Although your primary reason for working at Luscii might not be the money, it is still nice to get a financial reward for your efforts.

Our goal at Luscii is to distribute the amount of money available for salaries in a fair and relatively objective way based on contributed value to the company. The below is applicable to all people working full-time for Luscii.

The rationale

In a lot of companies, salaries are tied to compensation through yearly performance evaluations. We believe this leads to a couple of problems:

  1. Making salaries related to performance reduces learning and open conversations about what is not going well.
  2. Performance is not tied to an individual alone, it is a function of context, opportunity, individual, colleagues.
  3. There is no reasonable/practical way we can assess and compare performance on an individual level for, for instance, developers.
  4. There is an overwhelming amount of research that shows that pay for performance is not a good way to motivate employees. It will reduce motivation if there are other (more intrinsic) motivators in place. It will only ever be a short term solution to a motivational issue. People are generally not motivated by a higher salary as long as the salary is fair.
  5. Yearly performance appraisals tied to salary are often mentioned as the most demotivating events of the year by both managers and employees.

With this in mind, more and more companies are actively moving away from the pay for performance model. We have defined a new model with the following design principles in mind:

  1. As objective as possible: We don’t want personal preference or friendship to play a role. We want everyone to be evaluated fairly and objectively.
  2. Keep it simple: We want to try to keep it simple, even though it is very complex to create fair evaluations accross the entire organization.
  3. Concrete behavior: We want to evaluate concrete behavior and not vague expectations; this way everyone can follow what is expected and where they can improve.
  4. Compensating value: We want to compensate you for the value you provide to Luscii; so when you provide more value and take more responsibility, you should be compensated more.