Circle of Partners: increases, dismissals and hiring in self-management
When I tell someone excitedly about how it is possible to work without the premises of traditional management, then the question comes: Cool this business of circles and roles, but how does dismissal, promotion and contraction work in self-managed organizations? This is not a very easy question to answer. Practices are numerous, but there are some strategies that are more frequent in evolutionary-teal organizations. Today I will report on a practice that we are including in Organic Organization Standards Library and that outlines a solution to those problems.
This is a little more advanced text. If you still don't know much about self-management, I recommend that read this text. It is also important to know the Organic Organization method, which you can start accessing this page or downloading our ebook.
Alert: Before we start describing the pattern, I would like to clarify a point. The process being presented will not provide objective and clear criteria for how you should fire, remunerate or hire people in your organization. Instead, the “Partner Circle” pattern defines a meta-process, that is, a process that will lead you to the right process of firing, remunerating and hiring appropriately. But the “right way” to do these things is highly subjective and varies from organization to organization.
The standard below is compatible with the Organic Organization, version 3.0. It is not necessary to change the Meta-Agreements to adopt it. Let's go to the pattern:
An organization that wants to deal with self-managed and explicit issues that touch the relationship between its partners (collaborators, partners, employees) and the organization itself (hiring, firing, increases).
From now on in this text, we will use the term “partner-organization relationship” to refer to everything that involves changes in the contract between these two parties.
In most organizations, everything related to the partner-organization relationship is treated privately and unclearly. Salaries are kept secret, the processes leading to dismissal are obscure, subjective and highly personal. In addition to sinning in clarity and transparency, these processes tend to favor cognitive bias and maintain established standards, such as different treatment for minority groups, or lower wages for women. When an organization adopts self-management, it becomes a major nuisance, because there is no clarity at the beginning of which roles or groups must decide on layoffs, salaries and hiring. The result is that these decisions continue to be made based on the previous hierarchical organizational structure, that is, by former bosses and managers.
It is necessary to remunerate people fairly, to clarify what conditions are necessary for a healthy partnership and also to define who has decision-making authority in each step of these processes. All of this in a distributed way and compatible with self-management.
The solution is to define a circle called “Partners”, “Partner-Organization Relations”, or any other name that represents the people of the organization in question. This circle has the exclusive authority (in the form of an artifact) to govern the partner-organization relationship. The central idea is that any change in partner contracts must be decided by this circle. In addition, when a person seeks change, he must integrate objections from all members of the circle.
Let's do it by steps. First of all, the definition of the circle. Remembering that this is an initial definition, which should evolve over time. The main purpose of the standard is to define a starting point.
Purpose: Healthy relationships between partners and the organization
- Define conditions and restrictions that limit how changes in the relationship between the organization and its partners must take place
- Relationship between Partners and Organizations (changes in employment contracts, such as termination, increases, admissions, etc.)
In addition to the definition, the Partners circle must have two initial roles:
Paper: Representative of Circle X
Purpose: The purpose of Circle X
- Process proposals for changes in the Partners-Organization relationship according to the interests and needs of the Circle
Where X is each circle in the organization. We then have in the circle of Partners people from different parts of the company.
Paper: Partner Representative
Purpose: Interests of the represented Partners, seeking a healthy relationship with the Organization.
- Process proposals for changes in the Partners-Organization relationship according to the interests and needs of the Partners
They are elected representatives throughout the organization, whose objective is to represent people, as partners.
In addition to the roles defined above, the Partners circle must start with two restrictions:
Restriction: Assigning People to Roles within the Circle
The External Link cannot assign partners to roles within the circle. Instead, the following conditions apply:
- Each partner who is the External Link of a circle (with the exception of the Partners circle itself) is automatically invited to play the role of @Representative of Circle X, focusing on the circle of which he is External Link.
- Any Partner can play the role of @Representative of Partners, as long as it is elected by a majority vote in general election among all Partners of the Organization. The number of partners playing the role of @Representative of Partners is limited to 3.
- Any other role created in this circle follows the following attribution rule: any member of the Partners circle can invite partners to play a role, as long as they present a proposal and integrate objections from all other members of the circle.
The above constraint basically removes the powers of the External Link from the circle of Partners and determines an alternative form of assignment. The objective of the Partners circle is to have all the circles of the organization represented, in addition to partners chosen democratically to represent the partners themselves, as individuals.
