Rethinking Compensation and Support at Gramhal
Last week, one of my colleagues and I were having a standup on a product that he had been working tirelessly on for over the past six months. At the end of the call, he shared how he felt demotivated while working on a shoestring budget with limited resources. His rising frustration was evident in his communication. He went on to ask for a salary increase to what would be 25% more than the highest salary at the organization. Caught in the moment, I remarked, "Itni toh meri nahi hain bhai" (Even I don't earn that much, brother).
After the meeting, the statement kept running through my head. It left me at unease because it was happening in the backdrop of me preparing to participate in the 100X Impact Accelerator, which aspires to create social unicorns. I know that without a great team that feels fully supported and compensated, it is impossible to reach our aspirations of exponential impact.
What is wrong?
As I kept reflecting, it became clear that at Gramhal, we have unknowingly participated in and contributed to faulty compensation system of the non-profit sector. We identified five major shortcomings that contributed towards employees’ dissatisfaction at Gramhal. Notably, the ‘founder's mindset’ emerges as one of the key reasons.
At a Glance: Founders adopted the non-profit sector's practice of offering lower salaries, even though they had the resources and intention to offer market-rate salaries at Gramhal. Founders operated with a scarcity mindset. Founders fostered a culture of silence and non-transparency regarding compensation, leading to inconsistent discussions behind closed doors. Founders derived high psychic income, which made them content with lower financial compensation; this set an unintended glass ceiling for other team members. Founders often placed consistent support initiatives for employees on the back burner due to demanding work.
1/The Non-Profit Compensation Dilemma
It's well-known that salaries in the non-profit sector often lag behind those in other industries. Various factors contribute to this, including expectations from funders for low overhead costs, limited budgets, and, sometimes, an unspoken belief that a smaller paycheck is a form of commitment to the cause. When launching Gramhal, we had no objections to paying market-rate salaries in the social sector and were even fortunate enough to have unrestricted capital. Even so, regrettably, we fell into the trap of paying below-market rates.
As we introspected, we realized that the reason for falling into this trap was that we had been operating with a scarcity mindset. We assumed that paying lower salaries would somehow offset the resource constraints we face. Even while making organization-wide financial projections, we always wrote lower than market salaries for all roles.
The irony is that there is abundant philanthropic capital available in the market, and at Gramhal, we have never been questioned by any of our partners about the salaries of team members. This begs more reflection on understanding why, as founders, we adopted the scarcity mindset and how we can be more aware of it.
3/The Culture of Silence and Non-Transparency
Sadly, Gramhal lacks a healthy space for open, honest dialogue surrounding compensation. There is no official policy that is publicly available. Compensation has become an almost taboo subject within the organization.
I personally find it challenging to engage in compensation-related conversations with my colleagues or co-founders. This culture might have led many team members to feel judged when asking for a higher salary, with some possibly refraining from bringing up the topic. Even when discussions did happen, they were behind closed doors and on an ad-hoc basis without being motivated by due process of equity and fairness. This opaque culture has stifled individual employee growth and undermined the collective well-being of the team.
4/Founder's income as a glass ceiling for others
All team members choose to work at Gramhal even at lower wages because they get “psychic income” – the non-monetary part that includes feelings of personal satisfaction by contributing to farmers' well-being and having a positive impact on the planet. Hence, the total reward for an individual is the summation of the financial income and psychic income.
As founders, we disproportionately reap the benefits of psychic income through additional opportunities for learning, prestige, and recognition. This is partly because the ecosystem - fellowships, funders, incubators, accelerators - tends to focus on interacting with founders. Because we earn so much more psychic income, we are comfortable earning relatively lower financial income.
However, the low financial income of founders sets a benchmark for others in the organization and acts as a glass ceiling. Non-founder team members get relatively low psychic income, and even that can fizzle out in the face of complex and entrenched societal problems.
5/The Underinvestment in Support Systems
While our team members are motivated by a deep sense of social purpose, they often find their enthusiasm dampened by the operational constraints they face. In stark contrast to our mission of empowering farmers and fostering sustainability, the daily grind frequently involves delivering high-quality work with limited resources and without adequate support infrastructure.
