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Updated 4/23 12:27ET: To reflect a correction from The Information.
Shopify (NYSE:SHOP) is taking an “unconventional approach” to raises by assigning scores to its 8,300 employees representing their skill level making them eligible for higher pay as their scores increase.
According to The Information, Shopify (SHOP) assigns employees a numerical score to represent their skill level. Only employees whose scores increase within a certain time frame are eligible for a raise.
Like other tech companies, Shopify (SHOP) over-hired during the pandemic -- more than doubling its workforce between 2019 and 2022 -- and then cutting 30% of jobs in 2023. With a leaner workforce, the company continues to take steps to cut down on redundancy and waste by eliminating recurring meetings, cutting back on “unwieldy” Slack chats, and thinning out the layers of bureaucracy, The Information said.
The campaign to improve efficiency seems to be paying off for Shopify (SHOP). Last quarter, the company increased revenue by 24% year-over-year, and raised gross merchandise volume by 23%. Subscription Solutions revenue was 31% higher than a year ago, and monthly recurring revenue rose 35% from the same quarter last year.
And although the stock has been under pressure recently (down 18% in the past month) shares are up 41% year-over-year versus +22% for the S&P 500.
(The Information issued a correction to their earlier article to clarify that employees are eligible for raises when their skills improve and are not competing against one another for higher pay.)