Pay per Job
Posted on August 17, 2007 - Filed Under Philosophy |
Over the past few months, this Best Buy story has intrigued me.
For a synopsis, Best Buy has rolled out a program to it’s office workers. Rather than force individuals to sit in an office 40 hours per week, they pay them now to do their job at a flat rate. For instance, each employee is expected to write 10 TPS reports per day. It doesn’t matter if it takes them 2 hours or 10 hours, they get paid a flat fee.
The results have been surprising. Productivity has sky-rocketed. Sick time has been drastically reduced. Turn-over rate of employees has plummeted.
I have dabbled before with this same philosophy. First, it was with the yard clean-up. Recently, it was with some small chores. I say "small" because I don’t view them as big items. Yet they are big whereas I cannot do them.
For the task, the extra travertine needed to be picked up and delivered to the house. Also, the interior doors all need to be re-installed. Both jobs, per my estimate, would take in total about 4 hours.
The offer was extended to a buddy of mine: do both jobs for $100.
In detail, an outline was provided of all my expectations in order to receive the $100. Complicated it was not but clarification of responsibilities was called for.
The golden carrot was noticed when I said "I pay by the job, not by the hour. So if it takes you 3 hours to get this done you’ll still get paid $100. If you’re done in two hours, you’ll still get paid $100."
At that moment, you could literally see the wheels turning in his head. He suddenly saw his per hour rate climbing to a possible $50/hour.
Now I could have said "If it takes 8 hours, you’ll still get paid $100." But why would you want to "un-motivate" someone? In my mind, the preference is to stay focused on achieving the positive goal rather than obsessing on a possible negative outcome.
He completed his tasks in 3 hours. It probably would have taken two and a half had he not gotten lost.
He has asked for more work. The yard needs to be cleaned. Again.
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4 Responses to “Pay per Job”
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I remember reading that article about Best Buy’s new policy. There was a backlash by some of the old-line management but most people seemed to like it. So far, it’s gotten little traction outside of Best Buy, but it may catch on.
The possibility is that it unveils the dirty little secret that most Big Corporate Jobs can be done in far less than 8 hours. That might prompt management to start counting heads and wondering just how many people they need.
All in all though, I like the idea and hope it is adopted by more companies.
I have to agree.
Sitting in a cubicle for 40 hours a week has become so engrained into our society. For some reason, if you’re not at your desk you are not working. Forget the fact you could accomplish more on a five minute walk to the bathroom than sitting 6 hours in a cubicle perusing dream vacation spots online.
When I was a worker bee, as we were so affectionately called, I would get to work at 8:30 and essentially nap until 10 am. Then, I would spend 10am until about 11:30 or noon slamming out my work for the day so I could take leisurely 1.5 hour lunch and come back to my desk to spend the afternoon blogging and secretly playing computer games. My boss didn’t care for me much, but he couldn’t complain because I accomplished more in that 2 hour period than each of my teammates did all day. What can I say, I’m good at multitasking!
Trisha, this is an all too common story I hear time and time again from my fellow investors.
What blows my mind is someone would give their right arm to have a job like you describe. And would be happy for the balance of their lives.