Discngine reinvents salary negotiation

If there is one sensitive area within companies, it is the salary revaluation process. Stressful for all parties, regurlarly frustrating, not very democratic, and not very transparent most of the time, it’s often an hazardous process.   

However, some companies have succeeded in developing methods that are widely accepted.   

Discngine is a French company with  around 60 employees and a purpose to develops software for life sciences research. It has established an original organizational model, very horizontal, close to the Opale organization (Reinventing Organizations, Frédéric Laloux). For two years now, Discngine has been implementing a salary revaluation process that makes the employee an actor and responsible for his or her salary revaluation, while offering the organization a balanced and secure framework. In short, squaring the circle.   

We asked Anne-Sophie Barthelet and Sébastien Conilleau, both employees of Discngine, to present the system.   

What are the reasons why you redesigned the compensation system? What are the main principles and objectives?      

Sébastien: With our very flat organization, our CEO had to do all the re-evaluation interviews. This, however, posed two major problems:   

1. What was possible with 15 people was no longer possible with 60, given the time required. 
2. The CEO was no longer working with everyone daily and thus was no longer able to properly evaluate all contributions.   

Anne-Sophie: That’s exactly why we wanted to rethink our evaluation system collectively. Historically, we are committed to two principles:    

1. Remuneration must not be affected by inflation and is therefore automatically indexed to the cost of living (INSEE CPI)   
2. Beyond that, a revaluation must correspond to new and significant contributions by the employee, beneficial to the company.   

Sébastien: The system we have put in place is based on an evaluation by peers, who examine an employee’s request for a re-evaluation. We tried to respect the main principles that were important to us, such as:   

• Fairness: people with comparable contributions should be compensated in a comparable way
• Recognition: a salary revaluation is something that must be significant, hence the €2k increments (gross annual)  
• Will to be right: who better than peers to evaluate the quality of an employee’s work?   
• Willingness to be accountable: it is up to the employee to make the effort to ask for a re-evaluation and the level of this re-evaluation, which obliges him/her to look at him/herself honestly   
• Continuity: historically, Discngine has always given raises to employees who have demonstrated their commitment and quality of work (7% annual increase on average over the years before the implementation of the system)   

I work at Discngine, how does it work for me?    

Sébastien: The starting point is the formulation of the re-evaluation request, which is my responsibility as an employee. With finalized request in hands, I then turn to the dedicated Recognition Team who suggests several potential juror, of which  I choose three. After discussing my request altogether, the jury decides (by a majority) to accept it, to partially accept it, or to refuse it. The decision is then sent to the management, which, once accepting it, decides on the implementation (immediate, staggered, staggered in time). However, the management can also refuse the jury’s decision with the clear explanation.   

Anne-Sophie: This process was designed and created by employees. For my part, as soon as I think I’ve made progress on an activity, I keep a record of it in a dedicated personal document. Once a quarter, I re-examine this document; this helps me to determine whether sufficiently significant contributions are beginning to emerge. This practice forces me to regularly ask myself the question about my contribution to the company.   

Once I consider the list of contributions sufficient to make a request, I show it to at least one of my colleagues to get his/her  opinion on what I am presenting in this file. This is an essential step in my opinion to assess whether what I am putting forward is also seen as a significant improvement by others, who may be impacted by what I am presenting. It is a discussion that is often full of lessons learned and helps me to better formulate my request.   

Focus on the process

The process is designed to make the employee an actor and responsible for his salary evaluation. Thus, the employee initiates the request for re-evaluation, justifies the request, and chooses the members of the jury who will make the decision. The company’s management decides how the decision taken by the jury is to be implemented and has a right to veto, which it must justify if it is triggered.   

The salary evaluation is based on the examination of contributions on 3 pillars   

• External (World): the employee’s active participation in the expansion, development, and maintenance of the business  
• Internal (Discngine, Opale company): the company’s unique organizational model requires everyone to participate in cross-functional actions  
• Mastery of activities: the impact of the employee on the company within the framework of his or her main activity (developing, selling, supporting…)   

On each pillar, the minimum level consists of doing one’s job and not violating the company’s values. The higher the level, the greater the impact of the employee. For example, someone who becomes an internationally recognized expert in an area of interest to Discngine would likely be recognized for a high level of contribution on the « World » and « Business Control » pillars.   

