An Open Salary Formula to become a transparent company

- Practices & Exercises

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by Pedro Angel Serrano

In today’s world, transparency is one of the most important values a company needs to display to be considered as a model of excellence from a cultural point of view.

At Keepler we truly believe that transparency must guide our actions, to create a company culture that we are proud of and that attracts the right talent. We have launched a scheme designed to enhance transparency amongst our colleagues: Open Salary Formula. This tool allows colleagues to understand their full earning potential, what do they need to do to achieve it and empowers them to define their own professional development path.

How does open salary work?

Our Open Salary Formula consists of a set of variables which are aligned with Keepler’s strategy and values. These variables are role, experience in the role and particular skills.

Salary = Role * Experience + Skills

Role is the main function played by any employee at Keepler. Currently, we have three roles: cloud practitioner (cloud infrastructure specialists); data practitioner (data science specialists); and agile practitioner (agile methodology specialists with the mission of developing cultural transformation both within the company and with clients). These roles are totally aligned with Keepler’s mission, which is to develop data products using cloud infrastructure through agile methodologies.

Once a colleague has been assigned to a role they are then allocated a category level (depending on the role there can be three or four levels) based on their depth of knowledge and expertise. This level will determine where does the colleague sit between the minimum and maximum salary range for that specific role.

Want to know more about what Salary Formula means in a Management 3.0 environment? Click here.

Finally, the colleague can add complementary salary items according to the skills she has or learns that directly support the company mission. Skills are previously defined in alignment with the company’s overall strategy. For example, at Keepler, we champion public cloud as a business solution, so the skills that we consider more valuable are those tied to public cloud providers which have an added value for the candidate or employee. E.g: currently there are three skills for the cloud: Amazon Web Services, Google Cloud and Microsoft Azzure. Skills are structured in three levels, with a maximum additional salary of 10k euros.

By doing so, an employee who, for example, has level 1 of whatever skill will add 3.3k euros to his or her salary, while a person with level 1 of one skill and level 2 of another skill can add as much as 10k euros.

Our Open Salary Formula can be tested using this online calculator.

Skills expiration date to inspire continuous learning

One of the most important considerations of skills is their expiration date: the life-cycle of a skill is limited to two years. After that time, skills are reviewed and may change due to strategic change or strategic value (the value of the skill is less relevant now for the company strategy). That means an employee’s salary could be reduced. This is something colleagues are aware of.

The company’s strategy is openly shared with employees, so all colleagues have the opportunity to renew skills, to acquire deeper knowledge enough to reach a higher level, or to acquire new skills. As long colleagues remain alert and engaged, they demonstrate continuous learning and improvement – a key value at Keepler- they will keep their salary complements.

The process of skills acquisition is also connected to our knowledge sharing philosophy.

  • as a first step, the employee must obtain an official certification and/or internal validation of a specific skill level
  • secondly, the employee must prove that they have put that knowledge into practice by applying it to a project. This internal validation is performed by other role-mates who already have that skill. Based on the advice process used by Teal organizations, three role-mates are required to demonstrate that the employee’s knowledge and experience meet the organization’s standards. This avoids obtaining the skill simply by passing a test and helps to homogenize the criteria for technical excellence.

Our first impressions

After a few months working with the salary formula and the salary calculator published on our website, our interview candidates feedback is very positive as they feel they have clear expectations about their potential salary.

In addition to the curiosity aroused during the first few days, some companies have contacted us asking for information and advice around our salary calculator. It is very encouraging to think that they might be questioning their current salary model and thinking about the possibility of starting up a project like ours.

Internally, it helps us to let colleagues know what to expect from their career at Keepler, from day one, and what to do to increase their salary, almost exclusively depending on them and their interest in knowledge and improvement.

We would love to think that we have contributed to a change in salary models with our initiative and that this is just the beginning so that in a few years’ time this will not be the exception, but the rule.

Photo: Pexels

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