Brave New Work

by Aaron Dignan

  Set a time frame for deeper feedback that makes sense in your context. I recommend 120 days.

  On that interval, using software (e.g. Slackbot or Google Forms) or a team willing to facilitate, reach out to each member of your team, and ask them if they’d like feedback. If they say no, let it go. They’ll get another chance in a few months.

  If they say yes, ask them whether they’d like to use standard questions (start/stop/continue or similar) or write their own.

  Ask participants which three to five colleagues they’d like to receive feedback from. If you’re using software to automate this process, you may even be able to recommend the people they communicate with most frequently.

  Send the questions to their suggested colleagues with a time limit for contribution. Make this a ritual that is prioritized and celebrated in the culture.

  Compile and share the responses with each participant. Let them choose who to share it with, including their manager (if they have one).

  Invite participants to convene their respondents for an in-person sensemaking session led by them. The question on the table is “Based on the feedback you received, what questions do you have for your colleagues?” This is chance to zero in on things that they want to work on and make real breakthroughs and commitments.

  Finally, don’t let this feedback rhythm become an excuse to avoid real-time conversations and retrospectives. The end of every interaction, sprint, and project is an opportunity for feedback. Teams at The Ready try to take a moment for feedback after any key event. Leaving a new business meeting, I might ask a colleague, “What did you notice? What happened? What surprised you? And what feedback do you have for me?”

  Communities of Practice. If engineers don’t sit with engineers . . . if senior marketers don’t manage junior marketers . . . how will they learn their craft? This is common question that surfaces when we move away from functional silos to functional integration. The answer is pretty obvious: members who share a common practice or interest should get together regularly with the express purpose of sharing and learning from one another. If our structure is optimized for value creation, then we don’t want UX designers spending every waking moment together, but we don’t want them to be strangers either. Encourage the organic formation and stewardship of communities of practice or interest. Spotify, for example, calls groups dedicated to a specific discipline, such as software testing, chapters; groups that share a common interest, such as sustainability, guilds. Each one meets on its own rhythm and format, and each one is facilitated by one or more members who have expertise in that area and/or feel called to community. Moving in this direction is as easy as sending a calendar invite:

  Sustainability Meetup / THURS @ 4pm / Come if you want to chart a path for how we can go carbon neutral in the next 90 days!

  UX Community of Practice / WEDS @ 9am / Anyone with a role or interest in UX come and share questions, learnings, and advice!

  Mastery in Change

  A certain level of maturity and competence is required to participate effectively in an Evolutionary Organization. Members who lack self-awareness or self-confidence may struggle with self-management. If you’re not able to be vulnerable, radical candor can be too threatening. It’s a shock to the system even for those of us who think we’ve mastered our egos. If you’re not clear on your own talents and purpose, self-direction can seem overwhelming. Everyone’s always told me what to do, and now I have to decide? That’s why it’s important to view OS change as a continuous unfolding. One practice leads to another, and we build mastery through repetition. Start where you are, not where you want to be.

  Questions on Mastery

  The following questions can be applied to the organization as a whole or the teams within it. Use them to provoke a conversation about what is present and what is possible.

  What is our approach to learning and development?

  How do we define and assess competence?

  How does competence influence the roles we inhabit?

  What knowledge and skills are required to pursue our purpose?

  How do we give and receive feedback?

  How do we spread competence and mastery within our membership?

  How does competence shape or influence our career paths?

  What is expected of members in terms of learning and personal growth?

  What does it mean to be People Positive about mastery? Recognize that developing personal and professional mastery is a basic human need. If you can create an environment where people grow quickly, you’ll never lack for stunning colleagues. People are the architects of their own growth. Let them solicit and guide their own feedback and progression.

  What does it mean to be Complexity Conscious about mastery? Accept that competence is complex and contextual. Don’t try to reduce talents and skills to a matrix. Remember that reverence for expertise can lead to arrested development or missed opportunities. Learning agility is a far better bet. A great learner can figure it out on the fly. The world’s best hammer can only hit nails.

