How to get a raise at the new manager-free Zappos

zappos office
One of the core values of Zappos is to "Embrace and Drive Change." The company's switch to becoming a "self-managed" enterprise may test a lot of employees' willingness to do that if it doesn't get its pay practices right.

A job may offer a lot of things: purpose, prestige, perks. But for most people, the biggest thing a job offers is a paycheck.

So a company's pay practices -- how much you'll be paid, how to get a raise -- are kind of a big deal for employees.

At the popular online shoe emporium Zappos.com, however, those pay practices have become big question marks as the company attempts to go all-in on becoming a "self-managed" enterprise.

"We don't know yet what we're going to end up with. We may end up with several ways to set compensation," said Darshan Bhatt, a senior developer at Zappos who is part of the group debating how to structure pay practices.

No manager say on pay: What they're not going to end up with is individual managers calling the shots on another person's paycheck. That's because the company's CEO Tony Hsieh announced in a memo that as of April 30 there would be no more "people managers."

Those who held manager titles were invited to either leave with severance or find new roles in the company that suited their talents and interests. But no longer would they have authority over anyone else.

Instead authority will be distributed across everyone in the company, or rather across the "circles" they join and the roles they fill within those circles.

A hierarchy of autonomous circles is a key element of Holacracy, one of a few organizational methods that Zappos is drawing on to become a self-managing organization.

And while there may no longer be managers, there will be "lead links" who are appointed to guide a given circle to fulfill its stated purpose. Hsieh will be the lead link for the highest circle known as the General Company Circle or GCC.

From there will cascade down other circles, then from those circles more circles. All in all, the company expects to have 400 to 500 circles.

Related video: How Zappos expects to run without managers

Hsieh will have authority to appoint the lead links of the circles that emanate directly from the GCC.

In addition, he will head up the circle that holds domain over hiring, firing and compensation, Bhatt said.

But that doesn't mean Hsieh will be able to dictate what anyone earns.

That may be more of a communal decision or one strongly influenced by peer pressure.

Betting on badges: Right now the company is considering a few methods to establish pay levels.

One possibility involves "badges." Badges would represent different skill sets and certifications. Someone's current job likely could be broken down into a few of them.

zappos Tony Hsieh
Zappos CEO Tony Hsieh said in his spring memo that continuing to execute on the company's goals while overhauling how the place works "will feel somewhat like trying to upgrade an airplane while we're still flying in the air."

But only some badges are going to be "compensation badges," Bhatt said.

Those compensation badges would go through a longer approval process and must be reviewed by the compensation circle, which will be charged with setting competitive pay rates for different skills.

The skills and pay level that a compensation badge represents will be published and available for everyone at Zappos to see.

Set your own pay: Another option under consideration is to have employees set their own salaries. Sounds sweet, but it probably won't be as easy.

Bhatt has been suggesting "guard rails" for this option. For instance, you might have to justify why you think you're worth "X" in front of 5 people who do similar work but who are paid less.

Or you may have to justify your number to the circles you work in or to a broader group by documenting your accomplishments, what the market pays for your skills and your performance reviews.

Wait ... if there are no managers, who's going to review your work? Under the new Zappos, anyone and everyone.

Bhatt said there likely would be an ongoing 360-degree review called "Journey." Anyone can give their feedback on you at any point in the year, and you can also request certain people to do so. All reviewers, however, must indicate their relationship to you and your work. And their reviews will be made public.

The company likely will also continue its "Z60" review, which is done once or twice a year but only by people you've approved. They weigh in on how well your behaviors and personality embody the company's 10 core values.

No change in pay ... yet: Zappos told CNNMoney in an email that there is "no cut-off point currently defined at which everyone's salary will be adjusted."

Employees who have worked there since at least April have been told that their salaries are guaranteed unless the work they do changes drastically. If it does, their pay would be reset according to whatever new practices the company establishes.

When those new practices are in place, if a person's work stays roughly the same, her pay will likely stay the same or may even go up. "Nothing is black and white, but this should hold true for most people," the company said.

But former managers' pay will only be guaranteed until the end of 2015, according to Hsieh's memo. Some potentially could see a drop in pay if they haven't taken on enough new roles or haven't developed enough skill sets since they spent much of their time before micromanaging others.

Bhatt, who is a former manager himself, doesn't know what he will be paid in 2016 but said he trusts the company to do well by him.

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