This proposal aims to create a permanent approach to compensating dedicated contributors that is transparent, fair, and rewards long term engagement. This proposal builds on OIP-47 - Olympus Stopgap Budget Proposal - which specified the maximum monthly allocation by role but did not define the process for determining allocations or frequency of payments.
This proposal is the result of over two months of community discussions, including a DAO-wide sync on December 6, 2021. It incorporates over 200 comments and suggestions from community members.
The current compensation system is not scalable as we grow, and we have reached the limit of its capabilities. Lack of standardization around compensation per contribution effort creates unnecessary stress for contributors, strategos, and the community alike.
There needs to be transparency around the roles available and the compensation associated with those roles. OlympusDAO risks losing (and will have difficulty attracting) top contributors, unless changes are made.
Olympus has an opportunity to lead by showing that DAOs can be attractive career choices and by building a framework that makes OlympusDAO the top choice for DAO contributors.
Olympus will set compensation for contributors based on two factors:
- Role: defines the skills required to contribute (e.g. engineering, marketing, operations).
- Level: contribution for a particular pay period (e.g., story points, OKRs, deliverables).
The quadratic compensation model recognizes and rewards the asymmetrical value provided by top contributors while also providing a way for new contributors to onboard and be recognized.
(see tables below for role-specific compensation)
By compensating based on role and level of contribution, Olympus can create transparency:
- Competitive: Olympus will pay contributors competitive salaries.
- Fair: similar role and level should receive similar compensation across the DAO.
- Efficient: each role and level has clear expectations for expected output. This allows for better allocation of resources across the DAO and will help to streamline our processes.
Note that compensation is not employment. Members are paid based on contribution for each pay period and are paid as independent contractors. For example, that means members are responsible for paying their own insurance, taxes and vacation.
Levels set consistent expectations about member contribution that is consistent across all DAO roles. Each team can refine these levels to match their specific contribution levels (e.g., story points, OKRs). Each team member is assessed monthly based on a ten point scale:
- Level 1 (member) - make several meaningful contributions to the team. Enthusiastic and helpful.
- Level 2-4 (affiliate) - make skilled contributions to the team consistent with 5-20 hours a week of effort.
- Level 5 (associate) - make sustained contribution to the team consistent with over 30 hours a week of effort. Faster learner and willing to pitch in wherever needed.
- Level 6-8 (core contributor) - make skilled individual contributions to the team with little guidance. Handles pressure well. Knows when to escalate issues. Seeks feedback.
- Level 9 (principal contributor, manager) - demonstrates mastery of domain skill, sought out by team members for advice. May help set direction, manages team, build consensus. Comfortably handles team interpersonal conflicts.
- Level 10 (stratego, product leader)- strong leader who is able to develop strategy, set OKRs, recruit team, manage team to achieve OKRs within budget.
The specific monthly pay by role and level is as follows:
Contributors may receive allocations twice a month: at mid-month and at end of month. Team leaders perform a light assessment of team member contributions at mid-month and a full assessment at the end of month.
New contributors are only paid at the end of the month. Core contributors may be paid mid-month if they have contributed substantially during that period.
Mid-month compensation process (light assessment):
Team leaders rate member contributions through mid-month as follows:
Below level: the team member contributed below their previously assessed level.
At level: the team member’s output for the first half of the month is at a similar pace to their output from the previous month.
Operations calculates the mid month allocation for “At Level” contributors as 50% of their last month’s allocation. Below level contributors receive no allocation.
Allocation team reviews and approves payments
End of month compensation process (full assessment):
Group members complete optional self assessment giving their level (1-10) and most significant contribution for the month as input to the team leader
Team leaders rate rate member contributions on a full-month scale of 1-10 based on retrospective, comparison with peers and self assessments
Operations calculates the end of month allocation based on assessed level and role, less any mid-month allocation received.
Operations pays the full month allocation for assessed level less the mid-month amount paid (so monthly compensation is always determined by end of month level).
Allocation team assesses Stratego and Product Leader levels and sets allocations.
Allocation team reviews and approves payments.
- Alice was Eng level 6 in December and received $10,200. In mid Jan, she was rated “At Level,” so got bi-weekly allocation equal to 50% of Eng level 6 = $5,100. At the end of month, she was assessed at Eng level 7, so received $13,600 - $5,100 = $8,500.
- Bob was Design level 4 in December and received $3,000. In mid Jan, Bob was rated “Below Level,” and so received no allocation. At the end of the month, he was assessed at Design level 3, so received an allocation of $3,000.
- Taylor was Content level 7 in December and received $5,600. In mid Jan, Taylor received an “At Level” rating and so received $2,800. At the end of the month, they were assessed at Content level 5, so received an allocation of $3,150 - $2,800 = $350.
Next Steps In Compensation Planning
We are not going to get to the perfect comp model in one OIP. We are going to have to iterate and assume that everyone involved is working with good intent to create a great DAO. Additional comp-related OIPs that will be proposed in early 2022 include:
- 2022 Bonus Plan: sets quarterly payouts based on achieving DAO-wide OKRs
- Vested comp: provides vested OHM (vOHM) payouts for long term contributors.
The polling process begins 1/21/22 and will end at 00:00 UTC on 1/25/22. After this, a Scattershot vote will be put up at 00:00 UTC on 1/25/22.
For: adopt a standard approach to compensating contributors across the DAO.
Against: continue having inconsistent compensation models across each Stratego and group.