Authors: @Pepperoni_Joe, @anon10525910

Co-authors and reviewers: @iluscavia, @bradwmorris

This post is one of six exploring the comprehensive overhaul of Compensation and Community Ownership at Index Coop. Whilst each topic is a stand-alone piece, they are interrelated. We recommend reading through the posts in the following order:

Compensation & Community Ownership - Next Steps 30
Retrospective Airdrop to historical contributors 20
Dynamic Staking Model
V2 Fixed Salary Hiring
Owl Levels (not yet released)
Flexible Compensation (not yet released)

It is also worth noting that these discussions of airdrop, staking and compensation are occuring in parallel. They are interconnected and can be approved and implemented independently - hold ups in one area does not prevent implementation of another.

The holistic picture of our new Compensation and Community Ownership work was mentioned in the kick off post 30 and is displayed again below.

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Simple Summary:

This post introduces for discussion v2 Hiring Guidelines
It is one piece of the broader Compensation and Community Ownership 30 work. If certain pieces of that work are not enacted, this post will be updated. Such changes are not expected to substantially change this proposal.
Delegating hiring decision-making to a nominated group that can be refreshed by the community is a core piece of this proposal. This is intended to be an improvement over v1’s usage of a static committee and IIPs to confirm hires.
This delegation intends to make full-time hiring more efficient and agile.

Last but not least, this post is intended to start the conversation. Questions and feedback are requested!

Situation

The Index Coop has grown and evolved dramatically since launching in October 2020.

Part of that evolution included how the Index Coop hires full-time contributors.

Currently, the Coop has 5 “full-time” contributors. They were selected based on the criteria detailed in IIP-36 12 (Lemonde Alpha, Big Sky), Hiring - Web3 Engineer 8 (0xmodene), Hiring - Head of Analytics 6 (JD Cook), Hiring - Smart Contract Engineer 6 (Noah). Continuing to hire full-time contributors is essential if we are to achieve and maintain long-term success (see “Motivation” section below for more). Today, many Working Group Leads and other contributors are not technically “full-time.”

Thus far, we have gone through two iterations:

Generally speaking, the v1 guidelines were effective. They delegated responsibility to small groups of DRIs, made expectations for the role clear upfront (i.e. Hiring - Web3 Engineer 8), and resulted in multiple hires that have helped increase the Coop’s technical autonomy. Each hire was confirmed by Snapshot voting.

However, they were not perfect, especially given the evolution of the Coop. Together as a community, we’re on a never-ending journey of growth and improvement 2. Those v1 guidelines are in desperate need of a refresh with Index 2.0 1 in full swing and Compensation & Community Ownership 3 taking centerstage.

Now, it is time to introduce v2 Hiring Guidelines for discussion.

Once these guidelines receive sufficient buy-in, we hope these allow the Coop to quickly begin a new round of hiring in line with the revised guidelines and the broader changes brought about by Compensation & Ownership 3. Questions, feedback, and iteration are expected.

Read on for:

Differences from v1 Hiring Guidelines
Core principles
Motivation
Proposed v2 Hiring Process
Who decides which roles to prioritize? Wise Owls Group
Who runs interviews? Interview Team(s)
Next Steps

Differences from v1 Hiring Guidelines

In June 2021, v1 Hiring Guidelines 6 were proposed, iterated, adopted, and used to make a few hires.

What is being proposed in this post is less of a teardown of those guidelines and more of a refresh. It is intended to better fit the direction we’re moving in with Index 2.0.

