How we pay at REBORRN
Written by @Costas Mantziaris
⚠️ Note: This is Part 3 of a series of articles celebrating the 3rd anniversary of REBORRN: Part 1 (Purpose & Values), Part 2 (How we hire)
Many questions come to mind when it comes to compensation or an employee asking for a raise: How Much? When? How? etc. So, we had them answered — internally — and now sharing them with the world.
In this article, we are sharing the core performance principles that drive us to provide a raise, how one knows if they are eligible to receive one, and eventually how the compensation amount is determined.
Although we never want anyone to just stay for the money, we know this is a very important factor that people need a lot of clarity around. And here we are providing it.
🥇 First things first. What does it take to grow and get a raise?
There are 3 core performance principles that drive us to provide a raise:
1- Making the manager obsolete: As we like to make ourselves obsolete when it comes to our clients, we apply the same principle internally. We onboard people who are autonomous in a way that they can get to a point where they make the person they report to obsolete. So, the more they grow, the less they need their manager’s help and therefore, make them obsolete.
This does not mean that managers should not help their people grow. They should and they will always be there. It just means that the person would have grown so much that their manager’s help is appreciated but not mandated.
2- Scaling oneself: The more people spread their awesomeness the better. This could be training other people. Providing guidance and transferring knowledge. Automating mundane tasks. Documenting things so that others can do them easier and faster. Hiring and managing an intern. The sky’s the limit.
3- Providing exceptional Value: We expect people to perform very well in the role they are hired for (read more about how we hire). It is their “business as usual”. But sometimes they may be able to bring in that extra something. An exceptional value to the company that we define as:
Having amazing Business Development skills and/or network
Having a very specialized skill set that can give us an serious competitive advantage
Providing access to a new Market / Country
Delivering amazing execution / operations that significantly increases our profit margins
Now let’s talk about how one can know if they meet the above principles:
Easy. They should regularly talk about them during their 1-on-1s with their managers. Our advice is to do so at least once a month and co-create a development plan. Receiving or not receiving a raise should be of no surprise to anyone.
To make it easier to visualize what success looks like, we suggest breaking down the above 3 principles in developing some specific capabilities (e.g become better at data analysis) and achieving some goals (e.g complete a project in the insurance sector with minimal supervision). This way it’s easier for everyone to know how they are progressing and what they need to optimize in the future.
So, if one ticks all of the boxes, do they get a raise?
Not yet. There are some binary targets we need to achieve:
Live our Values. Even if they are the best at what they do, people must also embrace and promote the REBORRN culture and values.
Company Profitability. In order for the company to pay salaries and give out raises it must first have the ability to do so. We can give raises when we meet our profitability and growth targets. Otherwise we are risking the health of the whole company. People get updated about our Growth and Profitability targets monthly during our All Hands Meeting — Impact Edition.
🛑 A very quick stop before we continue. Does this mean that if one receives a raise, their job title changes as well?
The answer is simple. No. Somebody could get a few raises within the same role based on the goals they set with their Manager (see above). For example, someone could start at the baseline of a Consultant role and from there they start building some competencies (i.e better client management skills or getting in-depth knowledge of a sector or building their strategic thinking skills etc).
The table below provides some guidance on the expertise/experience level (from 1–5) one would need to be for a new job title (indicatively):
As you build those you come closer to making your Manager obsolete, scaling yourself and having more Impact.
🤑 Now let’s dig deeper into how much money one would receive as a raise.
Compensation should be determined by 2 major factors:
The Value one brings to the company
The Personal Market: e.g. how much money you would get for a similar position in a service provider company
We look for people that create impact and generate Value
We know that Impact and value are a bit abstract, so we measure them both directly and indirectly:
Direct (Financial Impact):
How much (on average) can we charge for an employee’s services / time?
How efficient is the employee so that they produce in less time the same amount and quality of work?
Indirect or Intangible Impact:
Is an employee’s work so amazing that we can showcase it and attract new clients?
Do they contribute in other ways in growing the company (e.g by consistently helping achieve your team OKRs)?
Do they help others grow within the company thus making us scale effectively?
Can they create things that scale (e.g a product or productized service that is reusable, an automated process, documentation, etc)?
We also aim for the Top Quartile of the “personal market” compensation.
Which means that we want to make sure that we pay at the top quartile of the market compensation that any other services company would offer for a similar role. We are not always able to match that, but we constantly try to stay true to that principle.
Ok, one last thing before you go.
At REBORRN there’s no standard salary review cycle:
It should not be expected that these discussions would happen during a formal performance management review once a year. We don’t have that. Instead, by continually monitoring growth progress and potential, people can initiate this discussion when themselves or their manager sees fit. Are they an overachiever? Maybe we need to adjust the salary twice per year. Is it going slow? It probably will take some more time to get there. Is the Market down and the company is not growing (even if they are)? We’ll need to wait until we get in better shape.
So, in order to wrap up this money talk, we know that our approach to salary review cycles is very dynamic. And, you know what? This is the beauty of it. A fast growing environment allows us to be flexible and provide our people with more potential to grow. Of course, again, many factors come into play (as mentioned above) including the fact that our people should live and breathe our values and that we should meet our profitability & growth targets in order to be able to give out raises.
P.S.: Go ahead and listen to our REWIRED: Employee Experience podcast and create an environment where your employees can thrive.