Sorry for the long hiatus from blogging; I have been busy with several projects as well as finishing my sixth co-op term. I have also been doing a lot of reading recently. When I first came to UBC, I was maybe reading one or two books per year. Last year, I managed to get it up to 25 books; this year, I’m on track to finish 52 books (one per week). For instance, some of the books I have most recently finished include Gretchen Rubin’s The Happiness Project, Ai Mi’s Under the Hawthorn Tree, and Susan Cain’s Quiet; I have also been reading books such as Ricardo Semler’s Maverick, Cali Ressler and Jody Thompson’s Why Work Sucks and How to Fix It, and Ayn Rand’s Atlas Shrugged. I mention these last three books because they highlight an unfortunate reality I have come to realize in spending time at work instead of at class: many, if not most, work places pay their employees for their time.

Why do I call this concept of employers paying their employees for their time an unfortunate reality? It doesn’t seem like it can be all that problematic. From what I can see, it appears to be the most common compensation system used today. It makes it easy to standardize across employees, job positions, and work places. It makes it easy to calculate how much to compensate employees, and for employees to know how much to expect to be compensated. Furthermore, it makes it easy by eliminating the need to measure results; although this reduction in required work is beneficial on its own, it is especially beneficial if those results are difficult to measure.

Despite these benefits of the pay-for-time compensation model, I stand by my original claim that this model represents an unfortunate reality. Although I feel there exists a broader and stronger argument for this claim, I will here reduce my argument to two premises. The first is a minor premise in which I will argue that the simple concept of paying for time does not make any sense. The second is my main premise in which I will argue that the concept of paying for time is essentially a bad business decision.

Let us begin. I feel that the unfortunate decision for employers to pay their employees for their time does not make any sense. Suppose an employee spends their entire work day in meetings. Suppose an employee spends their entire work day chatting with co-workers in the hallway. Suppose an employee spends their entire work day at their desk, planning the work they should be doing. Suppose an employee spends their entire work day resting their eyes and recuperating energy at their desk. Suppose an employee spends their entire work day at their desk, checking their Facebook, e-mail, online shopping websites, etc. Suppose an employee’s typical work day looked like any of these. They have given the employer their time; has the employer received what they expected? (Hopefully not)

I think that it is evident that justification for pay is not justified by the employee being in the workplace; it is my understanding (and perhaps my hope) that employers hire employees because there is a job to be done. That is, there exists something in one state that the employer hopes to bring into another state by means of an employee. Whether that be bringing a website from an idea in the employer’s head to the internet by means of an employee; whether that be bringing hamburger patties from a box in the freezer to their part of a cheeseburger; whether that be bringing samples from the lab to their form as data, or analysis, or conclusions drawn, there exists a job that the employer means to complete using the work of the employee. This being the case, it does not make sense to hire somebody to complete a job, but then to pay them for something that is potentially completely unrelated.

Now, I will argue (beyond the observation that it simply does not make sense) that the pay-for-time model is a bad business decision. One of the key goals of any business venture is to make a net profit. One key way to increase the possibility of increasing the net profit is to increase the value produced by the employees, whether that be in number of products made or the number of clients satisfied by a service. I feel that this increase in value production is discouraged by the time-based compensation model.

Why? If, as an employee, you finish the minimum requirements of your job early (that is, more efficiently than expected), there are two things that can happen. The first is that you do whatever you want (eg. Facebook, e-mail, gossip) until your time for the day is up. This is problematic because it makes it look as if you are slacking off, and thus potentially puts you at risk for being fired. The second is that you’re given additional work, for no extra pay (since compensation here is based on time). This means more effort on your part, with no real motive (because the minimum requirements of the job have already been met, your pay could be secured if you draw out your work; as a result, this extra expended effort is essentially being supplied to your employer for free. Furthermore, you’re also losing that downtime you could have used to check your Facebook, e-mail, catch-up with friends, or whatever else). In the case of co-workers who also lack motivation, it is even more demotivating to take on extra work when you see a co-worker who could be doing the extra work, but has taken precautions not to. In any case, it is evident that paying employees for their time discourages any increase in the production of additional value.

In case it is not immediately apparent, I would like to emphasize that this is not beneficial for employers. As has been shown above, time-based compensation models are not good for business. Although there is the potential for results to be obtained faster and/or better, this potential is not easily tapped into due to the de-motivating nature of time-based compensation. To make matters worse, paying employees for their time encourages employees to learn how to game the system. “Lazy” (potentially read as “smart”, depending on your perspective) employees will quickly learn to draw out their work to both minimize their required effort expenditure as well as their risk of looking unproductive. There may also be artificial selection against workers with potential to produce that extra value; this may take place if they finish early and look unproductive (thus getting fired), or if they take on extra work and then become un-motivated or feel that they’re being treated unfairly (extra effort with no reward) compared to either their past efforts or their co-workers (thus quitting). Whether it be the loss of potential value production or of valuable employees, time-based compensation does not benefit the employer.

To make matters worse, I would argue that payment for time is detrimental to employees. First, it pits the employee against the employer in a game of deceit. As mentioned above, the compensation model encourages employees to game the system. But it also goes farther than that, it paints the employer as a bad guy, a punisher, who deals extra work for good effort. This can devastate the relationship between the employer and the employee. Second, it trains employees to not work hard. This is bad for both the current employment, as well as employments in the future should the habit carry over. Finally, it is not the best use of an employee’s time. This is good for de-motivation, decrease in morale, and destroying any sense of respect from the employer felt by the employee. For reasons such as these, time-based compensation is also harmful to employees.

Here I have argued that the unfortunate reality of the time-based compensation model is that it is nonsensical and bad for business. I feel that this model has been convenient in the past, but I feel its flaws are too great to ignore. I feel that better alternatives could include giving raises upon assigning extra work, paying people extra (eg. bonuses) for extra work performed, or allowing people to own their time (ie. allow them to leave work upon completing their allocated amount of work). Alternatives such as these are progressive, but I feel that they are much better alternatives to the tradition of compensating workers simply by the time they put in.

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