Pay for Presence or Pay for Results?

Pay for Presence or Pay for Results?

How much paid vacation do you receive from your company? Do you take it all, or do you find yourself giving or banking time at the end of the year? Would you take more time off if you were allowed? Even if it meant that your team would underperform or miss important deadlines?

Sir Richard Branson is betting that the employees of his company will maintain an appropriate balance between getting the work done and taking off all of the time they want. His company is the latest to grant employees unlimited vacation time.

Branson calls the new directive a “non-policy.” It says that employees should decide the extent and frequency of absence that will still enable them to do their jobs well and encourage their teams to prosper. The only criteria is that they tell their bosses when they will be away.

So will paying people for results work, and more important, will it allow individuals to have more harmony in their work and non-work lives?

The answer is, “It depends.”

Netflix uses a similar process, and it appears to be working for them. Best Buy allowed employees in its corporate office to set their own schedules with the implementation of its Results Only Work Environment, and then it rescinded the program in 2013.

In the right culture and circumstance, paying people for results makes all the sense in the world. My first book agent was also a sales person for a large pharmaceutical company. He was so good at his job that it only took him an average of three days per week to maintain his spot as a top performer in the company. And, he was so good at his book agent sideline business that he sold my book as an unknown author in less than one day.

The typical response is that if he could produce great results in three days why shouldn’t the company expect even greater results that would force him to work five days? The answer is that this individual wasn’t motivated by time but by a work environment that allowed him to achieve on his own terms. He understood that his first responsibility was to his day-time job. The company understood that it would lose a high-performer if it tried to micromanage him.

The problem is that not every employee is as dedicated as my pharma-selling book agent. And, not every manager is confident and mature enough to know when and how to give people control over their own schedules. There is also the fact that the business requirements are different in an office or retail environment where regular face-to-face time can improve communication and keeps the work flow moving compared to an outside sales job where regular office visits are not part of the equation.

There is also research reported in the Journal of Marriage and Family stating that an employee-controlled flexible schedule does not lead to the increases in family time that you would expect.

Branson’s idea will be more difficult in some areas of his businesses than others. It would be challenging, for instance, to allow pilots, flight attendants, gate agents, and baggage handlers to set their own schedules. But, it could work even there…if the culture is dedicated and mature enough to act responsibly and be accountable.

The A.E. Staley company, for example, operates its plant in Lafayette, Indiana using self-managed teams that address everything from how work is done to who gets hired and who gets fired.

The key factor is an incredibly strong culture where every person at every level is committed to delivering amazing results and supporting the team. It also requires an exceptional level of management/supervisory maturity and competency.

We will see more and more companies deciding to pay people for results. It is inevitable as companies search for ways to attract, retain, and engage high-performing individuals. It won’t work everywhere, but it can be a powerful tool in the right situation.

If you want to have a discussion about whether a “pay for results” approach would work for you, contact us at info@penningtongroup.com

About the Author:

Randy Pennington

Randy Pennington is an award-winning author and a leading authority on helping organizations deliver positive results in a world of accelerating change. To learn more or to hire Randy for your next meeting, visit www.penningtongroup.com or call 972-980-9857.