Is It Time To Change The Way Employees Get Paid?

[Liberalman]

People have worked for pay since people started to work for other people and it seems that this system needs some improvement.

People get paid an hourly wage, salary, piecework, commission, bonus, benefits or whatever they decide.

The problem with hourly wage or even salary is that the worker gets dissatisfied with the job and wants more doesn’t matter if they are getting minimum wage or a high wage that union workers make.

If you look at any business from small business to big corporation the sale of the product or service pays their owners and from there they have to divide the spoils or money to the rest of their workers from the person that mops the floor at night to the chairman of the board and if it’s a public company the shareholders.

When a person enters a company to work the only way for them to get more money
is to work hard so the promotions will come which has more money attached to the new position and as they rise in the company they get more money and bonuses and perks like the key to the executive washroom and we can’t forget more responsibilities.

The problem to this model is that if a worker gets dissatisfied and if the company doesn’t want to pay the worker more, the worker leaves and the company has to train a new person which takes a lot of money and time and puts undue stress on the rest of the staff because deadlines are not met which means their customers will go to the competitor.

A possible solution to this is pay everyone a percentage of what the company gross profits on a monthly bases or a minimum wage and a percentage of the gross profits of the company.

This will help the company exist longer and the worker gets paid very well in good times and in bad times those workers that can’t afford to work at the company will leave on their own accord.

This can only work if everyone is paid the same way from the entry-level positions to high executive positions.

Workers will get paid more money, which means they can spend more.

If this were the case now we would not be suffering through a depression.

 

[captain morgan]

If you look at any business from small business to big corporation the sale of the product or service pays their owners and from there they have to divide the spoils or money to the rest of their workers from the person that mops the floor at night to the chairman of the board and if it’s a public company the shareholders.

You're mistaken here LM. The operating costs (that includes wages/salaries) are paid first and a portion (never all) of whatever remains may get paid in dividends.

A possible solution to this is pay everyone a percentage of what the company gross profits on a monthly bases or a minimum wage and a percentage of the gross profits of the company.

That mechanism exists in public companies. Anyone can purchase shares regardless if they are employed by that company or not. In addition what if there are no monthly profits for a period, how could the corp expect to retain any of the mid-entry level employees?

Workers will get paid more money, which means they can spend more.

Assumes the company is profitable enough to allow to consistently pay (ie each month) the employees a decent amount. You would find it near impossible to engage any start-up operations that needed an outside employee base.

If this were the case now we would not be suffering through a depression.

Based on what I've suggested above, do you still believe in the above comment?

 

[Liberalman]

You're mistaken here LM. The operating costs (that includes wages/salaries) are paid first and a portion (never all) of whatever remains may get paid in dividends.

A minimun wage and a monlthly gross company percentage would be part of the operating costs

That mechanism exists in public companies. Anyone can purchase shares regardless if they are employed by that company or not. In addition what if there are no monthly profits for a period, how could the corp expect to retain any of the mid-entry level employees?

If the company is not making any profits then it stands to reason that there wouldn’t be a need to hire that many employees even on the mid-level and like in any business amployees can purchase stocks if they wish

Assumes the company is profitable enough to allow to consistently pay (ie each month) the employees a decent amount. You would find it near impossible to engage any start-up operations that needed an outside employee base.

You would need less emplyoyees at the start up stage

A minimum wage would be constant but the percentage of gross profits would fluctuate, this will give incentive for the employees to be more productive especially if they know that their work will get them more money. We have to remember that the new employee will work hard for a while until they see what the other employees are doing then they slow to their speed so the employers is tricked into thinking that more people has to be hired but if they are getting more according to their work productivity then they will work harder.

Based on what I've suggested above, do you still believe in the above comment?

Yes

 

[captain morgan]

A minimun wage and a monlthly gross company percentage would be part of the operating costs

If there are no profits to speak of? Will the minimum wage be enough to sustain someone or will that min amount push a company into the red?

If the company is not making any profits then it stands to reason that there wouldn’t be a need to hire that many employees even on the mid-level and like in any business amployees can purchase stocks if they wish

That's a self-fulfilling prophecy. Not only can they not afford new hires but may be in a position to lay-off people... Without the people, there is less capacity to produce. With less production comes lower revenues.

It spirals downwards.

You would need less employees at the start up stage

Very true, however the growth will be delayed which results in the slower absorption of staff which will impact employment #'s.. Keep in mind that small business (as a group) is one the largest employers in Canada.

A minimum wage would be constant but the percentage of gross profits would fluctuate, this will give incentive for the employees to be more productive especially if they know that their work will get them more money. We have to remember that the new employee will work hard for a while until they see what the other employees are doing then they slow to their speed so the employers is tricked into thinking that more people has to be hired but if they are getting more according to their work productivity then they will work harder.