  COMPENSATION

  How we pay and provide; the wages, salaries, bonuses, commissions, benefits, perquisites, profits, and equity exchanged for participation in the organization.

  Everyone needs to eat. Perhaps that’s why the word “salary,” from the Latin salarium, is so similar to salarius, the Latin word for salt. Work is the means by which we meet our basic needs: food, water, and shelter. The modern concept of compensation goes well beyond our basic needs, though. It has evolved from simple wages into a diverse collection of financial and nonfinancial instruments intended to attract, retain, and even motivate a wildly diverse workforce. Despite decades of evidence to the contrary, organizations still treat compensation as a motivator. Want to make someone happy? Pay them more. Want them to work harder and hit their targets? Dangle a carrot in front of them.

  A well-positioned full-time employee in corporate America is likely to have a base salary that is paid to them once or twice a month, a benefits package that includes health insurance and a 401(k) retirement savings plan, paid sick days, paid time off, and a performance bonus. An in-demand employee at one of the top firms in the world is likely to add to that list a combination of stock options, extended parental leave, child care, transportation, free meals and snacks, expense-paid holidays, corporate retreats, professional development, conferences, sabbaticals, meditation rooms, on-site exercise, unlimited time off, the option to work remotely, free technology and supplies, corporate housing, and of course the office ping-pong table. In the war for talent, the modern workplace looks more and more like an all-expense-paid trip to Club Bureaucracy.

  Lacking purpose and meaning in their work, many professionals view their career as nothing more than a series of stepping-stones from one job title and pay package to another. But this frenzy on the part of both employers and employees betrays a misunderstanding about the connection between compensation and outcomes such as satisfaction, happiness, and loyalty. Several studies have attempted to examine the link between greater pay, incentive pay, and corporate profitability, along with other measures of performance. What they found amounts to no or an even slightly negative correlation between pay and results.

  Management guru W. Edwards Deming had it right when he said, “Pay is not a motivator.” But then what is it? In 1959 psychologist Frederick Herzberg proposed an answer to that very question in what would come to be known as his two-factor theory. In trying to understand the factors that lead to job satisfaction, he discovered that the opposite of satisfaction was not dissatisfaction. Rather, satisfaction and dissatisfaction appeared to be driven by two completely different sets of variables. Motivators included job characteristics such as recognition for achievement, meaningful and interesting work, involvement in decision making, and advancement or p
ersonal growth. Addressing these factors increased satisfaction by improving the nature of the work itself. Hygiene factors, on the other hand, included company policies, job status and security, supervisory practices, and—you guessed it—salary and benefits. Addressing these factors reduced dissatisfaction by improving the job environment. What does this mean for the world of compensation? It means that increasing salaries that are too low can reduce job dissatisfaction, but increasing salaries that are already generous won’t increase job satisfaction in any meaningful or lasting way.

  It won’t make us any happier either. According to a study published in the Proceedings of the National Academy of Sciences, household income above $75,000 a year doesn’t make us measurably happier. Below that level, increases or decreases in income were correlated with happiness. Daniel Kahneman, one of the pioneers in the science of cognitive biases, was one of the authors of the study. In an interview with the New York Times, he commented, “It’s not so much that money buys you happiness but that lack of money buys you misery.” Sound familiar? Herzberg was right. This is not to say that every job should have a maximum salary of $75,000. Supply and demand still play a part in shaping the market for any given role. But it should give us pause as employers attempting to pay our way to performance and satisfaction, and as employees weighing the merits of different offers and career paths. As Jack Antonoff of Bleachers urges in his 2017 anthem of the same name, “Don’t Take the Money.” Compensation is hygiene. Don’t mistake it for higher purpose.