 Step 1: The request   

 The employee writes his request in which he specifies the level requested on each pillar (External / Internal / Mastery of activities) by justifying these evolutions by the new contributions he describes. He sends it to the group dedicated to this process.     

Step 2: Setting up the jury   

The dedicated group proposes a list of eligible jury members to the employee, from which the latter chooses 3 people.   

Step 3: Decision-making   

The jury meets. It has the information it needs to make a decision (request, history, etc.). It discusses the request with the employee. In the end, the jury makes its decision, by majority vote, which must be justified: refusal / partial acceptance / total acceptance.   

Step 4: Validation and implementation   

The decision is sent to the employee and management. The latter decides on the terms of implementation (immediate, staggered), but can also refuse it. In this case, the refusal must be justified to the employee.   

In case of refusal, the employee can renew his request after 6 months. Otherwise, he/she may not make a new request for a period of 12 months. 

This system is very innovative but can be frightening, seen from the outside, from the point of view of economic control. How do you ensure that it does not lead to an uncontrollable increase in salary costs? 

 Anne-Sophie : At Discngine, trust is a very important value and without it this process could not work. An application can be accepted totally, partially or rejected by a panel of 3 employees.  

 In addition, management is an integral part of the process and makes sure that accepted applications fit with the economic reality of the company. They can, for example, stagger the application of the increase over time if necessary.  

In practice, we have had a few frivolous requests that have been refused, but also employees who have been encouraged by their colleagues to submit a request.  

 Sébastien: the revaluation decided by the jury is validated by the management. It can therefore be rejected, partially or totally (Editor’s note: see statistics in conclusion); and as Anne-Sophie says, the application of the decision can also be spread out over time.  

In reality, for the last 2 years there has been no « uncontrollable rise in salary costs », on the contrary, salaries have increased less than before! 

What pitfalls have you encountered? Is this system suitable for everyone?   

Sébastien: The system is based on a progression matrix, which is deliberately a little vague. Thus, the concept of contribution is not so easy to grasp. For example, « I have been trained in technology X » is not a contribution. On the other hand, « I can integrate into a team that uses technology X » is. As a result, the quality of the requests is variable. Moreover, we thought for a long time that the system would not be suitable for everyone and that some profiles would have difficulties in making applications. However, recent statistics show that most of the staff have become accustomed to the exercise. In fact, the number of people who have never applied is now very low.   

Anne-Sophie: Building this process was long (over a year), and getting the entire workforce to adopt it was also complicated. Moving from a model where the employee has no say in his or her rise to a demand system legitimately raised questions.    

This system can be complicated because it is based on the way our peers look at our activity. I find it very formative, whether one is in the position of jury or applicant. It forces me to reflect on myself and my work, to work on my communication, and on how to judge the work of my peers. I am very satisfied with it.   

Editor’s note: To implement the process, the company also had to meet two legal requirements:    

• The support of a specialized lawyer was necessary to set up a specific privacy policy to fully comply with the requirements of the GDPR (processing of employee data).
• When reviewing an application, jurors can request access to the salaries of employees with comparable contributions. To make this possible, a consent form has been implemented.   

You’ve been practicing for several years now, what do you remember about it?   

Sébastien:  this system is, of course, not perfect, but for me, one thing is certain: it is much better than the other systems I have been confronted with. It corresponds well to our values such as transparency, accountability, and continuous improvement.   

Anne-Sophie: It’s a very rewarding process! What changes is that today at Discngine everyone can actively participate in their salary revaluation. You know the rules, it’s no longer a sum given without explanation by your superior. If you feel you deserve more, you can initiate the process with a justified request.   

In conclusion     

The salary revaluation system implemented at Discngine is fully satisfactory and has fulfilled the objectives set for it.    

The figures speak for themselves, as since the implementation there have been…   

 48 requests for re-evaluation:  

• 36 applications accepted in full    
• 10 requests partially accepted (9 by the jury, 1 by the management)   
• 2 requests were refused by the jury   

These results show that the system is working well. Indeed, the jury is playing its regulatory role in full, with management intervening only on the margins.  

You wish to transform your company ? Discover our offer of Cultural and organisational transformation.