At this software company,
pay negotiations are conducted a little differently.
Here it's your colleague that sets your salary.
Because we trust them,
we should have transparency that will be paid back
by more trust from the people in the team, the company.
And that will create a positive feedback loop
that will benefit everyone.
Buenos Aires based 10Pines,
has an open book management style
that allows employees to have a say in all major decisions,
including who they hire and how much they're paid.
In the final interview of the hiring process,
the candidate meets the entire company, around 90 people,
who in turn decide if they're a good fit
and then their starting salary.
It's important that if this person, new hire,
enters the company,
then everyone will know the salary
and will accept and will acknowledge
that it looks at least,
with a small information that we have from that person,
it looks fair at that time.
Three times a year
the company has a rates meeting
in which employees can pitch and present
why they deserve a raise
before their teammates take a vote.
We live in a market that it's competing all the time
for the talent.
And of course, one of the ways that it compete is
by paying and raising salaries all the time.
So it's an important aspect that people needs to know
if they are being paid a fair salary or not.
10Pines calls this sociocracy.
And although it may sound unique,
its practices are grounded in a larger trend
known as radical transparency.
Right now we're really fertile ground
for this kind of idea to sprout up.
And I think we're going to see
many, many, many things kind of popping up
all over the world.
Many, many experiments over the next couple of years
in this approach.
And so, as companies and employees
start to look towards a post pandemic workplace,
could honesty really be the best policy?
Radical transparency is a concept that broadly applied
just means being super transparent
about details that a company or an organization
might otherwise choose to keep secret or keep hidden
or limited to a certain number of executives
or leaders at a company.
Netflix is one of the companies
best known for its culture
of radical transparency
that it says promotes accountability.
Netflix, the company, takes radical transparency very far
and they go so far as to have, you know,
public discussions or public emails sent out to, you know,
sometimes hundreds of employees
discussing why someone was fired.
Sometimes the discussions about why someone is getting fired
happen right in front of them,
so that they have a chance to share all the ways
that they made mistakes
that led to them no longer working at the company.
But they also have policies
that people might see as pretty welcome.
So for example,
they allow their employees to sort of, at their discretion,
make use of their expense accounts.
So that means no one's really tracking their vacation days
or their expense spending
or things that are you know,
useful to this person getting their job done.
And the idea is that it's freedom
and sort of freedom and responsibility
that is given to these employees
so that they have a chance to do their job the best they can
without being micromanaged.
But you only have to look at Netflix
on Glassdoor to see that this approach isn't for everyone.
Anytime you have a company culture
that's sort of extreme,
you have the chance to attract people
for whom it's really a good fit.
And you're also going to turn off a lot of people
who just feel that this isn't for them.
And it may explain why
this isn't a more widely adopted thing
because it's difficult
and it requires someone at the top, really committed,
to working through the uncomfortable parts of it
in order to make it the company culture.
For Netflix,
that person at the top is Reed Hastings.
He believes the company's success
stems from its high performance culture.
In the traditional industrial paradigm, you know,
you have to do something wrong to get let go.
You can think of a job as sort of a property right.
You know, until you lose it by abusing your position.
But if you think about professional sports, you know,
if that team is going to win a championship,
it has to have a mix of the right players
that work well together,
that are the absolute best in the world.
And so we try to model ourselves
like a professional sports team.
So highly paid,
but you got to earn your position every year.
And it's about performance.
And you know, that's not right for everybody.
Some people care mostly about job security.
Other people care mostly about excellent colleagues
and you know, playing great team ball
to achieving something important for the consumers.
And the Netflix numbers
seem to show that radical transparency is working,
while it fires people at a higher rate
than the average US company.
People actually choose to leave at a much lower rate.
But you also don't hear about the companies
for which this didn't work so well, right.
Or the companies that might have gotten to midsize
and then things sort of fizzled out.
Or you know, we look at Netflix and Bridgewater
and we see these success stories,
but we're also not hearing necessarily the stories
where it was hard to keep a company culture going
as it grew much bigger
or it was hard to keep it going
as the company expanded very quickly.
But beyond company success,
how does this high accountability system
impact the average employee?
