When small businesses have “per project” work, pushing employees banking on salary pay to work harder to meet the deadline can seem like herding cats.
BusinessWeek blogger George Cloutier relays a story about a sinking construction company in a recent article. The construction company’s workers are paid union wages to clock in at 6:30 a.m. and out at 3 p.m. However, a consultant found that workers were mostly standing around for the first hour because it was “too dark to work safely,” and leaving a half hour early to “beat traffic.” Because these employees had no personal financial motivation to get the job done on time (and perhaps were more motivated to string along the steady work), the company’s owner was losing money and taking a hit to his reputation.
Cloutier’s solution? Switch to performance-based pay. It makes workers and their managers accountable for their work in a way that hits them in their pocket. For more information and examples of performance pay structures, click on the source article below.
Source:
BusinessWeek: To Improve Performance, Revise Your Pay Structure
