• The new Pay System is not an effort to give money to employees
Organizations today are generally managed by either the “Control” or the “Caretaker” Model.
The Control Model is based on the military where rules and chain of command are the hallmarks. Pure forms of this model are rare today and are consistently attacked by today’s leading management gurus. Among the many problems with this form of management is that it is both inefficient in use of resources and totally ineffective with the Generation X/Yers.
The Caretaker Model is also generously known as the Commitment Model. Most management gurus prescribe some form of this model. All forms derive from Frederick Herzberg’s theories on motivation. He says “motivator factors that are intrinsic to the job are: achievement, recognition for achievement, the work itself, responsibility, and growth or advancement.” Other associated caretaker concepts include:
What is wrong with these concepts? Generally nothing! It’s just that no combination of the above ideas will come close to realizing an organization’s potential.
In addition to the Control and Caretaker Models, consider the Performance Model of management theory:
Profound differences between linear and non-linear work must be accounted for in any management system
Most management gurus solve the linear work problem by pretending it doesn't exist, eliminating it through automation, or camouflaging it with things like vertical job enrichment. The fact is there will always be linear work, and much of it is critical to an organization's bottom-line performance.
For those doing purely non-linear work, the Herzberg concepts are generally valid. However, in many instances they are not enough. Take the example of an Engineer who is doing totally creative design work and still sneaks out of work for half a day to prepare his dirt bike for a weekend race, or the Ski Instructor who plays computer games while he should be updating his student plans. In today’s world, there is always something more interesting to do.
Linear workers, who toil very hard for no extra money, are under attack ... from other people, and even from within. The notion is: “Why am I busting my tail to make some owner (or executive) richer when I could coast like Susie, have some fun, and take home the same pay.” organization performance entertainment factors as compared to performance factors have to leave at 2:30” … even if backlogged with critical work.
One design option for Gain Share is the Virtual Performance Company™. The idea is to build an organization within an organization. Anything from a small Work Group to a large division could be a virtual company. Virtual Revenue and Virtual Expenses are used to calculate Virtual Profit or Gain.
To get the right VPC mindset, ask yourself this series of questions:
If you answered yes to these questions, you should learn more about the Virtual Performance Company™.
Professional or Entrepreneur Group Design Criteria include:
Expenses are identified expenses of the VPC including employee cost. For Revenue, it is ideal to have a linear measure such as accounts processed coupled to a financial measure such as 8% of Net Revenue. There is a Step by Step Process and a flexible Key Performance Indicator Model to facilitate design & implementation.
Everyone can and will think and act as an owner!