Propose a plan like this and I'd wager that you'd have absolute support from the private sector. There are a number of companies (not tons) that pursue a policy similar to the above and they have made great strides.

The only observable downside has been that the really productive people have made numerous lateral movements from company to company in order to get the biggest bang for their buck (so to speak). I'm not saying that this is wrong, but it adds some instability into the company equations.

 

[taxslave]

I agree with the concept of a bonus system. The problem that arises is the quality of management. I've been there. Built logging roads on a per day rate plus meter bonus over X m/day. The problem was that the guy that owned the iron was busy playing around and not maintaining his equipment so there was a lot of avoidable downtime. Same goes for truck drivers that are paid by the load. If you have no control over the wait times you can get screwed.
There are places where I think it works quite well. Richply would be an example, where the employees are shareholders so have a say in management. Never had any experience with big companies that do this but I think it will work provided they do not have a union to slow them down.

 

[JLM]

People have worked for pay since people started to work for other people and it seems that this system needs some improvement.

People get paid an hourly wage, salary, piecework, commission, bonus, benefits or whatever they decide.

The problem with hourly wage or even salary is that the worker gets dissatisfied with the job and wants more doesn’t matter if they are getting minimum wage or a high wage that union workers make.

If you look at any business from small business to big corporation the sale of the product or service pays their owners and from there they have to divide the spoils or money to the rest of their workers from the person that mops the floor at night to the chairman of the board and if it’s a public company the shareholders.

When a person enters a company to work the only way for them to get more money
is to work hard so the promotions will come which has more money attached to the new position and as they rise in the company they get more money and bonuses and perks like the key to the executive washroom and we can’t forget more responsibilities.

The problem to this model is that if a worker gets dissatisfied and if the company doesn’t want to pay the worker more, the worker leaves and the company has to train a new person which takes a lot of money and time and puts undue stress on the rest of the staff because deadlines are not met which means their customers will go to the competitor.

A possible solution to this is pay everyone a percentage of what the company gross profits on a monthly bases or a minimum wage and a percentage of the gross profits of the company.

This will help the company exist longer and the worker gets paid very well in good times and in bad times those workers that can’t afford to work at the company will leave on their own accord.

This can only work if everyone is paid the same way from the entry-level positions to high executive positions.

Workers will get paid more money, which means they can spend more.

If this were the case now we would not be suffering through a depression.

I'm for piecework where practical- it's the fairest, the better the producer the more pay and the drones, parasites and sh*t disturbers soon get discouraged and leave. There is one down side, it can result in shoddy products, but that's easy to rectify, produce one shoddy product, the rate for two comes off your pay. I understand that productivity can be nebulous thing in a few jobs, like the guy slinging beer at the local, but that can be offset in that the wage is low but the tips for the good server can sort out who's who.

 

[captain morgan]

I agree with the concept of a bonus system. The problem that arises is the quality of management.

You'll always have that problem taxslave regardless of what system is in place.

 

[AnnaG]

Business burns. Company waits for insurance if it has some. If not, it takes previous profits and tries to rebuild but can't afford to pay anyone till it starts making profit again. It can't make profit unless it has workers. So it goes into the red to be able to afford workers' pay. Now it needs more profit to pay off debt. Big circle.*flush*

 

[JLM]

Maybe this isn't quite the time for this question. I know a few people who would just like to get paid, how is immaterial until the economy improves.

 

[AnnaG]

Big raid on banks would be neat. They've been making record profitss for years. As far as I know the career of bank robber has no personel limits.

 

[YukonJack]

An employee should be paid on his/her looks, alone.

Works in the entertainment industry.

Besides if it had been the rule fity years ago, I would be a wealthy retiree now.

 

[taxslave]

You'll always have that problem taxslave regardless of what system is in place.

That is true. But I think that if the employees have some say in the management it would go a long way to prevent empire builders from screwing up the works. When I was still a contractor I would often pay a bonus on jobs that we did well on, but this is rather a hit and miss approach and there is a slim line between being low bidder and loosing money, especially in remote areas where transportation is such a wild variable.
The union utopia does not work very well for both companies and employees with ambition. There are ways of rewarding good union employees with out the union knowing but most are taxable other than conventions in vacation hot spots. I don't believe that bonuses should be taxable as it cuts incentive and can some times backfire due to bracket creep. Even simple things like company vehicles CCRA considers to be a taxable benefit.

 

[Machjo]

One solution I could see would be to scrap the minimum wage but give workers voting rights on the board of directors, and let them fend for themselves beyond that.

