Fair P(l)ay - With the Apps with love wage model into a sustainable working world

In this article, I would like to take a look at the current world of work and how fair and transparent wage structures can make companies fit for the future. In the interview section, three companies share their experiences of introducing and adapting the Apps with love pay model.

Since its launch in 2017, the Apps with love salary model has attracted widespread interest. Fair and transparent salary criteria are increasingly becoming key factors for job seekers. However, this can also result in significant benefits for companies. Apps with love has been able to save several hundred thousand francs since implementing the model. This has been achieved through more efficient employee appraisals without salary negotiations and a reduced administrative effort for payroll accounting, while at the same time automation has reduced the error rate in the processing of salary runs and enabled precise forecasting of salary costs.

Working with value

We are in a new era in the world of work, characterised by many expectations of the job and the workplace. A new generation, for whom diversity, inclusion and a fair, transparent working culture are not just wishes but prerequisites, is entering the labour market. They are looking for jobs that not only promote professional but also personal development, that can offer fun, challenges and a sense of purpose at work.

In this context, fair pay criteria and transparency within the company play a decisive role. They are not only a sign of a fair and ethical organisation, but also increase the trust placed in a company. Clear, understandable and publicly accessible salary structures make employees feel valued and treated fairly. This promotes trust and loyalty to the company, which leads to fewer departures.

A culture of open dialogue and transparency also makes it possible for all employees to feel like an integral part of the company. When employees understand how their work contributes to the company's mission and how they can grow and develop personally, work itself becomes more of a place of self-realisation and personal engagement.

We are therefore faced with the challenge of creating workplaces that not only strive for economic success, but also promote a culture of appreciation, respect and collaborative development. Companies that lead and integrate this change will not only attract talent, but also build loyal, motivated and high-performing teams that are ready to face the challenges of the future.

Time to Play

The Apps with love Lohnmodell

The Apps with love salary model is an example of an approach that focuses on transparency, fairness and an inclusive corporate culture.

Traditional salary structures, which are often hierarchical and non-transparent, are increasingly being rejected in today's working world. Employees are demanding more insight into decision-making processes and salary determination.

The Apps with love salary model enables transparent salary structures, salary development that is visible far into the future and predictable salary amounts. The salary model is based on a basic salary and additional criteria that supplement the basic salary on an individual basis. To achieve this, criteria must be found that are the same for all employees, have a qualitative statement and are non-negotiable, such as training, loyalty, responsibility and specialist experience.

In a first step, employees assess their own criteria levels on the model. During the recruitment interview, the salary criteria are reviewed together and the current level of the employee is determined. Salary development then takes place automatically on the basis of the hiring date, workload and the defined levels.

A fictitious example to illustrate this:

Basic salary 5000

+ Education: Bachelor 300.-

+ Responsibility: Partial responsibility 800.-

+ Experience: 2 years of professional experience 200,-

+ Loyalty: 3 years loyalty 400.-

= Total Salary 6700.-

Apps with love Wage model with sample numbers

The Apps with love salary model aims to eliminate arbitrary salary negotiations and a lack of transparency by offering a transparent, fair and comprehensible structure. Salaries are no longer based on negotiating skills and judgement, but on facts.

It provides an overview of how your current salary is made up and how it will develop in the future. It also shows future events, such as a loyalty bonus or when you jump to the next level (pay rise).

For companies, this means that labour costs and future expenditure on recruitment can be planned realistically and are consistent with each other.

The figures and modules in the model can be adjusted at any time. For example, the basic salary could be adjusted specifically for different teams in order to achieve salaries in line with the market. The modular structure enables customised salary criteria that can be continuously adapted to the requirements of the company and its employees.

Man vs model

The Apps with love salary model is based on the approach that fair and objective salary determination is best achieved when the model itself, rather than individuals, determines salaries. Such an approach minimises the subjective influences and possible distortions that can occur with traditional negotiation-based approaches.

We therefore try to remove the human factor from the decision-making process as much as possible in order to ensure more objective and fair employment conditions. This makes the human factor all the more important in the selection of candidates.

It is important to recruit people who are a good fit for the company and the teams, not only professionally but also personally.

During the employee or recruitment interview, we can concentrate fully on the qualifications, development and human aspects. The salary issue deliberately takes a back seat, as it is determined equally and fairly for everyone by the model.

Apps with love Office Bern and Basel

From work-life balance to work-life blending
The model for the new generation?