Compared to v1, the core differences are:

Delegation of decision making on roles - the v1 guidelines delegated decision-making to full-time contributors and a Set representative. This group is no longer best suited for this role. We propose that this decision be delegated to the prospective “Wise Owl” council. If that council fails to form by November 28th, 2021 we recommend forming a “Hiring Team’’ with the same responsibilities described in this post.
A holistic view of hiring - v1 decision making was made on a role by role basis, rather than a strategic view of what multiple roles need prioritization & why. The Coop needs to be more intentional and strategic when it comes to hiring full-time contributors.
Equity - v1 compensation for full-time hires included an equity element. This is proposed to be removed as ownership is covered by “Dynamic Staking Model” which enables the Coop to put equity/ownership on sliding scale (vs. “your in” and “your out”) and offer competitive market salaries fixed in USDC.
Hiring approval - v1 had INDEX token holders ultimately deciding who got hired via IIP & Snapshot voting. This proposal instead puts that decision-making in the hands of the community-elected Wise Owls.

Core Principles

These have been slightly modified from Hiring Guidelines v1 6.These principles are intended to make clear some fundamental thinking.

Get the right people on the bus: “When facing chaos and uncertainty, and you cannot possibly predict what’s coming around the corner, your best “strategy” is to have a busload of people who can adapt to and perform brilliantly no matter what comes next.” (Good to Great 2)

The Coop hires people who are relentlessly resourceful & ship: The Coop is pioneering a new way of collaborating in order to launch and maintain structured token products and is trying to grow fast. In this startup-like environment, we need people who are resourceful in their pursuit of delivering impact for the Coop and are able to crank out a high-volume of high-quality work (Hire For The Ability To Get Shit Done 1, Relentlessly Resourceful 2).

Commitment & Trust: We, the Index Coop, should be willing to increase our commitment to contributors who earn trust by delivering impactful outcomes and who embody the principles 2 we believe are important to our long-term success.

We earn our people: We believe the best people are recruited (internally & externally), not bought. Protocols that pay top-of-market will always win salary-optimizing people. We believe the best people want to learn. Winning and retaining these people means creating an environment optimized for growth and learning, and so their long-term career capital. We believe that if we improve Index Coop member’s long-term career capital, we will get the best people (Carta 101 & The Alliance).

Speed & iteration: Similar to v1, we need to create a good-enough solution out the door that enables us address the major talent retention risks we face while still leaving room for iteration. That said, the goal is that v2 is a longer lasting solution.

The Coop hires to fill high-leverage needs: There are many ways to fill a need or solve a problem, including: software, process, technology, monthly rewards, and other programs yet to be created. Given those alternative solutions at hand, the Coop should use hiring as a tool to find & retain the right people to address high-leverage needs we can’t otherwise solve (Carta).

Fairness: The Index Coop is a prominent actor with exciting prospects for growth in a highly innovative, and highly competitive, space. We intend to provide full-time contributors with attractive compensation packages, while also ensuring the Coop is set-up to thrive in the long-run. Compensation should be objectively based on skills, capability, and expertise. Full-time contributor compensation should be fair (market) and based on the value/impact they provide to the Coop.

Mutually exclusive: If someone is compensated as a full-time contributor, they will not be compensated separately via separate existing or to-be-created programs (no “double-dip”). This may be moot should other Index 2.0 compensation structures come online.

Motivation

Market Realities

Simply put, the competition for great people is fierce.

Crypto organizations are well-funded and strategic. The Coop must be able to compete with these organizations.

These organizations (DAOs, corporations, startups) are flush with cash and are aggressively hiring.
They offer lucrative, full-time packages (salary, equity, benefits) to attract and retain talent.
They are strategic about talent acquisition.

Good humans with talent are scarce

There just aren’t that many people that have deep experience and expertise working in crypto (we are lucky that so many of them are contributing to the Coop today).
For folks that have important expertise outside of crypto and are looking to break in, there just aren’t that many who want to work for a DAO. It is a novel, evolving way to work that isn’t for everyone.

Why do we need full-time contributors?

The Coop needs contributors primarily prioritizing Index Coop in order to achieve and maintain long-term success.

