Short-term pay-for-performance contracts will be the natural culmination of the free market for talent.

They are also the best way to give free agents exactly what they want most – to be paid what they are worth when they deliver – without breaking the bank.

Research demonstrates that short-term, results-based work relationships often create a higher level of commitment than long-term relationships. The researchers believe this is because the short-term contracts give participants a very clear idea of what’s expected of them, what they’ll gain from delivering, the time limits of the job and the work load necessary to complete it successfully within that time period. Not only does this create a different kind of commitment (the kind you get with a short-term contract), but the positive work experience also adds to the employer’s word-of-mouth reputation among the workers’ peers.

Start negotiating with the people you manage as if they are vendors, regardless of whether they are independent contractors or full-time employees, and you’ll start getting your power back in your day to day relationships with talent. The fastest way to change your organization is to change the way you pay people. Behavior follows the trail of rewards.

Take this to the bank – over time you get the performance you reward. If you want results, you have to reward results, and nothing else.

If the role of rewards is to drive performance, managers should make performance the only lever for controlling rewards. That means it is critical to make very clear to individual contributors exactly what performance – what results, within what guidelines, parameters, and deadlines – the organization needs and will therefore reward. This must be done on an ongoing basis because the results required of any contributor in any organization nowadays are likely to be in constant flux.

Stay strong!
Bruce