Are you paying for hours, or for productivity? The difference could be huge.
All organizations need to develop an effective compensation strategy that is aligned with their business strategy; that is HR and Business 101.
Many compensation consultants discuss the concepts of base pay, performance pay and indirect pay, and most of those concepts are built on the foundation of an annual salary or hourly wage. Our society has been ingrained into the concept that a full-time employee works eight hours a day and 40 hours a week for approximately 2000 hours a year. It just can’t be any other way, most HR professionals would say.
- What if our society’s concept of the paid hour of work for eight hours a day is a flawed concept?
- Is eight hours the most productive number of hours per day to work?
- Are there any alternatives?
Well, some researchers and some businesses are exploring alternatives to the eight-hour day and seeing very productive results. Tower Paddle Board, a manufacturer of stand up paddle boards (SUP), moved to a five-hour work day and a five-percent profit sharing model.
- What was the result?
- Was it higher costs?
- Was there lower productivity and greater customer complaints?
I bet you can guess the answer to those questions was a big and bold: NO!
The opposite was true: workers’ wages went from $20.00 per hour to $38.40 per hour for 25 hours a week, and annual revenues were up 40 percent. Also, they have been named one of America’s fasting growing companies.
Click here to read about Tower Paddle Boards.
Discussion Questions
- Read the article about Tower Paddle Boards. Review the five steps Tower Paddle Boards used to implement a 25-hour work week. Pick a company and see if you could use those five steps to make a 25-hour work week work for that organization.
- Conduct some research online to learn about how other countries and companies schedule their work week. Come up with your own ideas for alternatives to the 40-hour work week.