So from a neuroscience perspective,
if we think about what the brain is innately craving,
like the brain's own goals,
one of them is a sense of certainty.
Like the ability to predict
what's going to happen the next second.
When you feel, you know, uncertain,
it activates quite a strong threat response in the brain,
which takes your attention away from
what you're trying to focus on.
When certainty goes up,
you activate a reward network in the brain
and your field of view literally opens up
your perspective and how much you can think about opens up
and your ability to be creative.
So one of the things with radical transparency is
people have a lot more certainty
about what's expected of them,
about what great performance looks like in any domain,
about what other people are doing,
how that compares to what they're doing.
So it really increases your access to information.
So you can feel a lot more certain
about everything that's going on in your world.
And this drive for certainty
is such a fundamental part of the brain.
It's literally one of the brain's intrinsic goals.
And it's not just
an increased sense of certainty
that could help us do our jobs.
When you give people access to information about
who's paid what and how
and what they're doing and how the whole business works
and the whole infrastructure,
people feel a much greater sense of control.
They feel like they can make decisions.
They feel like they are able to to take actions
and as a result,
improve their career or their performance.
While a radical transparency model
may check out on a biological level.
It definitely isn't a one size fits all solution.
As humans we have incredible neural diversity, right?
There are people who thrive under incredible pressure.
And in fact, they're really bored
unless there's enormous change and uncertainty going on.
And there are people who will fall apart
if the subway schedule changes.
I will say that radical transparency as a concept,
will suit a number of kinds of organizations
or maybe even functions.
It doesn't mean necessarily it will suit every person
or even necessarily every organization.
It's interesting because
I think there are certain companies
that have been pushing really hard for radical transparency
for a long time, for a decade plus.
And it hasn't had quite this moment of, you know,
a moment in time in which it became very popular.
I think that's because it's probably quite hard
to adjust to
and so you see companies
who really define themselves as a company culture,
try to differentiate themselves from other companies
by emphasizing radical transparency.
But those companies in my view,
remain pretty few and far between.
In addition to the potential legal issues
surrounding employee performance
and termination transparency,
a major hurdle for many companies is making salaries public.
Yep. It's 2021.
And women are still being paid less than men
for doing the same jobs.
One step in the direction of
amending this reality
is to have pay transparency.
In the case of pay transparency,
there's this pretty strong argument that
actually hiding pay between your employees
can hold people back.
It lets certain employees get paid more
and certain employees go underpaid for a long time
without knowing.
And so there's, I think,
a pretty strong argument to be made that,
you know, that pay transparency's more fair.
A 2021 Washington University study
found that pay secrecy directly contributes
to the continued pay inequality
between men and women doing the same role.
I wouldn't be surprised
if certain of the more palatable or easy to digest changes
that come with radical transparency,
say maybe like pay transparency.
I think that's something that more companies
could get on board with adopting.
It's less of a culture shock than
changing the way that you do all sorts of feedback
or firings or meetings or sensitive things like that.
And if that becomes more and more common,
then you'll see companies who want to distinguish themselves
thinking about, well, what's next?
Like what is something else that we can be changing
about how we run our business,
that's going to make us better and different
from our competitors?
A year of remote working
has challenged us to rethink
many of our traditional work models.
And while radical transparency, in its most extreme form,
may not become the norm,
some of it's central practices like flexibility,
employee autonomy and openness,
maybe on the way.
What the pandemic, in the last year, has done
is it's kind of given a lot of people
a lot more clarity about what matters to them
and a lot more willingness to speak up
and also vote with their feet.
And I think what we're going to see as a result
is what might've taken kind of five to ten years to happen,
I think it's going to happen in one to two,
in terms of organizational culture.
I don't necessarily predict a revolution,
but I predict some revolutionary approaches
are going to start taking hold in organizations
in the next couple of years.
We're seeing that in a really short amount of time,
things changed so dramatically.
And for some organizations, for example,
it was impossible to think like
people working from their home all day.
And from one day to the other,
we're forced to move to that situation.
And it just so that people keep working
and things keep moving
and it's possible to do such things.