their own. Programming bootcamps Dev Academy (part of the Enspiral Network) and Makers Academy, software company Figure 53, design firm Hanno, and management consultancy Realize! (as described in Reinventing Organizations) are each practicing self-set salaries in some form or another.
However, let's be careful not to confuse self-set salaries with two similar practices: algorithmic salaries, where compensation is based on a consistent formula (e.g., Buffer), and rankings-based salaries, where compensation depends on a system of peer assessments (e.g., W. L. Gore). In the case of self-set salaries, the individual, not an algorithm, makes salary determinations, and, while peers may influence these decisions, the individual retains final control over their compensation.
Inspired by Maverick, Gratipay implemented a version of self-set salaries in July 2013, which we came to call "take-what-you-want" (to parallel the "pay-what-you-want" pricing model that we also offer). Organizations with pay-what-you-want pricing share control over revenue with their customers. Similarly, organizations that practice take-what-you-want compensation share control over expenses with their workers." (https://opensource.com/open-organization/16/7/compensating-employees-letting-them-take-what-they-want)