PROFITS: WHO GAINS?
Profits exist only when
In semantic honesty, "profits" is a term that should not be written or spoken without qualifying forethought. Its Latin origins means to "advance," that is, go forward to a better state of being. Misuse of profits in labeling business activities would lead to endorsement of transactions that retard or regress one's state.
This mislabeling increases during inflationary periods. Symbols of capital are manipulated instead of production being increased. "Profit-taking" on Wall Street most often means selling old stocks that were originally sold long before the speculator was born. No production resulted. Human talent is wasted. "Profit-taking" is an oxymoron, capturing the nature of the decapitalistic theft of wealth through symbols. Profit-sharing is a tautology, for a true profit to exist, the created wealth must be shared.
People frequently confuse immediate income with permanent gain. Profits for a moment are not necessarily lasting profits. New wealth can be the seed of its own destruction.
Do thieves have profits? Unless punished and stopped, a thief can replace the rule of law with the rule of the jungle. This condition eventually destroys his initial gain of wealth. A drug dealer who makes a quick buck eventually loses his state of being to the law or the lawless. Quarterly gains in profits at the cost of long-term growth is not profitable performance.
If a company's policies and management maximize each person's profits, then the company's profits will be maximum. Maximum profits require objective determination, disbursement and investment of profits.
Objective determination of profits precludes the negative consequences of over- or under-payment on employee motivation.
Disbursement and investment of quantitatively determined profits are essential parts of AESOP's permanent growth.
Performance can be objectively or subjectively evaluated. Subjective evaluation generates problems compared to objective quantification. The Aesop program automatically and objectively quantifies performance as the employee begins and finishes a job. The job's times, costs and profits are written to the customer's invoice and to the operation log. Each billable action--customer's, AESOP's, or self--is recorded. When the employee signs out at the end of a shift, a sequential listing of completed jobs is generated and printed: performance log.
In many businesses, it is not clear whether an individual is profitable. Either one is part of the problem or part of the solution ... either one is productive or consumptive ... either one is advancing or regressing ... either one is creating time or destroying time. Aesop's performance log shows individual profitability.
Some people view strict and accurate accounting of their work time as Big Brotherism. If a worker is honest, decent and diligent he will not mind the strict quantification of his performance. His raises and equity are determined by the profits he creates and the profits of the operation. A good worker knows subjective assessment requires him to carry the lazy employee's work load. And, he suffers lower compensation because of the drain on the business by the poor worker.
Before payroll is computed, one's profits are adjusted by overall profits or losses of the operation. This adjustment reinforces the importance of the whole for long-term career survival. If the employees or management do not ensure profits by each person within the operation, then the whole will suffer.
The performance log quickly quantifies insufficient patience or knowledge relative to what an employee said he could do when he was hired. Quick and documented termination of people who oversold their skills and work ethic is not only in the interest of the operation but in the interest of the misrepresenting person and the economic community. Everyone loses when incompetent people with an inflated self-opinion hold problem-solving positions beyond their means. Problems are not solved.
One's performance log lists each job. It shows sales and cost which determine specific profits and losses. An entry looks like this:
Business Area Service Started Time Sales Cost P/L Hourly
The hourly figure is an adjustment of the profit or loss to an hourly rate. One can compare different services for strengths and weaknesses. With this objective feedback one recognizes areas needing improvement and training. Or, as one's income increases, one recognizes jobs which are no longer profitable. With this feedback, one delegates jobs to employees with a lower rate of compensation, e.g., typing an envelope or a letter.
When a worker's skills are not profitable in new actions, he can readjust his work level by removing his initials from the project macros. This aspect of Aesop, possible only with a computer program, reduces management costs and allows more specific job delegation based on the person who best knows one's own profitability. This aspect reinforces the individual's sense of being in control of his career. When a highly proficient person removes his initials from a project macro, this creates more opportunity for skills development of other workers.
The profit profile is created each morning. While the performance log shows probable income, the profit profile shows actual income and losses. The profile program determines the jobs for which payment has been received by reviewing paid-for jobs. The profile also provides a summary of profit sources which is crucial in organizing one's management load. The performance logs provide feedback on selecting production jobs based on profitability; the profile assists in scheduling time on job management and other areas of management.
One accumulates profits from the following:
Project Management and Sales Effort
Debits are activities which retard growth at best. They cause loss of time, resources or opportunities.
