When Tia Silas became the chief human resources officer for Shopify a year ago, she planned to take all of their HR programs down to their studs and rebuild for a new chapter at the company—one that rewarded what mattered and supported the employees and managers leading the way. They soon became obsessed with hiring high performers and building the tools they would need to execute at Shopify.
Since then, they’ve made some bold bets. At the start of 2023, the company canceled all recurring meetings with two or more people. And the impact is positive. “We’re seeing more one-on-one collaboration versus these large group meetings where there’s no way we’re getting value from all the people in it,” said Silas.
We asked Silas more about freeing up time for critical tasks and how they’re creating career paths for people who choose not to be managers. Here’s the interview transcript, lightly edited for length and clarity.
QZ: Shopify has recently rethought the way they compensate their employees. What motivated the change?
Silas: With compensation, as much as we think we’ve innovated, we haven’t changed it much over the decades. The instruments we used to compensate people and the decision-making flow are fairly consistent across many of my experiences and broadly across industries. Shopify’s flex compensation program was birthed out of the idea that the company wanted something where agency was key. We actually don’t want to make decisions for employees. As their life changes, we want them to have the agency to choose.
How does the new compensation program work?
Most companies try to do this idea of pay for performance. As our employees “master skills for growth,” we reward them “increased wallet size.” Traditional compensation systems make it very hard for people to understand that their equity is in this one place—it might be held by a third party, then I get my pay stub, I get benefits, and I may kind of understand what my pay is. This idea of productizing compensation was how we built this one-stop shop for people to understand all the components of their rewards in a really easy way.
To create agency, quarterly, our employees have options around selecting equity and cash with a slider that they can adjust for themselves. We want our employees to have the ability to center their life around great work and a great mission.
You’ve taken this opportunity to reinforce compensations tie to your company mission. How does that work?
This is another bundle of money we give you towards perks and benefits you can turn into things. One aspect we’re excited about launched last quarter and enables employees to turn their reward dollars into “shop cash.” We take $1 and give a premium on the money to use towards purchases from our Shopify merchants.
We obsess around our merchants, and this fulfills our goal to align our programs with our mission. Employees can take their dollars and push them into the ecosystem we care about most. You can also use these dollars for wellness and well-being. But the key is us not choosing for you. You’ve got a lifestyle that’s important to you, and you determine how you turn those dollars into something that’s meaningful to you.
In the future, we’ll be innovating around building in education and enablement within the wallet, so people interested in financial planning can use that as a one-stop shop.
How have employees and leaders responded to the new compensation plan?
92% of the company has elected to participate in the flex comp options. But more than that, there’s all these headlines about companies not delivering bonuses this year and equity being impacted. At Shopify, we’re going to give you the value of your job, and we’re pretty exclusive about only wanting high performers. So the assumption is that your value doesn’t vary over time. You will get that value, and it’s not contingent upon solely company performance. We look at the value of a skill and its impact in the marketplace.
You also rethought the way you were structuring rewards for management roles. What’s changed?
We have “crafters” who are individual contributors and “managers” who lead people. Typical career progression systems say at some point that crafting isn’t sufficient and you’d have to become a manager. At Shopify, we want to create a career system where they can continue to progress to senior ranks in the organization without having to lead people. As an example, no one thinks that Steve Jobs was a great leader because he loved people. He was an incredible innovator and probably could have never had one direct report and been as brilliant. It would have been a shame for someone to tell him at some point that he had to put his building tools down.
Our high performers come in many shapes and sizes, and we wanted to create a career system where they could progress. And that needed to not only be in theory–I had to then create a compensation system that proved that was true. Are you going to pay me the same amount you’re paying the VP with a sizable team? The answer is yes; we will if you can demonstrate value and growth. We call it our jungle gym career journey.
Leaders play an important role in compensation. How did Shopify invest in preparing leaders for this shift?
We spent a lot of time preparing them to have the right conversations. We want to eliminate any information deserts across the company and rely on our people managers to prevent that. We let them preview information and collected their feedback because these things are not one-and-done. We want to understand what’s landing and what’s not.
We did ask each leader to confirm that they had a conversation with each employee and asked a few questions. Did they understand the program? Do they like it? Then, in real-time, we built enablement. Perhaps we release another set of FAQs, or we decide to do a deep dive with all of our managers around these components to further equip them.
How is success measured and rewarded for those who don’t lead people?
We assess the crafters (those who don’t lead people) on the impact of what they built and shipped connected to our mission. We have an in-house industrial organizational psychologist who helps us develop questions that lead to the real output we’re measuring. If you ask a series of questions about your impact on the team, a scoring mechanism gives you a suggested relative ranking of how that person should fall. So we spend a lot of time developing the right question set based on the behaviors we expect from people who spend their time crafting and building versus leading.
We have a new process for our performance reviews. We built a one-stop shop tool where people go in and do their self-reflection, and they answer a series of questions built out by our behavioral scientist team. And then, we have 360 reviews that are automated through the tool and populated based on who you spent the most time with within a six-month period.