Saturday, March 2, 2013
On making people productive
I completely buy into the idea and having been in commission based jobs I am intimately familiar with the messes that get created when the wrong incentives are in place. When it comes to things like making outgoing sales calls there is very little imagination or creativity so you pretty much have to pay by performance... and you can, because you can usefully measure performance day by day. When doing work like writing however you can't just expect to pay 25 cents a word and get anything at all good out of people. More than that if you tell people exactly what to write, when to write it, and how it must be written you are going to get crap out the other end. Tell me I have to push out 500 words about coal mining in China between 3 and 5 oclock and you will get your 500 words but tell me to write something awesome as soon as possible and you will get 1000 words and they will be better.
This is very well demonstrated by the constant messes that executives get into when they have huge bonuses associated with specific performance targets. They shift the entire company around to put up a specific amount of profit for the last day in March instead of working to make the company successful five years from now. When you have someone in a job with a lot of creativity and flexibility you need them to look at long term goals; your company is not defined entirely by the sales logged in March specifically so why are you trying to make sure that is the only thing the people in charge care about? Moreover the size of their paychecks simply doesn't get you better people; while some CEOs are better than others you can't actually improve the quality of the person you get once you get past a couple hundred grand a year. I saw this constantly both in mattress sales and medical sales - doing ridiculous and damaging things to get an order delivered before month end just to hit targets was the norm.
The great thing about unleashing people's potential through autonomy and general goals rather than bonus targets is that not only do you get better results in creative jobs but you also have much happier people. It isn't just a way for an organization to get more out of workers but also a way for society itself to improve as everyone enjoys their work more. Admittedly it doesn't do much for those flipping burgers or operating a widget machine but it is a big step forward for everyone else.