Start by letting co-workers join the application rounds as extra observants and judges.
Then slowly but surely let them chair the first round conversations, then second rounds etc. Until they are ready to do it on their own. Then let them make up their own vacancies. And let them decide the salaries. Then you’re set. Co-workers hire new co-workers.
Keytoe is a Marketing and IT company that helps other organizations grow. Internally it is one of the most experimental and extreme (in terms of self organization) organizations out there. From colleagues setting their own salaries to a self-organizing exit round that happened.