Incentives

Incentive approaches that could be adopted within a contributionist organisation

Anyone that makes contributions towards an organisation should have their contributions fairly measured and rewarded. Incentives can play an important role in retaining high performing contributors. The more valuable and impactful someone's contributions are the more that it should be rewarded when this is possible. The default incentive structure for any organisation should be to proportionally reward contribution based on the value and impact it generates. This is unless another collective agreement has been made about how contributions will be rewarded.

Temporary incentive rights

Labour and capital are the two main contributions that can receive temporary incentives rights. There are a number of incentive mechanisms that could be used for rewarding both these types of contribution.

Labour incentive mechanisms

Financial incentives help with encouraging people to make impactful contributions in a market based economy.

Salaries

Contributors will often receive financial compensation for their labour in the form of a salaried income. Salaries or hourly rates can often be determined based on the skill and expertise of the individual as well as the amount of responsibility they are taking on in their role.

Bonuses

Bonuses are an effective way to reward top performing contributors. It is hard to know ahead of time who will be the most performant and impactful. Numerous things can happen that impact someone's performance and how much they are able to contribute. Bonuses can provide an effective way to reward people based on what actually happens rather than a prediction of someone's likely performance and impact based on historical contributions. Accurate bonus allocations can help with ensuring that top performers get recognised and fairly rewarded.

Vested bonus

Similar to vested stock options, a vested bonus structure could be an effective approach for retaining top talent. If a contributor has performed well they could be rewarded a vested amount of bonus income that they receive over time if they continue to contribute towards an organisation. This type of incentive could stack each year and give the contributor an ongoing reward for high performance.

Group bonuses

Teams that are performing well together could be rewarded as a group for their contributions. Rewarding groups rather than individuals with a bonus incentive structure could be an effective way to maintain and increase team collaboration and morale.

Labour contribution dividends

Contributions at the beginning of an organisation are often more risky due to there being less guarantees that a contributor will receive a fair reward for those contributions or that the organisation will even survive over the long term. Contributions made towards the beginning of an organisation, when it is most likely to fail, will usually be taking on more risk than those contributions that are made when the organisation has become more profitable or financially stable. Historical labour contributions could be rewarded on an ongoing basis for a certain period of time based on the impact of their previous contributions. This type of reward structure can help with better aligning the incentives with rewarding risk taking so that people are encouraged to create impactful organisations.

Capital incentive mechanisms

Loans

Capital investments are highly suitable for being rewarded in loan based structures. A loan could be implemented with a wide range of parameters based on the needs of the agreement. For instance a long term investment could have a delay of multiple years or even decades before the organisation needs to start repaying the loan. When a loan is being created the value of any capital invested can be calculated at the point of investment and the risks of investing in the organisation can also be documented. These calculations and information should then help with making a fair loan agreement that matches the requirements of both the investor and the organisation.

Revenue share agreements

A revenue share agreement is a financial arrangement where two or more parties agree to share a percentage of the revenue generated from a business venture or partnership. These agreements could last for a certain amount of time or up to a certain financial value that has been rewarded. Network introductions are a good example of situations where a revenue share agreement might make sense. The more valuable an introduction is for setting up new business relationships the more compensation the person could potentially receive due to the agreed percentage of revenue share that they will receive.

Leases

Capital such as properties and machinery (physical capital) or patents and trademarks (intellectual capital) could be leased to an organisation so that the capital investor can generate a return on investment on their capital. The organisation would then be able to utilise the capital for its own benefit and the investor would receive regular payments as their reward.

Other labour incentive mechanisms

Incentives do not need to be financially based. A range of other incentives should be considered that could also be effective for encouraging people to perform their best within an organisation.

Access based incentives

• Home, food & resources - Contributionism could be adopted in a variety of different economic models. In gifting economies or economies that don’t use markets the role of contribution could translate into access to homes, food and resources.

• Wellness & health - Contributors could benefit from access to gyms, sports facilities and health and wellness facilities.

• Other shared resources - Contributors could benefit from other shared resources such as entertainment, social or dining facilities.

Recognition and reward incentives

• Certificates & awards - Recognising top performers through certificates and awards could help with showing appreciation towards impactful and performant contributions.

• Appraisals - Appraisals from individuals or groups can help to ensure someone's contributions have been recognised and celebrated by their friends and colleagues.

• Gifts - Buying personalised gifts to reward contribution efforts could help with making a contributor feel more valued and appreciated.

Working environment incentives

• Flexible working hours - Contributors could receive more flexible working hours if they have provided a certain amount of contributions historically or if they have had a high level of performance.

• Paid time off - Contributors could receive paid time off due to their contribution efforts.

• Career advancement - High performing contributors could be given preferential treatment towards a future role change or for other progressions in their career due to their contribution efforts.

• Role flexibility - High performing contributors could be given more influence over determining the responsibilities and tasks they will perform in their current role.

Skills & expertise incentives

• Mentoring - Organisations could provide mentoring from within the organisation or from external experts to give contributors an opportunity to learn new skills and expertise.

• Educational courses & training - Educational courses and training can help with providing contributors an opportunity to learn new skills or improve upon existing skill sets.

• Self development - Giving contributors time to work on themselves could be an effective way to incentivise some contributors that want to work on their own self development.

Social incentives

• Social events - Events can help to increase social bonding and team building within an organisation. Cultural events, celebrations and experiences could all be effective for bringing people together.

• Volunteer opportunities - Contributors could be allocated time to contribute towards other causes that are meaningful to them such as charitable events or community initiatives.

Intrinsic incentives

• Autonomy - Autonomy over what a contributor works on and how they work can create a more engaging and rewarding environment for contributors.

• Purpose & meaning - An organisation's mission and goals could resonate with a number of contributors that join an organisation. Contributions that have meaning and purpose can be an important intrinsic incentive and motivation for contributors.

• Mastery - The complexity and skills required to execute certain tasks to a high level can itself be an effective challenge and intrinsic incentive for contributors that want to master different skill sets.