FITalking about salary is still difficult in many organizations. At the same time, the upcoming European Pay Transparency Directive is introducing new requirements for salary transparency. At AtoZ, however, pay transparency is not a new topic. We agreed on it together with the #AtoZpeople already in spring 2022.
For years, we have been developing practices that increase transparency related to salaries, career paths, and salary increases. At the core of all this is our sense of community.
In this blog, we explain how collective agreement increases, merit-based increases, and pay transparency work in practice at AtoZ.
Collective agreement increases at AtoZ – employees vote and decide
At the beginning of the year, salary increases defined by our IT Services Sector collective agreement (TES) have once again been a timely topic. All #AtoZpeople fall under this agreement, and AtoZ is also a member of Technology Industries of Finland – something we also voted on together.
Nowadays, it is possible to agree quite freely on salary increases locally, even though the collective agreement ultimately sets the minimum level. When salary increases defined by the agreement become relevant, decisions at AtoZ are not made only at the management table. In fact, we don’t have traditional “management” making these decisions.
The process usually begins with preparation by the HR and culture team. They bring different implementation options into a shared discussion, such as:
- percentage-based salary increases
- fixed euro increases
- hybrid models
The entire personnel then gets to vote on these options.
For several years, the most popular model has been fixed euro increases, as they are seen as a clear and fair way to distribute collective agreement increases. Part of the increases is intentionally reserved for merit-based increases, allowing individual contributions and skill development to be recognized.
Merit-based increases – recognizing good work
Over the years, AtoZ has experimented with several different models for distributing merit-based increases.
Previously, a highly collective model was tested where employees directly participated in decision-making. In practice, however, participation remained low, with only a small group actively involved.
The current model combines community involvement with responsible decision-making.
Merit increases are decided by a separately agreed group that includes representatives from the board, support persons, and HR. At the same time, anyone at AtoZ can propose a colleague for a merit increase, including justifications, before decisions are made.
This ensures that good work and expertise are recognized.
Pay transparency is not new at AtoZ
At AtoZ, pay transparency was agreed upon several years ago. For us, salary is not something that should be hidden from others. That’s why employees can broadly participate in decisions related to salaries and compensation models.
The goals of pay transparency are to:
- increase trust within the organization
- reduce salary-related ambiguity
- support career planning
- provide tools for developing operating models
The upcoming European Pay Transparency Directive will require companies to adopt even clearer practices. Although we are already advanced in many areas, the directive will require us to critically review our practices. Simply making salaries visible may not be enough.
In our organization without a traditional hierarchy, we have outlined a career path model that supports pay transparency and helps #AtoZpeople understand career development and shared values. In addition to technical expertise, we value participation in business activities and other qualities that support AtoZ and the community.
The career path model is connected to pay transparency through a guiding base salary framework. With this combination, we are already well on our way to meeting the directive’s requirements.
Transparency is part of our foundation
At AtoZ, pay transparency is not just an HR process or a future legal requirement.
It is an integral part of our company culture and a fundamental pillar of how we operate.
When practices related to salaries, career paths, and salary increases are transparent, trust within the workplace grows, misunderstandings decrease, and career development becomes easier to understand.
At the same time, every #AtoZperson can influence how the workplace and its practices evolve.
AtoZ is a human-sized company — now and in the future.
