Networked enterprise compensation concept: From pay-by-enterprise to pay-by-userHaier's model overturns the traditional compensation system: Intraditional enterprises, staff receive payment based on position and job grade. Employees execute orders from superiors who evaluate their performance, and receive pay from the enterprise. The compensation system of a networked enterprise developed by Haier is pay-by-user, where employees create value for users who, in turn, evaluate the value. The compensation then comes from extra profit sharing. The traditional compensation system is a fixed compensation system with ex-post evaluation. Haier compensation system adopts VAM pay related to user value, which requires commitment-oriented planning. The resource investment for creating user value depends on VAM and co-investmentinstead of allocation by superiors. The microenterprise takes the initial risk, and pays employees their co-investment capital first if it fails to create value for users and the VAM comes to nothing.
If you want to share something you need create an account. It only takes 1 minute and it is completely free.