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If I had to structure an organization of 1,000 people

You might also want to read this: http://www.amazon.com/Maverick-Ricardo-Semler/dp/0712678867

This is why I love the HN community - not one but two people recommend the same book - that's a huge vote of confidence that forced me to take a better look at it.

Just based on the summary, it sounds like he has a lot of good ideas and one bad mistake: profit-sharing is socialized. So if the company does well then the employees do well, but individual contributors would have trouble getting rewarded.

It may not be as bad a mistake as you think. There's some experimental (if unintuitive) evidence that rewarding individual contributions in organizations is harmful, even to that individual's motivation. The extrinsic motivation extinguishes the individual's intrinsic motivation.

Many high achievers have an attitude of "achievement for the sake of achievement." Individual rewards crush that spirit.

Joel Spolsky wrote about it on more than one occasion. Here's one link: http://www.joelonsoftware.com/items/2006/08/09.html

See also:

A) Punished by Rewards (Alfie Kohn)

B) Herzberg's Motivation-Hygiene Theory (Two Factor Theory). The idea is that a very low salary can lead to dissatisfaction, but increasing the salary beyond the required minimum isn't one of the things that increases happiness. Link: http://www.netmba.com/mgmt/ob/motivation/herzberg/

There's a huge difference between the sense of ownership that comes automatically from small organizations and the 'incentives' that a paternalistic committee chooses to bestow on a few in its largesse, while bleeding motivation in all the other ways large organizations do that PG talks about. I don't interpret any of those studies (including Herzberg's in the sibling post) to mean 'socialism isn't so bad'. Yes it is so bad. But that doesn't mean you can't implement capitalism poorly.

Capitalism isn't about profits, it's about motivation.

That's not entirely true. Workers set their own salaries, subject to the review of their colleagues.

If you think you are awesome, you can give yourself a hefty raise. If your co-workers don't agree though, in a few months you'll be out on the street.

I think it makes sense to share profits equally, since the whole point is that the result was achieved collectively. Salaries can be all over the map.

Semco sounds just like Nucor and Gore (of Gore-tex fame). There's probably a few companies like this around.

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