This Company Lets Its Workers Vote on Their Pay Raise

A travel insurance company has a bold way of handling pay raises. They allow coworkers to vote whether their colleagues deserve the raise.

Ever since its creation in 2003, Squaremouth made a new policy of peer-reviewed raises. This means that if the workers think they deserve a pay raise, they have to bring it before their coworkers at a company-wide meeting.

The coworkers have one day to make a decision. They must also provide a reasonable explanation for their vote. The pay raise is approved once, the majority of the company votes in favour of the raise.

Remarkably, none of the votes are anonymous. Squaremouth CEO Chris Harvey believes the system increases workplace transparency.

Harvey said the company relies on everyone having enough information and are intelligent enough that they will vote for an acceptable raise. Source: Squaremouth

The company also promotes transparency by posting each employee’s salary internally. The practice is based on 2013 UC Berkley study, which suggests productivity can be improved “simply by providing workers with information about the earnings of their peers,”.

While subjecting raise negotiations to a public vote sounds horrifying, the majority of raise requests at Squaremouth actually gets approved. About 39 out of 41 raise requests since 2010 were approved.

On top of the pay raises, managers have the authority to award smaller raises based on employees’ merits. Introduced in 2015, 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.

Employees also receive an annual raise to adjust for cost of living. Source: Squaremouth.

Other than that, Squaremouth also offers unlimited paid time off (with a 10-day minimum), a $200 (RM835) bonus on your birthday and free beer on tap in the office.

But not every employee is suitable for such an open community like Squaremouth.

“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.

Would your company try this? Or are you too worried even to reveal your salary offering on job ads?