Victus Spiritus


Boost efficiency with Open Earnings

23 Feb 2010

Let's begin by defining what I mean by open earnings:
Transparent public record of what individuals earn, and the responsibilities and metrics that will define their pay scale. An open ceiling on value added and corresponding pay is the key to getting the best effort from each team member.
Historically only sales positions could be open earnings. And this is the way big affiliate companies or other sales teams work. Each person earns a small percentage of each sale.

Internet Community Hubs Mimick Sales Splits

Several Internet community sites and marketplaces have mimicked open earnings.

For the most part these web entities provide a value proposition as exchanges. By leveraging their brand and an existing market, they boost sales and share a small split of the revenue. The web business collects payments, ships or electronically sends goods, and then processes payments to the affiliate. The entire system is well documented, clear to each participant and the earning ceiling is open (depending on supply). Partnerships are terminated if circumspect practices are employed to get sales. This is done to protect a brand, and the trust it has built up.

Existing Methods of Applying Open Earnings to Organizations

An employee stock ownership plan (ESOP) or stock options can be used to reward exemplary effort. But there are some problems both in allocation and the utilization of this motivation method. Options are usually limited to heirarchical "elite employees" or executives in business organizations, which is subjective (hiring, advancement) and are usually private. Employees can only access ESOP or options value if they leave a company or the business is liquidated (sold to other companies). In bad circumstances the common stock of ESOP/options is paid out after all preferred stockholders.

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