  Thought Starters

  Parity Problems. It’s been a half a century since the Equal Pay Act, but women still face a sizable wage gap, earning somewhere between 78 and 80 cents for every dollar a man earns. Many minorities face similar gaps, which are in some cases actually increasing. These pay gaps are a complex phenomenon, driven in part by discrimination and bias but also by broader educational and sociological patterns. A new study on the gender pay gap in Denmark, one of the world’s most egalitarian societies, reveals that women working full time are still paid 15–20 percent less than men. Surprising, until you realize that pay gap is largely a penalty for childbearing. Women experience a sharp decline of up to 30 percent in their earnings after the birth of their first child. This is less about different pay for the same work than about choosing different work altogether, seeking greater flexibility and/or reduced hours to accommodate a different set of demands on their time and energy. While their earnings continue to grow at a pace similar to men’s, women never fully recover from this dip. This phenomenon also manifests in what is now a well-publicized leadership gap. Women make up 44 percent of the overall S&P 500 labor force, but only 25 percent of executive and senior-level positions and 6 percent of CEOs. Any organization seeking to provide equal pay or equal opportunity today is facing a challenge more to do with privilege than with pay scale.

  Formulaic Pay. One response to bias and favoritism is formulaic pay, an approach that organizations such as Buffer and Stack Overflow have publicly adopted. By visiting their websites and entering a few variables such as the role you’re considering, your level of experience, and your location, you can calculate the salary you’d earn if you worked there. By design this is a take-it-or-leave-it offer. Once you’ve gone through their recruiting process and your variables are firmly in place, there’s no room for negotiation. You’ll be paid the same as everyone else at your level. This is how the formulaic approach reduces bias; historically marginalized people negotiate less aggressively than their white male counterparts. This can be challenging for candidates used to pushing for more, but it’s a philosophical commitment that doesn’t work with exceptions. Another offshoot of the formulaic approach is contribution-based pay. In this model, peers rank or evaluate one another’s contribution (or ability to contribute). The resulting distribution of people is mapped algorithmically or by committee to a set of salary bands or levels. Whether this results in fairness or a popularity contest depends on the maturity of those involved—but then again it can be hard to parse the difference. Both these approaches run the risk of oversimplifying an inherently complex topic. How do we know seven salary bands is the right number? And is it possible to balance quality of life by calibrating salaries to cities? These and other questions taunt us.

  Market Pay. In the spirit of self-regulating systems, many organizations base their compensation on the market. Approaches vary, but essentially this means using the industry average salary or wage for a particular role as the baseline for your own compensation decisions. Netflix famously takes this approach to the next level by paying top of market for the person in question. This is an individualized approach also known as “paying the person.” It uses three questions to determine the top-of-market value for a member of their team: (1) What could this person get elsewhere? (2) What would we pay for their replacement? (3) What would we pay to keep this person, if they had a bigger offer elsewhere? The goal is to consistently keep each employee at the top of their own market value. Sometimes that means large or frequent raises. Sometimes that means reduced pay. Unlike a typical market-based model, Netflix is actually skeptical of using titles or roles to determine the market, as “all people with the title ‘Director of Engineering’ are not equally effective.” Paying top of market is great, but in many cases it’s still dependent on a manager interpreting someone’s value from their singular perspective. Unconscious bias and favoritism are bound to creep in.

