• Proposal
  •  OIP-75: Olympus Compensation Process

Summary

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-47Olympus 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.

Motivation

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.

Proposal

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

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:

Compensation Process

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):

  1. Team leaders rate member contributions through mid-month as follows:

  2. Below level: the team member contributed below their previously assessed level.

  3. 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.

  4. Operations calculates the mid month allocation for “At Level” contributors as 50% of their last month’s allocation. Below level contributors receive no allocation.

  5. Allocation team reviews and approves payments

End of month compensation process (full assessment):

  1. Group members complete optional self assessment giving their level (1-10) and most significant contribution for the month as input to the team leader

  2. Team leaders rate rate member contributions on a full-month scale of 1-10 based on retrospective, comparison with peers and self assessments

  3. Operations calculates the end of month allocation based on assessed level and role, less any mid-month allocation received.

  4. 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).

  5. Allocation team assesses Stratego and Product Leader levels and sets allocations.

  6. Allocation team reviews and approves payments.

Examples:

  • 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.

Polling Period

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.

Poll

For: adopt a standard approach to compensating contributors across the DAO.

Against: continue having inconsistent compensation models across each Stratego and group.

Should the DAO adopt a consistent compensation model for all contributors?

This poll has ended.
abipup changed the title to  OIP-75: Olympus Compensation Process .

I am torn on this a bit. I do like the consistency we can convey, but it almost feels pre-mature without the other incentive options defined.

Currently with it being determined across each working group and their respective strategos is that they can be flexible depending on the needs of the department and the talent they are seeking to bring in.

If we adopt this proposed model as-is, we lose that flexibility granted during the stop-gap proposal and make our DAO more rigid which may lead to instability in the current contributors and whichever we might be courting to join.

If we delay the adoption of this until we have additional compensation legos at our disposal, strategos will be able to craft more complex contribution compensation packages for their respective divisions.

I'm going to abstain from a vote until we can discuss these finer points a bit more!

    It’s so important that we are able to provide stability and predictability for our contributors. I appreciate all of the hard work that went into working through a system that will be transparent and fair!!

    dr00 This is providing a framework for the same allocation levels that are being used in the teams currently with the stopgap. It doesn’t change the flexibility within the teams, it’s just formalizing the way the stopgap has been implemented.

    I do agree about seeing all of the pieces of the puzzle together- it’s important to have a complete picture of okrs, bonus, and vesting, to align the goals of the DAO and long term incentives to our contributors.

    This sounds fair to me, a couple questions:
    1) Does this apply to Agora given its status as a project with its own budget? DropKick Darren recently put a lot of effort into a new compensation system for Agora that is very similar to this and quite good.
    2) I don't see what happens if one over performs. For example, if there is an effort to push something out and we work extra that week?

      I feel I spend a lot of time working on the DAO although it might not be visible.

      E.g. I got compensated as a part timer in December though I felt with the time & effort, I should be considered full time.

      I am working a lot on the app localization regarding RTL language support but the updates on these are semi-regular so it could be 1 month working in the background before the changes are submitted so how that would be evaluated? (Part vs Full time)

      Mugen Good questions: one of the reasons that comp has been such a huge admin burden is that almost every Stratego had built their own assessment and comp system. Over the last 2 months, we started with OIP-45 salary maximums and then worked with the Strategos to take the best elements of each comp model. In December, over 60% of allocations were made using the new model. Once we get the base comp process defined, we will move to bonus and vested comp processes, which are meant to provide longer term incentives and reward longer term contributions as well.

        twoeggs Great that answers me. I've been saying for months strategos had too much on their plate doing normal duties and trying to create framworks for allocation and keeping track of everyone's work.

        Good to have an actual system now. Thanks!

        @twoeggs @abipup is it possible to include a clarification for which category sherpas/mods fall under? general or content?

          Z33 Yes the sherpa and supermod comp was set by OIP-47 and so that is the basis for the Content Role Allocation levels, so sherpa max is at Level 6 ($4,500) and supermod max is at level 10 ($11,000)

          Wish I saw this earlier. Been on my mind… Few points:

          1. Thanks for the transparency, please bring more. Maybe you can publish like working groups' meeting minutes on periodic basis - so that non-DAO ohmies can have insight on whats going on? Maybe with a time delay so as to not reveal time-sensitive information, and perhaps some parts REDACTED .. But I often sit and wonder "what is going on now in the DAO? anyone still working?" …
          2. It has itched on me for months now, that the compensation has no relation to the underlying value of the project. Knowing that there are winters as well as summers (bear and bull), there comes times when it can be kind of gritty for a sustained time. If we have a sustained barren environment for 3 years with OHM trading at close to RFV - then can we afford the dilution of hundreds of contributors receiving top level compensation as measured in dollars ? At 140 contributors, assume 10kUSD average payout, we would be paying out 16.8 MUSD per year with market cap at 225 MUSD. Over 3 years, that would take a huge chunk of our RFV/mcap.

            bubbidubb you raise a bunch of good points here. Like many startups, Olympus has grown quickly and is now at the point where it makes sense to think harder about how we work together as a DAO, starting with more transparency about how we coordinate and compensate the work needed to achieve our reserve currency vision.

            In particular, we need to get better at translating the vision into specific objectives and defining the metrics which will demonstrate whether we have met those objectives. The recent Olympus12 medium post was a good example of setting the objectives. Once we have objectives, we can start looking at how much it costs to achieve them and prioritizing which objectives we feel are most important (resulting in a budget tied to OKRs).

            Will take a couple of months to get this all in place, but result will be full transparency on what we are paying to achieve certain objectives and how teams are performing on achieving those objectives.

            a month later

            Wow, more money to those who destroyed this protocol. Wall Street is so proud of you all….

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