This is how we make salary decisions at Identio
This article is a follow-up to our earlier blog post, where we explained how we handle career development discussions at Identio. Salary discussions and raise decisions are a separate process for us, even though they’re timed to link up with the career development cycle. I wanted to write a completely separate post about it, so that the whole picture might feel a bit clearer to you.
In many companies, the process behind salary raise decisions could be more transparent. The criteria may be a little vague, and the outcome can feel arbitrary. That’s why salary discussions can be frustrating experiences. I won’t claim our model is perfect or that it only produces excellent outcomes, but we’ve wanted to make it as transparent as possible.
In this article, I’ll walk you through how we at Identio make salary raise decisions and what factors go into them.
The process: we review salaries twice a year
At Identio, salaries are reviewed twice a year, always at the end of the career development cycle, in spring and autumn. This isn’t a promise of a raise but a process that runs regardless of whether you ask for one or know how to negotiate well enough.
We humans are quite different from one another. For some, asking for notably large raises comes easily, while for others negotiating is awkward and stressful. Of course, in our model too a raise often starts from the employee themselves, but that’s not the only deciding factor.
Salary decisions are currently made by the company’s leadership. The criteria are transparent, and next I’ll explain all the things that influence leadership’s decision-making.
Self-assessment and reviewing feedback
Before leadership makes any decision, you assess your own performance against clear criteria. These criteria cover areas related to your work, such as technical skills, client feedback, independence, collaboration, and your own development. Every role from developer to designer, and from sales to marketing, is assessed on the same principles, but with role-specific expectations.
The most important thing in the self-assessment isn’t the number but how you justify your own assessment. What have you done? What has gone well? Where would you like support? The written assessment explains how you arrived at the number you gave. It’s also worth noting that the number doesn’t only measure your skills, but also the impact your skills have.
Before you send your self-assessment on to leadership at the end of the career development cycle, you go through it with your pod. This is an important and deliberate step, because it helps you gauge whether you share the same view as your pod members. Are you being too modest? Or perhaps a little optimistic? Your colleagues, who see your daily work up close, are often the best people to answer this and to offer valuable perspective.
At the same time as the self-assessment forms are being worked on, everyone should also, by this point at the latest, gather feedback on their own work. You can ask for feedback from clients, colleagues, and internal teams. Leadership and the People & Culture Lead have access to the feedback form responses. Feedback and self-assessment run conveniently in parallel without taking too much time and energy away from daily work. They support each other and help you get a better sense of your own skills and areas for development.
A raise is ultimately determined by the sum of many factors
Both – the feedback form and the self-assessments – are essential material in the decision-making around raises, which is why they’re part of this biannual salary review.
At the end of each career development cycle, we review every employee’s salary. The final decision on any raises is made by the leadership team. They go through your self-assessment, the feedback you’ve gathered, and other factors that may influence the decision. In the decision-making, your performance is viewed broadly: results, the way you work, and the value you bring to clients and to the team.
A good assessment in one individual area doesn’t automatically mean a raise. Instead, the basis for a raise forms when you consistently perform better than expected across several areas.
The aim is to ensure that differences are justified and didn’t arise by accident or because someone is better at negotiating than another. Raises must have objective grounds, so that unjustified pay gaps don’t emerge. The collective agreement also partly defines the minimum budget set aside for raises each half-year.
It’s important to consider every employee’s salary on each round, regardless of who has asked for a raise and who is content with their situation. This way we can ensure that all our employees’ salaries are in line with their role, responsibilities, and performance.
When the round is over, everyone receives personal feedback on their own situation. In addition, everyone is given a summary of the round, covering the number of raises made and the general reasoning behind the decisions. At this stage the decision can still be discussed, and the employee has the chance to get clarifications or ask questions about their own career development and salary.
Summary
Raises are influenced by many factors, such as the employee’s own well-justified request, the self-assessment, and feedback. In addition, leadership can consider other factors such as the feedback they’ve received, the conditions set by the collective agreement, and the equality plan.
This process, too, is never entirely ready, and we’ll continue to develop it going forward. We want the process around career development and raises to stay transparent and fair for every employee.
That matters to us now and in the future.