Freelance or Consultant vs. Employee: Or, The Structure Wars

Labels, like manners, matter.  Social researchers are always resurrecting or creating new labels, classifications, and divisions to increase variable control.  Through variable naming and onto controlling, social researchers slip bias for particular variables into research reports, slanting conclusions, creating disharmony in the population, and destroying unity.  The results can be seen and witnessed in every facet of American Life.  Republicans are constantly pitted against Democrats, both are pitted against Independents, and inside these general classifications are heaps of additional labels, splitting the general classifier into ever smaller and more easily controlled sub-groups such as Constitutional, Conservative, Progressive, etc.  From this disharmonious adventure in social research has come a plethora of laws benefitting one sub-group against other sub-groups, upholding gender against gender, religion against religion, culture against culture, and forcing courts to choose.  The end result, everyone loses.

This same division has caused business organizations problems aplenty since the WWI era.  Government has forced business to uphold cultures, genders, and personal choice over what is best for the organization.  The relationship between law and the organization is going to be reviewed in future writings.  This first review assesses the definitions for freelance or consultant and employee as well as the relationship behind labels, and the dilemma and burden of the hierarchy of business organizations.

Freelance

According to UseLegal.com (2012) freelance workers are self-employed; work for their selves, bid for open work, and are independent of the business hierarchy.  Contractors and Consultants are considered in this category.  Freelance employees possess some tax benefits, risk problems, and American Business has embraced these classifications for filling work in times past to reduce payroll expenses.  Freelance workers must justify their work, intentions, and pass a 20-point test from the IRS to qualify as a freelance worker.

Employee

Again from UseLegal.com (2012) the actual definition of an employee is quoted herein, “An “employee” is defined as “a preference eligible in the excepted service who has completed 1 year of current continuous service in the same or similar positions” or “an individual in the excepted service (other than a preference eligible) . . . who is not serving a probationary or trial period under an initial appointment pending conversion to the competitive service.” Ramos v. Merit Sys. Prot. Bd., 2009 U.S. App. LEXIS 24378 (Fed. Cir. Nov. 6, 2009)”  Essentially, a person can be hired by an employer, but does not attain employee status and protection until that person has been hired for a continual year by the same employer, is not under a ‘probationary period,’ and or appointment.

An employee agrees to be controlled by an employer; the production of that person is only one of the controls granted to an employer; conduct both on and off the job can be controlled, along with the means and manner of producing the work specified.  The right to control is the primary determining factor in this relationship.  The right to control is also the deciding line between freelance workers and employees.  Upon this single imperative hang tax law, responsibility of parties, risk, and every item in employee/employer relationships, hierarchical structures, and will ultimately decide who or which party is in charge.

Fancy axioms have been created to express a need to become more creative in thinking, to break the model of dependency, and drive ingenuity and creativity back into the workplace, but these axioms do not reduce control and their purpose is immediately lost when applied to restoring workforce employee choices.  To change the paradigm, business organizations must evaluate their ultimate motivation with regard to employee relationships, and employees must decide as individuals how they can best foster their knowledge, experience, talents, and skills whether in a climate of self-control or company control.

Long has it been claimed that, “Those who pay, rule.”  By choosing to be an employee, the rights of the employee to control his responsibilities are surrendered to the employer in exchange for less tax burden, regular paychecks, and a continuity producing security.  Supervision, management, or control is placed upon an individual’s agency in exchange for less risk.  Less risk breed’s complacency, complacency breed’s compliance, compliance breed’s servitude, and thus the individual is captured in a system of control producing a menial mindset.  This menial mindset is expressed by phrases like, “Captured by the system,” Taken over by the man,” “Brainwashed,” etc., and has created a dilemma in every business organization.  The dilemma is this:  although business organizations have control over processes and individuals, this control restricts or prevents employees from doing exactly what business organizations desire in an employee, which is the ability to use ingenuity, logical thinking, and freedom of action so necessary in business interactions and transactions between employee and customer.

The epitome of this dilemma is that the federal government has consistently made having control more expensive through taxation, mandating benefits, and increasing controls thus forcing businesses to choose to either exert more controls upon employees or go out of business.  This simple fact is the driving force behind shifting the employment paradigm.  It is past time for freedom in employment to break out, to return to valuing knowledge acquisition in business transactions, and to enhance freedom in all aspects of individual lives and livelihoods.

© 2012 M. Dave Salisbury

All Rights Reserved

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Organizational Contention – Or, Fostering the Case to Shift the Employment Paradigm

Medical doctors call any condition that progress slowly into advanced stages before manifesting itself openly a “silent killer.”  Organizational Contention (OC) is one of the deadly ‘silent killer’s’ rampant in business today.  Organizational contention can be as simple as when employees disagree with each other, or as complicated as when whole departments antagonize, hate, and actively work against each other.

