Social Salary Setting at Spiber

Teaching Note for HBS Case No. 920-050. The case tells the story of Spiber, a Japanese technology start-up company. To reflect the company’s values, the leadership team implemented a new and unique salary-setting process: each employee had the authority to choose their own salary. In the course of discussing the case, students are asked to contemplate the challenges that managers face when incentivizing innovation and are invited to brainstorm methods for motivating the behaviors that drive innovation. Students consider the merits of Spiber’s new compensation system and reflect on issues of pay equity. The case allows for a rich discussion regarding the design of effective and fair compensation systems, with a special emphasis on exploring how organizational culture and the broader social and cultural context in which an organization is embedded shape employees’ responses to compensation systems.