August 15, 2008 at 13:08Affiliate ownership scheme. Partners, profit and experience.
Everyone has a pleasant time of the day, I am writing for the first time to Habr, so I apologize in advance for possible flaws.
I would like to share our experience in the partnership model of doing business, tell us how it is with us, what it pours into and get feedback. First about us. We are a start-up company, we are engaged in the sale, implementation and maintenance of configurations on the 1C8 platform. The number at the moment is 8 people. Faced (like many companies) with the need to retain the best professionals, increase personal and collective responsibility for the results of activities and came to the following:
The company now has 3 levels at which you can work.
Levels describe company status and payroll systems, but not functional responsibilities.
Whatever the employee may do — coding, staging, implementation, etc., he is always at one of the levels.
Level 1 Probationary period (IP)
Remuneration system:
• An employee who is on an IP receives only the amount agreed upon upon receipt of an IP.
• This amount is ALWAYS less than the salary that employees on the second level receive.
• At this level, bonuses and bonuses are not provided.
Features:
• There is no opportunity to go on vacation.
• Regardless of the level of professionalism, work in the company starts from level 1.
• At this level, learn to work. This is not only the study of software 1C, but also learning how to interact with employees of the company, with its corporate spirit.
Stay time:
• The duration of IP depends on the quality of work.
• Interrogated Partners who came into contact with the employee on the IP at work and provided that the Partners give the go-ahead - the employee goes to level 2.
• The shortest IP - 2 weeks. The longest is 3 months. Then either up or to the side, that is, the employee leaves the organization.
Level 2 Candidate Term (COP)
The remuneration system:
• An employee at this level receives the salary agreed with the Partners when transferring from IP to the COP.
• The salary amount reflects the average level of salary in the organization at the moment in this specialization.
• An employee may receive a higher salary than the average for the company if he will be credited with special merits.
Opportunities:
• At level 2, the specialist becomes a full-time employee.
• The salary of the employee at the COP will increase for each certificate received from 1C for passing various tests and exams.
• The employee may be paid a one-time bonus, the amount of which depends on the project and on the Partners who will vote for the size of the bonus.
Duration of stay:
• Duration of stay at the COP depends on professionalism in work and the decision to connect part of his professional life with our organization.
• At the request of the specialist, a meeting will be assembled where all Partners will vote for your acceptance of the employee into the Partners of the company.
• The shortest COP - 6 months of work. The term can be reduced due to special merits, or due to the sharp expansion of the company. The longest COP is 2 years. Then either up or to the side.
Level 3 Partnership
The system of remuneration:
• The amount of salaries of Partners consists of 2 parts:
1. salary
2. partnership remuneration, calculated as part of the organization’s profit.
• The salary amount reflects the average level of salary in the organization at the moment in this specialization.
• If the organization is operating at a loss, the amount of the partners' salaries is reduced in proportion to the losses of the company.
Features:
• The highest level of responsibility and the highest level of remuneration.
• The ability to directly influence the adoption of strategic and tactical decisions about the company.
• Ability to influence the level of employee remuneration in the organization.
• The ability to influence the costs of the organization.
Duration of stay:
• Duration of stay at the partner level is not limited by anything other than the desire of the Partner and the general meeting of all Partners.
The procedure for calculating affiliate remuneration.
Calculation of the organization’s profit
• Profit is the entire amount of money received from customers per month minus all expenses of the organization.
• Costs include payment of rent, payment to Suppliers, office, meals, payment of salaries to employees (including Partners), taxes, and more ...
Calculation of the amount of capital investment
• The amount of capital investment is 12% of the amount of profit.
• This amount is spent on the acquisition of various assets by the company.
• In total, there is a part of the profit of each of the Partners. During the work of the Partner, part of it is taken into account and constantly summarized. After the Partner leaves the organization, the accumulated amount of assets is paid to him as compensation (in cash or property).
• This is an analogue of the shares that the Partner will be able to receive and accumulate during his time in the organization.
