Evolving Pay Structures: A Study on Remuneration Strategies in Self-Managed Organiza-tions in Switzerland

Topic

'Evolving Pay Structures' investigates how self-managing companies in Switzerland implement compensation models. The study focuses on four distinct models: Adapted Traditional Pay, Factor-based Pay, Self-Set Pay, and Uniform Pay, exploring their mechanisms, challenges, and proven techniques. It not only contains a comprehensive and practical explanation of these remuneration models but also provides actionable implications for companies interested in transforming to self-managing structures and keeping pace with their pay structures.

Relevance

With the thrust towards digitalization and the desire to create innovation-centric, purpose driven workplaces, organizations increasingly adopt self-managing structures like Holacracy and Sociocracy. Understanding effective remuneration strategies that fit these frameworks therefore becomes a vital subject. This research is relevant for practitioners seeking to implement a fair, future-proof and motivating pay structure that aligns with modern organizational forms and the company's functional values, to enhance transparency, and foster employee engagement and satisfaction.

Results

The study found that traditional pay models can be adapted for self-managing organizations and with that facilitate the transition process. Factor-based Pay models offer scalability and fairness, implementing many principles of New Pay. Self-Set Pay, where employees determine their salary on their own, enhances autonomy and fosters engagement but presents challenges in fairness and scalability. Uniform Pay, driven by the organizational values of equality and solidarity, simplifies compensation, which can be beneficial for start-ups and ensures that unfair pay is no longer a topic of concern during coffee breaks.

Implications for Practitioners

• Organizations transforming into self-managing structures (e.g., introducing Holacracy) can adapt their existing pay systems incrementally during the transition by introducing dedicated roles and implementing mechanisms such as peer feedback.
• Factor-based models provide a sound solution for growing companies needing scalable and fair remuneration systems. Continuous development based on employee feedback ensures that the system fits the company's values and culture.
• Companies seeking a solution that fosters employee engagement and responsibility may consider Self-Set Pay. A refined peer feedback process allows for fair compensation.
• Uniform Pay is the go-to solution to simplify compensation, especially recommended for start-ups focusing on core topics or value-driven organizations that prioritize equality as their foundation.

Methods

The study followed a qualitative approach, gathering data from 10 self-organized Swiss firms by conducting interviews with professionals. Additional data was collected from company documents, blog posts, and news articles. The data were then analyzed in a structured manner using the grounded theory method by Gioia et al. (2012). This methodology offered a deep understanding of the topic of remuneration models and exploring both challenges faces by firms as well as proven techniques, in order to provide actionable implications.