[grufus]

I think you are mixing up the general concept "hiearchy" with the very concrete concept of a "pyramid scheme".

The defining characteristic of a pyramid scheme is that the income at each level is predominantly connected to the recruitment of new members into the scheme. Twice as many new members per unit time translates to twice as much income, roughly speaking.

In management hierarchies, that may play a certain role, but your manager in a company isn't payed proportionally to how many new employees they recruit each month (unless they are explicitly a recruiter). It is rather proportional to the amount of responsibility which often correllates to the number of reports and their reports.

In other words, oversimplified, in corporate hierarchies, the pay relates to the number of people below you, while in a pyramid scheme, it relates to the first derivative of that value.

[Adrox]

Except even if you receive money for a referral, you are still not getting any money FROM the referral.

My company gives 5k if I reference a developer that they hire. But he gets his normal salary, it’s not like he has to pay 5k, or even it’s deducted from the salary.

The problem with MLMs is that the money comes from other “members” not from sales… (Basically more than 80% of the revenue is other members and only 20% sales)

A normal company 100% of the salaries comes from sales (or shareholders, never from employees).