Liip’s new salary system was developed specifically for self-organisation. It puts employees front and centre, whilst remaining transparent and innovative. It is straightforward, with just three criteria: expertise, impact and loyalty/age. As it uses the ‘Lohnrechner’ salary calculator for the base salary, it is based on the market.Yet, it explicitly assigns much less importance to qualifications and traditional careers than what expertise and knowledge employees have to offer and how they use them within the company. It is innovative, designed for agile organisations, and practical for employees and the company. The Liip Deal represents digital human progress.
A salary system that puts employees front and centre
The Liip Deal – a salary system about more than just money. Employees’ impact and expertise are the focus. It's a transparent, non-negotiable salary system based on personal and peer evaluations. It’s tailored to agile, purpose and impact oriented organisations with a high level of self-responsibility. All employees, including the former management, are part of the same system. All roles are paid the same base salary, gaps can be filled, and higher salary bands achieved. Employees are remunerated not just with their monthly salary, but with an entire package:
The Liip Deal
The Liip Deal explained
An equal salary system that does not differentiate between career areas and has no significant salary differences has been in place at Liip ever since it was founded. To make sure we keep it that way, we are continuously developing the system. True to the motto: digital human progress.
Our salary system was developed in 2016 and is based on the concept of peer evaluation. The system has been fully transparent since 2018: all Liipers know who earns what and how their salary is calculated.
The next stage of development was kick-started in 2020. We continually further develop our internal processes, including our salary system. We adapt the familiar tools and methods used in agile software development to internal developments so we can test new features in the most efficient way possible.
The new salary system is based on six levels, each personally (self-) and peer evaluated. This means that all Liipers can build on their base salary and create their own individual salary from their expertise, the impact they have, their age and their loyalty. The system and salaries will remain transparent.
What it looks like – The big changes
Liipers evaluate themselves based on the new criteria. This self-evaluation is then checked by three peer reviewers and confirmed at the salary conference.
Fewer criteria, no points system, no formulas
Expertise and impact (split into six levels and evaluated in CHF) instead of points for education, expertise, work experience, and personal skills.
Opening up the salary range
A system that offers prospects for growth and new hires. A maximum range of 3.
One system for all
The company founders and partners are now also incorporated into the salary system.
No more annual evaluations, just as and when required
Salary evaluations only happen when adjustments are required or desired.
Why this particular method?
The employer’s market is becoming an employee’s market. In IT, we are used to skills shortages. Ever since Liip was founded, we have tried to do our part to ensure a sustainable society. Self-organisation also means self-leadership and taking responsibility for key decisions in the company. So why not apply this to salaries as well? Under the new system, the responsibility lies completely with employees: they complete a self-evaluation using a set of criteria and examples, which their colleagues then review.
One specific role (the Salary Determiner) is responsible for equal pay and ensures that salaries are fair across different roles and locations. The salary system is fully transparent, and salaries cannot be negotiated at any time. It is not dependent on roles when it comes to grading or evaluation, meaning that no role has more value than another. This is an innovative way of actively incorporating employees’ impact and expertise. The ‘Lohnrechner’ salary calculator is used for the base salary. So the system is based on the market, but it explicitly assigns much less importance to qualifications and traditional careers than it does to what expertise and knowledge employees have to offer and how they use them in their role.
Open over closed – why are we making it public?
Usually, a company's salary system is not public; employee remuneration is too significant and generally too opaque. We deliberately share our experience with agile organisations and other interested companies, as we predominantly deal with similar issues. This means that we are actively making a difference for other companies and for society as a whole, ensuring self-determination, equality and fairness in compensation.
Digital human progress also means moving with the times and living transparency and agility. We use a user-centric approach not only in software development but also for our salary system.
Introducing and developing the system
Liip works using Holacracy as an organisational model. The salary system and wage determinations were developed and implemented in a circle with the associated roles.
This circle is called ‘Compensation’ and was created to apply and maintain a sustainable and fair compensation system and process.
One specific role worked on developing the new system, whilst everything in the legacy system continued as before. And now it is time for implementation.
The new system will be implemented in well-supported stages in 2022.
Following grading by the Salary Determiner role (specifying criteria and examples, rough cost calculation), all current employees will be added to the system via a self-evaluation process that has been tested by beta testers and peers and reviewed by the salary conference. After a successful probation period, new employees will gradually be transferred to the new system using the same process. We have planned in a suitable amount of training and support for Liipers to ensure that this all goes smoothly.