Compensation principles

The salary review process happens every six months because people continuously increase their skills and capabilities, and their compensation must follow accordingly. Compensations in Agile Lab are based on the following principles:

  • Pay top of our reference market
  • No speculation on people's cost of life ( family situation, residence region, etc.) or other factors ( gender, age, etc.)
  • Internal fairness, everyone should fit into the ladder

Reference Market

Our reference market is defined by where our customers are based because our revenues strictly depend on this factor. If we mainly work with Italian customers, our "reference market" is Italy for salaries. When we shift our customer base towards other countries, we will adjust the compensations accordingly. When possible, during the recruitment process ( typically after we made our proposal ), we collect information about the previous compensation of people we are interviewing to gain a 360 view of the market based on roles and seniority.

Top of the market

At the same time, we measure the effectiveness of our hiring proposals to understand if we are paying top of the market. If we can satisfy candidates in at least 80% of the cases with our proposals, we are on the right path. All our proposals should be compliant with ladder ranges, and as soon we detect that our offers are not compelling anymore, we are falling behind the market. In that case, the ladder and its ranges will be reviewed, and this will positively affect all the people currently employed in Agile.

Fairness

Within each ladder level, we evaluate if people's compensations are balanced and if they are a good mirror of their performances, impacts and contributions. Because new people are coming into the picture each semester, it is essential to re-evaluate the fairness across all the people with the same frequency.

How to

Once the ladder ranges have been reviewed, how to decide if a salary increase is needed or not?

Not the case

  • They are not improving
  • They are not engaged
  • They are toxic or negative
  • With a raise they would go above the upper limit of the ladder level range

should be considered, but not due

  • They are performing good, showing some improvement, but not consistent
  • Not getting a salary improvement since one year or more
  • Acquired some specific skills valuable for the company

Is needed for sure, no doubt, even if they got a raise six months ago

  • They are falling behind the ladder level they belong to
  • They are clearly outperforming another person within the same ladder level but with a higher salary
  • They demonstrated a tangible performance boost and authentic engagement since the last raise

These three blocks should be evaluated in this order.

Constraints

At the beginning of the year, we define a budget for salary raises, typically a percentage quota ( ex. 4% ) that should be managed for the whole year.

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