What is an employee worth?
To stay with the example currently under discussion, is it better in the long run to pay interiorscape technicians by the hour or by the account? The pros and cons of both are obvious and it really depends on whose perspective you take.
Paying by the hour can either encourage techs to take more time with the detail work and customer care (provided their schedule is not overloaded with unrealistic expectations by management) or it can simply result in having them "walk in circles more", as Mike suggests.
Paying by the account can either encourage techs to work more productively with respect to the amount of time put in on each account, or it can lead to cutting corners and poor quality of workmanship in order to squeeze in more accounts and, hence, generate more income for the tech.
Which is less risky to the! employer? There is no cut and dried answer. It always will depend on the quality of each individual employee and that employee’s motivations, character and abilities. Talented, diligent, honest employees will be better suited to working "by the piece", so to speak...that is, the more accounts they can handle, the more they will earn. This entirely hinges on their ability to maintain a high level of quality in their work while simultaneously handling a high volume of accounts. A high-stress regimen like that can produce burnout after awhile, though, so be careful to avoid techs becoming too dependent on volume for their livelihoods.
More "average" techs probably will perform best on an hourly rate basis, with incentives of some sort added as a way to boost their income. For example, if you’re a small company, maybe your techs can do some "on the job marketing" to the existing clients and/or neighboring companies in the buildi! ng or neighborhood. That could allow you to pay bonuses for ne! w accoun ts or just for leads that pan out for your salespeople to close. However, most working class Americans tend to feel more comfortable with the known quantity of 40 hours of work a week times their hourly rate. The kicker here is that they will have to realize that, at some point, there will be a "glass ceiling" above which their hourly rate can no longer escalate, depending on the business climate within your client roster (i.e., how much you are able to increase their service rates each year). If there aren’t opportunities to earn more in other ways or a chance for promotion within the company, they will hang around for awhile and then leave...something each of us dreads as managers.
There really is no good rule of thumb here. It depends on your individual business structure and philosophy, client base, market, and the prevailing business climate at any given time. Some may say that employee ownership is the only "guaranteed" way to ensure co! ntinual growth and quality of workmanship, since direct financial benefits accrue to good workers in good companies under that setup. And rank-and-file American labor is forever suspicious of the motives and goals of management and ownership as a matter of course...seeing creative compensation ideas as "gimmicks" designed to evade paying employees more per hour worked while getting more work out of their employees. That perception can become a cancer in your company, so be sure that your employees can feel confident in "buying into" your business philosophy by rewarding great work and company growth in the appropriate fashion.
Clem
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Source: http://www.interiorscape.com/?id=scapetalk_view&oripost=13842&cid=20357&hit=20891&reply=46&subject=Re:
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