This is not to say that extreme transparency applied to all things is right - just that it often looks a lot more scary than it is. When you act transparently you relinquish some control, and some people hate the very idea of giving up any control.
Or is it only transparent if you're in the club?
Here's the payscale in short, then. There are 2 main roles within the company: client management and sales.
Salespeople get £20k p.a., plus a 15% commission on sales, plus a share of the bonus pool. The base salary never goes up according to the current scheme.
Client Managers get £28k p.a., plus a share of the bonus pool, but their salary goes up by £2k/quarter for the first year, £1k/quarter after that, up to £40k.
The bonus pool is calculated by taking all the turnover, halving it, then deducting overheads, commissions and base salaries. The remainder is the bonus pool, split in a number of shares.
Now to derail the discussion:
How do you reward excellence? There will surely come a time where an employee has been working considerably harder than his colleagues asks for a pay-increase. How do you envision this would go down with the other employees? Your Client-Manager salary infact seems to be based purely on duration of service, not output.
Also, your company seems very unique to only have two roles, which perhaps explains why you can reveal this information freely. Full transparency would include how much you get paid, how much the office admin gets paid, the lawyers, accountants, coders, etc.
First, it's worth noting that this is a work in progress. We have quarterly meetings where the whole company decides on what changes they want to see made to the compensation scheme, so this stuff might very well change over time.
Secondly, they are rewarded for their hard work already - but as a team, rather than individually - via the bonus scheme. Whatever's left of their 50% of revenue is in the bonus pool, so if they generate an extra £100k of revenue, that will translate into an extra £50k of bonus pool.
Are there individual incentives? Not at the moment. They may well come in in the future, of course.
> Also, your company seems very unique to only have two roles, which perhaps explains why you can reveal this information freely. Full transparency would include how much you get paid, how much the office admin gets paid, the lawyers, accountants, coders, etc.
My cofounder and I get paid the amount of wage and dividends that allows us to pay no income tax. It's pretty standard (and not all that high) in the UK. There's just one director and one office manager, so I'm hesitant to post their current salaries as that is private and specific information, at least outside the company, I think...
The only thing we don't share openly in this manner is personal health problems.
edit: of course, if this is something you feel stongly about, you should just add it to any future employment contract you sign - I imagine most employers would be pretty flexible about this sort of thing.
The European Union takes this matter pretty seriously - hence the whole do not track and cookie notification policies that you see with European websites these days. I live in Canada now, and here they have two federal privacy laws, the Privacy Act and the Personal Information Protection and Electronic Documents Act - though some provinces are deemed federally exempt because they have their own legislation that is substantially similar in nature to the federal mandates. I guess this "right" isn't accounted for in U.S. law?
> Article 8 – Right to respect for private and family life
> 1. Everyone has the right to respect for his private and family life, his home and his correspondence.
> There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
I am not a lawyer, however I think this refers to personal and family matters. How much you're being paid by your employer is not a personal matter, it's a business matter.
There are many public employees whose salaries are published openly and regularly. If this was a breach of human rights, then it is a breach that the UK government is guilty of on a regular basis.
Ref: http://conventions.coe.int/Treaty/en/Treaties/Html/005.htm
Does that include personal information about you, for example your personal medical information that is part of the treatment records of a government-administered medical insurance plan? Some countries (not many) make personal income tax filings public information. Do you live in such a country?