Team members find themselves struggling to advance projects, lacking both mentorship and opportunities for professional development. Even the efforts we did take, for instance, onboarding an Emotional Intelligence Leadership Coach, were dropped as work picked up steam. This type of ad-hoc support infrastructure hampered team members’ effectiveness in achieving the organization's mission.
As the conversations around inadequate compensation progressed, we took a step back to fully grasp the extent of compensation given up by team members. It is also an endeavour to acknowledge the substantial financial contributions that each member has poured into furthering Gramhal’s mission, despite the existing constraints. We are calling this “Mission Investment”.
At its core, "Mission Investment" represents the difference between what a team member could have earned at the market rate (across various sectors) and what they actually earned at Gramhal.
We reached out to 29 past and current team members who worked at Gramhal in different capacities. We requested everyone to state what they would have earned elsewhere for each position they held at Gramhal. While one individual chose not to participate in the study, three did not respond. For the remaining 25 team members, we added up the differences and landed at a number that led to shock, amazement, and deep gratitude for all.
Collectively, over the course of three years, team members at Gramhal have contributed ₹4,77,15,850 ($573,156) to the mission.
Since we wished to publicly celebrate the investment made by each team member, we had asked in the survey whether they were okay with both their names and the mission investments being shared externally. Out of 25, 16 said yes, and nine chose to remain anonymous. The table below includes the list of all mission investments made by team members between July 2020 and July 2023.
Mission Investment in USD
9 team members across job functions
Operations and Fundraising
Design and Research
Operations and Supply Chain
Nagu Lal Hada
Partnerships and Farmer Interface
We believe that acknowledging all historical mission investments by team members is a necessary first step for any organization to course-correct their compensation practices. We are proud and grateful to all our past and current team members for committing their time, energy, and financial resources to Gramhal's mission.
Recognising the gravity of systematic problems concerning compensation and employee support at Gramhal, we decided to acknowledge them publicly and then design a comprehensive framework to solve them.
So, how are we thinking about designing a comprehensive compensation framework?
We aim to establish a transparent and fair structure so that no team member feels anxious when discussing raises and promotions. Instead of a team member speaking to someone in the leadership team in a conversation dominated by power hierarchy, both the team member and the leadership team member should review the policies together and make a shared decision. We collected feedback from past and current team members, and after detailed discussions, we have identified the following principles to design our comprehensive compensation policies:
Keep mission investment in check.
Gramhal shall make a continuous effort to keep mission investment to a minimum; if possible, it should be zero.
All non-founder team members shall have an upper limit for mission investment based on their pay bracket, beyond which they will receive the market rate salary.
No mission investment will be expected from team members who are earning below a certain amount. These team members will receive market-rate salaries in all scenarios.
Each year, on 31st December, a list will be published publicly to acknowledge the mission investment made by all the team members.
Make it easy to have a compensation conversation.
During hiring, salary ranges will be transparently displayed on all job descriptions.
Job families and pay bands will define the compensation for each role, offering everyone a transparent and clear path for financial and professional growth.
Internally, everyone will know who earns what, and on what grounds pay for team members is revised in each review cycle.
Bi-annual reviews will be hosted to open up space for salary discussions based on absolute numbers, not percentages.
The ratio between the highest pay and lowest pay in the organization will be capped.
Set team members for individual and collective success.
Gramhal founders will shift external learning opportunities like fellowships, scholarships, and skill-building to the non-founder team members.
Gramhal will commit up to 10% of the current financial year's budget for team support programs that include dedicated mentorship programs, skill-building workshops, co-working spaces, and team retreats. (This percentage will be revised each year.)
We see this as a small first step in creating a work culture that acknowledges, appreciates, compensates, and celebrates each team member's contribution to achieving Gramhal's mission. We aim to finalize and implement our comprehensive compensation framework by the end of November.
We are actively seeking best practices to develop a holistic compensation framework. If you have any feedback, comments, thoughts, or ideas on how we can enhance our framework to be even more transparent, equitable, and fair, we'd greatly appreciate it. Please share your insights with us at firstname.lastname@example.org.
This blog is written with support from Nabilah Noorani.
To learn more about our work at Gramhal (and the multiple openings across roles!), please click here: https://gramhal.zohorecruit.in/jobs/Careers-Live