It’s nerve-wracking enough to ask your boss for a raise. But what if you had to take your request to coworkers instead?
When it comes to pay raises and new hires at travel insurance comparison website Squaremouth, the decision is done by a group vote.
- How Squaremouth's democratic raise process works:
- Workers make their pitch to their colleagues on why they deserve a raise
- Every employee gets one vote, all weighted equally
- No anonymous votes, must provide feedback on decision
The company, which has been doing peer-reviewed raises and hiring from its inception in 2003 and posts everyone’s salary internally, says it’s all about transparency.
“Everyone knows everything,” said CEO Chris Harvey. The company also posts sales and customer figures on its website for everyone to see.
When employees feel they deserve a raise, they can call a meeting with their colleagues to make their case.
Employees usually have until the end of the day to make their final decision and must give an explanation of their votes, which are not anonymous. An employee needs a majority to get their raise, and all votes are equally weighted.
“There is no stopgap,” said Harvey. “We rely on everyone having enough information and being intelligent enough that they will vote for an acceptable raise.”
Along with the peer-voted raises, all employees automatically receive an annual cost of living raise every year, that varies based on inflation. In January, all employees were given a 2.1% salary raise.
Megan Moncrief has been working at Squaremouth since 2013 and has received three raises through peer vote. Her first request was for a 22% raise.
“I will absolutely never forget it,” the marketing and sales director said of her first raise request, which was approved.
Once the decision has been made, the requester receives comments from their colleagues.
“You get a document full of people’s feedback about your contributions in general and what you bring to the table on a daily basis, and that eliminates anyone from saying ‘no’ for a personal reason,” Moncrief said.
Since 2010, there have been 41 raise requests and 39 have been approved. Sometimes, a smaller than requested raise has been approved.
As the company has grown, the company has tweaked the process to shrink the voting pool by office so employees are pitching to a more targeted audience.
Squaremouth has two offices: Most of the software developers work out of the Fort Wayne, Indiana, office, while the rest of the company, including sales and marketing, is in St. Petersburg, Florida. The technology workers in Indiana vote as a group while the Florida office pitches to each other.
The company introduced merit-based raises in 2015 that come directly from managers. These increases are mostly used if an employee gets a promotion or changes positions within the company. They tend to be smaller than the peer requested raises.
“The group requests are supposed to be for the bigger jumps,” said Moncrief.
In addition to her three peer-voted raises, Moncrief also received two merit-based raises in her five years at the company and has more than doubled her salary.
Squaremouth employees get a taste for the open culture during the hiring process, a decision that is also done by a group.
“When you interview, you become aware of this process, and I really liked the idea of it,” said Moncrief. She said raise requests at her previous employer would get jammed up due to bureaucratic roadblocks.
“I remember my boss telling me he wanted to pay me more, but he got hit with so much red tape. All that is eliminated here.”
The company claims its “nothing to hide” philosophy creates trust among employees and management.
It’s common for Squaremouth to get around 300-400 applications for each open position, according to Harvey, but the number has slowed a little recently.
The company also offers perks like unlimited paid time off (with a 10-day minimum), a $200 bonus on your birthday and free beer on tap in the office.
But not every worker is cut out for such an open community.
“If you come from an environment where you had to jump over someone who is failing in order to get ahead rather than help, you are going to have a hard time at Squaremouth,” said Harvey.