Most of today's employee compensation systems were originally developed in the old, factory environment, stemming from how hourly workers were paid and advanced in the labor-orientated hierarchy. Having a job meant a fixed hourly wage (usually including paid-overtime for working beyond normal hours) with annual pay increases based on years of service with the company, the occasional bonus and an expectation of lifetime employment.

The best knowledge-workers can't just be paid for the hours they work - they may always be "working". They should be stimulated by the freedom to innovate and contribute to the business. That's the wave of the future.

This is what's revolutionizing human-resource attitudes in this new century. In the era of knowledge-work, employee compensation styles should adapt to achieve maximum benefits for those who generate results.

Read my latest article (May 2007) on Automation.com.