 

[Machjo]

One problem with the minimum wage is that it's not fair to unskilled workers as it risks pricing them out of the market. Let's not forget, higher education, be it academic, trades, or professional education, is not free in Canada. If it were, I might go for a minimum wage. Otherwise, a minimum wage is unfair to them. And besides, if higher education were free, then we wouldn't need a minimum wage anyway because people would have the skills to increase their value to the company. Besides, I'm sure they'd prefer a low salary over none. And also, if they can vote onthe board of directors, that would protect them sufficiently from abuse while at the same time accepting that when times are really tough, and the company really doesn't have much money, then they might prefer a low salary to nothing at all.

Often, overregulation risks hurting the very people it's trying to protect.

 

[Machjo]

And another thing: scrap the labour unions. Labour and management need to work together, not against each other. If a worker goes on strike, then he's awol. Fire him. Besides, if they have voting rights in the company, then what reason would there be to strike anyway?

 

[JLM]

One solution I could see would be to scrap the minimum wage but give workers voting rights on the board of directors, and let them fend for themselves beyond that.

I think you might be onto something- the market place should establish wages. The one problem I can see with it is these immigrants from 3rd world countries who come here and are willing to work for a buck an hour because it's better than the 50 cents they were getting back home. On the other hand maybe that's the reality of the situation, we have to compete with the world and if by chance everyone had to go back to working for a buck an hour, then what do you suppose would happen? Price would drop like a rock and things might just return to sanity. I can remember when bread was a 11 cents a loaf and milk was 14 cents a quart, now some bread is $3.00 a loaf. How are we any better off?

 

[Machjo]

I think you might be onto something- the market place should establish wages. The one problem I can see with it is these immigrants from 3rd world countries who come here and are willing to work for a buck an hour because it's better than the 50 cents they were getting back home. On the other hand maybe that's the reality of the situation, we have to compete with the world and if by chance everyone had to go back to working for a buck an hour, then what do you suppose would happen? Price would drop like a rock and things might just return to sanity. I can remember when bread was a 11 cents a loaf and milk was 14 cents a quart, now some bread is $3.00 a loaf. How are we any better off?

My sentiments exactly. Inflating ourselves to higher salaries just hurts the poor in the end. After all, what's the point of a pay raise if inflation just creeps in behind anyway? Don't get me wrong here. I admire the left for its noble intentions; I just think it's on the wrong track.

If we open our market to the world, first off, a third world immigrant would not be willing to work for a buck an hour considering prices right now in Canada. But he might be willing to work below the current minimum wage, which would certainly bring prices down over time. As for unemployed Canadians, they'd be willing to accept pay cuts too if they see prices dropping.

Oh, but what about exploitation? some might say. That's why we give them voting rights like in a co-op. Beyond that though, the reality of the matter is that the employer can't give what he doesn't have. With voting rights, all the facts would be put on the table, and all players (workers, management, investors) woudl have to negotiate a fair deal. If the employer is unreasonable, we end up with deadlock and nothing can get done, riwking everyone's job and investments. If the workers are unreasonable, the investors start selling off their stocks, close the company down, and workers are all out of work. If managment is unreasonable, it gets fired. Perfect balance that way. And it puts all workers on an equal footing.

 

[Machjo]

Another point about the buck an hour, JLM. What's the point of the Canadian government giving money to developing countries but then not let them trade freely with us? The NDP is especially guilty of this. Again, I admire the left's intentions, just not its wisdom. The NDP wants to give money to develping countries, but then wants to tariff them out of the market. It's like the right hand doesn't know what the left hand is doing. Let's stop giving them money, and give them freedom instead.

 

[taxslave]

Another point about the buck an hour, JLM. What's the point of the Canadian government giving money to developing countries but then not let them trade freely with us? The NDP is especially guilty of this. Again, I admire the left's intentions, just not its wisdom. The NDP wants to give money to develping countries, but then wants to tariff them out of the market. It's like the right hand doesn't know what the left hand is doing. Let's stop giving them money, and give them freedom instead.

That is the whole socialist agenda. Keep them dependent. That is why social workers do not really want to help anyone get off welfare. It gives them independence. I have come to the conclusion that socialists, however well meaning are control freaks.

 

[Machjo]

I have come to the conclusion that socialists, however well meaning are control freaks.

Similar conclusion here. Just look at minimum wage. All that does is price people out of the market. Again, if higher education were free, then they'd have the skills to earn the higher salary, though then that would eliminate the need for minimum wage anyway. So either way, it's pointless.

Same with rent ceilings in Toronto a few decades back I think. It killed the incentive to build more buildings and maintain the current ones, even though the population was growing. It resulted in a housing shortage in Toronto, and landlords charging a 'key fee' (hey, if you can't raise the rent, charge for something else), and tenants bribing landlords, etc. Who do you think suffered the most from this? The poor of course.

Like you said, they may be well intentioned, no doubt about it. But when it comes to critical analytical skils, that's a whole different story. I'm all for helping the less fortunate, but let's do it in a rational manner, not through knee-jerk reactions.