The Science of Business Compensation Systems
“There’s a whole science involved in business compensation systems. But you can probably work out a very effective one for yourself if you keep the three basic principles in mind:
1. Deal with each individual on an individual basis. Make sure his compensation is dependent only upon his own value to you.
2. Contract only for what you want. Determine what results you want from someone and pay for those results only. If he delivers, you needn’t worry about how he uses his time — that’s not your concern.
3. Don’t attempt to perpetuate a relationship by contract. If any contracts are necessary, make them for the shortest practical period of time, with ways of terminating with relatively short notice. Try to avoid any situation in which you or anyone else is obligated to perform services beyond the time in which it’s in his self-interest to do so. You won’t get good value when the individual no longer wants to be involved.”
- How I Found Freedom in an Unfree World (Harry Browne)
“If you don’t have enough money to begin, you can pay interest on borrowed money; you don’t have to take in a partner. Arrangements whereby an investor is made a partner are risky; if the business is a success, you’ll be sharing your profits long after you need the initial capital. While that’s a decision you might willingly make, you may regret it five years later. And taking in a partner always opens the door to joint decisions and disagreements.”
- How I Found Freedom in an Unfree World (Harry Browne)
“Even if you don’t operate a business, you’re in a better position if you act as a supplier of a service rather than as an employee. You can contract with companies to perform specific services for them at specific prices. In addition to the tax benefits, you can choose your own working hours, usually make more money, and have more free time. If you avoid the assumptions that most employers and employees take for granted, you can earn the money you want without sacrificing your freedom to get it.”
- How I Found Freedom in an Unfree World (Harry Browne)
“I’ve found that the most fruitful long-term projects have evolved out of short term projects. The short-term projects have definite pay-offs at various points along the way; I never have to wonder for very long if I’m doing the right thing. If they then lead naturally into larger long-term pay-offs, so much the better. But I never have to undergo a long period of stoic self-denial based upon the hope of a brighter future many years away.”
- How I Found Freedom in an Unfree World (Harry Browne)
