Blue-collar employee incentive problem

I’ve heard a great joke a few years ago: Do you like your boss’ new car? Then work harder, so he can buy an even better one.

My point here is about mostly blue-collar jobs where there’s little to no room for promotion, or it’s simply not worth it.

With an hourly salary, an employee is only motivated to do a job good enough to earn the salary. There are certain things an employee has to get done – when he does, he gets paid.

Employees in these jobs have absolutely no reason to suggest improvements like how to do something more effectively, faster or for less money. They have no reason to care whether something’s wrong as long as it doesn’t negatively impact them or their salary. 

Why would they? 

They won’t be the ones to benefit from it anyway, and if they were, their boss would benefit disproportionately more, which is a reason good enough to better stay quiet.

Consider this example: Employee gets an idea about a more effective way of doing some aspect of the business which will save the company $20.000 annually. If the employee came to a manager and told him about the improvement, what do you think he’ll get in return?

A pat on the back? A bottle of whiskey?

When we simplify it, the employee just handed the owner a luxury 2-week Bali vacation voucher for free.

The problem is that most companies don’t give their employees a reason to care. They somehow don’t realize that even if they split the money that was saved (or made) by the employee 50/50, they would still benefit from it big time.

I’m sure some companies would be willing to appropriately reward their employees for such ideas, they just don’t say it out loud, so nobody knows about this option.

There would be SO MANY improvements proposed if they were fairly rewarded.

It’s no secret that the management is often out of touch from what’s going on “down there”, so the room for improvement may be huge in a lot of companies.

It would also eliminate (or at least soften the bitterness of) the employees with “I could run the company better than these idiots” mindset.