This model has been shaped by many conversations, experiments, and sources of inspiration along the way. I am especially grateful for the ideas explored in Slicing Pie, The Trust Equation, the gov/acc dashboard, the work and conversations with Mónica Guerra from TejeRedes, and contribution-recognition systems such as Praise from Commonstack. Each of these perspectives has helped inform the reflections and experiments that eventually led to the framework presented here.

Every collaborative organization eventually encounters the same uncomfortable question.

At the beginning, everything feels natural. People contribute because they believe in the mission. Recognition happens informally through conversations, shared documents, and spontaneous expressions of gratitude. Work flows through coordination channels without much concern for measurement.

Then the organization grows. More contributors join. More responsibilities appear. More resources begin to move through the system.

Suddenly the stakes change. Decisions about work and recognition begin to affect real livelihoods. The organization must decide not only what it wants to build, but also how it intends to recognize the people who build it. At that point a deceptively simple question emerges:

Who actually created value here?

Not who spoke the most in meetings.
Not who appeared most visible in communication channels.
Not even who produced the largest number of measurable outputs.

But who actually helped the organization function, evolve, and move forward.

This question exposes a structural problem that many collaborative organizations face. Teams experiment with compensation mechanisms (salaries, grants, retroactive funding, bonuses, milestone payments) yet still struggle to build systems that feel fair and sustainable.

Some forms of work remain invisible. Recognition becomes political. Contributors begin optimizing for visibility rather than impact. In other words, the problem is not only how to distribute rewards.

The deeper problem is that many organizations lack a shared framework for understanding how value actually emerges inside cooperative systems.

This article proposes an experiment to address that gap:
a Value-Based Compensation System designed to help organizations recognize contributions more coherently, without reducing cooperation to simplistic productivity metrics.

The goal is not to impose a universal model. Instead, the aim is to offer a conceptual template that organizations can adapt to their own governance structures and cultural priorities.

In many economic systems, value is treated as if it originated from a single measurable source: revenue, productivity, or output.

These metrics can be useful, but they often fail to capture how value emerges in collaborative environments.

In a cooperative project (whether a company, a nonprofit organization, an open-source network, or a decentralized community) value rarely comes from one activity alone. It emerges from the interaction between multiple types of contribution.

A system’s effectiveness depends not only on the work performed, but also on the knowledge accumulated, the relationships maintained, and the resources that make collaboration possible.

Some contributors produce concrete outputs.
Others generate insights that shape future decisions.
Others maintain trust and relational cohesion across teams.
Others provide infrastructure or resources that reduce operational costs.

Each of these contributions creates value in a different way.

Yet many compensation systems recognize only one of them.

To address this gap, it is helpful to begin with a simple conceptual framework that describes how value tends to emerge in cooperative systems.

One way to represent this dynamic is through a conceptual equation describing net value added:

This equation functions as a conceptual model describing how value emerges when different dimensions of contribution interact. Each variable represents a dimension of value that commonly appears in collaborative organizations.

Use value refers to the practical outcomes produced by work.

These are the most visible forms of contribution: projects delivered, problems solved, products launched, or services provided.

Examples include:

• completing a project deliverable

• launching a feature or service

• organizing an event

• solving a technical issue

• coordinating operations

• delivering a training session

Use value answers the question: What tangible outcome was produced?

Knowledge value refers to learning generated inside the organization.

While less visible than deliverables, this form of value strengthens the organization’s long-term capacity to solve problems.

Examples include:

• documenting internal processes

• writing onboarding guides

• producing research or analysis

• developing reusable frameworks

• capturing lessons from past projects

Knowledge value answers the question: What did the organization learn that will improve its future capabilities?

Social value refers to the relational infrastructure that enables collaboration.

Trust, dialogue, and coordination are often overlooked forms of work, yet they determine whether teams function effectively.

Examples include:

• mediating disagreements between collaborators

• facilitating productive meetings

• onboarding new participants

• maintaining communication across teams

• supporting morale during challenging periods

Social value answers the question: How well are people able to collaborate and trust one another?

In-kind value refers to resources contributed by participants that reduce the organization’s operational costs.

These contributions may include tools, infrastructure, services, or financial support.

Examples include:

• providing workspace

• lending equipment or software

• offering professional services at discounted rates

• contributing operational capital

• covering travel or logistical expenses

In-kind value answers the question: What resources made the work possible without increasing costs?

The equation uses multiplication rather than addition to describe how these dimensions interact.

This reflects a practical observation about collaborative systems.

These forms of value do not simply accumulate. They reinforce one another.

A team may produce impressive outputs, but without documentation the knowledge disappears. A group may generate excellent research, but without trust and coordination the work cannot be implemented. A technically sophisticated system may still fail if the relationships between contributors deteriorate.

Cooperative value grows when these dimensions align.

It weakens when one of them collapses.

The denominator of the equation represents a different (5th) dynamic.

The variable of Opportunistic behavior (A_{opportunistic}), which refers to behaviors that extract value from the system without contributing proportionally.

Examples might include:

• taking credit for others’ work

• withholding knowledge for personal advantage

• exploiting governance processes for personal gain

• participating only when rewards are immediate

Rather than subtracting value directly, opportunistic behavior reduces the system’s overall effectiveness.

When participants perceive unfairness, trust erodes. Coordination slows. Collaboration becomes transactional.

