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WORKBOOK — THE LUMINOUS GAINSHARE EMPLOYEE

Chapter III.03 · Complementary and Local Currencies

For the person working inside a gainshare arrangement — where a defined share of verified improvement returns to the people who created it. A gainshare account is a complementary currency with one issuer and one acceptance point, and everything this chapter measures about circuits applies to your ledger.

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WHY THIS CHAPTER IS ABOUT YOUR LEDGER

A gainshare unit and a mutual credit unit have the same four parts: a baseline, a measure, a share, and a period with a verifier. They differ in exactly one respect, and it is the one this chapter is about.

A circuit's unit can be spent with any member. A gainshare unit can be spent in one place: back at the employer, as cash, at the stated date.

That single difference sets your velocity, and velocity is the whole arithmetic:

        c  =  C / (M · V)

Where V is fixed at one — earned once, paid once — every cost of administering the scheme lands directly on the amount distributed. Where V is effectively zero, because credits are earned and never paid, the scheme costs nothing and does nothing, which is precisely what Japan's fureai kippu measured: NALC's 2010 returns show 198,091 credits earned and 10,548 redeemed — 5.32 percent. 94.68 percent were never spent.

Read your own scheme against that number and you will learn more in an hour than from any amount of scheme documentation.

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PART ONE — DISCOVERY

Days 1–30: what your unit actually is

Exercise 1.1 — Trace your own line (2 hours)

Take your last gainshare statement, or the scheme document, and answer in writing:

1. What is the baseline, and what date was it set?
2. What is the measure, as a formula?
3. What is the share percentage, and is it of gross improvement or net of costs?
4. Who verifies, and when?
5. What is the redemption rate — of everything credited to the pool since inception, what fraction has actually reached people?

Question five is this chapter's question and almost nobody asks it. A scheme where credits accrue and distributions lag is running a breakage model, whether anybody uses that word or not, and breakage is income to the issuer that rises as the currency circulates less.

Exercise 1.2 — The three schemes, named (90 minutes)

Every scheme in the record is financed in one of four ways, and yours is one of them. Find out which.

Ask which line in the accounts pays for the administration of your scheme. If nobody can tell you, that is the finding, and it is the most valuable thing you will produce this month.

Exercise 1.3 — The appreciative team conversation (45 minutes)

Ask your team, out loud:

"Tell me about a time this team made an improvement that showed up in the numbers and somebody noticed. What made it show up? What would have made it invisible?"

Take notes on the conditions. What you are looking for is the mechanism by which work becomes visible, because in a gainshare that mechanism is the whole of your compensation.

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PART TWO — THE ARITHMETIC

Days 31–45: compute what you are owed

Exercise 2.1 — Your share, calculated (90 minutes)

Write the chain out in full, with every input labelled and sourced:

  verified improvement in the period          ______
  less costs netted against it (if any)       ______
  = distributable gain                        ______
  × the share percentage                      ______
  = the pool                                  ______
  ÷ the allocation basis (heads? hours? pay?) ______
  = your line                                 ______

Then compute the administration ratio: what the scheme costs to run, divided by what it distributes. That is your c. Ask for it. If the scheme has never computed it, you have just given its sponsor a genuinely useful question.

Exercise 2.2 — Your redemption rate (45 minutes)

  redemption rate  =  distributed to date / credited to date

Compute it for your scheme since inception. Compare it to fureai kippu's 5.32 percent and to a payroll's 100 percent.

Anything below about 90 percent needs an explanation, and there are only three honest ones: a genuine timing lag with a stated payment date; a vesting condition you agreed to in writing; or an accrual that nobody intends to pay, which is the one you are looking for.

Exercise 2.3 — The baseline ratchet (45 minutes)

Find out what happens to the baseline when a gain is realised.

If the baseline resets to the improved level each period, you are on a treadmill. Every gain raises the bar you are next measured against, so the same effort yields less each cycle and eventually nothing. A well-designed scheme holds the baseline fixed for a stated term — three to five years is typical — or ratchets on a published, gradual schedule everyone can see coming.

Compute the effect explicitly. If your improvement rate is g per period and the baseline ratchets fully each period, your share converges to the value of g alone and never compounds. Over five periods, that is the difference between being paid for the level and being paid for the change, and the gap is large.

Exercise 2.4 — The honest negative (30 minutes)

Write the strongest case against your own scheme. Not a straw version — the one that troubles you. Candidates from the record:

• A measure that rewards what is countable rather than what is valuable.
• An administration ratio high enough that a straight pay rise would deliver more to people for the same total cost.
• A baseline nobody has re-verified since it was set.
• A financing line that is a grant wearing a different word.

If you cannot write it, you do not yet understand your own scheme well enough to defend it.

Exercise 2.5 — The administration ratio, benchmarked (60 minutes)

You computed your scheme's c in Exercise 2.1. Now put it beside the record, so you know whether it is good.

A gainshare is closer to a payroll than to a currency: one issuer, one acceptance point, one payment date. So the benchmark you should hold it to is the payroll's, not Bristol's. If your scheme's administration costs more than a few percent of what it distributes, ask the obvious question out loud and ask it without accusation: would a straight increase to base pay deliver more to people for the same total cost to the firm?

