Start
Topic: A fast-growing AI company says it will give every employee a 10% pay rise on their next work anniversary.
Think about this question: should pay increases be automatic, performance-based, or a mixture of both?
Lead-in questions
1. What usually makes employees stay in a company for longer?
2. Would an automatic annual raise make work feel fairer?
3. What problems could a universal pay-rise policy create?
Reading Comprehension
Source: Adapted from CNBC Make It. Original article
Employees often feel nervous about asking for a raise. They may wonder when to speak to their manager, how to make their case and whether their request will be seen as reasonable. Lovable, an AI software company based in Stockholm, wants to remove some of that uncertainty by giving every employee a 10% raise on their work anniversary.
The company has around 200 employees worldwide and says the policy is based on a simple belief: people become more valuable the longer they stay because they carry more context and can have more impact. Lovable's chief people officer, Maryanne Caughey, says the company wants compensation to recognise contributions that build over time.
The raise will be given to employees whose work anniversary falls between July 2026 and July 2027. After a year-long trial, the company plans to evaluate whether the policy improves retention and saves time during performance reviews and pay discussions. Caughey hopes the approach will also give time back to the business, allowing managers and employees to focus more on customers.
Lovable is expanding quickly, with staff in Stockholm, Boston, San Francisco, London and New York City. It hopes to grow to about 400 employees by the end of 2026 and is hiring across engineering, product and sales. The company says the policy is proactive rather than a reaction to a turnover problem.
The 10% increase will be the minimum raise for employees who are meeting expectations. However, it is not the company's only compensation tool. Lovable also uses quarterly performance checks, twice-yearly salary reviews for promotions or new responsibilities, and ongoing checks to make sure people doing similar work in the same region are paid fairly.
This approach is unusual because loyalty is not always rewarded in the wider labour market. In the United States, workers who stay in their jobs often receive smaller pay increases than those who move to a new employer. According to ADP data cited in the article, job stayers saw pay grow by about 4.4% over the previous year, while job switchers saw gains of about 6.6%.
Sweden is already known for flexible working and generous leave policies. Even so, Caughey says a 10% anniversary raise would be highly atypical there. The policy raises an important question for modern companies: should compensation reward loyalty automatically, or should every raise depend on negotiation and individual performance?
Exercise 1: Open comprehension questions
1. What problem does Lovable want to reduce for employees?
It wants to reduce the anxiety and uncertainty employees often feel when asking for a raise.
2. Why does the company think employees become more valuable over time?
Because they carry more context and can have more impact the longer they stay.
3. When will the trial period for the anniversary raises take place?
The raises will apply to work anniversaries between July 2026 and July 2027.
4. Is the policy designed to solve an existing turnover problem?
No. The company says it is a proactive move, not a reaction to turnover.
5. What other compensation checks does Lovable use?
It uses quarterly performance checks, twice-yearly salary reviews and fairness checks for similar roles in the same region.
6. How does the wider U.S. labour market compare with Lovable's idea?
In the wider U.S. market, people who stay in their jobs often receive smaller increases than those who switch jobs.
Vocabulary
Exercise 1: Match the word to the meaning
Choose the best answer.
1. A pay bump is...
2. Retention means...
3. A proactive move is...
4. Turnover means...
5. Compensation refers to...
6. Across the board means...
Exercise 2: Complete the sentences
Drag the correct word or phrase into each gap.
1. The company wants to improve employee by rewarding loyalty.
2. The 10% increase is described as a .
3. Lovable says the policy is , not a reaction to a crisis.
4. The company says it is not trying to fix a serious problem.
5. Salary reviews are part of the company's wider strategy.
6. Employees receive the raise on their .
Grammar: Advanced noun phrases and nominalisation
Business articles often use noun phrases to make ideas sound more professional and concise. Instead of saying the company checks whether pay is fair, the article-style version might say ongoing pay-equity checks.
a proactive retention strategy, a universal pay policy
the evaluation of employee retention, recognition of long-term contributions
evaluate → evaluation, recognise → recognition, retain → retention, compensate → compensation
Exercise 1: Drag the noun phrases into the article-style sentences
Choose the more formal noun phrase that completes each sentence.
1. The company wants to improve .
2. Managers will conduct .
3. The company will carry out .
4. The raise recognises .
Exercise 2: Drag the noun phrases into the sentences
1. Lovable wants the policy to improve .
2. The 10% raise is part of a broader .
3. The policy may save time during the .
4. The company uses data to compare pay with each role's .
5. Similar roles in the same region are monitored through .
Discussion
Speaking questions
1. Would you prefer a guaranteed raise or a performance-based raise? Why?
2. Could automatic raises make employees less motivated, or more loyal?
3. Should companies reward loyalty more than job-switching?
4. What would make a pay policy feel fair and transparent?
Useful language
Giving an opinion: From my perspective..., I would argue that..., It depends on...
Balancing ideas: On the one hand..., On the other hand..., A possible drawback is...
Workplace vocabulary: retention, turnover, compensation, performance reviews, pay equity, loyalty.