The equation captures this dynamic conceptually: cooperative systems generate less value when opportunistic behavior increases.

The coefficients ( \alpha, \beta, \gamma, \delta ) represent the relative importance assigned to each value dimension.

While they appear as mathematical weights, they actually reflect something deeper: the cultural priorities of the organization.

Every organization implicitly values certain contributions more than others.

Some prioritize execution and results.
Others emphasize learning and documentation.
Others depend heavily on relational cohesion.

By making these priorities explicit, organizations can align their compensation systems with the kinds of contribution they want to encourage.

These coefficients therefore function as a kind of cultural configuration layer for the system.

The conceptual equation explains how value emerges.

But organizations still face a practical challenge:

How should compensation actually be calculated?

Conceptual models are useful for understanding systems. Compensation systems require something simpler and more operational.

To bridge this gap, the framework introduces a Contribution Scoring Engine derived from the value dimensions described above.

The purpose of this mechanism is not to automate fairness, but to generate a structured recommendation for compensation that communities can review and adjust.

To keep the system stable for contributors, compensation is divided into two components.

First, every role includes a base compensation. Contributors who fulfill their commitments receive this base amount.

Second, the organization allocates a value-based upside pool that rewards contributions generating additional impact.

This separation provides both stability and flexibility.

Contributors know the minimum compensation associated with their work, while the system can still reward exceptional contributions.

Each contribution can be recorded using a simple scale:

0 = No meaningful impact or incomplete work.

1 = The contributor delivered what was committed.

2 = The contributor delivered beyond what was committed.

This intentionally simple scale reduces evaluation friction while still distinguishing between expected and exceptional work.

Each contribution can be associated (using NFTs) with all the value dimensions it generated in the system:

• Use value

• Knowledge value

• Social value

• In-kind value

These tags help identify the type of impact produced by the contribution, and helps calculate the amount I would fairly deserve as a reward, based on each community's coefficient.

Organizations rarely prioritize all forms of value equally.

To reflect this reality, communities can adjust the coefficients ( \alpha, \beta, \gamma, \delta ) for each operational cycle. These coefficients determine how strongly each value dimension influences the final compensation calculation.

In this way, the compensation system can adapt to the evolving priorities of the organization.

Once contributions are logged, the system can estimate their relative impact using the following formula:

Where:

• Level_c represents the contribution level (0, 1, or 2).

• V_use, V_knowledge, V_social, V_in-kind represent the value dimensions involved.

• α, β, γ, δ represent the organization’s cultural priorities.

• K_c represents peer recognition signals, often referred to as Kudos.

Rather than producing an exact measurement of value, the score estimates the relative contribution impact within the system.

At the end of each cycle, the value-based compensation pool can be distributed according to contribution scores.

The final payout for a contributor can be expressed as:

This formula distributes the upside pool proportionally to the scores generated during the cycle.

The result is not an automated payment system (yet), but a structured recommendation that communities can review before finalizing compensation decisions.

The system can operate through a simple recurring cycle.

Step 1: Define seasonal priorities

The organization identifies strategic priorities for the upcoming cycle and sets the coefficients for each value dimension.

Step 2: Define roles

Roles describe responsibility zones rather than job titles. Each role specifies its purpose, expected outcomes, and the value dimensions it is likely to generate.

Step 3: Contributors perform work

Participants take on roles and deliver contributions during the cycle.

Step 4: Contributions are logged

Contributions can be recorded through lightweight interfaces integrated with existing tools such as project management systems, documentation platforms, or communication channels.

Step 5: Peer recognition

Participants can signal meaningful contributions through recognition signals such as Kudos.

Step 6: Cycle review

At the end of the cycle, the system calculates contribution scores and proposes a compensation distribution.

Step 7: Community validation

The community reviews the suggested distribution and approves or adjusts the final payouts.

The conceptual equation is not intended as a strict mathematical calculation. Its purpose is to clarify how value emerges in cooperative systems. The operational calculator translates that conceptual model into a practical scoring mechanism.

Most organizations already track work through various tools such as project boards, documentation platforms, and communication channels. The proposed system simply organizes that information into a clearer narrative about how value flows through the organization.

All evaluation systems involve human judgment. Distributed recognition signals may actually reduce political concentration by allowing multiple perspectives to identify meaningful contributions. Over time, consistent patterns of recognition often reveal the contributors who create sustained value.

Yes. The structure remains the same, but the coefficients allow each organization to adapt the system to its own priorities. A research-oriented organization may prioritize knowledge value, while a service organization may emphasize use value. The framework remains stable, while its priorities adapt to context.

Collaborative organizations are entering a period where sustainable contributor economies are becoming increasingly important.

Without credible systems for recognizing contributions, communities risk losing experienced participants or drifting toward transactional relationships.

The Value-Based Compensation System proposed here is not a finished solution. It is an invitation to experiment with a richer understanding of cooperative value.

Even a simple pilot (defining roles, logging contributions, and reflecting at the end of each cycle) can reveal important insights about how value actually flows through an organization.

Understanding that flow may be the first step toward building systems where people feel that their work is not only useful, but also recognized.

Because ultimately, the success of any collaborative organization depends less on the size of its treasury than on whether the people creating value inside it feel that their work matters, is visible, and is worth continuing.