Here’s why:

The Coop is on a mission to make crypto investing simple, accessible, and safe for everyone. At our heart, we are a tech organization helping create deeply technical products, in addition to creating a lasting organization in a new organizational paradigm.
Many mission-critical functions require dedicated, focused effort over long periods of time. To build the type of organization we all want the Coop to become, we need to hire the right people capable of building and executing these functions as their primary responsibility. This co-exists with other types of contributors who are deeply valued and are also important to long-term success.
Hiring full-time contributors is currently the best known mechanism for aligning people & protocol in pursuit of long-term objectives. Should a better mechanism come along, we should be excited to explore it.
We must avoid a revolving door of contributors in highest-impact areas.

What happens if we don’t hire full-time contributors?

Index Coop lasting success will be hard (if not impossible) to achieve.

We won’t retain talent - loss of core contributors represents the biggest threat to Index Coop’s long term success.
- We are conscious that right now the Coop is at risk of losing contributors unless full-time hiring continues.
We won’t attract talent - they will go to other crypto organizations that offer full-time packages.
Short-termism will prevail. Long-term success will be hard to achieve

The Index Coop needs to be able to hire full-time, long-term committed individuals who focus on developing high-impact areas with an “in it for years” mindset. This is to the benefit of all Index Coop stakeholders.

Such long-term contributors need predictability and commitment in the form of salary. Other benefits, including equity are covered by other aspects of the compensation model. The only non-financial benefit which may also be covered within the v2 Hiring Guidelines is for health insurance.

Proposed v2 Hiring Process

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We propose the following v2 hiring process to enable Index Coop to quickly act to address our hiring needs.

The changes we propose as part of “Compensation & Community Ownership” 30work are multifaceted and comprehensive. Thus, it is important to note rolling out the v2 Hiring Guidelines is not necessarily dependent on these other topics. We hope to get community buy in for this proposal, and then immediately look to launch a round of fixed salary hires.

This process relies on two distinct teams with delegated responsibilities:

Wise Owls - Responsible for hiring on behalf of the Coop (prioritization, guiding interview process, determining fair market salary). Should the Wise Owls group fail to form by November 28th, we would then form a “Hiring Group” responsible for the same tasks, unless or until a suitable replacement emerges.
Interview Team - Responsible for interviewing individual candidates.

More detail on those two teams follows after this section.

Hiring Process

The goal of this section is to provide clear guidelines for how the Coop hires.

This is the proposed hiring process, it assumes that the “Wise Owls” was properly formed with community buy-in.

#0) Wise Owl drives conversation on needs: Ranked order priority of roles to take through the hiring process. This will be done following the principles of openness, transparency, and seeking feedback from key stakeholders.

#1) Interview Team formed: Nominated and formed for a specific role.

#2) Interview Team scopes role: Create a hiring scorecard and conduct initial research on a competitive market salary

#3) Open application: The hiring scorecard will be shared via the Coop forums (Who 2). This forum post should include an application (Google Form or a dedicated tool like Lever) that applicants will be asked to complete in order to submit their application to the hiring team.

This is intended to both 1) prioritize looking internally first and 2) make the role crystal clear to set all sides up for success.

#4) Conduct the interview process: An interview process will be run by the “interview team”. This will remain flexible for v2. Depending on the candidate, it may include the following (Great CEO Within 5):

Phone screen
Topgrading interview
Focused interviews
Work trial

#5) Salary offers, negotiation & close:

The Interview Team conducts the initial salary negotiation
The Interview Team thens makes a recommendation to the “Wise Owls” on an “go” / “no-go” on a hire with a proposed salary offering.
The “Wise Owls” will then approve the proposed salary offer and/or counter proposal.
Final offer presented to the candidate
If the conditions are approved by both parties, the hiring proposal will be confirmed publically. Final salary offers will no longer need to be approved through the IIP process.
If the hire is approved, proceed to an onboarding process which may include a clear statement of alliance 2.

#6) Pass:

If at any point in the hiring process it is determined to not be a fit by either side the process will end.
Alternatives may be discussed (i.e. Working Group, Treasury Rewards, and other payment programs that may exist in the Coop)

Termination

This is a challenging topic to navigate. Letting someone go is a stressful experience for all parties involved, but sometimes it is necessary.