Below are some examples of OC the author has knowledge of:

  1. A senior operations employee instigates a fight with a junior supply chain employee.  The senior employee picks up a metal rod and strikes the junior employee.  The resulting company investigation shows the junior employee at fault.  The junior employee leaves the company.  The contentious response of the senior employee will result in a repeat of this incident again.
  2. A manufacturing company whose labor union is so anathema to change that adding equipment to improve the manufacturing process almost initiates a strike.  A production supervisor added a fully anchored roll table to the output side of a machine.  The table sped up production 25% per part.  The owner averts the labor union’s strike.  The supervisor forced to apologize, the table removed, and the labor union fakes pacification until the next attempt to initiate change.  This animosity cycle to change repeats itself repetitively.
  3. A call center and business unit in one geographic area is despised by the other call centers and business units.  Actions initiated to show the value of the call center at fault is to no avail.  Enough employees at the other call centers and business units run down the other call center causing action by senior management to investigate the call center for possible closure.  The investigation uncovers that the call center is performing above company standard in all aspects measurable, the call center remains open, the dislike and discord continue unabated.
  4. A supervisor, to a fellow supervisor, describes a new employee as “unstable.”  Examples include “slamming papers down,” “scowling,” not making eye contact, and the supervisor invokes those action demanding words, “workplace violence,” to the other supervisor.  The second supervisor conditionally concurs based upon the reputation of the first supervisor; neither supervisor notifies human resources; no corroborating investigation occurs.  The second supervisor makes copies of the employee handbook, takes the offending employee aside, explains the observations, details the employee handbook sections applicable, all in an effort to “raise awareness.”  The employee expresses amazement that the first supervisor is receiving this perception and asks for specific instances, specific guidance, and situational training for the new corporate environment to “make the right first impression.”  No underlying causes, discussed in the meeting receive attention, no further training or guidance was received, and shortly after this incident, the employee was terminated.

Reality check, these are not fictitious examples.  Even in a down economy people remain people, organizational contention continues to cost valuable resources, and without significant change to organizational cultures the contention wins.  Even with massive interdiction changing the organizational culture, contention can still win.  Not all is without hope.  People do change, contention does lose, and the pressures feeding contentious responses mitigated.

At this point, some would argue for tougher business policies against employees on employee violence or human resources taking a more aggressive position regarding labor control and/or calling for more professionalism in the workplace towards other employees, ramping up existing or creating new incentive programs, etc.  The list is as endless as customizable solutions for specific incidents.  Others argue that since each organization is unique, unique solutions are required, that the one-size-fits-all or most approach will not be successful, that allowing people to express themselves is all fine and good within certain limits.

Change has come of age, essential and demanding change in thinking and actuality, for success in current market environments.  These former, unsuccessful arguments fail to address the core issues of individual employee responsibility, accountability, and organizational needs, to address organizational contention and foster safe working conditions.

Correcting organizational contention and fostering safe working environments do have a universal answer:  change the employment paradigm.  Traditional thinking on employees imply they “must be managed, controlled, and persuaded to act in a specific manner.”  Because the concept and reality of changing “employees” to “contractors,” specifically those choosing to affiliate with an organizational brand, prepares people to come fully equipped to work with a proper more prosperous mindset to do the job.  They do not need or want managing, controlling, and persuading.  As a result, organizational trust in people to make good decisions is realized when they have a stake in the organization that demands responsibility and accountability.

            Introduced in the article, “Shifting the Employment Paradigm,” are the support for the need of shifting and the reconstruction plan to shift.  This plan rectifies many of the diseases silently killing today’s business organizations through the process of ‘shifting the employment paradigm’ from traditional thinking to new and innovative levels of employee responsibility and accountability.  Employees are smarter, more engaged, and less needful of the expensive pampering traditional thinking forces upon organizations where employee relations are concerned.  It is time to make the change, shift the thinking, and reconstruct the business environment.

© 2012 M. Dave Salisbury

All Rights Reserved

Shifting the Employment Paradigm – Or, “I do not want to be an Employee”

The largest tax increases in history are inundating every business organization in America.  With President Obama’s re-election more taxes and problems are developing as anti-business, big government, politicians and are going to keep on attacking the golden goose of business until everyone is beholden to the Federal Government.  This is a cold, hard, ugly truth.  Maybe, it is time for business to strike back by shifting the paradigm.  Small business owners complain that even with current order demands, lay-offs must occur.  Medium size and large business organizations echo the same problem with ever increasing magnitude.  Business owners, decision makers, stakeholders, lend a moment of your time.

