COMPLEX KRONOS PAY STRUCTURES and THE END OF THE WORLD AS WE KNOW IT
Dec 20, 2010
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Stay with me folks… hold hands if necessary but things are going to get complicated here as I share with you my latest update on costing complex pay policies. As you know, my curiosity was piqued when amongst all the granularity of labor costing there was ‘a gap in the literature’, as they say, when it comes to costing all the complexity we have created over the years in ways to pay people. Since I couldn’t find anything in the HR/PR/Labor realm I was forced out into the significantly less hip discipline of finance and economics. This ultimately led me to a very eerie connection. Apocalyptically eerie. Like I may not even have time to measure the cost of all this complexity before Kronos TimeKeeper, the entire Workforce Management industry, nay, our society itself collapses!
In the world of economics I ran into Professor Eric (E.L.) Jones. Jones is an Economic History professor who, in 1989, reviewed a book by anthropology—yes, anthropology professor Joseph Tainter. Tainter and I both went to the University of California at Santa Barbara where I was kicked out—but that’s not the eerie, apocalyptic connection. The connection I am drawing you to is from Tainter’s book Collapse of Complex Societies. Are you all still holding hands?
Tainter investigated different societies like the Mayans, Romans, Kronites and the Chaco canyon people (think Pueblo skyscrapers built 1,000 years ago). These societies became more and more complex in order to solve problems. (I was kidding about the ‘Kronites’ just to see if you were still paying attention because this is very important!) Anyway… Complexity. Complexity in a social system is characterized by many different and specialized social and economic roles and many mechanisms through which they are coordinated and reliance on symbolic and abstract communication. Sound like payrules and paycodes to anyone?!? Hold hands and keep walking. Tainter further states “this leads to a class of information producers and analysts who are not involved in primary resource production.” Uhmm Payroll people, yes, that’s you…just hold hands.
Recall the title of the book is The COLLAPSE of Complex Societies. Yep they folded not in spite of their ingenious complexity but, according to Tainter, because of it. Specifically, because of diminishing returns on investments in social complexity. Diminishing returns works like this—as you divide and create all these specialties you enhance your overall ability to mass produce. The modern assembly line is a prime example of this. So, there is a lot more production but also a lot more mouths to feed out of that production. The production tapers off as the complexity (and thus number a people who must draw off it) increases. In complex pay policies this is represented by not just the extra 50 cents an hour that must be paid but the people and systems that have to figure out when and how to deliver that 50 cents. “Oh”, you say, “but we’ve automated our shift differential with Kronos TimeKeeper, Timeclocks and other Kronos modules.” This is exactly the point—behind the scenes of that automation are hardware and software vendors like Kronos and behind them are marketeers, executives, programmers. And you can’t get programmers for soda and pizza like you could in the 1970’s and 80’s. My how society has changed.
The apocalyptic part comes, obviously, because those ancient societies didn’t fix this trend in time and they crumbled. In retrospect this shouldn’t have been inevitable—there were ways to make significant changes (simplifications and streamlining) in the systems and time to do so. But they didn’t . They just kept on adding more and more complexity until the motor couldn’t turn for the friction of all the gears. I’m sure someone stood up and said something like – “Tell me again what the wheat berry skip-loading machine bearing polishers do and why they get 4 coppers more on feast days?”. But I’m sure someone told them it was critical to production. In fact, they just ordered a new wheat berry skip-loading machine bearing polisher with biometrics… you know, to prevent fraud and waste.
So there it is. I will continue measuring all this cost as promised but it will be up to you all to do something positive with the information (and quickly) before our workforce timekeeping and pay systems (oh, yes…and society as we know it) collapse under their own weight. Okay...please stop squeezing my hand now.