The new workplace compensation model is the vision/hypothesis associated with a new Future of Work economic research initiative. This new workplace compensation model is called the Empowered Employee Compensation Model (EECM). It replaces hourly wages, salaries, and benefits with ten new income resources and benefits and will usher in a 3-fold increase in the aggregate standard of living
Consider the following:
- During the industrial revolution, the average worker’s wealth-building capacity increased as workers migrated from farms and small shops to earn a wage in factories. It was a historic transition.
- As we undergo this information revolution, shouldn’t there be a corresponding historic transition that dramatically improves the wealth-building capacity for the masses?? If so, where is it? All we see today is a decreasing middle class and a rising gap between rich and poor
Moreover, with the internet, smartphones, and social media applications such as Facebook, society is more connected. However, most of this well-connected society is still living paycheck to paycheck with little to no savings or assets
The bottom line question here is how information technology and future technological innovation should be applied to improve the wealth-building potential of the average workers and masses. To aggressively address this question, we are launching an economic research project to explore how to apply the internet and other information technology to increase the income production and wealth-building capacity of the masses three times.
Yes, a 3-fold increase. Why not? THINK BIG. Why shouldn’t current and future technology innovations and applications elevate the income production, wealth building, and overall living standards of the masses three times over and more if possible similar to something on the scale of the Industrial Revolution.
Think about it. Pre-industrial revolution, over 90% of workers eked out a living on farms and small craftsman shops. When comparing that reality to today’s workplace/economic reality, it was a significant and historic transition, and income and living standards increased 2 to 3 times over. So, what is the next historic transition on this scale? This economic research pushes the envelope in this regard.
The visionary hypothesis regarding this next historic transition is called the Income Reengineering Vision. The compensation model underwriting this vision is called the Empowered Employee Compensation Model (EECM). This model replaces hourly wages and salaries with three new income resources and benefits designed to usher in a 3-fold increase in the aggregate standard of living
Why Workplace Compensation Must Evolve to Reach this 3-fold Increase
It’s start with insuring workers own their own productivity instead of just renting it for an hourly wage.
For example, increased productivity is the primary benefit of implementing information technology and automation in the workplace. As you can see from the chart, since 1973, workers are not benefiting from this increased productivity. This deficiency in compensation is one of the reasons why the gap between the owners of stock and workplace assets and the average worker is growing continuously.
According to the Economic Policy Institute, this productivity gap exists “because of policy choices made on behalf of those with the most income, wealth, and power have exacerbated inequality.” Now, regardless of your politics, workers’ must tie their income to workplace productivity to adequately address this productivity gap. Even with futurist and future-of-work advocates putting forth efforts to educate companies and corporations and upskill workers, if workers’ do not tie their income to productivity, this wealth or productivity gap will continue to plague the workplace .
Even with this being the case, we must go a step further to reach the three-fold increase objective. Instead of just linking worker income to productivity, workers must own their productivity or a least a significant percentage of it. With this in mind, consider this statement:
Given that most people make their living in the workplace, what better way to improve the income and wealth-building ability of the masses for the long term than to create a workplace where people effectively run their own business under the roof of their employer with the support of their employer?
To bring this vision alive requires a new era of strategic collaboration and partnership between employees and employers. Many details are involved, but, in general, employees must give up hourly wage/salaries and replace them with productivity and ownership-based compensation.
Now, this may seem ludicrous upon first thought. However, under this hood of the economic research campaign and the associated Income Reengineering Principles and Processes, such a transition can be accomplished smoothly, comfortably, and, most of all, profitably for employees and employers. The result is a 3-fold increase in the aggregate income production and wealth-building ability of the masses.
The Income Reengineering Vision and the Empowered Employee Compensation Model
Next, let’s take a closer look at the Income Reengineering vision and the Empowered Employee Compensation Model. Let’s start with the formal definition of the Income Reengineering Vision:
The Income Reengineering Vision: Eliminate paycheck to paycheck dependence on a large scale and shift employee thinking and focus away from just earning a paycheck to running their own business under the roof of employers with the support of employers. The resulting workplace compensation model is called the Empowered Employee Compensation Model (EECM). The EECM replaces hourly wages and salaries with ten (10) new income resources and benefits with the potential to usher in a 3-fold increase in the aggregate wealth building capacity for both employees and employers
The new workplace compensation model under this vision is called the Empowered Employee Compensation Model.