The formula for knowledge has always been education plus experience multiplied over time.  [(Ed + Ex) = K]  Returning to these roots is paramount to getting business back on track in a hostile government situation.  Every day consultants are hired and invited into business organizations for a synopsis and opinion.  Taking this thought one step further, consider those currently labeled as traditional “employees” and rebranding them as contracted knowledge consultants is simply an extension of a thought that can return American Business back to its roots.  Before WWII’s industrial capitulation to the Federal Government, what workers knew, how hard they worked, and their willingness to sign-on for the long haul were paramount to a successful organization.

These days are not that far gone, nor are they not able to return.  Employees cost big money.  The taxes, the benefits, the tools, the resource drain, all form a dubious risk, with little return, and a constant headache of hiring more people to now watch, manage, and interact with the employee.  What happens if this paradigm shifts?  Instead, of hiring employees, Human Resources begins to arrange human capital who freely associate with your business brand as they grow their own business brand as independent contractors, knowledge vendors, or knowledge working consultants.

Consider the secretary, administration assistant, or executive assistant.  Their skills are unique, the knowledge possessed valuable, and their methods for working in a storm invaluable.  Co-opting them into knowledge vendors does two things:  raises their status and allows innovation into an arena stifled by paperwork and business processes.

Call centers; replace the phone reps with knowledge consultants.  The task shifts from simply answering the phone to having a personal interest in remaining affiliated with a brand.  Consider the change in attitude apparent to the customer from the first interaction.  What are the possibilities of a customer service rep abusing a customer when the rep is now a vendor, affiliated with your brand, knowing their personal brand is both reflected in their take home pay and future contracts are dependent upon current actions?

Long has responsibility and accountability been missing from the manufacturing employee and the construction employee regardless of union membership.  How many times would manufacturing employees destroy company property and waste production time and construction employees work intentionally slow to delay projects and increase costs if they knew their reputation and future contracts are dependent upon current actions and knowledge and, therefore, have a personal stake in the business outcome.

This model eliminates much of the middle management landscape as their roles have diametrically changed.  Those remaining as traditional employees in this organizational model would possibly be restricted to a small core of individuals oriented as service delivery officers knowledgeable for their expertise areas on the corporate level, i.e. IT/IS, HR, CFO, Operations, etc., wholly customizable to organizational needs, security concerns, and future goals.  Their role has changed from management of numbers and data to leaders of people.  This new organizational model places business owners and service delivery officers into partnership with the knowledge contractor.

This idea means the average employee right now will need assistance in understanding contracts, and human resources will need to ramp up to fill a new market of vendor management and contract negotiations, central to their role in human capital development, and both of these skills sets are trainable and easily conquered.

Instead of laying-off an employee, present to the employee the opportunity of becoming a knowledge consultant affiliated with your organization, explain the plan, co-opt their ideas into this rough outline, and grow your organization.  The best ideas will come from your current employees desiring to become knowledge contractors for a customized solution to your organization.  Your company and individual consultants singularly contract these negotiations.  Over time patterns in contract negotiations, will emerge bringing efficiency and additional cost savings.  By working with employees, honestly communicating, and searching for answers outside the box, dynamic change will come back to America and business will see a better day.

This concept is not new; benchmark current commission sales reps and current vendor contracts.  The training is available through public sources online.  Many organizations stand at the ready to assist in a transition to this model and are local to your organization.  Additional assistance and information is available.  Please contact me using email.

Dave Salisbury is pursuing is PhD in Management as an Organizational Psychologist.  He possesses a dual Masters in Adult Education and Training and an MBA in Global Management specializing in Human Resource Management.  He is available at mdavesal@gmail.com.

© 2012 M. Dave Salisbury

All Rights Reserved

Hello world!

Welcome, I am glad you are here.
The intent of this blog is to provide ideas, discuss new options, and drive business thinking forward.  As a project manager, business professional, and lifelong learner, it has become apparent that current thinking is sinking opportunities, wasting resources, and opening business to attack from government agencies intent to ruin achievers.

I aim to change this by publishing that which can provide new thinking on old topics.  All I ask is that when reading, you employ an open mind.  When commenting, use professional language.  By banding together, standing firm, and continuing to work hard, America can begin to become a place of innovation, manufacturing, and developing the ideas for tomorrow again.

With an MBA in Global Management specializing in Human Resources, a Masters Degree in Adult Education, and in pursuing a PhD as an Organizational Psychologist, this blog covers business topics, training topics, and ideas for improving American Business Society.

Welcome, now let’s go to work.