Zappos, an online shoe and clothing retailer, is implementing a ‘no bosses’ structure known as Holacracy. This radical management system eradicates traditional hierarchy and instead encourages self-management and peer reviews. Employees are grouped into ‘circles,’ with each circle responsible for a specific task. Pay increases are determined by ‘badging,’ a system in which employees earn badges for demonstrating skills or completing tasks. The more badges an employee earns, the higher their pay.
However, this system has been met with mixed reactions. Some employees appreciate the autonomy and flexibility, while others find it confusing and time-consuming. The badging process, in particular, has been criticised for being overly complicated and subjective, with employees required to submit evidence of their skills and await approval from their peers.
Despite the criticism, Zappos remains committed to Holacracy. The company believes that this system fosters innovation, encourages employee empowerment, and ultimately leads to a more efficient and productive workforce. The company also provides extensive training and support to help employees adjust to this new way of working. Zappos’ experiment with Holacracy is being closely watched by other companies interested in alternative management structures.
Go to source article: http://lasvegassun.com/news/2015/jul/15/no-bosses-how-do-zappos-employees-get-raises/