Sometimes the honest answer is yes, and it is worth knowing. A gainshare earns its administration cost only when it does something base pay cannot — when it makes a contribution visible that would otherwise be invisible, when it lets people see the mechanism connecting their work to their circumstances, and when it changes behaviour because it is legible rather than because it is large. Those are real goods and they are worth paying an administration ratio for.

What they are not worth is paying for silently. Write down which of the three your scheme delivers, in one sentence each, with an example. If you can write all three, the ratio is earning its keep and you can say so in the meeting. If you can write none, you have found something worth raising, and you have found it with arithmetic rather than with grievance — which is the only form in which it will be heard.

Exercise 2.6 — The velocity of recognition (30 minutes)

Money is not the only thing in a gainshare that circulates. Recognition does too, and it obeys the same identity: a store of credit that never moves does no work.

Count, for the last twelve months: how many times did a specific improvement get attributed to a specific person in a forum where somebody outside the team could hear it? Divide by twelve. That is a velocity, and in most teams it is well below one.

Then do the thing that raises it: attribute somebody else's, by name, this week, in writing, where their sponsor will see it. It costs nothing, it is the single cheapest intervention in this workbook, and it is how the second owner in Exercise 4.2 gets recruited.

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PART THREE — DESIGN

Days 46–70: make the uncounted countable

Exercise 3.1 — Build the baseline nobody built (2 weeks)

Find one real improvement your team has made that never entered the measure because there was no baseline for it. There is almost always one.

Build the baseline, on one page:

1. The metric, defined so precisely that two people compute it identically.
2. The period, long enough to contain normal variation.
3. The method, written down.
4. The verifier, named — internal audit is sufficient and usually free.
5. Two signatures: yours and your sponsor's.

Then leave it alone and change nothing for a full period. Measuring before intervening feels like waste. It is the foundation of every claim you will make.

Exercise 3.2 — The proposal (one page)

One page: baseline, proposed change, expected improvement, how it would be verified, and what share it would generate at the scheme's existing percentage. Give it to one person who can act. Not a meeting. One person, one page, one number.

Exercise 3.3 — Read the reversion (1 hour)

In the shared-savings facilities of Chapter I.01, savings revert entirely to the operating unit once the facility is repaid, and that reversion is what buys genuine cooperation at no balance-sheet cost.

Find the equivalent clause in your scheme. Is there a point at which an improvement stops being shared and becomes simply yours — a permanently higher base, a rate change, a role change? If there is not, ask for one, and ask for it in exactly those terms: at what point does this improvement stop being a bonus and start being the job?

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PART FOUR — DESTINY AND DELIGHT

Days 71–90: make it hold

Exercise 4.1 — Into the standing review (one conversation)

Your metric, monthly, on the pack. Anything reviewed monthly persists; anything reviewed by exception does not.

Exercise 4.2 — The second owner (this month)

One person tracking a measure is a hobby. Recruit a colleague who will notice if the number stops appearing, and recruit them by giving them the credit for the first result.

Exercise 4.3 — The written record (ongoing, ten minutes a week)

Ten minutes, once a week: what changed, what it moved, and how you know. Dated. In your own file.

Schemes get restructured, sponsors move, baselines get re-set by people who were not there. A contemporaneous record is the only thing that survives a reorganisation, and it is the difference between a claim and an assertion when the scheme is reviewed.

Exercise 4.4 — Delight, honestly (ongoing)

The Chiemgauer's stamp is a small deliberate act that people report liking, and that liking is velocity. Find the equivalent in your own practice — the moment of the weekly number, the visible chart, the note you send when a change lands. Make it genuinely pleasant. A practice with no pleasure in it has a half-life, and this chapter computes half-lives for a living.

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KNOW YOUR SCHEME — A CHECKLIST

Tick only what you have seen in writing.

Fewer than eight ticks is not a complaint. It is a list of eleven specific questions you may now ask, each of which has an answer and most of which will be given to you simply because you asked precisely.

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THE CONVERSATION, SCRIPTED

For the meeting where you ask. Four sentences, in this order.

"I've been tracking [metric] since [date] and it has moved from [baseline] to [current]."

"Using the scheme's own formula, that is [amount] of verified improvement and [share] to the pool."

"I'd like to understand two things: what the baseline does next period, and what the scheme's administration costs against what it distributes."

"And I'd like to propose the next one — it's on this page."

You are not asking for a favour. You are presenting a verified number computed with the scheme's own method, and then asking two questions any well-run scheme can answer. The last sentence is the one that changes the meeting, because it moves you from claimant to designer.

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APPRECIATIVE QUESTIONS FOR YOUR TEAM

1. When has an improvement we made shown up clearly in the numbers — and what made it visible?
2. What are we doing now that nobody is measuring, and what would it take to measure it honestly?
3. What is already working about how this scheme reads from where we sit?
4. If everyone here could describe exactly how the value they create reaches them, what would change about how we work?
5. What is the one number we would want on the standing pack, and who would own it?
6. What would have to be true for this scheme to still be running, and still fair, when everyone currently on this team has moved on?