Future Friday: The Demise of Pay for Time

by Michael Haberman on November 1, 2013 · 0 comments


 

By 2030 these may be found only in a museum.

By 2030 these may be found only in a museum.

I have written several times on the concept of Results only work environments (ROWE). You can see that here, here and here. I think it is a great concept but I have noted that most organizations will have a difficult time instituting because of the way we currently have to pay people. One futurist feels that by the year 2030 we will see the demise of pay based on the time you work.

Bye-bye time clocks

There are already a number of organizations that have tried to do away with keeping track of time. That is the whole concept of ROWE. The problem with this is that if you have nonexempt employees you are required by the Fair Labor Standards Act to keep track of their time. We are required to pay them based on the number of hours they work regardless of the productivity they achieve. We take care of productivity, or the lace thereof, with raises, bonuses or terminations. If we allow someone to sit and play a video game for 40 hours we owe them, by law, the same amount of money that sits and works hard and accomplishes work during that 40 hours. The law makes no distinction. We can and eventually will distinguish the difference between these two workers, but until then the game player earns a paycheck just like the hard worker.

Pay-per-task

Writer Carrie Anne Zapka, writing in The Futurist, says that future historians will see the time clock as a failed aspect of the Industrial Revolution. She feels that future compensation will be based on pay-per-task. She feels this will replace fixed wages and we will see annual salaries and hourly wages disappear. Rather in their place will be a negotiation between workers and “workees”, with compensation being volatile. How much is received for each task will depend on supply and demand, reputation of the worker, experience points and recommendations from the network that surrounds the worker and workees. This is similar to the concept of reputation capital.

Many of us already work that way

To me this is not a strange concept. In a sense I, and many fellow independent consultants, already work this way. I charge a fee for the completion of a project. This is negotiated up front. Occasionally I negotiate an hour rate, though that is not my favorite method. What I can charge is based upon my reputation and the recommendations I get. We independent consultants already live in our own ROWE situations. By the year 2030 it is likely we will all operate in this manner. This will all be a part of the trend under way of being a nation of entrepreneurs as Dan Pink and Tom Peters have written about.

There will have to be many adjustments in thought process and some major changes in legislation. Right now there is not the leadership in government to make that change. However, as the Millennial generation grows up with some of that independent experience they may then have what it takes to make some of those changes.


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