Value-Pricing At NHL Level...

Over at the Verasage Institute we talk a lot about value pricing and the elimination of timesheets. One of the Verasage Fellows, Ed Kless, has just posted a brilliant example of value pricing at the Verasage blog.

If your company is still...

• selling expertise on an hourly basis
• forces employees to fill in timesheets
• hire new employees for an hourly wage

...then you should read this post. It's pretty eye-opening, and rest assured this is how it plays out in the work of technology as well not only in ice hockey.

Actually, I've just read an interesting article about the performance of people who work for hourly wages. They were told that as soon as they complete normal eight hour's of work, they can pack up and go home for the day. On average, eight hour's of work was completed in three hours and 19 minutes, 41% of the allotted time.

What does that mean to you, the employer? It means that your people are smart. They learn the system and have become pretty good at playing to the weakness of the system. Their focus shifts from improving performance to marking time and filling hours to maximise their wages.

For many companies people relax during normal hours and then request overtime to complete the work. And you can't blame them because this is what they are motivated to do. There is a definite motivator to work slowly and inefficiently.

So, what to do? Well, you have to recognise that they are knowledge workers of the "knowledge age", as Peter Drucker defined it about a half a century ago, but most managers were so busy managing their feudalist empires that they didn't pay attention.

Then put your people on annual salary with a bonus structure, create an environment in which people are naturally inspired to do great work and leave them alone. If there is any problem, give them instant feedback and forget about the annual review. If your HR goons insist on the annual review, then throw them out of your department or, if you can, fire their arses.

Through living history, traditional HR practices have never contributed anything positive to the work environment, so there is no reason to keep old-fashioned, time-focused HR practitioners on the payroll. They have taught people how to lie on their resumes, how to doctor references and to perform consistently at sub-par level.

Anyway...

Read Ed's post at the Verasage blog and see how you could replace your time-centred organisation with a value-focused organisation.