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 10 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 wealth building capacity for the average worker increased significantly as workers migrated from farms and small shops to earning 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 decreasing middle class and a rising gap between rich and poor
Moreover, with the internet, smart phones and social media applications such as Facebook, society is more connected than ever. However, the majority 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 should information technology and future technological innovation be applied to improve the wealth building potential of the average workers and masses. To aggressively address this question, an economic research project recently launched to explore how to apply the internet and other information technology to increase the income production and wealth building capacity of the masses 3 times over.
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 3 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 envelop 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 10 new income resources and benefits designed to usher in a 3-fold increase 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 is one of the reasons why the gap between the owners of stock and workplace assets and the average worker is continuously increasing.
According the Economic Policy Institute, this productivity gap exist “because of policy choices made on behalf of those with the most income, wealth, and power have exacerbated inequality.” Now, regardless of your politics regarding the reasons why, workers income must be tied to workplace productivity in order to adequately address this productivity gap. Even with efforts put forth by futurist and future of work advocates to educate companies and corporations and to up skill workers regarding workplace changes and automation, still, if worker income is not tied to productivity, this wealth or productivity gap will still exist.
This said, we must go a step further to reach the 3-fold increase objective where, instead of just linking worker income to productivity, workers must own their own 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 in lieu of 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 end 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 varies resources created by the Income Reengineering Process and/or the supplemental compensation/benefits of the EECM to build wealth and eliminate paycheck to paycheck dependence and the associated mentality prior to 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 10 new ownership based income resources and benefits.
As you can see from the diagram of the Empowered Employee Compensation Model, the model consist 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, empowered employees are paid 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 on a daily basis. Also, employees will not have to wait around for raises. They can create their own raises real time simply by increasing their daily productivity.
- Ownership Equity: EECM enterprises are 100% owned by original owners and workers. 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, in order 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: The Residual Income Equity Benefit is the movie star benefit. Regardless of whether an empowered employee is an accountant, engineer, office manager, administrative assistant or secretary, this benefit pays empowered employees a percentage of each and every sale made by the EECM enterprise whether that sale is made over the internet, inside the office or over a retail counter. This benefit pays while individuals work for a given EECM enterprise and it can continue for some pre-determined and negotiated period of time even after empowered employees 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): Hourly wages and salaries are phased out of the EECM, which is why wages/salaries are temp 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 insures 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 insures EECM enterprises can raise capital without going into debt and without violating 100% ownership provisions associated with the EECM; and 2) it insures empowered employees will always have monthly income coming in from sources other than their primary resources. This serves as a 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 that’s accessible to individuals completely independent of the EECM one may work for. People can use this new wealth resources to fund continuing education and skill set upgrades prior to 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 insures 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 as that company integrate 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: Medical benefits will be provided through large entrepreneurial associations. Think about it. Empowered employees are effectively entrepreneurs on the job. So, large national EECM entrepreneurial membership organizations will naturally form, segmented according to industries, professions, etc. These entrepreneurial organizations can easily provide extremely affordable group medical for their association members, thereby freeing up individual EECM enterprises from the expense.
As you can see, the Virtual Income Machines anchor of the supplemental compensation/Benefits. In general, the 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 3 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. So, with the 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
So, how does this vision benefit 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
Benefit to Employers:
- Employers get a highly productive workplace (ownership motivates productivity) without the traditional payroll expense (typically, 60% of operating expense);
- 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.
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