Team Agreements

The contributor agreement is the cornerstone of the Compensation Algorithm. Each contributors compensation is calculated based on the peer-to-peer assessments they received and their agreement.

The agreement consists of 3 elements:

1. Market Rate (MR) - the most objective market rate for full time commitment based on the roles and responsibilities of the contributor. Often times in startups, contributors get significantly lower salary, because the organization can't reward them accordingly. Try not to do that when you're setting up the Market Rates. They should be objective and competitive to the market.

2. Monetary Compensation - The monetary compensation of the contributor for the compensation period of the organization. Should be lower than the MR.

3. Commitment - time committed to the project in percentage.

4. Roles and Responsibilities

Base Salary - the base salary of the contributor is calculated as follows:

$$Base Salary = Commitment * Market Rate$$

Example:

Market Rate: $10 000

Monetary Compensation: $1000

Commitment: 50%

Base Salary: 10 000 * 0.5 = $5000

Setting up a Team Agreement