With the entry of Generation Z into the labour market, we are experiencing a further shift in expectations and preferences towards the world of work. Born between the late nineties and into the later noughties, this generation is characterised by its profound familiarity with the digital world. Having grown up with an abundance of digital information from an early age, the real and digital worlds merge seamlessly. For them, digital tools are a natural part of their lives and an extension of themselves.

Generation Z's values and expectations of the world of work differ from those of previous generations. They were often at the centre of the family, their opinions were heard and their self-confidence strengthened. This also shapes their idea of work: for them, salary or status do not count as much as the opportunity to fulfil themselves, to enjoy their work, to work in a good working atmosphere and to find a working environment that suits them.

It is no longer so much about finding a work-life balance, but about blending work and private life. Work-life blending is about having the flexibility to organise your work, your interests and your private life in such a way that they mesh harmoniously. Digitalisation plays an important role here, as it makes it possible to work anywhere - be it on the road, in the office, in a home office, remotely or in a hybrid model.

This allows working hours to be organised more flexibly and better adapted to personal needs and priorities. The motives behind the desire for work-life blending are often the desire for more self-determination and personal responsibility in everyday life.
Since everyone has individual requirements and is in different life situations, it is advisable for companies to regularly enquire about the needs of all employees and enable everyone to achieve a suitable balance, or "blending".

From my own experience (in a digital agency), a 3-day presence in the office is ideal for staying in touch with the team and the corporate culture and working together. While employees work from home, they also save time travelling to work, which they can use for family, reflection or household, which in turn promotes quality of life and ultimately satisfaction.

So we need to create working environments that not only utilise the skills of new generations, but also support their search for meaning and fulfilment in their work. Organisations need to adapt to new needs and constantly evolve to attract and retain young talent.

Sources:

https://www.agentur-jungesherz.de/generation-z/https://www.kalaidos-fh.ch/de-CH/Blog/Posts/2023/12/HR-Management-1068-Work-Life-Blending-Trend-oder-Arbeitsform-der-Zukunft

Apps with love Office Bern

The Apps with love wage model adapts

In a globalised working world, it is becoming more important for companies to position themselves as attractive employers. The Apps with love salary model is a powerful tool for responding to the changing demands of the modern working world. It not only offers solutions to current challenges such as salary transparency and equality, but also sets standards for corporate culture that meet the needs and expectations of today's and tomorrow's workforce.

The salary model can be adapted as required to the circumstances and structures of other companies, not only in terms of salary amounts, but also in terms of criteria.
It can therefore serve as a model for other companies that want to promote a sustainable and employee-oriented corporate culture and automate and simplify salary processes. This requires not only an open attitude, but also a willingness to rethink traditional structures and break new ground in employee management and remuneration. In addition, the continuous adaptation and review of models is crucial in order to adapt them to the dynamic development of the world of work.

The future

We are currently working on further developing the payroll model as an online tool to make it even easier to create, calculate and operate in a company with all the necessary connections. To this end, we are in constant dialogue with other companies to make this payroll model platform easier to adapt. Implementation as a software tool saves time, particularly when creating and testing the model, and a lot can be automated during operation. This in turn reduces the source of errors in payroll runs and ultimately saves money.

Swiss HR Award in the Culture and Change category for our salary model

The wage model in action - Interview

I asked three different companies that have already adapted and implemented the Apps with love wage model about their experiences and challenges.

Pascal Fotsch from the engineering and consultancy firm for energy efficiency, sustainability and building physics, Lemon Consult AG

Tobias Castagna from the National Cybersecurity Test Centre (NTC)

Graziella Eicher from the Zurich concert venue Moods

Till (Apps with love): Why did you decide to adopt the Apps with love pay model and how did you tailor it to your business?

Pascal (Lemon Consult): We wanted to create a clear structure in a modular system (like Lego bricks) that provides orientation and transparency about responsibilities. Employees are remunerated according to function, training, professional experience and loyalty. Apps with love had shared a valuable basis with us here.

Tobias (NTC): This is a transparent and simple model for setting wages according to objective criteria. Everyone knows which criteria are taken into account and how they are weighted. The respective wages are not disclosed, but the model used to determine them is transparent.

Graziella (Moods): The model is quite simple and easy to understand. It was tailored to our company in such a way that we put what is important at the centre. We also have to work in the evenings, so "evening work" is one of these building blocks for us. We also prioritise experience more than training, for example.

Till: What impact did the adoption and adaptation of the Apps with love salary model have on the recruitment of new employees and talent retention?

Pascal: We have much calmer situations when it comes to defining salaries. Potential candidates understand the model right from the start. In the case of large gaps, we remain consistent (even if we absolutely need someone) and instead discuss functions / roles and tasks. The model is an initial cultural compatibility test. It is either supported by potential new employees or not. The model also helps very well as a guide during employee development meetings. The necessary developments are discussed in order to reach the next function level.

