How Gratipay transformed hiring and compensation for open organizations
Want the best employees? Let them hire themselves
In The Open Organization, Red Hat CEO Jim Whitehurst defines an open organization as one that "engages participative communities both inside and out." At Gratipay, we've pursued a similar vision, asking: Can we blur the line between inside and out? What if individuals in an organization could decide for themselves what level of engagement is right for them at any given time? We might unlock even more productive energy, which, as Jim points out, is a key competitive advantage.
In a series of two articles, I'm going to introduce Gratipay, and tell you about the open hiring and compensation practices we've discovered. In this first installment, I'll introduce Gratipay and the problem we're trying to solve, and I'll tell you about an experiment in open hiring that Drupal conducted on Gratipay. In a future article, I'll tell you the story of open compensation within the Gratipay organization itself.
What is Gratipay?
Gratipay is a payments startup with a mission to cultivate an economy of gratitude, generosity, and love. We are pursuing our mission with a product that offers weekly recurring crowdfunding for open organizations. Most of our customers are FLOSS projects, who use us as one of their donation options. A couple key customers are co-working spaces. We've been around for about four years, and we've processed over $1,000,000 on behalf of about 1,500 customers.
One of the most unique aspects of Gratipay is that we don't generate profit simply by "skimming 5 percent off the top." Instead, we're funded on our own platform just like the rest of our customers. Moreover, from the start, we have tried to operate as openly as we responsibly can. The payments industry is a heavily regulated one, not known for its affinity with open culture. Despite that, we have innovated in areas such as product development, partnerships, public relations, and security — and, of course, hiring and compensation.
What problem are we solving?
Work is infinite. So why are jobs scarce?
Gratipay operates on the assumption that "jobs" are a mechanism for creating artificial scarcity, something imposed on the infinite abundance of available work in the world. The dignity and pleasure of work is a basic human right. When we talk about cultivating an economy of gratitude, generosity, and love, an important aspect of our vision is a world in which everyone has ample opportunity to freely participate in meaningful communities of work.
Open source is just the beginning. We envision a world in which economic activity and voluntary labor merge into one.
This is notoriously difficult because of money's propensity to introduce extrinsic motivation into voluntary organizations, thereby "crowding out" those who had been acting out of intrinsic motivation and ruining what made the organization attractive to volunteers in the first place. Solving this problem means answering two questions.
First: Who gets to participate? Who has a right to a portion of the money in a given project or organization? At Gratipay, we wanted to find a way for open organizations to retain the porous boundaries and wonderful, welcoming inclusivity of open source projects, rather than reverting to the elitist hiring practices and rigid boundaries of the traditional firm. The solution is a fairly natural extension of existing open source best practices (as we'll see in a moment when we discuss Drupal).
The second question is the harder one: Who gets how much? Once you're "in," who decides how much of the available money is yours? I plan to lay out the specifics in a future article, but Gratipay's basic answer is pretty straightforward: you do! In the same way that "pay-what-you-want" gives the customer control over the amount they pay an organization for a product or service, the "take-what-you-want" system we discovered gives workers direct control over the amount of money they receive for their labor.
Take-what-you-want is a promising solution to the problem of distributing revenue without poisoning intrinsic motivation. Together with open hiring, it may unlock the possibility of a new, more harmonious relationship between the individual and society.
Open hiring and take-what-you-want are not mere theory. During a two-year, boot-strapped pilot, Gratipay saw 100+ organizations distribute almost $50,000 to 300+ individuals. Two organizations drove 72% of the dollar volume in our pilot: Drupal, and Gratipay itself. Let's turn now to Drupal to understand what open hiring looks like.
Open hiring at Drupal
Drupal is a mature open source project that a non-profit organization, called the Drupal Association, steers. The project's use of Gratipay was a skunkworks initiative by two core contributors, who intended to eventually hand the reins to the Association. These two contributors defined criteria for adding and removing others from revenue sharing on Gratipay, and then they recruited fellow Drupal community members to the pilot program. Roughly 200 people were eligible to participate.
Like most successful open source projects, Drupal already has clearly documented onboarding procedures. Anyone may start contributing to the project, without asking permission or going through a hiring process first. From there, establishing criteria for someone's work to grant them revenue-sharing privileges is a natural step.
In effect, the Drupal core team on Gratipay made it possible for people to "hire themselves" by voluntarily performing the work specified in their criteria:
- you are in MAINTAINERS.txt; or
- you have six commit mentions in the last six months to Drupal Core; or
- you make a good case based on non-commit contributions.
All told, Drupal distributed about $13,000 to 22 people over the course of one year (that's about 10 percent of those eligible).
From hiring to compensation
Gratipay is cultivating an economy of gratitude, generosity, and love, where intrinsic motivation is the norm, and open organizations provide opportunities for everyone to participate in meaningful communities of work. Open hiring and compensation practices further this vision. With Drupal, we caught a glimpse of open source evolving into open hiring. To truly see take-what-you-want compensation in action, we will have to look elsewhere: to Gratipay itself.
Stay tuned for Part 2!
(Editor's note: Gratipay's culture of organizational transparency meant this article took shape in public.)