Self-setting salaries

by Evgeny Shadchnev

24 October 2015

Yesterday I told Makers Academy team to set their own salaries. The crazy thing about this is that nobody really reacted to it. There was no discussion, no questions, no raised eyebrows. Someone thanked me for actually saying it.

Nobody was surprised because I simply stated the obvious, “signing” into force something that’s been discussed for months. At Makers Academy we’ve been moving towards self-management since early 2015. Self-set salaries are part of self-management, so it happened.

In reality it’s slightly more complex that just setting your salary. You’re supposed to follow the advice process: announcing your intentions, your reasons, actively seeking feedback from everyone affected and the experts in the domain, and then making up your mind. It’s ok to disagree with the others but you must consult them. So, technically you can raise your salary against the advice of your colleagues.

The counterbalance here is the fact that in a self-managing team anyone can make any decision (subject to the advice process), including letting you go if you become a liability to the team. So quadrupling your salary against the advice of the entire team may not be the smartest thing.

In the 10 months that we’ve been transitioning to self-management there wasn’t a single case of abuse. Sure, we made mistakes — and lots of them — in the process, but I can’t recall a single occasion someone at Makers Academy took advantage of their unusual power.

Maybe it’s because of the people. A self-managed team runs on very deep trust and we’ve been hiring carefully. At the same time, in my experience people are by and large trustworthy. Trust is important, and is built slowly over time, but we aren’t specifically looking for people with exceptional levels of integrity. I’m not sure it exists: we, human beings, tend to be fallible.

A Makers Academy student asked me what’s the hardest challenge with self-management. I said, fear. What if it doesn’t work out? What if someone abuses the system? What if the opposite happens and people will rather quit over a low salary than to raise it themselves? These questions are coming from a place of fear.

I’m asking a different question. What if it works?

Originally published at blog.makersacademy.com on October 24, 2015.