I am the only one who practices magic: I practice magic in the city

Chapter 194: Is it not the lower levels that are being replaced but the management? (First update)
Vesting schedules and cliff periods are two of the biggest evils in the tech industry.

In fact, these two things were not developed by high-tech companies. They were first used in some traditional industrial manufacturing industries in Malaysia and Europe sixty or seventy years ago.

These mechanisms were initially used mainly for employee pension plans and stock option plans, which were linked to years of service, and employees could receive incentives when the years were reached.

When used in traditional industries, most companies are actually quite disciplined. Generally, the compensation is only linked to the length of service, and when the period is reached, what is owed is basically paid.

But in the past decade or so, since high-tech companies introduced this thing, the so-called equity incentive has become a carrot hanging in front of a donkey's eyes. You can see it, you want to eat it, and if you want to eat it, you have to call the master.

When this thing was introduced to the Great Zhou, it was used in even more diverse ways.

Equity incentives become a promise that can be fulfilled but comes with an additional cost because its realization depends not only on years of service but also on performance evaluations and relationships with leaders.

For example, some companies require that every team must have a 3.25. You may say that everyone in my team is very capable and highly dedicated. That won't work either. You must find one.

What should I do? They are all old employees, who should I give it to? I can only cheat the newcomers.

The relationship is shallow, so it’s easy to take action.

Therefore, in recent years, the so-called equity incentives of many companies have gradually lost their so-called incentive effect.

Even if it is useful, it will only make people stay in the company for a longer period of time. Once the term is up, they will sell it immediately and move to the next one.

When Fang Yu said that this equity incentive plan did not have any vesting schedule, there was immediately some commotion at the scene.

"Mr. Fang, excuse me for interrupting, but do you mean that I can cash out the equity figures displayed on the big screen right now?" A 1.8-meter-tall handsome young man wearing a black T-shirt and long hair, who did not look like a programmer at all, raised his arm and asked the question.

There are supporting actors, which is great.

Fang Yu looked at the handsome guy named Niu Tianrui with approval. Niu Tianrui's skills were not particularly outstanding, so he only received 800 shares of equity incentives this time, at 10 Mai Yuan per share, which is 1 Mai Yuan, equivalent to more than 8000 Da Zhou coins.

"Yes, if you want to cash out, you can do so now. The company will repurchase it based on the current company valuation." Fang Yu nodded and replied very affirmatively.

Niu Tianrui's eyes lit up and he wanted to say something, but held back.

Fang Yu looked at Niu Tianrui, with some speculation in his mind, but his expression did not change at all, and continued: "The reason for setting such a rule is not because I believe that sincerity can be exchanged for sincerity, but this round of equity incentives itself is an affirmation of your previous work."

"As for whether you will have equity incentives in the next period and how much equity incentives you can get, it all depends on you. TeamPulse will score your daily work based on your contribution, and these will affect the amount and method of your annual equity incentive plan in the future."

"The execution of all equity incentive plans does not require approval from anyone. They are all given by the Orange model, and no middle management can exert a negative influence."

"Of course, the TeamPulse contribution algorithm I set up is only the first version, and there will definitely be many problems, but with continuous adjustments and iterations in the future, this system will eventually become more and more accurate and fair."

All employees were a little agitated. Is this equity incentive available every year?
Moreover, using TeamPulse to connect to the Orange big model to measure employee contributions is indeed a relatively fair assessment method.

What Fang Yu has always been thinking about is how to minimize the influence of "people" in performance evaluation and daily work management.

Note that it is daily work management, not overall management.

It just so happens that Youzi Technology’s current organizational structure and industry are very suitable for the management method envisioned by Fang Yu - a comprehensive performance evaluation method led by artificial intelligence.

This method sounds somewhat similar to the scoring table that Meng Guangkang created before, but they are completely different in essence.

First, the selection of basketball players and the confirmation of playing time can be measured by data, but it should be measured according to game performance. The NBA has already matured in various data analysis of games, and NBA coaches basically arrange players' playing time according to data, which has become a common way of team management.

Second, Meng Guangkang introduced too many subjective coefficients, such as the so-called attitude score. Attitude cannot be accurately quantified, so it becomes a subjective score. With the existence of this score, the entire table loses its corresponding meaning. It becomes not reducing the influence of "people", but increasing the influence of "people", which is a misuse of OKR.

Third, at any time, a scoring approach can only measure the immediate contribution of the work, but not the long-term contribution. Therefore, when measuring the specific work contribution of employees, managers still need to make adjustments to employees based on strategic vision and impartiality.

This adjustment value should be a positive adjustment value and cannot be negative.

Fourth, scoring can be used for rewards, but when it comes to promotions, remember that scoring is only auxiliary, and whether employees have the corresponding leadership potential is the only gold standard.

In management, there is no absolute fairness, and it is impossible to achieve absolute fairness.

However, it cannot be absolutely unfair.

At least let everyone see that we are moving in a fair direction.

Therefore, Meng Guangkang himself is just too stupid, and he will use the wrong method even if you give him a good method.

"Mr. Fang, I have a question too." Hua Zecheng hesitated for a moment, "I don't object to the Orange Big Model combining with TeamPulse to come up with an employee equity incentive plan."

"But you know, the contributions made by some employees are not reflected in the present, but may be long-term contributions in the next three to five years or even longer. If artificial intelligence is used mechanically to measure employee contributions, will it be unfair to these employees?"

