Is it possible for employees to determine their own pay rate? This article explores the idea of self-set salaries and how to introduce them to your team using an example from the author's personal experience. Also learn about how empowering your people to set their own schedules and team budgets helps build a culture of trust and support that results in better service and increased revenue.
Wade Okinaka·February 23, 2023·5 min read
Is it possible to have employees in a company determine their own pay rate?
Like in most companies, the last company I worked for stressed to employees that no one was allowed to discuss their pay. Employees were disciplined and sometimes terminated for sharing this information.
Despite this mandate, I believed in transparency with open communication, especially when trying to build a culture of trust with my team. For this reason, I sought to be as upfront as possible regarding wages.
Since most of the starting pay was minimum, this topic was easy enough to communicate to all new employees.
With my lead team, I went over what the market rates/average rates were in the fitness industry for their different positions, what our payroll budget was, and how employee wages were calculated.
The concept of self-set salaries has always intrigued me, and I wanted to see how I could apply this with my team.
Payroll budgets were mainly set based on location traffic and revenue.
Most operations teams consisted of one assistant operations manager and the rest were front desk, facilities/janitorial. The location had the amenities, there were also kids’ club and juice bar employees.
Because I believed that a team that felt supported would be happier, more confident, and in turn complete their responsibilities with better energy and efficiency, I created a ‘lead team’ which consisted of two assistants and eight more leads.
The intent was to provide my operations team with someone they felt comfortable and confident going to with questions at all hours of the day, so these leads were spread out and covered even the overnight hours.
This also meant that from a customer service perspective, there was always a ‘manager’ on duty if they needed any additional help that the front-line team was not able to assist completely with.
The big question became my payroll.
With that many leads, their hourly rate was slightly higher than most of the operations team. I created a scheduling template, a simple spreadsheet where I could enter each individual’s hourly rates and individual hours. It would then automatically calculate an estimated total hours and total pay for the week and month.
Since I was not able to put everyone on a set salary, and hourly rates were for the most part controlled by the company, I had to get creative in adapting the self-set salary concept.
Most of the operations team were at minimum wage, which was normal in the fitness industry.
I communicated to my lead team what the hourly range was in our industry, and let them know that most other teams normally did not have the number of leads that we did. I took time to go over our payroll budget and how hours and pay were calculated and applied.
With all this information I then met with them asking how much they felt like they needed to, and we calculated how many hours they would need to work each week to get to that amount. Plugging in all the lead hours and pay, I then was able to determine how many other hours we had to spread out amongst the rest of the team. In this way everyone in the team was involved in scheduling and budgeting - this allowed them to get a better understanding of the business.
My lead hours had some flex time built in, and I let them know that whatever their responsibilities were, they just had to complete them as needed, the time that it took them was not important so they were free to adjust their start and end times as they wanted, the only stipulation was that they could not go over the total hours that we agreed upon and budgeted.
I also ran an experiment where I had the team ‘make their own schedule’.
Basically, how it worked was, I had shift blocks in all departments for each day of the week, and I allowed team members to sign up for each week for whichever shifts they wanted to and were able to work.
Each block allowed for multiple sign-ups and then I would take the sign-up sheet and convert it into a schedule for the next week.
Some of the positives of this experiment were:
- I no longer monitored request offs or vacation days, if people could not or did not want to work, they just did not sign up for any shifts;
- I no longer monitored availabilities or changes, again if employees could not work, they just did not sign up for those shifts;
- Social/Culture insights, I learned more about my team members and how they adapted to new ideas. Interestingly enough, the younger employees seemed to adapt better than the veterans.
Unfortunately, instead of sticking to this idea, I gave in after a few months to the majority who preferred we go back to the ‘old’ way of doing schedules.
I think eventually I would have liked to have gotten to a point where I did not even have to do schedules anymore and the team members themselves would just communicate and work out the hours and days themselves.
However, I still feel like it these two experiments were successful, and probably the biggest takeaway I had was how my team ended up working with each other to ensure that everyone got hours as needed.
I had people giving up shifts or a few hours here and there to try to help others if they needed more hours. This helped build a stronger team culture and reinforced our philosophy of ‘how can I help?’.
With this awareness, we rarely went over the estimated payroll while consistently providing some of the best service and highest operations revenue in the company.