- The phrase empowered employee applies because workers are financially empowered worker-owners instead of wage dependent employees. Financially empowered means workers use various resources created by the Income Reengineering Process to eliminate paycheck to paycheck dependence and build wealth before showing up for work for an EECM enterprise. This way, people show up for work to build wealth as opposed to worrying about hourly pay;
- To this end, the model replaces hourly wages and salaries with ten new ownership based income resources and benefits.
As you can see from the diagram of the Empowered Employee Compensation Model, the model consists of two primary parts: primary resources and the supplemental benefits/resources. Let’s dig in, starting with primary resources.
The Primary Compensation Resources
The primary compensation resources associated with the Empowered Employee Compensation Model are:
- Productivity Based Compensation: Here, employers pay empowered employees a negotiated amount daily, weekly, monthly, or yearly linked directly to the professional services they provide to their employer. They are paid based on daily production, not a predetermined wage or salary, nor is it linked to company sales or profits. It’s hard dollars linked to what empowered employees do daily. Also, employees will not have to wait around for raises. They can give themselves a raise in real-time by merely increasing their daily productivity
- Ownership Equity: EECM enterprises are 100% owned by original owners and workers. There are no outside investors who do not work for the EECM enterprise. Therefore all empowered employees will receive ownership shares. They can also invest in the EECM to buy more shares while they work there. However, to maintain 100% worker ownership provision, once employees leave, he/she much “cash-out” equity and invest it into their next EECM enterprise. It’s similar to selling a house and investing the proceeds into a new house
- Residual Income Equity Benefit: This benefit pays employees a percentage of each sale made by your enterprise, whether the company makes the sale over the internet, inside the office, or over a retail counter. The company pays this regardless of whether a team member is an accountant, engineer, office manager, administrative assistant, or secretary. This benefit pays individuals while they work for your enterprise. It will then continue for some predetermined and negotiated period even after they move on to another enterprise. It’s similar to how movie actors earn income each time a re-run plays.
As you can see from the primary resources, employees effectively run their own business while on the job in collaboration with employers.
The Supplemental Compensation and Benefits
As you can see from the diagram, the supplemental compensation and benefits serve as the financial foundation for the primary resources. Here’s an outline of each resource:
- Wages/Salaries (Temp to Zero): The EECM phases out hourly wages and salaries, which is why wages/salaries are temporary to zero. It’s in the model to illustrate various transitional scenarios where employees may be learning and transitioning to the EECM primary resources;
- Virtual Wages: Virtual Wages is one of the four unique/specialized crowdfunding solutions we called the virtual income machines. Virtual wages ensure employees can get funds to pay down bills, build up savings, and generally build a financial foundation leading away to paycheck to paycheck dependence in preparation for work at an EECM enterprise. No debt-related credit checks, collateral or related issues apply. Once individuals submit a resume, interview, and get a job within an EECM enterprise, he/she can secure the funds.
- Virtual Dividends: Virtual Dividends is also one of the four unique/specialized crowdfunding solutions we called the virtual income machines. Virtual Dividends serve two primary purposes: 1) it ensures EECM enterprises can raise capital without going into debt and without violating 100% ownership provisions associated with the EECM, and 2) it ensures empowered employees will always have monthly income coming in from sources other than their primary resources. This serves as diversification of income “safety net” which add to the safety net created by virtual wages ;
- Virtual Bonds: Virtual Bonds is also one of the four unique/specialized crowdfunding solutions we called the virtual income machines. Virtual Wages and Virtual Dividends are linked to the EECM. Virtual Bonds is a wealth resource accessible to individuals independent of their employer. People can use this new wealth resources to fund continuing education and skill set upgrades before showing up for work for an EECM enterprise
- Virtual Stocks: Virtual Stocks is also one of the four unique/specialized crowdfunding solutions we called the virtual income machines. Virtual stocks ensure large companies and corporations can adequately facilitate, support, maintain, and motivate the formation of internal EECM subsidiaries without comprising 100% ownership integrity of EECM subsidiaries and without compromising the ownership value of their existing stock. In fact, because of the low overhead and productivity incentives built into the EECM, the value of stock shares associated with any company will increase significantly once that company integrates EECM subsidiaries into operations
- Private Retirement Plans: The EECM is the antithesis to traditional workplace retirement benefits such a defined benefit plans, corporate pensions, or 401ks. Under the model, people show up for work to build wealth, not for hourly wages/salaries or corporate benefits. The model idealized complete independence from traditional corporate benefits with a 100% focus on eliminating fixed cost that’s not associated with real-time productivity and profits. To this end, empowered employees are encouraged to take control of their own retirement investment and planning — the foundation of such being the ownership equity they earn by working for an EECM enterprise via the ownership equity primary resource.
