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Performance and compensation

Although your primary reason for working at Luscii might not be the money, it is still nice to get a financial reward for your efforts.

Performance and compensation

Although your primary reason for working at Luscii might not be the money, it is still nice to get a financial reward for your efforts. Our goal at Luscii is to distribute the amount of money available for salaries in a fair and relatively objective way based on contributed value to the company.

Your salary is paid out at the latest before the end of the month, typically on the 25th of the month (but not necessarily). Luscii will make sure all employer premiums, income tax and pension premiums are withheld from the salary. You will get a digital payslip which specifies all the details.

In a lot of companies, salaries are tied to compensation through yearly performance evaluations. We believe this leads to a couple of problems:

  • Making salaries related to performance reduces learning and open conversations about what is not going well.
  • Performance is not tied to an individual alone, it is a function of context, opportunity, individual, colleagues.
  • There is no reasonable/practical way we can assess and compare performance on an individual level for, for instance, developers.
  • There is an overwhelming amount of research that shows that pay for performance is not a good way to motivate employees. It will reduce motivation if there are other (more intrinsic) motivators in place. It will only ever be a short term solution to a motivational issue. People are generally not motivated by a higher salary as long as the salary is fair.
  • Yearly performance appraisals tied to salary are often mentioned as the most demotivating events of the year by both managers and employees.

With this in mind, more and more companies are actively moving away from the pay for performance model. Instead, salaries are role and loyalty based (instead of performance based). We make it the same for everyone in the same primary role performing at roughly the same level. And it can grow through the number of years at the company.

Salary = Base salary + (Base salary * Loyalty years * 2%)

Base salary

Most people at Luscii will have a primary role: the role that they spend the most time in and consider themselves the expert in. As guideline, this is probably the role that matches best with the function they would apply to at another company.

We divide these primary roles into 2, 3 or 4 levels (depending on role). Each level has its own base salary, which will be determined through an independent assessment. We aim to pay at the 50% bracket of Amsterdam salary levels for the different roles. These salaries are established on the 1st of January of every year. There are clear written guidelines of what is expected from each role at a certain level as to distinguish the different levels.

To grow to a higher level people can apply by writing a motivation (e.g., 2 pages, but creativity is encouraged) explaining why they feel they are supposed to grow to a higher level. This motivation should be based on the behaviour they have displayed compared to what is expected of that behavior in next level. The employee should include the outcomes of their 3 most recent personal retrospectives, and their personal development actions that came out of that. A group of peers, the lead link of the circle of the primary role, and the People Angel assess and decide on the request taking into account the written motivation and personal retrospectives. The motivation will be made public. Changes are processed once a year on January 1st. Valid motivations have to be send to the People Angel before November 1st.

A small group of people might divide their time equally over multiple roles. For them we still need to figure out an extension of this model.

Loyalty

In addition to yearly increases per role, salaries will also grow based on the number of years with the company (loyalty). The idea being that someone who is longer with company is more valuable (knows product, tech, business, organization better), that we believe loyalty is important, that we can offset the cost of recruitment a bit with this, and that is fair towards existing employees that when a new person joins in the same role they don’t start off making exactly the same amount.

Increases in salary due to loyalty will be processed monthly. Whenever an employee finished the next 12 months at the company, their salary will be adjusted with 2% per loyalty year according to the formula above. There is a maximum of 5 loyalty years to gain on top of the base salary, although that doesn’t mean Luscii wants you to leave after 5 years.

Other forms of compensation

Next to a monthly salary we also provide an 8% holiday allowance on top of your monthly salary. Holiday allowance is paid out once a year, with your salary in the month of May (or when you leave the company).

Luscii also offers an innovative and fully interactive pension plan. This is handled through the pension provider BeFrank. As a part of this, the employees and Luscii both contribute 3% of the pension base (a formula mostly based on your salary) into the pension plan of the employee.