Why a Good Reward System Should Be Performance-Based Rather Than Time-Based

by Paul Githutha

Companies need to start emphasizing on results, quality of work and reward workers based on performance rather than time spent.

Time-based performance is wrong because;
Not all employees require the same time to complete a task-This method assumes that all employees need same time to complete a task. This is normally very wrong and it leads to negative energy on the part of high performing employees. Some employees have great skills and speed compared to others thus allocating equal time and equal reward system is wrong.

It leads to redundancy- Time-based system of rewarding employees creates an impression that one only needs to do the minimum he can and even if one can do three or four tasks in that given time, he or she will not bother to do more.

It leads to high costs and inefficiency- Since employees are not working at their best yet the company still pays them salaries, this increases inefficiency and costs to the company. The company is paying for both performers and non-performers while it can reduce this if it uses performance-based reward system and only reward the employees who deliver.

Misuse of Time-based work- Employees will find other ways of utilizing the extra time left after completing a task. Others will use it for personal issues, others going for prolonged lunch, others will fake sickness during important work days to avoid difficult tasks thus exploiting other employees. High performers will take advantage of the system as low performers take advantage of high performers.

It results to low productivity- This system lowers the productivity and quality of high performing individuals. When an individual can complete two or three tasks in the same timeframe he’s required to finish one task, and he’s restricted to only complete that one task, then his productivity level is very much lowered and this may lead to a low esteemed employee.

Different employees perform better during different times- Some employees perform better in the morning while others perform better after lunch. It’s upon the manager to know what time each individual performs better and schedule tasks accordingly.

The list is big and I can go on and on, but these are just of the reason s why time-based way of rewarding employees is wrong and it is high time companies start recognizing the importance of performance-based reward system in that they don’t have to reward employees who fail to deliver. They should enlighten workers on what work will be rewarded, establish an elaborate way of rating to help managers differentiate between different levels of performance and derive distinguished ways of rewarding those who perform better, averagely and dismally.

A performance-based reward system will increase effectiveness, efficiency, motivation, attitude of the employee and reduce costs greatly.