Dive Brief:
- In 2013, Zappos began transitioning to "Holacracy," an alternative management system that replaces a pyramidal hierarchy with a network of circles dedicated to specific functions like marketing or HR, and ditches traditional management.
- Job titles are replaced with "roles" that employees can accumulate.
- One of the key challenges the company faces during this time of transformation is figuring out how to pay workers who don't have traditional job titles. It's now experimenting with a "badge-based compensation" system developed by Holacracy founder Brian Robertson, according to an article at Business Insider.
Dive Insight:
Employees receive various badges that represent roles and skills they have. Currently the badges don't represent pay, but they may in the near future.
"At this time, compensation is tied to roles, and the badges encompass the work or skills being done in those roles," Lisa Jewett told Business Insider. She is the "@Badge_Librarian" and leads how compensation works in the Zappos Holacracy. "However, we are currently in the process of building a more robust badging system that will allow people to build their salary based on the avenues they would like to pursue."
Zappos will continue to see how role-based compensation and eventually a full-fledged badge-based compensation system will work, and is also considering options it has yet to reveal.
"It's been moving really fast and people are excited, but until we flush out all the bugs we will be in a testing phase," Jewett explains. "We are also looking at other ways as well to enhance the compensation conversation."
