Two weeks ago I dropped what has since become my most read newsletter ever, and it's easy to see why.
In it, I covered a discussion I had with Rowan Savage, former CTO at Runn (now COO at Scannable).
In it, he explained how their comp structure was built in such a way that comp cycles (the one's that typically take 6 weeks just preparing for, let alone running), took five minutes.
You read that right — Five. Minutes.
The more Rowan spoke, the more things just clicked into place. Their comp structure was simple:
They paid one rate that differed by level, not by role (so a marketer and an engineer at the same seniority would be paid the same).
They put their salaries on their website and at the top of all job ads.
Someone's pay would change for two reasons:
Market adjustment. They increased base salaries based on market conditions to make sure they were always in roughly the top 15% of employers. This applied to everyone.
Tenure-based increase. They gave an automatic pay rise based on how long someone had been with the company. His reasoning was that the longer you've been there, the more valuable you are to retain, so pay should reflect that.
This pay design had incredible outcomes for them:
Role based gender pay gaps were eliminated. Just because you chose a career didn't mean you were paid less (or differently) than someone performing at a similar level elsewhere in the business.
They were able to lure talent from the likes of Atlassian, Canva and other tech giants. Because they showed they paid competitively on their job ad (and site) no one opted out assuming Runn couldn't afford them. They removed it from being an objection.
Because their increases were systematic, people knew what they would get year on year. This mean competitors trying to approach their people had to explain what their pay trajectory over time would be, not just the offer salary. This became a barrier most companies couldn't address, preventing reducing turnover.
Most of all - they saved hours of time across the business normally spent on the merit and calibration process. Instead of asking people to prove who high performers were, they set expectations and assumed that if people were there, it was because they were a high performer.
This was one of the most novel pay designs I'd come across, but it was clear that it worked for this company.
The full read (and interview) is here if you're keen to check it out. Rowan covers this and much more in the people practices he built and ran, that led to an eNPS of +100 and zero turnover in the six years he was there (stats most of us can only dream of!).