  Self-set Pay. If formulaic pay is too reductive and market-based pay is too preferential, what’s left? Letting employees set their own salaries. This radical notion captured the imagination of a handful of early adopters that have been doing this for decades. At Morning Star, the tomato-processing company I mentioned earlier, you’ll remember that employees take part in an annual ritual where they write their own job descriptions and set their own pay. Using internal and external compensation data, the firm’s financials, and their role mix, they craft a recommendation for their salary or wage for the year ahead. Next an elected compensation committee made up of their colleagues reviews these proposals and provides feedback in the form of advice. Some employees are advised to soften their ask—perhaps their track record doesn’t support such a big raise, or the market is softening and the firm needs to be careful with expenses. Others are encouraged to reach higher; they may have undervalued their contribution. The advice is just that—guidance that employees can heed or not. Most do. And a conflict-resolution process does exist for any extreme outliers, but this is rarely needed. The transparency around compensation is sufficient for most people to make sound decisions that can withstand the scrutiny of their peers. As eccentric as this sounds, it’s not that uncommon. In addition to Morning Star, organizations such as Semco, Bruggink & Van der Velden (BvdV), Incentro, Hanno, elbdudler, Premium-Cola, and AES have each allowed employees to set their own salaries without breaking the bank. But beyond that, the benefits in financial acumen, stewardship, and collective responsibility that this approach produces are unparalleled.

  Gig Economy. The platforms behind the gig economy like to talk about their movement as the savior of the American worker, empowering otherwise underemployed individuals to be their own bosses and live the entrepreneurial dream. After all, the drivers and laborers who make Uber, Lyft, Grubhub, DoorDash, Postmates, Fiverr, and TaskRabbit work can choose when and where they work with unprecedented control. Realistically, though, many of the workers in the gig economy need money. That’s why they’re side hustling. They’re underemployed or unemployed, and the minimal extra income they earn from these services—85 percent make less than $500 a month—is helping them make ends meet. That doesn’t sound like the ultimate in entrepreneurial freedom. But there’s something more troubling about the fact that one in four Americans is now participating in the gig economy. By turning work into a series of app-mediated transactions, we’re actually narrowing the scope of their participation to something closer to the opposite of entrepreneurialism. When you work at Lyft
full time, you’re (hopefully) looking for ways to grow and serve Lyft all the time. If you see something worth doing, you might just do it. But when you drive for Lyft as a gig, your relationship is read-only. You transact, but you do not serve the bigger picture. Why would you? And that’s the problem. If we move toward an economy where everyone is paid “by the drink,” we run the risk of eliminating good corporate citizenship. If we thin slice the work too much, we’ll watch as “that’s not my job” becomes a mantra and a way of life. And that disconnection will rise at precisely the moment when we need all hands and minds on deck to invent the future.

  Compensation in Action

  Transparent Compensation. Considering the significance we attach to compensation, it’s somewhat surprising that the subject is taboo. At least in the Western world, we don’t talk about money—it’s actually considered distasteful. Talking openly about how much we make, either in public or within our teams, is less popular than talking about politics. Of course, this deference to polite society has real societal consequences. The main by-product of this secrecy is “information asymmetry,” which is what happens when one party in a negotiation has more information than the other. Whoever knows less is at a disadvantage. In this case, employers know a lot (such as what every single employee at your level is making), and employees know very little. This can result in a wide range of salaries for the same role, known as wage dispersion, both within firms and across industries. More than half of this dispersion can be attributed to workers not knowing the wages offered by all employers and cross-firm differences in wage policy and productivity. One easy solution to all this is to abandon the taboo around salaries and make them transparent, both within the firm and to the broader public. Buffer, in addition to sharing its salary formula, also shares the salaries and equity of everyone at the firm on its website at buffer.com/transparency. And before you remark on Buffer’s relatively small size (~120 employees), keep in mind that Whole Foods has shared salary data internally since 1986. In fact, dozens of organizations including Namasté Solar, CareerFoundry, Crowdfunder, SumAll, and the federal government practice internal transparency when it comes to pay. They report that although it can soak up some additional time and energy, the results speak for themselves: more job applicants, reduced bias and unfairness, and increased trust. Some studies have even shown that environments with transparent pay are measurably more productive. It may still feel like a radical choice, but websites such as Glassdoor and Salary.com are giving employees a platform to share anonymously right now. Glassdoor, for example, has more than 40,589 user-contributed salaries listed for Microsoft in the United States alone. The cat’s out of the bag. Transparency is coming. If you want to get ahead of it, here are a few steps to get started: