Or: How to Pay Individuals if not by the Hour
While management has contorted itself attempting to improve the productivity of their best people and limit the impact of their most useless people, it has relied on the clock to demonstrate accountability. The when, no matter how dated a concept, still drives the ship.
"When will you be at work?"
The first consideration of traditional management is whether the employee showed up to work. Some managers will want to make sure he showed up sober. Others that he showed up bathed and well dressed. Most will want him to show up on time at the designated time. But showing up, really, is key.
We agree with showing up. We think showing up is a big part of success, just not in the time card kind of way.
The word show literally means to cause something to be seen, to make a public display. But it also means to make clear, to guide, or to explain, prove, or demonstrate. So, showing up could be done writing a compelling article, generating the best learning module ever, or delivering outstanding results on key performance indicators. All of which can be done anywhere at any time.
Should we compensate someone for showing up? Definitely. As long as showing up means performance, guide, demonstrate, explain, or prove. When showing up means illuminating something, changing something, having an impact, that’s work worth compensating.
When showing up means sitting in a chair watching YouTube videos for hours between responding to emails, taking 30 smoke breaks, or standing over others’ cubicles to avoid going back to your own, then it’s an entirely different kind of performance. It’s pretending to work. In that case, showing up ended when the time card was punched.
Compensate people on the work they do.
At CRC, we pay salary. We have a set rate for our contributors determined by their role in the organization and the skill sets they contribute. The salary is negotiated at hire and eligible for improvement as the company’s finances improve. (Hey, we’re a start-up, we’re just glad anyone is getting paid.)
At CRC, salary for performance is based on three factors: 1) accessibility, 2) work, and 3) revenue.
First, we ask: did the person attend meetings they committed to? Did they respond according to our standards of communication? Did they volunteer for tasks and posts and generally show enthusiasm for the work the organization is doing? All of these indicators are about accessibility. We pay team members a salary to engage with the team. If someone is completely disengaged, we’re not benefitting from the awesomeness. So, to that person: Get in the game or get out.
Then, we ask: did the person accomplish the things she said she would? Did she meet deadlines? Did she fulfill billable work? Did she please the client? Did she ask for help when she needed it? Did she take on tasks that stretched her skills and helped her improve? All of these indicators are about work. Real work. Not butts-in-seats work, but legit, produced-something-that-helped-someone-else work.
Finally, we ask: did this person help our clients? Did she build our network? Did she bring in new business? Did she help create new products or services? Did she deliver billable work? Did she complete internal operational work that saved us money? All of these indicators are about revenue. How did this person help the company stay in business?
We evaluate one another on these key performance indicators (KPIs). We keep track of assignments and work and deadlines. We keep track of networking and leads and customer engagements. We watch out for one another and step up to common tasks like social media, internal training, and process documentation.
So far this results-oriented approach that asks people to be honest about what their priorities are by the day and week has been successful. When there’s work to be done, it gets done. When there are opportunities, we’re positioned to take them.
And none of these conversations ask, even for a minute, “When do you work?”
For more on our thoughts of the evils of hourly billing, click here.