A short excerpt from a YouTube video by Mike Andes arguing that measurable outcomes (daily labor revenue) should determine team compensation and incentives rather than hours worked. He emphasizes that what gets measured gets managed, and ties efficiency to pay-for-performance based on daily revenue generated by team members.
Ultimately, what gets measured gets managed. And so if you're not measuring budget hours completed, the performance of the team, how much revenue they're making on a daily basis, what is their labor revenue each day, if you're not measuring that, it will not get managed, it will become inefficient. Efficiency has to do with pay for performance. And so I want the incentives of my team not to be based on how long did you work today? I want it to be based upon how much revenue did I earn the business today. That is why I am compensating them based upon their performance every single day.