When necessary, here is the proposed process:

Clear expectations: The Index Coop aims to be transparent in our expectations and measurement of performance. This is the purpose of the scorecard (step #3) & statement of alliance (step #4).
Attempt to resolve: Any failure to meet these measures will first be discussed by the Wise Owls and other relevant parties
Decision: The decision to terminate will be discussed by the Wise Owls and put into effect by the Finance Nest in the event that performance expectations cannot be met. If the Wise Owl model is discontinued long term, an alternative clearly identified group will fulfill this role.
Severance: There will be a severance package of 2 months salary.

Any gross violation of our guiding principles 2will result in immediate termination without severance.

Salary

Salary will be determined based on fair market rates within the industry.

The Interview Team will conduct research on a comparable role the candidate is looking to fill, and base their salary options on this fair market rate.

For example, when recruiting for a head of product, the interview team should research typical salaries offered to a head of product at other web3 organizations.

Further, a note that typically (and in v1) salary and equity are tied together in comp. However, in v2 we are separating these out, and address equity and community ownership through a more holistic approach as defined in the “Dynamic Staking Model”.

Equity and Non Financial Benefits

Once contributors move onto fixed salaries, they will still be eligible to participate in the staking model and non-financial benefits packages offered to all contributors based on Owl Levels. The Owl Level of the fixed salaried high will be fixed for the duration of the year, for the foreseeable future, all fixed salaried hires will be Gold Owls.

If this does not come online by Feb 31st, an alternative equity, ownership and non-financial benefits packages will be proposed instead. Indication of what this will look like will be made during the salary offer, negotiation and close phase.

All fixed salaried hires will be awarded benefits aligned to their given Owl Level. Further negotiation on benefits may be conducted if required.

Salary recalibration

Owl Levels can change and are not tied directly to a salary. Every 6 months, Priority Hires are expected to go through a salary recalibration conversation where salary may be readjusted.

The Wise Owls also has the right to immediately kick off a recalibration of an individual’s salary if their current involvement with Index Coop has changed.

Who decides which roles to prioritize? Wise Owls Group

Similar to v1, we recommend delegating this decision making to a small group of people. However, to update this for v2, we recommend the creation and usage of the “Wise Owls” group.

Upon formation, the group would be responsible for:

Ensuring the v2 hiring process guidelines are maintained for all prospective fixed salary hires
Determining which roles to prioritize and articulating why. This will depend on the strategic importance of filling the role.
Negotiating and determining and approving a final salary offer for those going through the fixed salary hiring process.
Considering salary recalibration as needed.

*Given the ongoing Index 2.0 work, it is critical to note that the responsibilities delegated to the “Wise Owls” is intended to be iterative. We have seen success with delegated decision making both with hiring and elsewhere (MGC, FLI parameters, etc…), and we are trying to continue it here.

This post refers to the dedicated “Wise owls” post for how that group forms and other details.

Who runs interviews? Interview Team(s)

When interviewing candidates, it is important the composition of the interview team has relevant expertise in the given field.

Thus the responsibility for practically coordinating the interviews and making a recommended salary proposal will lie with an “[role_name] Hiring Team”

This will be comprised of:

Member of the Hiring Team
Subject matter experts
Other relevant individuals

Other members of the Coop may be asked to attend a discussion with the candidate and hiring team, and/or the hiring team.

The interview term will then make a recommendation to the “Hiring & Owl Levels” on an “go” / “no-go” on a fixed salary hire with a proposed salary offering.

The “Hiring & Owl Levels” will then approve the proposed salary offer and/or counter-proposal.

Next Step

The immediate next step is to gather constructive feedback and questions.

Please share any comments/questions/objections/concerns you have below!

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Change Log

Updated terminology from “Full Time” to “Fixed Salary” to better reflect the focus of this proposal
Expanded the opportunity for Health Insurance to contributors also located outside of the US
Confirmed that Fixed Salary contributors will also have their Owl Level fixed

Compensation | V2 Priority Hiring Guidelines