Income differentials do not work well in central, decision-making organisations. An income differential ideally accords with realised potential, ideas, and new ways of doing things - the property most corporations effectively eliminate (as well disenfranchise) from employees, though it is employees’ greatest potential contribution.
Current income distribution in corporations accords with people’s positions in the hierarchy of command. This rewards command-and-control type behaviour, rather than behaviour permitting free expression of potential and ideas (and related improvements to productivity).
Rewards from ideas should not be co-opted, but they are in corporations with central decision-making. When central management earns more than workers this sends a signal that it is position, not contribution, that matters.
If everyone is performing and contributing equal effort (though in different roles and by different means) they should be rewarded equally, but organisations’ performance management systems contradict this.
With recognition that fulfilment without harm is for everyone there is a shift to earnings shared more evenly, which arises partially in concert and partially as a consequence of changes in organisation responsibility, information sharing, decision-making, and ownership.
Recognition is peer driven in open, non-controlled systems, so without the abuse or individual error of closed systems.
Attempting to measure the financial value of ideas in an organisation and equating it to compensation is unwise. If financial compensation is tied to ideas this incentive warps open information systems and the feedback in them. Rather ideas are shared just as earnings are shared.
In organisations where all people are free to realise their potential, ideas and proceeds are shared evenly. People share ideas so all can grow them and share in that growth. No one should earn twice that of another.
Organisations could become voluntary, with open entry-and-exit participation, in which all participants earn relatively evenly regardless of their form of contribution. The purpose of people working and organising together is to facilitate their fulfilment and enable others.
With understanding of the common purpose the primary reason for participating is the fulfilment people find in contributing.
Need is met by people seeing a need (having it also) and distributing their solutions. Great incomes are unnecessary to the creation or distribution of a solution if people have a base income. The system still requires communication and markets to signal what is going on and what is needed to be done, but people are willing to contribute for fulfilment more than finances.
There is a difference between the effort contributed and the effect. CEO’s would say the effect from their efforts is many times greater than the effect from others efforts. Thus they are worth more. But their effects are not greater, just different.
While financial viability is important and profit welcome these are not the purpose of common purpose organisations or their members. The focus for members is not how much can they earn but in what ways can they best contribute.
In common purpose organisations, half of earnings are shared evenly and half returned directly to the shared base income, which raises all incomes.
The tie to the shared base income means that all incomes are linked. The tie to the shared base income means that profit is not an individual motivation, but a collective one. By this, the profit motivation is subordinated to the motivation of fulfilment via the best contributions people can make.
[Excerpt from The Common Purpose Manifesto]