- Group Medical: Empowered employees get their Medical benefits through large entrepreneurial associations. Think about it. Empowered employees are entrepreneurs on the job. So, large national EECM entrepreneurial membership organizations will naturally form, segmented according to industries, professions, etc. These entrepreneurial organizations can quickly provide extremely affordable group medical for their association members, thereby freeing individual EECM enterprises from the expense.
As you can see, the Virtual Income Machines anchor of the supplemental compensation/Benefits. In general, Virtual Income Machines represents an evolution in crowdfunding packaging and application …all in an aggressive effort to serve as a financial foundation for the Empowered Employee Compensation Model (EECM) .
For example, let’s revisit the primary question we are asking: how to apply the internet and other information technology to increase the income production and wealth-building ability of the masses at least three times over. The key phrase here is how to apply the internet and other information technology.
Now, crowdfunding is an internet-based, peer to peer phenomenon. With Virtual Income Machines, we are re-packaging and re-applying this internet-based phenomenon to create new wealth-building solutions for the masses.
How this vision benefits Employees, Employers, and Nation at large
Here’s how this vision benefits employees, employers, and the nation at large? Let’s take a look starting with employees:
Benefits to Employees: Employees get the best of both worlds:
- The income, ownership, profitability, and flexibility associated with running a profitable business WITHOUT losing the financial security and guaranteed steady monthly paycheck piece of mind normally associated with a steady job.
- Financial security and the guaranteed steady monthly paycheck piece of mind comes from various applications of the Virtual Income Machines, not from hourly wages
Benefits to Employers:
- Employers get a highly productive workplace (ownership motivates productivity) without having to pay the traditional payroll expense, which is typically 60% of operating expense;
- Think about it. Traditional payrolls represent a fixed expense to companies. So, whether companies make sales or make a profit any given month, they still have to meet the fixed payroll;
- More specifically, the Empowered Employee Compensation Model eliminates this fixed expense because the compensation paid to empowered employees is linked to productivity, sales, or profits. This creates significantly more cash flow flexibility for employers;
- Empowered employees can become a source of operating capital for employers with the ability to tap into resources from the virtual income machines to buy an ownership stake in the company;
- Employers can use the low overhead to launch a maze of new initiatives, grow new profit centers, compete effectively in the evolving new global marketplace, and, most of all, design and package new ownership-based, residual income equity and wealth oriented compensation incentives for employees;
- Employers can tap into the Virtual Income Machine resources and secure capital to restructure to an EECM compensation and operating infrastructure.
The Nation at Large
- Large scale deployment of the Income Reengineering Vision and the associated Empowered Employee Compensation Model equates to a 3-fold increase in the aggregate standard of living;
- This ultimately means a higher national income, a higher Gross National Production (GNP), more tax revenue for the treasury to pay down the national debt, etc;
- Today, according to statistics, 1% of the wealthy pay 40% of the taxes, and the other 99% pay the other 60%;
- If the income of the 99% increases 3 times over, then the average tax rate can drop significantly, and still, the U.S. treasury will receive enough tax revenue to pay down the national debt and then operate in a surplus continuously.
The bottom line: it’s WIN-WIN at every level.
Support and/or Contribute Professionally to this Economic Research Campaign
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