Using Merit to Battle Complacency
Like many, I spent a number of years of my young adult life working in a number of jobs in a variety of sectors. You get a job, you work hard to learn to do it right, make yourself an asset to the team or company, but then you coast. Some stay motivated due to other goals they have in their lives, but many find that base level of acceptable work quality and then coast just above it. They maintain that level and gain cost-of-living increases and tenure for little effort. This complacency can stagnate the growth of a business and local economies, but a number of companies have found ways to limit this effect.
Some warehouses use a base-level pay rate and will not give raises. One would assume that you would not gain highly productive individuals in that industry. Instead, the company adds a productivity bonus to an employee’s pay rate when they meet or come in under a project deadline. Therefore, more productive workers would gain a higher pay rate, while complacent workers would lose their bonus and remain at their base pay. They are incentivized to stay productive and minimizes complacency. This practice can be replicated in a number of industries.
In this growing digital world, one of the most popular features of online sales has been the ability to leave product and seller feedback. This is leading to a growing force that emphasizes product and service quality in a much more real-time representation. How does a business use this to battle complacency? With a variable pay rate. I recently met with an AirBnB host that uses this concept for his maintenance and cleaning crews. As customers arrive and leave their accommodations, they are able to leave feedback and rate the cleanliness and other aspects of their stay. The owner then takes this rating and converts it to a rate of pay. Whereas a low rating results in a low rate for the cleaning crew (although never below minimum wage), a high rating results in an above-average rate of pay for the job. This is important because in this business sector a bad review can have an immediate effect on future business. If a crew gets complacent, ratings drop. Tying the pay rate to the rating system incentivizes them to continue doing a great job.
While many companies have been doing this for a long time, there are a number of places where this concept has not found a home. Most notably, in our education system. It seems there is little to no competition when it comes to education. There are no incentives for teachers to perform better, as they gain retention increases annually with no reflection on performance. Teachers with tenure are often unmotivated, coasting to retirement. Meanwhile, children receive only partial education, which is reflected in our dropping test scores.
I believe part of the solution to our education system is to develop a more merit-based pay structure. A dual-rating approach can add a variable that could incentivize our educators. Ratings based on test performance can encourage a teacher to take steps to ensure the material is given to the students efficiently. And to prevent teachers from just handing out answer sheets, the testing could be done online as professionals do for certifications and licensing. Secondary ratings can be accumulated from students themselves and their parents about the teacher’s performance. This can bring to light issues with presentation and the social aspects of the educator’s abilities that cannot be determined from testing results. While this will not fix our education system by any means, I believe it would have a positive effect. We would retain more quality teachers that will continually strive to innovate and tweak their curriculum, while those that are complacent become more apparent and can be replaced.
Complacency in the workplace has a negative impact in our economy. By taking a more merit-based approach to pay rates, companies can limit losses that come from paying employees higher fixed rates, even when they’ve become complacent in their work. A wage drop (or lack of a bonus or increase) can motivate employees to push hard again to earn more money. This will bring more value as employees stay motivated to not only produce, but also to innovate ways to increase or maintain higher productivity, while protecting businesses from growing complacency that leads to lack of productivity and the expense associated with higher turnovers.