| The majority of companies employ their staff on a | | | | same rate of pay. That is surely unfair. While the bad |
| time basis. The employee is contracted to work so | | | | staff stay bad and the good staff turn bad and |
| many hours each week and is paid for each one of | | | | demoralised, the SEO sits in his |
| those hours.The questions is....why?Pay-for-Time | | | | ivory tower saying that it is too hard to pay on |
| versus Pay-for PerformanceIf an employee is | | | | performance indicators rather than by time alone |
| employed simply to be somewhere and not have any | | | | while. Poor thing. Let's put the SEO on a |
| other function then it may be understandable that | | | | pay-by-performance system and see if things change! |
| they are paid solely on how many hours they are | | | | Yes, let's take away his salary and give him a small |
| there. A few - very few | | | | chunk of the company. Now he is a part-owner, how |
| - examples come to mind: perhaps a security guard | | | | does he feel about free-riders using up his |
| who simply reports what he or she sees or is simply | | | | money?ProgressPay-by-time goes back to factory |
| there as a deterrent to would-be thieves; perhaps | | | | work and sweat shops from the last century and the |
| somebody who is employed to monitor how | | | | century before, when the machines kept running and |
| many cars pass through a particular junction. Hey, | | | | the staff simply had to turn up and sew, or put this |
| wait a minute, surely the security guard needs to | | | | gismo into that gismo etc. Yes, there are still sweat |
| look smart and have | | | | shops around the world, but even |
| his or her top button fixed; the car-counter must | | | | many of them are more sophisticated these days |
| ensure that an accurate record is being kept?Well, | | | | with staff being paid on quality |
| the more enlightened companies tend to pay on a | | | | criteria. In fact, many factories are leading the way |
| mixed basis with time still being the main element and | | | | in pay-for-performance. I would say that it is in |
| quality elements such as smartness or accuracy, for | | | | administration and even is some |
| example, being used to top up the salary. However, | | | | professional work where there is a stubborn lack of |
| with | | | | progress.Chef ExampleTake, as an example, a chef. I |
| many jobs should this be taken one stage further? | | | | would class this as a professional job. Yet many |
| Surely most companies want their staff to complete | | | | establishments pay their chefs according to how |
| the tasks they have been | | | | many hours they have worked. OK, they may not |
| set? Many jobs are not directly dependent on the | | | | clock on and clock off, but they will be expected to |
| clock at all. They are more dependent on getting the | | | | put in a week's work for a week's pay. As an |
| job done. Admittedly, a call-centre salesperson may | | | | illustrative example only, why |
| be tied to their desk (some might say chained!) for a | | | | not pay on this basis:Weighting Aspect60% |
| fixed period of time. Yes, they have tasks to | | | | Profit achieved20% |
| fulfil, but they are governed largely by the clock. | | | | Michelin Star (or similar)10% |
| However, the labourer, electrician, plumber, postman, | | | | Health and Safety Record10% |
| sales manager, buyer etc etc are largely judged on | | | | Cleanliness and Food Safety RecordOK, the Michelin |
| getting the job done. Why shouldn't a fast postman, | | | | star element is a little ambitious for most restaurants, |
| for example, be allowed to go home early on full pay | | | | but there are equivalents at lower |
| - if they have completed their round? By the same | | | | levels! The health and safety record speaks for |
| token, shouldn't the slow postman be made to stay | | | | itself: accidents can be banded into grades of |
| until the job is done, without any extra pay? Further | | | | seriousness. Cleanliness can be measured by having |
| still, shouldn't the fast postman be permitted to carry | | | | an outside independent agency, or the boss, if you |
| out a second round in one day and double his pay? | | | | like, carrying out random inspections against |
| Of course I have simplified the argument to make | | | | predetermined criteria. You see, as long as it's |
| the point. Many postal organisations do have a policy | | | | measurable, then a fair system of |
| of paying for the round (or perhaps paying according | | | | remuneration can be built around it. If the chef |
| to how many letters are posted) - but many do not. | | | | works for 90 hours a week to earn a decent living |
| Why? Why are so many companies paying on a time | | | | then, so be it (it may be worth his while looking for |