• Upon dismissal of the Partner, shares are redeemed from him by the firm.
Calculation of the amount of equal remuneration
• 40% of the amount of profit minus the amount of capital investments are divided by the total number of Partners.
• Under this item, the remuneration of each Partner is increased by exactly the same amount.
Calculation of the amount of remuneration by years of work
• 60% of the amount of profit minus the amount of capital investments are divided by the total number of years worked by employees as Partners.
• We receive the so-called SVP - Cost of Partnership Time.
• Next, the SVP is multiplied by the number of years that the employee worked in the organization as a Partner.
• Under this item, the remuneration of each of the Partners is increased by an unequal amount and the oldest Partner receives the largest remuneration.
• The maximum number of years by which SVP can be multiplied is 20 years.
Economic consequences of applying the partnership scheme
In general terms, the economic consequences of introducing an affiliate model can be described as increasing economic maturity and awareness. Like any company based on technical specialists, the company pays a lot of attention to technical issues and very few issues of strategic development, the economy of the company, as well as marketing and advertising. After the partnership was introduced, the focus was primarily on the firm's economy. All partners understood their contribution to the total cash flow at the company, the picture of the formation of salaries and costs was clearly clarified. As a result, along with technical issues, when solving the Client’s tasks, the issue of project cost and profitability is always considered.
Before the introduction of the affiliate model, expenses were chaotic and were not always recorded. After the partnership is introduced, all expenses are accurately recorded, and capital investments are discussed at the general meeting of the Partners.
Moral and ethical consequences.
Increased employee attention to each other.
Lack of remuneration for individual performance indicators has increased the number of employee consultations with each other. The encoders independently introduced a system of accumulating knowledge and maintaining a history of the work they performed for Clients. Partners vigilantly monitor who and how much money the company brings. There were no conflicts on this basis, but a couple of times the situation was seriously understood.
Increased company loyalty
In the months when the organization worked at a loss and the remuneration of the Partners decreased, all Partners continued to work actively and openly announced at the general meeting that they were ready to do everything in their power to increase profits.
I would like to share our experience in the partnership model of doing business, tell us how it is with us, what it pours into and get feedback. First about us. We are a start-up company, we are engaged in the sale, implementation and maintenance of configurations on the 1C8 platform. The number at the moment is 8 people. Faced (like many companies) with the need to retain the best professionals, increase personal and collective responsibility for the results of activities and came to the following:
The company now has 3 levels at which you can work.
Levels describe company status and payroll systems, but not functional responsibilities.
Whatever the employee may do — coding, staging, implementation, etc., he is always at one of the levels.
Level 1 Probationary period (IP)
Remuneration system:
• An employee who is on an IP receives only the amount agreed upon upon receipt of an IP.
• This amount is ALWAYS less than the salary that employees on the second level receive.
• At this level, bonuses and bonuses are not provided.
Features:
• There is no opportunity to go on vacation.
• Regardless of the level of professionalism, work in the company starts from level 1.
• At this level, learn to work. This is not only the study of software 1C, but also learning how to interact with employees of the company, with its corporate spirit.
Stay time:
• The duration of IP depends on the quality of work.
• Interrogated Partners who came into contact with the employee on the IP at work and provided that the Partners give the go-ahead - the employee goes to level 2.
• The shortest IP - 2 weeks. The longest is 3 months. Then either up or to the side, that is, the employee leaves the organization.
Level 2 Candidate Term (COP)
The remuneration system:
• An employee at this level receives the salary agreed with the Partners when transferring from IP to the COP.
• The salary amount reflects the average level of salary in the organization at the moment in this specialization.
• An employee may receive a higher salary than the average for the company if he will be credited with special merits.
Opportunities:
• At level 2, the specialist becomes a full-time employee.
• The salary of the employee at the COP will increase for each certificate received from 1C for passing various tests and exams.
• The employee may be paid a one-time bonus, the amount of which depends on the project and on the Partners who will vote for the size of the bonus.
