SumAll: Salary Transparency (case-study)

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Gone is any office gossip about who makes how much. SumAll, a Manhattan-based tech start-up that provides data and analytics for small businesses, gives every employee access to company-wide salary information and publicizes the entire capital structure of the company. Their unique emphasis on transparency is in the interest of avoiding certain abuses that often occur under typical corporate structures.

Why

CEO Dane Atkinson implemented these cultural changes in order to be “the counterpoint to the corporate culture that’s out there.  We want people to understand that…you don’t have to fight over information and be overly protective.  If you are open and you do take this route, it can work and it’s been working very well for us.”

How it works

New employees are assigned a peer group which knows their compensation and can vote on it.  All of this employee information is saved to a public company drive so that each employee has the option of checking the information.  Atkinson states that while just a few people actually look at this data, simply knowing that the information is available to them fosters a deeper trust in the community.

Atkinson admits, however, that this transparency requires extra work, to explain salary and equity differences and explain why decisions are being made and how they benefit the whole rather than a specific few employees.  In addition, 10 percent of each employee’s ownership is put aside for a non-profit dedicated to social outreach.

Results

Atkinson remarks that this has led to an increased level of trust and support in their workplace environment.  There is less political strain among employees, and collaboration comes easier.

Job candidates learn up front that they have to give 10 percent of their ownership of the company back to the nonprofit and that everyone will know what they make.  This narrows the pool, allowing the company to essentially self-select to their own DNA, as the job attracts a certain personality—one that is based more on meritocracy than grounded in negotiation.  As such, the company has gotten amazing individuals at extreme competing odds.  “Most of our team has refused offers from Google and Facebook and whatnot in the last few months. They are unshakable because once they get that sense of being part of a family and that openness in a company, it’s really hard to go away from it.”

HOW analysis:

The Freedom Report is a recent study which sets out to measure the “return on freedom” in companies. One of the key criteria of “freedom” in the report is the fostering of an office culture based on shared values and decision-making, evidenced by SumAll’s ability to hire and retain employees who share these values at extreme competitive odds.  Additionally, transparency is a key quality of freedom, namely, “freedom from” information hoarding and opacity. A key finding of the report is that companies with these types of high level freedom outperform other companies in their industry, which helps explain why SumAll now tracks over $4 billion in sales activity for over 100,000 businesses.

For more information about transparency and freedom in the workplace, see this post on extra-transparent companies.

Categories: HOW: Workplace Cultures

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