Imagine. Imagine if you could stop paying people and start buying their results, one by one. What do you think would happen if every manager had the discretion, the ability, the skill, and the gumption to start negotiating with employees as if they were outside vendors? What if you could tie every single reward and detriment solely to measurable instances of employee performance -- one person at a time, one day at a time? Think of industries in which individuals are paid an agreed-upon amount for each defined unit of work they produce. It's known as piecework. But piecework can be applied to all kinds of work. Let me give you an example: some accounting firms have experimented with paying accountants per tax return they prepare or per audit; they pay more for more complex returns and audits, and they pay less when the reviewing accountant finds errors in the accountant's work. Here's another example: some hotels pay chambermaids by the number of rooms they clean; some pay more if it's a really filthy room, and less if the room started out cleaner; some pay more based on a checklist of standards. See, you can apply piecework to almost any kind of work. Labor economists have convincing data that worker productivity increases substantially whenever pay is directly tied to performance. Why shouldn't this be applied to all kinds of work?
What if you could give every person the chance to meet the basic expectations of the job and then the chance to go above and beyond—and to be rewarded according to the work that person actually does? What if you could create trust and confidence through real open communication and transparency so that every employee who worked for you knew exactly what he or she had to do to earn rewards -- one piece at a time? If you monitored and measured and documented that performance every step of the way, then you know you would be fair. You can't flinch when it comes to providing the promised rewards and detriments that people earn through their choices and their behavior.
When your employees deliver on their commitments for you, then you deliver on the promised rewards for them, one piece at a time. If they fail to meet commitments, you have to call them on that failure immediately and withhold the reward. Ideally, you want to reward people when they deliver results -- one piece at a time.
BONUS MANAGEMENT BEST PRACTICE
Many employers won't allow people to be paid solely on the basis of the concrete results they deliver. Don't give up too easily! For each of your direct-reports, try to identify the measurable results of each person's work in the smallest measurable pieces. Then ask yourself -- can you base ANY portion (no matter how small) of each person's standard pay on the accomplishment of tasks that are basic expectations of the job? Can you attach ANY rewards at all for demonstrations of above and beyond performance?