Tobias: The model has been very well received. It avoids arbitrary wage setting.

Graziella: New employees have reacted very positively to the salary model. They know right from the start what they ll receive and how their salary is made up. So far, we haven't had any salary negotiations as a result. However, we have occasionally had prospective employees drop out because it didn't match their expectations and they knew that negotiating a salary was not an option.

Till: Has the introduction of the salary model had an impact on the corporate culture and employee satisfaction?

Pascal: I think that the introduction of the model reflects Lemon's values well and is therefore very well accepted by the workforce. Overall, by shifting the discussion from salary level to function/responsibility, a lot of calm and trust has been restored.

Tobias: So far there has only been positive feedback.

Graziella: Yes and no. On the one hand, pay is no longer such an issue for employees, but on the other hand, the model is criticised - and rightly so. There is still room for improvement. We also have the problem that, as a non-profit organisation, we can't pay very high wages and can't pass on any increases every year, which means that some people are still dissatisfied with the model.

Till: What challenges were encountered during implementation and how were these overcome?

Pascal: In the event of differences (original salary higher than the model yields), we have introduced freezing, i.e. no downgrading. We introduced intermediate levels in several steps and revised the salary model. This enabled us to achieve a faster development time. There was a risk that employees would not develop for too long because the pay jumps were too high.
Tobias: We don't yet know how the model will develop in the long term. Some parameters will probably need to be readjusted. Over time, certain cases will probably arise that will push the model to its limits. For example, what happens if inflation remains high for a long time? Or what happens if a lateral entrant is hired who is a top professional but cannot be modelled correctly. He can do everything that is required, but lacks the formal training and further education to do so. However, we are convinced that such cases can also be solved.
Graziella: When we introduced the salary model, it turned out that some employees were earning more before the salary model was introduced than they were classified under the new model. So we had to make pay cuts when we introduced the new salary model. If the amount was not so high, we froze the salary. Neither of these went down well with those affected, and there were also redundancies as a result.

Till: Why was it decided to scrutinise the existing pay system and look for a new model?

Pascal: The lived model was very situational (strong need for reinforcement resulted in high salaries) and too individualised (depending on who was leading the conversations). The main aim was to create clarity, comprehensibility, simplicity and reference to roles and responsibilities. We also wanted to close the gender gap that had unconsciously developed over the years.

Tobias: The model was introduced when we first recruited staff, so there was no need to replace an old model. It was important for us to have a transparent system right from the start to avoid pay inequalities. Without such a model, it is difficult to ensure fair wages throughout the organisation in the long term.

Till: Where do you see the benefits for employees and for the company?

Pascal: Clear position, easy to understand, modularly expandable and developable, flexible - in other words, "Lemon like".

Tobias: Fair and clear criteria that make arbitrary wage negotiations superfluous.

Graziella: The employees know very clearly what they ll receive, how they can earn more or what a reduction would mean for them financially. They may find it bad or good, but they can understand it and also be sure that everyone is categorised equally and that no one has more advantages or earns more just like that.

Challenges with the wage model and how we deal with them

Wage jumps

If the salary model is newly introduced, the various salary totals must be calculated and run through. This results in fair wage structures after fine-tuning. However, the wage model also reveals who had previously negotiated well or rather poorly. Those who received "too little" pay in relation to others receive more pay. However, we did not want to penalise anyone by reducing their wages after the introduction of the model, as the negotiated wage total was accepted by the company and a reduction would rightly lead to dissatisfaction. We have therefore decided to "freeze" these wages, i.e. not to allow them to rise through the model until the wage bill in the model and the previous wage match. These transition phases are unavoidable after a change of model, but with good communication and individual discussions with the employees affected, this can be implemented well;

Individual performance

Individual performance can certainly be measured under certain circumstances, e.g. when closing sales deals. However, closing sales deals is part of the job, just as writing code is for a developer. Both contribute to the success of the whole.

Individual, performance-related wages encourage lone wolves, and although performance can often be measured, it is difficult to translate it into a monetary amount. That's why we have introduced a system of mutual appreciation: Everyone can nominate each other for badges, which are then ceremoniously awarded in front of the team. The amount of money involved is of secondary importance; the focus is on appreciation. Anyone who has nominated someone must also give a short explanation in the form of a laudatory speech, which prevents badges from being awarded indiscriminately.