The end of shift program subtotals profits for each management category: job, project, operation, resource and expansion. The subtotals are listed at the end of the profit profile. Projected stock and raises are also listed for each area. Management areas which exceed limits are highlighted so one can delegate more time to other management activities. A balanced profit profile maximizes overall current and career income.
A person's benefits are funded from his profits when the payroll is processed. If no profits exist then no accounts can be funded. This profit disbursement begins after the profits are adjusted for any shortfall in operational profits.
Elected benefits are self-selected payments which can be purchased more cost effectively through the group action of the company, e.g., health, life, and dental insurance.
Aesop provides and requires certain benefits to promote better workers on and off the job. These accounts are funded from one's profits. They are accessed by submitting a purchase order for which a check will be written if the funds are available in a person's account. They are Time-off, Entertainment, Education and Community service.
The remaining profits, after elected and required funding of benefits and accounts, regulate stock ownership and monthly raises. The increased funding for community and education parallels a reduction in the workweek.
Raises and Stock Ownership
Workers perform better if pay raises are readily available for good work. They perform better if a pension is established. In keeping with the principle that capable people should be compensated according to their motivation and production, Aesop quantifies pensions and raises according to profitability.
The company's "savings rate" is an important figure in computing raises and stock ownership. The savings rate is an adjustable figure selected to promote optimal growth of the system and to meet financial retirement needs. For instance, if the savings rate is 10% then each employee wages are adjusted to save an amount equal to 10% of his compensation package.
Suppose one had a $1000 compensation package and had $300 dollars in profits after disbursement. One would receive stock equivalent to $300 which would be 30% of one's compensation if profits were balanced among the different management areas. One is limited to the savings rate in any one management area except expansion and resource development.
If the $300 profits came solely from job production and the savings rate was 10% then one would only receive stock equivalent to $100 and a raise of 1%. If half the profits came from job management and half from project management then one would receive stock equal to $200 and a raise of 2%. There are several reasons for these restrictions which benefit both the company and individual. A balanced profit profile encourages a balanced career growth, from manual to mental work.
Raises are based on the dollars in excess of the savings and on the hours worked during the month. If you have $200 in excess of the retirement savings requirement and if you worked 150 hours per month then you raise would be $200/150 or $1.33 per hour. The process works the other way, reducing hourly wages to meet the mandatory savings requirement.
Savings is a must if people are to have employment and requirement security. Better gradually adjust one's standard of living on a monthly basis than to end up with no income through unemployment or no savings.
Workweek Reduction, Gradual Retirement
Any raise received in excess of the rate of inflation reduces the number of minutes for which one will be paid in the following month. If one's excess raise is two percent, then the number of minutes on which one's wages are based is reduced by one percent.
The object of this workweek reduction is to promote both increased disposable income and increased disposable time. Rather than people retiring suddenly, they retire gradually. Or, because their work activities are guided by a profit profile, they can continue working as long as they want.
Workweek reduction, based on increased profits, shares the needed work among more people. Reducing the workweek is the best way to handle unemployment or mis-employment including workers who feel they must work a forty hour week. Otherwise, the gainfully employed continues to work the hours to pay the taxes and social costs of the unemployed and misemployed.
Why work for others in their place? The present workweek of forty hours is an inefficient allocation of work demand and created wealth. In 1989, each person works 40% of the time for the government through some form of taxation. A large percentage of the tax is for people who are not producing, in part, because they cannot find work. Why not put them to work?
Self-Management of Career
A company needs both queen bees and worker drones. A company benefits from a system of raises and ownership that encourages employees to work smarter not harder. These benefits exist both on and off the job.
Between the daily profit profile and the monthly raises/stock payments, the individual becomes tuned to scheduling his time to learn and to grow to have a balanced profit picture. Areas of growth are better problem-solving of projects, resources, markets and expansions. These skills transcend the work place, benefitting both home and community.
After hours learning benefits
Quantifying the assistance needed to learn one's job will end the discrimination against and punishment of self-starters. Willingly taking work home, a self-starter studies how to be a better worker. The phenomenon of people learning more on their own time will increase under Aesop as people see what it costs to asks questions of co-workers. Knowledgeable workers resent unnecessary work flow disruptions from co-workers who will not learn on their own. The occasions for disruption and resentment decline when the disrupter pays the knowledgeable worker for his time.
