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Agile Compensation
Agile Breakfast Luzern
David Baer@davidbaer
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Plutschow Ziroli, MSc ETH in Computer
Raffa Luca, in Ausbildung
Ravani Leonardo, in Ausbildung
Rechsteiner Martin, Dipl. Informatiking. ETH
Reichert Raimond, Dr. sc. techn. ETH
Roth Christian, HauswartRothenberger Frederik, in AusbildungSamuelsson Ted, MSc Univ. in Software Engineering Sauter Alois, Verkaufsleiter Schaffhauser Michelle, MSc ETH in Computer Science
Schaller Cédric, MSc ETH in Computer Science
Schaub Martin, MSc ETH in Computer Science
Scheidemann Kathrin, Dr. rer. nat.
Schlachter Simon, MSc ETH in Computer Science
Schmid Raphael, MSc ETH in Computer Science
Schneider Adrian, Dr. sc. ETH
Schneider Hans-Jürg, Dipl. Informatiking. ETH
Schnider Guido, Dipl. Informatiker Univ.
Schoch Philippe, Dipl. In
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Schuler Christoph, Dr. sc. ETH
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Goals
Learning Objectives:
– Show how important salaries are to culture and how it shapes the culture of a company.
– Prove to the audience (by example) that different compensation models are possible.
– There is no easy way to implement this in another context. Therefore I want to help by giving other examples and embedding the topic with relevant literature to give the attendees the capability to come up with their own unique solution for a more agile compensation scheme.
Overview
– What is Agile Compensation?
– A few words on Ergon
– Products
– Culture
– Compensation @ Ergon
– Beyond Ergon
David Baer
@davidbaer
What is #AgileCompensation?
Problems in Compensation
– Bonuses
– Individual Goals, MBOs
– Individual Performance
– Negotiations
– Interview
– Yearly
– Discrimination
Agile Compensation
– Fair
– Transparent
– Participatory
– Profit Sharing
– Self-organized
– Sustainable
– Enduring
– Team Spirit, Company Goals
– Motivating (or at least: not demotivating)
– Attractive
– Culture (fits Company’s Culture)
The Ergon Compensation Model
Who is Ergon?
The company leads the field when it comes to developing custom applications, and it is an established manufacturer of software products
– 250 employees, 9 apprentices – 86% with university degree– 43.8 Mio CHF turnover (2015)
Facts & Figures Ergon Informatik AG
38 %29 %
7 %
27 %
Prix Egalité
2011ICT Education &
Traininig Award
Breakdown of turnover by sector
Core Principles aka. Culture
Core Principles
Our employees’ enjoyment of their work and their determination to succeed are key factors in the success of Ergon.
The culture is based on the principles of grassroots democracy:
– Equality – Transparency – Participation – Profit Sharing
Most of our employees are IT graduates, and all employees have equal status – flat organisational structure – short lines of communication – non-discrimination in all matters
Equality
All company figures and data are transparent and accessible to all employees – This includes all payments to employees (salary &
bonus)
Transparency is a precondition for being proactive and entrepreneurial, acting self-organized without orders from a manager
Transparency
Participation
Full participation and democracy is the core principle. Employees are encouraged to contribute their own ideas proactively.
Every decision of a team leader can be delegated by a majority of the team members to the next level. This includes the executive management.
Employees share in the company’s success and risk – 20% of our salaries are variable. The variable part is paid at the end of the
year, when this can be done without a loss. – A large part of our profit is payed as an additional bonus to our employees.– The performance-related pay is based on the results of the whole company,
not on individual targets.
Profit Sharing
#AgileCompensation @ Ergon
Image: http://www.foodaktuell.ch/editorial.php?id=1312
Salaries Overview
– Transparent
– Calculated
– Bonuses distributed in Teams
– Profit Sharing
– Democratic
Transparent
Percentage FTE
Yearly Salary
Various Bonuses
Total
Transparent
Calculated
Years Experience
0 3 6 9 12 15 18 21 24 27 30
Head
Base Salary = 80% of Target Salary
Target Bonus
Function Bonus Management
Tea
m
Div
ide
nd
Dividend
ca 20% of Target Salary
10
% o
f Ta
rget
Bo
nu
s
10
% o
f Ta
rget
Bo
nu
s
Senior. Salary
Function Supplement (10% of Target Bonus)
max 25% Bonus
Profit Sharing
Democratic
We voted on Parental Leave, Pension Funds
Why does it work?
– Grown
– Culture
– Contract
– Success of company, no individual or team rewarded
Other Examples, Literature
Employees are «really» important to us, that‘s why we are different
Prix Egalité
2011ICT Education &
Traininig Award
Illustrations: www.guedel.biz
David Baer [email protected], @davidbaerwww.ergon.ch, @ErgonAG © Copyright 2016, Ergon Informatik AG, Zürich