When you like to get more autonomy in your organization, the salary can be a subject that you can think about. But this can be hard and maybe you want to start smaller. This practice can be a good way to start smaller.
Organizations use all kinds of frameworks to figure out what the raise will be this year. Examples are the balanced scorecard or rewarding on KPI’s. When you are using these methods, you probably are using a certain percentage (of your current salary costs) that you will use to get to the amount of money to divide.
To make you step towards self-managed salaries smaller, it can be possible for the employees to decide on this percentage themselves.
For now, we will focus on deciding the raise percentage.
When you are ready to start, follow this -step :
Start with informing all the employees what you like to achieve and why. Be sure to make clear why you use a percentage.
Next share the percentages of last year and the turnover and profits when choosing the new percentage.
Now make it clear for everybody what a percentage means for each role. When seniors who already earn a lot will get 5% raise or a junior will get this 5% it means something totally different.
It will help when you can make everybody understand what will happen when a certain choice is made. For example: when you will use 10% (of the salaries) for the raise, the effect will be that the costs go up for the organization.
Because of this, the company has to make more profit next year and lose some flexibility. Is this what you want as an employee?
Give other options. Salary is only one way to reward. Think with each other about other rewards, like more budget for your learning program or more time for the employees to do some innovation together.
Now, just give all the employees the possibility to vote. What percentage do you want for the group?
Take the average of the input and tada: here is your first co-created percentage.
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