| basis when this does not fit the goal of the | | | | another job). If, on the other hand, chef has set |
| organisation? Take builders. If a house could be built | | | | things up so efficiently that he only needs to pop in |
| simply by having a load of builders turn up on time | | | | for few hours a week |
| and stay for 8 hours each day then house building | | | | to achieve his goals and therefore earn a good living |
| would be very easy indeed. No, builders should surely | | | | then good luck to him! The business |
| be paid for their productivity. Turning up for 8 hours | | | | is obviously thriving and the chef deserves his time |
| a day doesn't really come into it.Speed versus | | | | off. In this situation an ignorant owner might sack his |
| QualityI think I partly know the answer to my own | | | | successful chef and pocket the money for himself. |
| question. I have omitted quality, of course. Take | | | | Wrong wrong wrong again. If a manager, or any |
| builders. Just being fast is only part of their job. They | | | | member of staff is paid for doing a good job, rather |
| also must work safely. Skilled builders must do a | | | | than merely turning up AND ends up doing just a few |
| quality job, not just hit the deadline. The postman | | | | hours a week, then that employee is ready for |
| must post the letters to the right | | | | promotion. I would say to |
| addresses: if he tries to squeeze in an extra round | | | | the restaurant owner: hurry up and open another |
| he may not achieve this in the rush. Because this | | | | restaurant and get your chef running two so he can |
| balance must be struck in most jobs - the speed | | | | double his pay and you can get a healthy |
| versus quality balance, it is easier for companies to | | | | return.Rabbits and HatsPay by time can be very |
| simply pay on a time basis, and manage staff within | | | | unfair. Many staff quietly and conscientiously get on |
| that framework.Too Complicated - Too DifficultIsn't | | | | with their work and do a good job. They get ahead |
| this laziness on the part of employers? Wouldn't is be | | | | of the game, smoothing over future problems, |
| better to analyze each job and work out the best | | | | removing barriers before they appear. Others are |
| way to pay staff. Surely the salesman's salary should | | | | fire-fighters. They don't anticipate looming problems |
| be mainly weighted towards sales with minor | | | | and hit them head-on, sometimes failing to solve |
| weighting given towards administration, keeping up | | | | them. Other times they dramatically solve such |
| corporate policies and image etc. Shouldn't a labourer's | | | | problems themselves and grab the headlines and |
| pay be weighted with safety record at say 55% and | | | | become the hero. These are the people that get |
| productivity at | | | | noticed. They put rabbits in hats and then pull them |
| 45%? And what about our postman, wouldn't it be | | | | out again. They are the ones that get promotion |
| better if his pay rewarded quality and speed in | | | | while those that prevent problems in the first place |
| roughly equal | | | | go unnoticed. Now, with a pay-by-performance |
| measure? No, say many employers, this would not | | | | system, such |
| be better, it would be very complicated. Speed could | | | | fraudulent and unfair practices would be exposed.Fly |
| be measured fairly easily but quality aspects require | | | | KillersIn our business we sell fly killer machines that |
| judgements. There are bound to be | | | | use ultra-violet lamps to attract and kill flies. The |
| anomalies and accusations of unfairness, say | | | | ultra-violet emissions, that are the main attractant, |
| employers. It's simply easier to pay by time, make | | | | degrade after about a year and the uv bulbs need to |
| sure the staff turn up and then work on them.I say | | | | be |
| that is the lazy approach. I don't accept that most | | | | changed. We also sell a gadget called a UV Light |
| quality measurements | | | | Tester. Those that are conscientious - who want to |
| boil down to human judgement. Most measurements | | | | change uv bulbs at the optimum time - have |
| can be devised using established | | | | purchased the u.v. Light Tester from us. They will not |
| criteria, often simply based on | | | | suffer from inexplicable fly infestation nor will they |
| mathematics.UnfairnessIt's unfair when a hard | | | | have their |
| working member of staff is working alongside a lazy | | | | premises closed down by the Environmental Health |
| here-for-the-ride good-for-nothing waste-of-space | | | | Inspector. Those that buy this gadget would surely |
| employee and both are paid by time and both on the | | | | be paid well under a pay-by-performance system! |