While discussing the shift of employment paradigms with a fellow traveler, the question was raised that if everyone is an independent knowledge worker, what about fringe benefits and non-wage compensation. Whether these are called benefits, perks, bonuses, fringe benefits, the end result is the same; competition in non-wage areas is employed to attract talent to an organization. The history of benefits can be directly traced to the Federal Government requiring, by legislation and non-legislation, business organizations to compete without direct wage compensation to attract and hire an employee. Therefore, wage compensation cannot be used to compete for talent pursuing or attracting qualified employees. The sources for this requirement can be found in several legislated actions, the most important being the War Labor Board during WWI and the New National War Labor Board during WWII both of which carried presidential power and were not legislated. These two periods of wartime effort formed much of the landscape found in modern employment situations; namely, classes of employment with specified wage ranges, equal pay for all sexes, the mandated eight-hour workday, the forty-hour workweek, and non-wage benefits. Frequently, the definition of benefit is challenged, attacked, and litigated.
The dictionary holds several definitions for the term ‘benefit.’ Those with direct application are “to derive … advantage,” “a payment or gift,” and “something that is advantageous (Dictionary.com, n.d.).” A follow-on question often asked is, “If the benefit offered does not provide an advantage to you personally, why not choose something different?” For example, medical insurance is often offered as a workplace benefit. However, if wages are not sufficient to allow participation, if premiums are involuntarily removed from paychecks, if employment requires membership, and if the offered ‘benefit’ is not used, is advantage really enjoyed; of course, not. Yet, the cost of the unused ‘benefit’ is not compensated in employee wages because of wage laws and the possibility of litigation or accusations of unfair labor practices. Although adapting a diversity of plans to meet a diversity of employee needs is preferable, the costs of customization are, frankly, exorbitant and extreme. Yet, the buzzwords in employee benefits are always customizable, morale boosting, and game changing, as benefits are tools to compete for talent.
The issue of shifting the employment paradigm regarding fringe benefits and non-wage compensation is a two-fold issue. By no longer requiring organizations to invest precious capital in non-wage compensation, the business organization possesses the freedom to contract with another small business owner, i.e. the worker, as an equal. This means that the right to control what is offered as compensation rests as a negotiation tool for contracted services. The worker has the freedom to reject or accept terms offered to find a perfect match. This also places the worker in a unique position to be accessible as an equal with other companies vying for business. Being equal with other business owners provides an entirely new market for many companies vying to do business solely with other businesses.
Innovation, freedom, and empowerment are words that are bandied about often, but, when one side of the equation has had their freedoms and rights stripped in exchange for a paycheck, innovation, freedom, and empowerment are muzzled. This is exactly what has transpired in the modern workplace. The Federal Government squeezes employees into a one-size-fits-all mold and employers are forced into complying in exchange for favorable employment law interpretations that Labor Unions constantly and expensively attack. The costs are passed onto consumers who are already forced into the traditional role of ‘employee’; the vicious cycle turns and the only winners are politicians and political appointees.
A paradigm is nothing more than a pattern, a mold, or method. A paradigm shift is nothing more than changing the mold, pattern, or method. Many paradigm shifts, especially where data is understood, refer to changing the perspective of understanding, interpreting, or analyzing. Kuhn (1996) offers logic points that detail the paradigm shift argument while detailing how paradigms are chosen, created, and clung to. A logic point worth considering is that rules can overturn paradigms. The paradigm is the mold or pattern, but rules are processes that people cling to like traditions, this does not say that paradigms are not clung to, as the human psyche does not like change. When paradigm shifts meet rules, rules rule; but, only until a crisis occurs can rules be disregarded for a new paradigm. A paradigm is created first by thought; these thoughts become actions in a specific pattern. The specified pattern, repeated, becomes habit, which become processes when taught to another. Processes become procedures when written down and applied to a larger audience through training. The training done in accordance to specifications is the paradigm molding the future. Employment has become a pernicious and hostile paradigm draining freedoms from individuals, capital from business, and producing waste, which invites government to legislate more restrictions on personal power.
Yet, it is asked, where is the crisis that will provide the impetus for changing paradigms? The answer lies in the current economic and government state of decay and overregulation. Here is a conundrum of a crisis. Businesses cannot financially afford to retain sufficient employees to satisfy consumer demands; however, businesses cannot afford the consequences of an insufficient number of employees to perform the necessary work. Look at one of the exorbitant, non-wage costs of an employee workforce: medical benefits have quadrupled in less than four years. This is a 100% increase in year-over-year costs for the last four years, and the forecasts say this is going to continue for the foreseeable future. This is a crisis in employment driving a shift in paradigm thinking. Right now the answer lies in reducing employee hours, which cramps budgets for workers, reduces payroll, and wreaks havoc. The retail industry has reported the largest drop of employee hours, down to 30.2 for full-time employees. This does not mean that 9.8 hours are no longer needed by those previous full-time employees, those employees simply now must either stretch their dollars farther, make more familial budget cuts, or get another job. Putting this into greater focus, this means a stay-at-home caregiver is out of the question. If both parents are working already and had their hours and wages cut, this means both parents are now working part-time jobs on top of reduced full-time work. The added tax burden of the second job, does not improve the financial lot of the family, nor will it sufficiently cover the lost wages of the cut hours. Since wages are not going to go up for less work, a second job is not going to be the value-added solution, a different answer to the paradigm must be found. This is a prime example of lost freedom, lost ‘Right to Control,’ and lost liberty, all in the name of old paradigms.
Another fellow traveler postulated that no freedoms are stripped in the modern workplace; his argument being that sacrificing the ‘Right of Control’ is expected as a condition of employment. The counter argument is that the employee should never have to sacrifice his ‘Right to Control’ for a paycheck. Businesses gain and benefit from professional and credentialed knowledge, experience, efficiency, and education of those aligning themselves with a brand or business organization, and, therefore, lose nothing, but rather embellish and enlarge the scope of the organization with greater opportunity for success and profit. The requisite of employment to disavow a person’s inalienable right to freely and rightly pursue his work in a manner subsequent to his credentialed preparation and professional experience as he sees appropriate is foundational to his basic rights. This is the first paradigm needing to be shifted in the modern workplace. In shifting this paradigm, much of the problems and costs inherent in human capital are reduced or eliminated entirely.
Benefit. (n.d.). Dictionary.com Unabridged. Retrieved May 06, 2013, from Dictionary.com website: http://dictionary.reference.com/browse/benefit
Kuhn, T. S. (1996). The structure of scientific revolutions. (Third ed., Vol. VIII). Chicago, ILL: The University of Chicago Press.
© 2012 M. Dave Salisbury
All Rights Reserved