"For example, when Doug Cutting developed Hadoop, it was just a tool for distributed storage and processing of big data, and not many people used it, but now Hadoop has become the basic framework for big data processing." "For this part, if there is no more fair plan, I am worried that employees will become more and more short-sighted, only focusing on the tasks issued in the system and losing their initiative and creativity. In the long run, this is not a good thing."

What Hua Zecheng said is indeed a problem. As a technology startup company and a company that mainly focuses on AI software infrastructure, the nature of the work of most scientific researchers is actually innovative.

Fang Yu divides jobs into innovative jobs and imitative jobs. There is no difference in superiority or inferiority between the two, only a difference in nature.

The so-called innovative positions are jobs that rely more on subjective initiative and personal ability. The content and results of the work depend on one's own chosen actions, that is, the strength of one's ability and personal wishes.

For example, most key scientific researchers, military commanders, art practitioners, B2B sales for major customers, etc., basically all belong to innovative jobs.

The effectiveness of these jobs depends entirely on the personal abilities and optional actions of the practitioners. When managing positions of this nature, too many restrictive conditions should not be set, and personal freedom should be increased as much as possible. Only in this way can real results be achieved.

Imitative positions rely more on existing processes, standards, and technologies, and do not allow for any unnecessary optional actions. The results of the work depend on whether the above-mentioned process and technical specifications are implemented in place.

For example, low-level scientific researchers who conduct repetitive experiments according to the requirements of their supervisors, assembly line workers, patrol officers, 2C marketers, telephone sales, daily administrative management, bank counters, re-drawing personnel in technical departments, judges, prosecutors, grassroots civil servants, formulaic writers, etc. all belong to imitation positions.

For imitative positions, the standard for excellence is to complete one's work in strict accordance with existing processes and specifications, and no optional actions are allowed.

Therefore, for the management of imitation positions, extremely detailed and strict implementation standards and methods must be set up. Feedback on work performance is often based on punishment and supplemented by rewards. The key is not to deviate from the line.

However, the management of innovative positions should be just the opposite. Rewards should be the main approach, with punishment as a supplement.

"What Mr. Hua said just now is absolutely right." Fang Yu nodded with a smile, "I have always believed that innovation is the lifeblood of an enterprise. A company that can continue to operate must be a company with lasting innovation capabilities."

"The Orange Model is not a god, nor can it tell fortunes. It cannot accurately predict which of your innovations will have a huge impact in the future. Therefore, this part will not be included in the annual equity incentive plan, but will be a separate incentive policy."

"That is what I am going to introduce next - the policy of covering the pearl with dust."

Fang Yu waved his hand and turned the PPT to the next page.

"After TeamPulse's version update was connected to the Orange model, the two most important features updated were the contribution panel and historical project tracking."

“You can see in real time on the contribution dashboard of your TeamPulse client how much you are contributing to the company, as well as the profits and value these contributions have created for the company.”

"Historical project tracking can provide a linear tracking of each of your projects for up to ten years."

"During this period, whenever any of your innovations are recognized by the market and reach a certain level, TeamPulse will give you instant feedback and calculate the weight of the application of this innovation in the product."

"For this type of contribution, we can provide two options. First, we can give the employee a cash reward based on the change in contribution weight."

“For example, someone created an algorithm that might not have been included in TeamPulse’s contribution panel for the year in the early stages, affecting the year-end bonus and equity incentives for the year.”

"But three years later, the importance of this algorithm was verified and applied to a certain model function, which achieved a total profit of 30 million Malaysian dollars in a year. TeamPulse determined that if the weight of this algorithm in this function accounted for %, then he could enjoy % of the total profit of the project, which is Malaysian dollars."

"Starting from the year this algorithm is applied, this money can be received for five consecutive years!"

“Of course, the premise is that in that year, this algorithm was not included in the contribution panel and did not receive corresponding equity rewards. And in the past five years, the functions of applying this algorithm have always been generating profits.”

Wow!
More than a dozen employees of Youzi Technology started to riot at the same time. Fang Yu’s policy was indeed too shocking.

The rationality of distribution policy has always been the most headache-inducing issue in the management of all organizations.

It’s not that there haven’t been companies that wanted to do similar things in the past. For example, Google once introduced a special innovation incentive policy, where employees could enjoy high profit sharing for their innovations.

Later, this policy made little splash.

Because it is so difficult to measure the contribution of a technological innovation to a company. Even if it can be calculated using a complex algorithm, how can human resources and finance apply this algorithm?
With hundreds of thousands or even millions of innovations every year, how can we reasonably evaluate them one by one?

Is the contribution algorithm still applicable after changes in technology and market environment?

These are difficult problems to solve.

Pushed up management costs.

But Yuzu Technology is different!
Firstly, the number of employees is small, the product form is simple, and the initial calculations are not that complicated.

Secondly, Fang Yu introduced AI into this evaluation system for the first time. With the current capabilities of the Orange Big Model, it already has the hardware foundation to implement this management method!

Even if the initial algorithm is unreasonable, it is not impossible to create a near-perfect system after a period of practice and adjustment!
Could it be that the first people to be replaced by artificial intelligence are not the bottom level, but the management level?
"I don't know if this method will succeed, but I'm willing to give it a try," Fang Yu added.

(End of this chapter)