The “Basic Salary” idea
Some of you might have heard about the “Basic income” idea as a form of funding and social stability in a society. It’s been discussed now in several countries around the world. Switzerland just recently had a vote on it (which got refused by a vast majority. Everybody here is rich I guess).
AFAIK it’s not been deployed anywhere on this planet on a larger scale than just a few villages in Africa. However, this morning I had the idea of transferring that model into a company environment as a way to pay your employees.
By the hour but yet inaccurate
I’m working in a IT/software company, and almost all accounting, all contracts with external consultants as well as time keeping for employees is based on a “by the hour” model. Work your 42 hours a week. Pay the 180 Franks per hour. This is something which everybody unconsciously knows that it’s incredibly inaccurate, as IT software tasks cannot be exactly planned to the minute and especially person A sometimes only takes 10% of the time of person B for the same task. Yet everybody, employers, employees, project managers etc are still raving fans of that model. Or are we just doing it that way, because we have always been doing it that way?
Then there is the output of your company, which is usually not payed by the hour: projects and products (Except maybe pay per use models, but let’s skip that for the moment). I think this is a fundamental mismatch. Customers want solutions to their problems, and there is a price tag attached to that, which is pretty much fixed (through available budget and the willingness to pay a certain price). Those customers really don’t care about how many man-hours you put into the solution. Still, everything supplier-company-internal is calculated by the hour. Ain’t that quite nuts?
Anyway.
Basic income enterprise edition
This realization together with the knowledge of the “Basic income” idea took me to this thought:
Why not have sort of a “basic salary” which would be payed, even if you would only surf the internet the whole day. This of course should just barely enough to not die of hunger, else you would get a sack full of free riders, exploiting the system. Then once the company wins a customer, there’s additional budget (for product, project, change requests, support hours etc). This budget needs to be split up into “how much is this feature worth”, so instead of and estimate of hours on your Jira-Ticket (Note: the assignment of a task to e.g. a software developer), you would actually have a price tag in hard money currency to it. You would need to split the work up into a level where a task can be done by a single person. Or maybe not, and the the multiple persons assigned to a task need to split up that money themselves. Once the task is completed, tested, and accepted by the customer, the money from the assigned ticket is transferred to your bank account. More tasks → more money.
This way, everything becomes the wet dream of a corporate manager: everything is totally flexible and transparent. Workforce is only applied where actually money is around. People only get payed when they work (on top of their basic salary, of course else they would leave). And would it not motivate some people to work more efficiently? To get more tasks done in shorter time, so you still have your paycheck AND the spare time?
Sabbaticals? Vacation?
Or what about taking a sabbatical? Easy. No need for special contract agreements, just don’t let any tasks be assigned to you. When your “recreational process” is completed — just return to work.
Vacation of course then can’t be “time off”. You need more money during vacation. It can’t just be the basic salary during those times. So instead you’d get a “vacation budget” (in Germany there’s the term “Urlaubsgeld”, which kind of fits very well here :), which you can distribute over whatever months you want. For legislation issues, someone then just needs to check that the employee has the minimum “days without tasks” during a year, if legally required.
Automatic salary raise
No more discussions about your salary. No more envy amongst employees. You automatically get a “raise”, once you get better at your job. Why? Because you can solve more tasks in a shorter amount of time once you get better!
And salary is totally transparent to everyone in the organisation, because the tasks have a price tag, and everybody is getting the same basic salary. Collegues will appreciate your pay, as they know what you had contributed.
Sick days
Well, that’s a bit more problematic. At least in most European countries, the law is for the employer or an obligatory insurance to continue to pay salary for a certain amount of subsequent sick days.
When you’re sick, usually you need more money, not less (medicine, treatments). So what to do? You could either tie the pay for those days to your “yearly average salary”, or maybe even the “company average”. I’m still not happy with that solution, because you could enable the free rider opportunity here for folks who want to stack up their basic salary by just preventing they’re sick. But I’m sure you could find an agreeable solution to this, too.
Thoughts?
So how do you think about this? Would this be something for you as an employer to try out? Or would you like to try this as an employee? Would there be any legal (work law related) issues, that I’m not aware of, since I’m not a lawyer? Or is this even not at all new, and someone tried it all out, and I just missed it through my poor research?
Let me know! I’d be interested about discussion on the basic salary idea.
