Raises

We do not give “cost of living” increases, and we do not give raises.

The key confusion here is “inflationary raise” vs. “right-sizing due to actually learning a great deal and now doing a whole different job”. These are very different ideas.

Right-Sizing

At least once a year, each Pod Leader will look into the balance of industry standard value for your role and ensure we are paying you commensurate with industry standard salaries through third-party analysis rationally compared with role descriptions (currently we use PayScale). Ideally, the Pod then right-sizes you to the appropriate salary commensurate with your skill set compared to the local job market - and make sure you are paid “above average”.

Ironically, as the largest agency of our type in the local market, we can significantly influence “average”, but we adhere to it accordingly.

Note that the possiblity exists that your Pod is not actually generating a level of revenue that can support your industry standard comparitive value - in which case we will openly and faithfully discuss the implications with you.

If you genuinely believe you are underpaid, follow these steps carefully until you are satisfied;

1. There needs to be a plan to improve the revenue of the Pod so that it can afford you at a right-sized rate. You should be personally responsible for helping revenue increase through working with your Pod to increase revenue through generating sales and increasing your contribution rate. If you are stuck, talk to the CEO for advice on how to do this. If this fails…
2. Request a Full-Review. If this fails…
3. Transition.

At any given inflection point in your growth, you should be able to make a reasonable claim that you are not being paid commensurate with the job you are actually doing compared to the local market. If you do this more than every few quarters, you are probably just complaining, and don’t genuinely have a good perspective on the salary your role commands.

“Raises”

The working world has been indoctrinated with the idea that “raises should always happen”, and a steady increase of wage is a natural and organic entitlement of an “employee”. Traditionally, if an employee does exactly the same job for many years, a steady raise should always happen. If said employee is doing a good job year after year, they should always get a raise to compensate for “inflation” - 3-5%.

However, by this logic, a production person who works for a company for 50 years will eventually be paid 250% of what he or she was originally hired for even if he or she does not do anything differently than the day he or she started. Suddenly you are working for General Motors getting paid $48 an hour to screw in the same bolt all day, without being stimulated to grow. This renders any given company toothless and incapable of being competitive or innovative due to a false bubble of entitlements, where the entitled employee changes their lifestyle to accomodate the unnatural salary growth but doesn’t personally stretch their competence or skillset (denying themselves authentic happiness). GM is not designed to last 1000 years - it can only abuse you and then fire you if it wants to survive. This hampers the success of future generations of the company.

There are more legacy entitlement costs in a GM car than steel costs. GM is walking dead.

The impact of this trend is excacerbated at Treefrog when we are not equally compensating by raising prices of products by 3% every year. All inflationary raises do is cut into Treefrog’s capacity for survival without adding value to the organization as opposed to Treefrog’s belief that “All Frogs can Grow”.

Traditional mechanisms to handle this raise indoctrination include;

1. Firing People - Fire people regularly to keep costs down. This is counterintuitive to Treefrog’s core philosophies.
2. Go Public and Unionize - End up with a slew of over-paid employees through unionization, and choke on the horrible culture left behind.
3. Ignore Everyone - Not give raises and make people think they are doing something wrong because they expect to get a raise for just performing the same job.

Raises should not be tied to performance or tenure. Raises should be tied exclusively to contribution rate or output (which should increase due to performance and/or tenure). In other words, “Treefrog does not give out raises” - we just “right-size” people commensurate with the industry-standard pay of their role compared to their output.

Requesting a “Full Review”

If you believe you are being radically underpaid commensurate with your role (>10%), at any time, you can request a “full review” of your salary. The following mechanism then takes place:

1. We work together to define your role. You refine your resume.
2. You go actively looking for work elsewhere with your resume and our blessing. Should you get a justifiably equal offer, we will match the offer (within reason): and you can choose where you would like to work.
3. BUT, we will also be actively looking for a replacement for you. Should we find a replacement at a lower cost with more experience, you agree to immediately resign your position without notice or any further entitlements on the day the replacement starts. Our commitment to “Frog loyalty” transfers to “Mutual Acceptance of an Alternate fit that allows you to move on to a better paying job”.

This is not intended as a threat to the Frogs or as a mechanism to induce “Stockholm Syndrome” to force people to stay in an underpaid environment. That would be against our philosophy. However, if someone’s miseducated entitlement has superseded his or her current capacity, it is inevitable that his or her discretionary effort will drop to nothing, and we mutually inherit mediocracy.

Mediocracy is evil. The tyranny of infationary raises lead to long-term mediocracy.

Instead, we will promote and stimulate learning and growth, and raise compensation accordingly through right-sizing.