Saturday, January 7, 2012

Should We Be Working Hourly?

I've been reading some of the thoughts other people are writing about value-based consulting and alternatives to traditional workplaces. I enjoyed the idea of unlimited vacation time one company had set into policy. All of this got me thinking: Is it appropriate to pay knowledge/information workers by the hour?

What are we paying people for?

Paying workings an hourly wage is certainly a decent way to pay people. This has been the paradigm of unionized labor for decades. The amount you are compensated is based on one metric - attendance. Keeping your job is based on two metrics essentially - attendance and productivity. Your presence is easily measured. In a manufacturing or manual labor environment your productivity is easily managed.

In the world of knowledge workers does attendance matter? For that matter, how do we manage productivity for someone who is working in their mind?

Obviously, employers have been solving this issue for ages by paying salaries rather than hourly. Its a step in the right direction but its a solution that's just too easy to abuse and burn people out.

A system I'd like to see someone try would be a combination of salary and value-based compensation. Finish a project and get compensation based on meeting the metrics or set goals.

Its something I could see working in public sector. I think it would encourage creativity and reward efficiency.


  1. Another great post.

    I've always wondered about hourly because it rewards just being there, clocked in, instead of always getting stuff done efficiently because ... well ... you get paid less! Then salaried employees can be taken advantage of by employers at the same time.

    Not good on both accounts.

    Personally, I'd just like unlimited vacation. Sometimes you need extra time, and other times you don't.

  2. Isn't this the ROWE (results oriented work environment) that best buy does? Get your projects and goals done and you make money...