Duration of stay:
• Duration of stay at the COP depends on professionalism in work and the decision to connect part of his professional life with our organization.
• At the request of the specialist, a meeting will be assembled where all Partners will vote for your acceptance of the employee into the Partners of the company.
• The shortest COP - 6 months of work. The term can be reduced due to special merits, or due to the sharp expansion of the company. The longest COP is 2 years. Then either up or to the side.
Level 3 Partnership
The system of remuneration:
• The amount of salaries of Partners consists of 2 parts:
1. salary
2. partnership remuneration, calculated as part of the organization’s profit.
• The salary amount reflects the average level of salary in the organization at the moment in this specialization.
• If the organization is operating at a loss, the amount of the partners' salaries is reduced in proportion to the losses of the company.
Features:
• The highest level of responsibility and the highest level of remuneration.
• The ability to directly influence the adoption of strategic and tactical decisions about the company.
• Ability to influence the level of employee remuneration in the organization.
• The ability to influence the costs of the organization.
Duration of stay:
• Duration of stay at the partner level is not limited by anything other than the desire of the Partner and the general meeting of all Partners.
The procedure for calculating affiliate remuneration.
Calculation of the organization’s profit
• Profit is the entire amount of money received from customers per month minus all expenses of the organization.
• Costs include payment of rent, payment to Suppliers, office, meals, payment of salaries to employees (including Partners), taxes, and more ...
Calculation of the amount of capital investment
• The amount of capital investment is 12% of the amount of profit.
• This amount is spent on the acquisition of various assets by the company.
• In total, there is a part of the profit of each of the Partners. During the work of the Partner, part of it is taken into account and constantly summarized. After the Partner leaves the organization, the accumulated amount of assets is paid to him as compensation (in cash or property).
• This is an analogue of the shares that the Partner will be able to receive and accumulate during his time in the organization.
• Upon dismissal of the Partner, shares are redeemed from him by the firm.
Calculation of the amount of equal remuneration
• 40% of the amount of profit minus the amount of capital investments are divided by the total number of Partners.
• Under this item, the remuneration of each Partner is increased by exactly the same amount.
Calculation of the amount of remuneration by years of work
• 60% of the amount of profit minus the amount of capital investments are divided by the total number of years worked by employees as Partners.
• We receive the so-called SVP - Cost of Partnership Time.
• Next, the SVP is multiplied by the number of years that the employee worked in the organization as a Partner.
• Under this item, the remuneration of each of the Partners is increased by an unequal amount and the oldest Partner receives the largest remuneration.
• The maximum number of years by which SVP can be multiplied is 20 years.
Economic consequences of applying the partnership scheme
In general terms, the economic consequences of introducing an affiliate model can be described as increasing economic maturity and awareness. Like any company based on technical specialists, the company pays a lot of attention to technical issues and very few issues of strategic development, the economy of the company, as well as marketing and advertising. After the partnership was introduced, the focus was primarily on the firm's economy. All partners understood their contribution to the total cash flow at the company, the picture of the formation of salaries and costs was clearly clarified. As a result, along with technical issues, when solving the Client’s tasks, the issue of project cost and profitability is always considered.
Before the introduction of the affiliate model, expenses were chaotic and were not always recorded. After the partnership is introduced, all expenses are accurately recorded, and capital investments are discussed at the general meeting of the Partners.
Moral and ethical consequences.
Increased employee attention to each other.
Lack of remuneration for individual performance indicators has increased the number of employee consultations with each other. The encoders independently introduced a system of accumulating knowledge and maintaining a history of the work they performed for Clients. Partners vigilantly monitor who and how much money the company brings. There were no conflicts on this basis, but a couple of times the situation was seriously understood.
Increased company loyalty
In the months when the organization worked at a loss and the remuneration of the Partners decreased, all Partners continued to work actively and openly announced at the general meeting that they were ready to do everything in their power to increase profits.