Re: Anarchy and spontaneous order in business and education

James Rogers (
Tue, 22 Jul 1997 16:04:26 -0700

At 10:00 PM 7/16/97 -0700, Andrea wrote:
>At 04:21 PM 7/16/97 -0700, James Rogers wrote:
>>This model assumes that everyone operates as an independent contractor. My
>>favorite aspects of this model is that it would make the work environment
>>very market driven. It would allow rapid and accurate adjustments in wages
>>as the market changed and as job requirements changed. However, the
>>current structure of business is too rigid to adapt to such a fluid and
>>equilibrium sensitive job model. I do know of (and have worked for) a
>>couple small companies that actually operate this way. You don't have to
>>do anything you don't want to (no work, no pay of course), and the pay for
>>work is adjusted according to type and market values. In my experience
>>this actually seems to produce a more efficient work environment, with few
>>administrative hassles and a lot more satisfied employees. It is a lot
>>more relaxing when you are not "required" to do anything.
>Very Cool! What companies were they? I worked with someone who was
>suggesting that our company pick up a similar model, but we didn't in the
>end. I suspect one of the biggest problems is trying to interface such a
>system with a traditional hierarchy. I kinda wish we had tried it out; it
>sure couldn't have made anything worse!

I've never worked at a company that had everything right, but a few came
close. Most of the companies that had dynamic payscales were small
consulting groups and the like. In these cases, it is actually rather
obvious since the client companies can be billed for each type of task as a
separate line item and rated according to market. This makes it easier for
the payroll system to reflect these changes for both direct and indirect
costs. The only negative side is that these companies tended to have a
more rigid management structure and technique.

One notable company for which I have worked a relatively lengthy time is
Sesame Software, Inc. out of Scotts Valley, CA. In this company the rate
is usually fixed (although not always) per project and not per task. You
work when you want to and can work on pretty much any open task you want
to. Most employees can get medical and 401k, etc. even if they work on a
somewhat transient basis. Telecommuting is generally the rule. They will
gladly teach you new skills "on-the-job" if it is within the scope of what
they are currently doing. A pretty good company overall with virtually no
bureaucratic heirarchy, although lately the company has been waffling a bit
IMO. I still work for them on a part-time basis.

>And how was the type of work and market value determined?

The types of work were broken down by significant category. The software
business has numerous obvious divisions. (Java programmer, Oracle
programmer, Oracle DBA, Unix C/C++, SAP programmer, NT applications, Web
design, Unix TCP/IP apps, etc. )

The breakdown for various projects and market value is usually negotiated
between the client, the management, and the employees. These keep the
figures at a level that is somewhat average for Silicon Valley. Most of
the basic market values are arrived at over time and are adjusted
occasionally to reflect the changing market for that skill. It isn't
something that changes on a weekly basis. Usually if one asks around, they
can get a feel for the going price for a particular skill.

-James Rogers