# RAW — Compensation Model 1.0
###### tags: `RAW DAO`
# Context

This document presents a compensation model proposal for RAW DAO, designed to preserve decentralization and honor the goals outlined in its organizational design document.

The proposal is divided between two sections: **short-term and long-term:**

- **Short-term compensation** aims to address the issue of funding the basic operations of the DAO in a more immediate time-frame, and provide opportunity for newcomers to be integrated and quickly rewarded for their work.
- **Long-term compensation** aims to compensate members for continued and valuable presence and contribution to our community, rewarding those who take responsibility for important work and make themselves continuously present and available to the community. This is critical for retaining talent.

# Proposal

## Short-Term Compensation

The proposed steps for short-term compensation of member contribution are as follows:

1. Each area of the DAO shall have its general **activities and responsibilities** predetermined (refer to RAW Organizational Design)
3. The compensation period will happen in a **monthly basis**
2. **Goals** will be chosen and agreed upon for each area before the start of each month
4. At the start of each quarter, the community will approve a monthly **compensation budget** for each area of the DAO, with a **split between fixed and performance-based** compensation for each area (e.g. 60% fixed, 40% performance-based)
5. Work happens
6. At the end of each period, total compensation of each area is calculated based on its achievements, like so:
$Total\ Compensation = Fixed\ Comp. +\ Performance\ Comp. \times \frac{Goals\ achieved}{Goals\ set}$
7. Contributors inside each area then vote among themselves (using [Coordinape.com](http://coordinape.com/)) for the division of compensation, where each contributor starts with **100 votes** to assign to other contributors *(can't assign to themselves)*. Individual compensation is then assigned proportionately based on the share each member got from the total votes
1. moderators will be able to assign up to **300 votes**
8. Compensation is paid with ETH (via disperse.app)
9. A new compensation budget is approved for the next period, and the cycle repeats
10. Total ETH compensation paid during the year shall not exceed the yearly compensation budget

## Long-Term Compensation

The proposed system for long-term compensation is the following:
1. The total votes obtained by members in the short-term compensation system through the months will be normalized, summed, and used as a live ranking to grant $RAW tokens and extra Coordinape points to top performing members
2. The following Discord Role hierarchy will be established to identify members by their level of contribution:
1. Top Contributor
2. Gold Member
3. Silver Member
4. Bronze Member
5. Active Member
3. Roles and grants will take place according to the [following table](https://docs.google.com/spreadsheets/d/1S9r_QMSeVa8cryuBxT13kBDbZzx3ZhVsNybGYr0jYu0/edit?usp=sharing):
4. The maximum amount of Coordinape votes any member can yield will be capped at **300**, and the minimum will be **100**
5. Coordinape placement in the bottom 20% or absence in any one month will result in full role demotion and coordinape vote reset to the minimum amount of votes
6. Contributors can negotiate a total aggregate vacation period of **1 month** per year to avoid inactivity sanctions
7. *Top contributors* can pledge to become full-time employees, to be approved by the community
8. The community will be able to award members with the **Most Excellent Order of RAW Honour**, to identify and reward those who have accomplished outstanding acts of contribution to our organization. A one-off extra compensation grant can be included with the Honour.

# Closing Remarks

This model might seem complicated, and will require a bit of getting used to from newcomers. However, they have the advantages of being transparent, meritocratic and decentralized.

All members can choose to work and get compensated by these rules.

By having everyone do a little bit of compensation work, we avoid the need for a centralized HR or top management arbitrarily deciding others' compensation.

This definitely isn't a flawless solution, and the idea is to iterate on it as we go (hence the 1.0).

In case this experiment is successful, we'll be pioneering a novel way to organize and compensate individuals.

<details>
<summary>Q&A</summary>

- **Why the added complexity of a performance-based tranche?**
- the purpose is to incentivize collaboration and keep compensation attached to performance instead of mere "effort". It also helps to rally members around specific goals. Without this, we increase the risk of running around in circles and compensating pointless contribution/discussion.
- **Why not have all compensation be determined by performance, then?**
- not all performance is directly attached to members' effort and initiative, there is always a portion of performance which is random and subject to external shock and things outside the control of compensated individuals. A fixed-tranche also provides a guarantee that contribution will be compensated, necessary for members who might depend on these payouts for their daily lives.
- this also compensates for the inherent inaccuracy of measuring individual contribution.
- **Why no fixed roles/hierarchies?**
- hierarchy and fixed roles aren't a goal in and of themselves for the DAO; what's important is that things get done. Hierarchy then is just a tool that can be used to organize people to increase performance (with its fair share of side effects). In honoring the spirit of innovation and decentralization, this model intends to premier an alternative to compensation which we believe is more interesting, flexible and meritocratic.
- if it doesn't work, we can always revert to more mechanic/corporate models.
- **thus, all members are expected to contribute at some point**, as opposed to relying on the effort of others.
- **Members might collude to exchange their votes**
- the votes in Coordinape are public, and thus collusion would becomes obvious, in which case we can reward whistleblowing or directly inquire and punish dishonest members
- **This voting model might add pressure and competitiveness within the DAO, possibly straining relations**
- members are expected to be professional and work together, as the whole economy is already designed around virtuous competition and seems to work most of the time. The shared pools of compensation are intended to incentivize people to work together.

</details>