Restriction: Changing the Partner-Organization relationship
Any member of the Partners circle may seek a change in their relationship with the Organization or that of another Partner (termination, hiring, and change in the contract). However, before obtaining explicit permission to do so, the member seeking change (the “proponent”) must submit a proposal to the other members of the Partners circle. The submitted proposal must be based on a tension perceived by the Partner, through the role he or she plays in the circle. The proposal may involve one or more changes to the Partner contract to be affected. The proponent must provide clarifications, listen to reactions and advice, and then integrate objections from any other member of the Partners circle. The validation and integration of objections follows the same criteria of proposals in Adapt Mode described in the Meta-Agreements, but they can be done in an asynchronous forum or another channel agreed between the members of the Partners circle.
Therefore, the “Partner Circle” pattern is composed of:
- A “Partners” circle, usually created within the organization's general circle
- 2 roles: Circle Representative and Partner Representative
- 2 restrictions: Assigning People to Roles within the Circle and Changing the Partner-Organization Relationship
Solution Application Examples
To better understand how the pattern works, let's imagine two hypothetical situations.
Case 1: Dismissal
Lisa, a member of the Partners circle, proposes that the relationship between Joana and the organization be ended (a resignation). Lisa presents the proposal to the other partners, stating that she observed that Joana constantly arrives early, registers her check-in point and sleeps for about two hours, until she starts working later. In addition, Lisa believes that Joana is working for a competitor. Today Joana plays a role within the circle that Lisa is External Link. Lisa believes that these behaviors are harmful to the organization (tension) and it impacts her circle.
When presenting the proposal, Lisa listens and answers a series of questions asked by the other members of the circle.
Marcos questions: Lisa, have you ever confronted Joana about your perception that she is sleeping?
Marta asks: Have you checked with Joana what she understands as a competitor of our company?
After listening to the questions, the facilitator of the meeting asks each one to express a reaction on the proposal that Lisa presented.
Marcos says: Lisa, I think it's important that you have a conversation with Joana before making any proposal here. You can discover new things by having this chat.
Cléria reacts by saying: I think it is too hasty for you to propose a resignation of a person without first dismissing them from the role in your circle. I think you are avoiding a difficult conversation. Talk to her and remove her role assignment from your circle if it bothers you and your tension will be resolved. Maybe Joana has space in other circles in the organization.
Lisa hears all the reactions and the facilitator gives her a voice again. She thanks everyone for listening to her proposal and chooses to talk to Joana before moving on with a resignation proposal. A few weeks later, Lisa brings back to the group that talked to Joana and that she no longer sleeps when she arrives.
Lesson learned: Dismissal is a strategy to resolve a conflict, but there are others. The Partners Circle helps in this regard, placing more responsibility on whoever makes the decision (the proponent). Upon hearing advice and opinions from the other members, Lisa rethinks her decision and manages to resolve her original tension without causing a break in Joana's relationship with the organization.
Case 2: Increase
Jonas is dissatisfied with his salary and believes he is out of step with what he would receive at another company. He takes a proposal in the partner circle, through the partner representative, which increases his salary by 100% in relation to what he received before. Kelly, a representative of the financial circle, raises an objection, saying that the increase of 100% would set precedents for others to do the same, since many salaries are still behind. And according to Kelly, today the organization cannot afford to pay everyone according to the market. The facilitator asks the objection validation questions and Kelly concludes that his objection is valid. In the integration of the objection, Jonas agrees to reduce his increase to just 50%, while Kelly takes on a project in the financial circle to give more clarity on the financial situation of the organization, which is still not very transparent for everyone.
Lesson learned: Proposals, as unreasonable as they may be, generally lead to the maturation of the remuneration system. Jonas probably proposed such a significant increase because he only considered his perspective. When Kelly takes on a project to clarify the financial situation of the organization, we have a systemic improvement that will also serve for other future proposals.
From the application of the “Circle of Partners” pattern, new paths begin to be outlined for the resolution of contractual issues between the organization parties and their partners. The standard tends to provide comfort in clarifying which are the channels for dismissals, hiring and salary changes to be approved. Despite this, it does not define “how” or what types of increases, for example, are desirable and / or applicable. Basically any member can propose a change, and it will move on after the objections are integrated.
This will inevitably generate a series of tensions, which may establish restrictions on the conditions under which these proposals must be made. For example, an organization may establish that before a partner is dismissed, he must lose all of his roles in the structure. Or that before submitting a proposal for an increase, the proponent should check the financial impact with the circle that takes care of it. The possibilities are endless, and the “Circle of Partners” pattern opens the way for consolidating more bilateral and healthy relationships between people and the organization.
This pattern was based on the “Partnership Circle”, described by Brian Robertson as a possible solution on how to deal with the partner-organization relationship in Holacracia. The standard was then adapted for use in the Organic Organization.
At the time of writing, a variant of the standard is used by a Brazilian organization practicing Holacracia called eduK.