Suppose the following:
- You have a very small startup (a few people) with almost no startup capital
- You have a client or two and are making some money, but not enough to afford real salaries
- Each member of your team performs a variety of tasks (development, testing, documentation, management, client relations), with highly varying amounts of effort (varying over time, and per teammate - I might work 20 hours this week but 5 the next, while my colleague might put in 10 hours one month, and then none the next)
Now given points 1 and 2 above, you decide that profit sharing as a form of payment seems reasonable for the time being. Because the amount of effort each team member puts into the project varies so much, you decide as a team to share the profit depending on the hours worked - the effort. A nice, simple formula.
Although this seemed fair at first, you soon discover a serious (and, in retrospect, obvious) problem:
- Although you're no-where near as good a programmer as your super-duper developer buddy, you each get rewarded the same for an hour's worth of work. In practice, this means that your super-duper developer colleague is (heavily) punished for being more efficient.
Your team quickly decides that you need a system that reflects both the effort put in and the teammate's individual skill levels. Being a huge proponent of transparency in the workplace, you come up with the following table, which is reviewed and updated as a team on a regular basis (eg: quarterly):
Dev Docs Management You | 7 | 16 | 20 Super developer | 20 | 5 | -- Tech writer | -- | 20 | --
Each number in the table is used as a multiplier to help calculate what share of the profit each teammate will get. Eg: If you work 2 hours of development and one of documentation, then you get 30 'profit points'. If your developer worked a single hour of development, and your tech writer didn't work this week, then they get 20 and 0 'profit points' respectively. That week, you would get 60% of the profits, and your developer would take 40%. Note that the hours are recorded usually once/week and 'roughly'.
The questions: Is this a reasonable, fair approach to splitting profit share under these circumstances? Is there a name for this sort of completely transparent table for how much everyone is 'worth'? Is there a much easier way to do this I'm missing?