Monthly Archive for: ‘January, 2010’

Does your organization’s compensation model and your personal attitude support prostitution?
[Note: The definition of prostitution is provided at the end of the blog post. In the context of this post, I am referring to the second and less often used definition.]

The Scenario

As the head of a large Information Technology department, you walk by Michael’s desk one afternoon and to your surprise, you notice that your system administrator is frantically switching from Google to Chat to a discussion Forum. You recall similar observations a few weeks ago so you quickly wonder if, at $80K per year, you are getting your money’s worth for a system administrotor who always seems to browse the internet. To make matters worst, you don’t even remember when was the last time your company ran into serious systems issues. Do you need Michael on your team? Maybe he is a good candidate for the headcount reduction you have been imposed by Finance.

A few days later, on your way out of the office around 7:15 pm you hear key strokes and notice that Kim is still working. You remember approving Kim’s over time report last month and start to realize that the increase in ERP support calls might be starting to impact Kim’s work-life balance. Remembering your conclusion about Michael, you wonder if you shouldn’t close the system administrator position and add resources to Kim’s team. At $55K per year, you would still be able to cut your budget spending. Pleased with your conclusion, you briskly walk to your car hoping for a nice family dinner.

A New Concept

Here’s a new concept. For people working in most traditional organizations, this will sound like a really weird concept but what if employees decided their own working hours? I’m not talking about the flex time concept where people decide what time they wish to start and end their work day but actually decided how many hours and which hours they worked?

Typically, the traditional work week varies by company and by country. A standard work week in Canada is somewhere between 35 and 40 hours per week. Some would argue they work many more hours per week but that’s not where I want to take this discussion.

Imagine for a moment you stopped controlling the hours worked and focused instead on the results. Granted, this is a much more complex endeavor but in my opinion much more suited to year 2010.

The Old Paradigm

At the beginning of the industrial age, many employees were paid “by the piece”. For every bolt fastened, shirt sowed, or widget delivered they received a small amount of money. Eventually, companies realized that it would be more predictable and easier to manage if people were paid by the hour. Needless to say, the model has somewhat evolved and employees are currently paid by the hour, by the day, by the week, or by the year but the model pretty much remains the same.

The New Paradigm

The new model I’m proposing is to offer a fixed salary (or a risk salary), without any expectations of number of hours worked. Instead of expecting people to work 40 hours per week, people would be expected to deliver value or results. As I mentioned, it is certainly more difficult to set up the type of results expected but on the other hand, isn’t this the basis of commerce – I pay you $x for this good or service without any consideration about how many hours were required to produce it. The production piece is the responsability of the seller, not the buyer.

Back To The Scenario

Pleased with the previous day’s conclusion, you call into your office Michael and Kim’s direct supervisor to share your thoughts. Michael’s boss explains that since hiring him 2 years ago, systems outage have dropped 92% as Michael is consistently looking for ways to improve systems availability. He heavily praised Michael for creative and pragmatic solutions and despite the fact the Michael rarely has to do overtime, he would recommend him for a promotion.

Slightly shocked, you turn to Kim’s boss and ask for comments on her employee. With a grin on her face, Kim’s manager tries to hold back her answer as it certainly wouldn’t make you look good. She explains that Kim clearly lacks analytical abilities which is why she has to spend more time than all her colleagues solving similar issues. In addition, Kim is a poor team player. She likes to think of herself as a super-hero and she prefers trying to handle problems without the help of her team mates which often leads to repeated issues as the root problems are rarely solved properly the first time around. Despite many attempts at helping Kim with her shortcomings, she doesn’t feel the need to improve since she is often praised by the head of the department for putting in long hours…

(Silence in the room)

Embarrassed and apologetic toward both managers, you realize your attitude toward the number of work hours per week may have had the opposite effect that you were originally looking for. You genuinely thank your employees for their valuable feedback and wonder if you shouldn’t aim to leave early today…