The best system of staff remuneration
In this article I want to talk about the best of my known wage systems. For many years I was an opponent of the salary system and advocated people being paid for piecework. Fixed payment affects employees like vodka on an alcoholic: always desirable and most destructive. The seller should receive interest, I considered, the production worker – on development, the rest – small salaries and large premiums. Today I have revised my views and am no longer a devoted supporter of these systems. I found myself another – fresher and more interesting. In the distant 80s, I worked in the dressing burn center as a nurse. For those who do not know, each dressing in such a center is a separate operation performed under general anesthesia. Without anesthesia, few would survive it, we treated patients with more than 50% of burned skin. It happened that people saved lives, but because of regular anesthesia they became addicts. And somehow we are standing with my partner (curly descendant of the natives of sunny Israel) on the porch of this paradise. We breathe fresh cigarette smoke, trying to get rid of the smell of iodine and Pseudomonas aeruginosa from their nasopharynx. And he, with the pleasure of dragging on, argues: – Here we did today 20 dressings, and I will receive 120 rubles a month for it. And if we had made 40 dressings, I would have received 120 rubles for it. So I’d rather do 10 dressings for the same 120 rubles! This is the philosophy of the cover system. There is logic, right? In the end, almost all employees with fixed salaries, who work exclusively for wages, reach this logic. And you are fabulously lucky if the percentage of real enthusiasts in your team is high.
People love to feel their effectiveness, which is expressed in straining less, and getting more is completely normal for any person. And salary system allows to achieve high efficiency, only reducing the amount of work. Therefore, it is fundamentally flawed; an inoperable birth injury kills her. The soldier is sleeping – the service is on. This simple scheme, most understand the second month.
However, I also found a mortal congenital pathology in the piece-rate bonus payment, which is completely devoid of salary minuses. It seems that it should be a panacea. It is such from the point of view of those who receive a percentage of income. But you can not pay a percentage to each employee! “One hundred and one percent” is either a colorful expression or a loan. The salary you pay out of income, and it can not be more than a hundred percent. I have been using the percentage system for more than 20 years in enterprises that I manage. Rather, the combined – someone gets a percentage, someone piecework production, someone salary, someone salary plus a bonus. The payment system becomes incredibly complex, but everything seems to be taken into account. However, this is only an appearance. The problems of the managers do not end, the motivation of the employees remains weak, the bookkeeping works in full force. At the same time, employees continue to complain about the injustice of payment and distortions in income, salary is given in envelopes, as righteous indignation will arise “why does he have so much, and so little for me ?!”.
The overwhelming majority of businessmen to whom I tell (for example, on the online program “Full control of my business”) about our wage system:
a) use a piece-bonus and
b) find a proportional system (discussed later) more advanced and devoid of all the minuses of the two schemes mentioned above.
So what’s the problem with the “interest deal”?
Such a system has “favorites”: people directly involved in sales and production of goods and services. For the rest of the team members, they have to invent something non-standard in order to introduce an element of the game, and often these systems become really complex. Twenty-one years working as a manager gave me a large amount of material for analysis. Working as a business consultant since 1997, I studied the proportional payment system, developed in 1958 already. But by golly, I never had the heart to introduce it completely! However, once everything has to be done for the first time. More specifically, I had an insoluble problem with the payment of several categories of employees. These included: the department for working with new clients, employees of the department of control of regional offices, employees of the personnel department, employees of the marketing department, accounting, etc. All of them influenced the company’s income indirectly and could just freak out, creating the conditions for a large flow of customers. But then the entire avalanche of interested people created by them passed through sales managers who had a high percentage, but who simply did their job, like the rest of the team. And the sellers received a lot of money, and “the rest of the staff” – the average. After the sale, these people fell into the “gentle lion’s paws” of our specialists in the basic services department, who also received good piece-rate pay.
