Mike Andes argues that traditional hourly pay is unfair and inefficient for both employees and employers because it incentivizes slower work and extensive monitoring (e.g., dashcams). He proposes switching to pay-for-performance to align incentives, improve quality assurance (peers policing standards), and retain high-performing employees who otherwise leave for slightly higher hourly wages.
The traditional hourly model, you pay someone by their time makes no real sense for the employee or for the employer. If someone's getting paid by the hour, the longer the job takes, the more money they make. If they go faster, the employer, the boss, they'll make more money if they go faster. And that's why there's this constant tension tracking people's trucks. And you gotta have video cams on everyone's dashes like it's crazy. Because the employee is incentivized to do something complete opposite of what makes the business money. Create incentive that the harder they work, the more money they make. This serves as a great quality assurance inside the business, because now team members are looking at other people's work, and if it's not up to standard, they're going to let you know because it takes them longer to fix the problems. It's honestly not fair that someone making $15 an hour is slacking off, doesn't care about the job, and then someone right next to them in the same truck doing the same work gets paid 18 bucks an hour, but does 90% of the work, is hustling all day long. If you're tired of losing employees that are great and they're leaving for a dollar or two dollars more per hour to your competition institute, pay for performance.
