Pay for Performance

Despite my graduate studies following Dr. Edward Deming, a believer of the "willing worker", I am a true believer of pay for performance models. I recognize that I perform better when I can associate my income with my efforts.

As an engineer in a large technology services company it is difficult for me at times to associate my pay with my performance. This lack of correlation between pay and performance drives mediocrity in my opinion.

I combat this meritocracy by focusing my energy on activities that can boost my income. For instance, my employer offers a financial incentive program for patent activity by its employees. Naturally, as a result I focus my energy on patent activity.

I will soon be receiving a $1,800 award for some recent patent activity. While this is a small pittance in relation to the amount of effort that has gone into the patent activities, it is still correlated to my performance and I take great satisfaction in these financially rewarding achievements.

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Comments (11)


Congratulations on the patents. I agree with your views on the pay for preformance model. A set hourly wage in most industries penalizes good works and rewards slackers.

I am curious, do you get paid for posting links to books that you have read on this site? I see that you have been mentioning a lot of books lately and your name is referenced in the URL address. I am assuming you get some sort of percentage if a person goes through your link and purchases a book? If so, have you disclosed this somewhere on this site? Thanks.

Yup - I am a member of the Amazon's affiliate program - so if you purchase a book through the link, then I get a small commission. The reason there is more books mentioned recently is I am doing more reading :-). I have such a backlog on my nightstand I am working hard through the books to read and review them.

Congrats on your patent. It's nice to be reconized.

Good call focusing your attention on the patent incentive. I've always been an advocator of paying for good performance, unfortuantely too many corporations seem intent on a straight salary.

Dictionary.com describes meritocracy as "...an elite group of people whose progress is based on ability and talent rather than on class privilege or wealth". Why would you want to combat meritocracy? I

You certaintly meant mediocrity, not meritocracy. The former is what results when performance does not matter. Meritocricy is when only results matter.

If you want to get paid for performance, go into sales. I did. You live under the sword and you die by the sword. The pressure is high but if you are successful, you can make a lot more than most people.

Very good post... see also www.businesshackers.com for more posts on this subject...

Oops. Thanks for the catch. I wasn't paying close attention to the spell checker.

I was pretty sure 'mediocrity' was what you had in mind; I just didn't want your dedicated readers walking around saying they hated 'meritocracy' :)

By the way, November was an awesome month for you, and congratulations on the patent. I am sure I will never earn a patent for anything.

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A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
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