Some workers think the world owes them a living; that is, they want something for nothing. This consumptive attitude takes many avenues. One variation is the eternal questioner. He never listens. He keeps saying, "I can't do the job until I am trained." He is, in fact, a non-learner who will never become a productive worker.
The profit profile quickly establishes the presence of a consumptive learner who plays mental games without responsible goals. It shows up in the bottom line of the profile. The person quickly must decide to listen and learn or lose and leave. The AESOP system, as such, shapes consumptive waste into productive responsibility. (This model could be applied to the educational setting.)
Finding one's own level at one's own pace
One is not chastised for mistakes at AESOP; a pound of flesh is not exacted as payment when poor performance is evaluated and adjudicated automatically. Aesop assists workers in finding their level of competence without pestering them. Each person is allowed to choose his mode and rate of career growth. If he wants to learn on the job, that is fine, but it will affect his raises and stock ownership. His expression of freedom and self-determination will be respected. On the other hand, if he wants to study the businesses at night to become quickly proficient then his raises and equity will be greater. The rewards in either case will objectively match the ability of the person to do the job.
An employee's excess profits purchase stock in AESOP Leasing. The invested money purchases equipment for rental or leasing to the AESOP operations. The employees' retirement funds promote employment security. Some retirement funds have bought out and dismantled the contributors' company which eventually destroyed the retirement funds; this is an example of decapitalism. The AESOP mode of investment guarantees on-going production after one retires to provide funds and needed goods and services.
Investments in AESOP Leasing are divided among the levels of organization:
District: Half of the profits
The aggregation of funds at the higher levels provides capital for purchases that would not otherwise be possible. The purchase of the equipment is authorized by the operations heads meeting on a monthly basis.
AESOP Leasing is an embodiment of the original purpose of capitalism, that is, people coming together to provide funds to create a level of productivity that they could not achieve by themselves. As a symbol of their contribution and as a claim to a fair share of the profits, investors receive stock in the new company. In the case of AESOP, the stock is called the Lifehour.*
AESOP Leasing will charge a fair market value for the leases. The difference between the cost of the funds and the lease markup will be dividends for disbursement to shareholders in AESOP Leasing. AESOP Leasing coordinates traditional leasing services in providing equipment to AESOP operations, especially during the start-up period.
Lifehour stocks cannot be sold any more than one can sell other forms of company pensions. Dividends from Lifehour shares in AESOP Leasing have time limits and conditions. They are not negotiable stock. They can be sold to AESOP Leasing during retirement to meet retirement expenses.
Besides providing a retirement/investment function, AESOP Leasing also simplifies depreciation accounting. Major ticket items will be purchased by AESOP Leasing and depreciated by it. This reduces the paper work in each operation. The operations will take advantage of the small business expense rule which allows immediately writing off $10,000 worth of purchases that would otherwise require depreciation.
AESOP Leasing will help with the problem of outdated equipment by conducting regular sales of equipment that has been replaced by more advanced technology. AESOP Leasing will be able to do this at a profit because it will purchase at a national wholesale level and resell to end-users. An existing exmple is a car rental agency which buys, rents and sells the latest models. Service companies that do not plan to dispose of their obsolete equipment in a profitable, methodical way will themselves become obsolete.
Profits exist only when the newly created or saved wealth takes one forward permanently. At the job, project, day, month and career level, the AESOP process is designed to allocate a measured amount of a person's wealth for each time frame of his life so that he goes forward in all regards. At the job and project level, the feedback shapes his ability to create more wealth faster by quickly solving problems more intelligently. On a daily basis, the performance log and profit profiles assist in self-assessment and self-decision for allocating one's workday for a balanced professional and personal growth for maximum problem-solving ability. The monthly raises and stocks from increased profits ensure that a person is ideally rewarded for growth and safely protected for retirement. The gradual reduction in the workweek takes one forward to a better life. In addition, the re-investment of profits for employment security at all levels of economy (district, region, and nation) are part of a true profit picture.
Central to this balanced and optimal growth of profits is the theme of problem-solving ability. One's true worth as a human being to his fellow beings derives from the ability to solve problems. Economic systems that downplay this worth for the symbols of past problem-solving (deeds, metals, paper, stocks and bonds) are self-destructive, for current problems will not be solved by the wealth of old problem-solvers: they require new problem-solvers. If individuals grow as problem-solvers on and off the job, then their collective worth, the worth of the economy and country, will reflect these true human profits.
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