In the age of knowledge and technology, where almost 80% of the US workforce is in the service industry, we continue to operate dating back to the industrial age of manufacturing, some 250 years ago.
The economic and social changes brought on with the replacement of hand tools to power machinery, and large-scale factories became the order of the day. The ability to move production to 24/7 with shifts became the norm, and with that, a move away from remunerating workers based upon their outputs and paying them for their time. It was an economic boost brought on by significantly increased productivity, while paying workers for the hours worked. And this has continued for centuries and exists today.
Now that we are predominantly a services economy, we continue to apply the same model. Today over 90% of US workers are salaried or hourly waged, with over 66% being hourly. We reward people for the time they put in and not what they put out. The worker who is efficient and can perform twice as much work in half the time does not earn four times that of their co-workers. We hear individuals say ‘Only an hour left before I leave,’ instead of ‘only ten units to complete before I leave.’
Yet, we as leaders expect increased productivity, and so we should. If we continue to incentivize a system that uses time as the measure, we should expect employees will work with time as their primary driver. It is simpler to manage, and it provides the employees with a more consistent cash flow. If we seek efficiency and value productivity, we may require a new reward system, or we can expect the same.