The myth of performance-related wages

The debate about performance-related pay is as old as the world of work itself. Many companies rely on this model in the hope of increasing the work performance of their employees. But what if the reality speaks a different language? A detailed analysis of various studies from the fields of psychology and economics provides revealing insights into the complex dynamics between performance-related pay, motivation and work performance.

Extrinsic vs. intrinsic motivation: The key question is whether money really is the ultimate motivator. While extrinsically (income, status) motivated employees can be encouraged to perform better through financial incentives, performance-related pay for intrinsically motivated employees harbours the risk of undermining their self-motivation. This phenomenon, known as the displacement effect, shows how external incentives can displace intrinsic motivation and thus paradoxically lead to a reduction in work performance.

Empirical evidence: Studies show that performance-related pay does not always have the desired effect. In some cases, it was observed that intrinsic motivation and thus enjoyment of the activity decreased after the introduction of a paid benefit. External rewards led to a reduction in work performance, particularly in the case of activities that were previously performed out of personal motivation and interest.

Economic studies vs. psychological studies: While the economic perspective tends to emphasise the positive aspects of monetary incentives, psychological studies suggest that these incentives can diminish intrinsic motivation, which has a negative impact on work performance. Particularly in the case of complex, creative or intrinsically motivated activities, it has been shown that performance-related pay can be counterproductive.
Recent behavioural economics studies show that in addition to the pursuit of material self-interest, other social preferences, such as fairness and reciprocity, can also influence the behaviour of individuals in the workplace. From an economic perspective, performance-related wages can therefore also have a counterproductive effect in certain contexts, particularly if they are perceived as unfair or if they disrupt social harmony and cooperation in the workplace.

Source and studies mentioned: "Transparency of remuneration distribution and productivity effects of wage distribution" by Marcus Krall

Different market wages

There are various approaches to do justice to different market wages. We can illustrate these using our salary model and the version from Lemon Consult AG.

Today we work with a basic salary that is divided into 3 levels (young professional, professional and senior). All salaries, regardless of specialism, are treated equally, based on the philosophy that everyone makes an equal contribution to success.

However, wages are very different on the market. We are therefore currently working on version 4.0 of our salary model. We are planning to leave the basic wages at three levels, as there are employees from junior to senior in almost every job category. However, we are developing a separate model sheet for each job category, in which the base salaries are slightly different. This way, we still have transparent wage criteria, but we improve competitiveness in terms of current market wages.

Lemon Consult, on the other hand, have defined their main job functions as base salaries, i.e. from interns to project managers to the CEO.

Visualization of the Lemon Consult wage model based on the one of Apps with love

Benefits

Non-monetary benefits of employment are a good way to compensate for this, especially for companies that cannot or do not want to pay top salaries. For many, these additional benefits are even worth more than a higher salary. Such benefits can also be a decisive factor in employment, as they enable employees to better harmonise their work with their life situation. Companies can customise and continuously expand these benefits. Apps with love currently has various types of benefits: In addition to things that are now standard such as free drinks, snacks and fruit as well as lunch from a chef, we offer flexible working hours to adapt working hours to personal circumstances. We have 6 weeks holiday (2 weeks more than legally required) 18 weeks maternity leave (4 weeks more than legally required), 4 weeks paternity leave (2 weeks more than legally required), opportunities to have a say and co-determination in the company, Time to play and monthly neck massages to promote health and exchange and we have two annual tickets for the local football club.

Lunch in the Apps with love Office Basel

Lunch at the Apps with love Office in Bern

Lunch in the Apps with love office in Bern

Lunch at Apps with love Basel and Bern

Summary und Takeaways

Adapting to new generations
Companies must take the changing requirements of employees seriously. A good working atmosphere, personal development and comprehensible salary structures must be prioritised.
Cost savings
Experience with the Apps with love model shows how transparent salary structures and efficient processes can save significant costs.
Promoting a transparent work culture
Transparent salary criteria and the elimination of arbitrary salary negotiations promote fairness and trust within the company.
Attractiveness as an employer
A fair and transparent salary model makes companies more attractive to talented people who value clear development paths and fair treatment.
Flexibility and individualisation
The model allows individual factors such as education, experience and responsibility to be included in the salary determination, ensuring individual and fair remuneration.
Future orientation
The adaptability of the model to different company structures and the possibility of continuous further development help companies to plan reliably and be fit for the future.

Companies that adopt this approach can not only increase their efficiency and reduce costs, but also create a corporate culture that attracts and retains young talent in the long term. Investing in an adaptable salary model with transparent salary criteria is a decisive step towards a sustainable and employee-orientated corporate culture.