Rewarding Effort vs Results
Sometimes we confuse effort with outcome. We think that hours spent are more important than outcomes achieved. Or we unintentionally create a system where effort is rewarded, rather than outcomes.
Consider a situation where you work for a consulting firm, doing capped Time & Materials jobs. The client gets charged for the amount of time actually worked. Any amount of time up to the cap will be accepted. If more time is needed to complete a task, you’ll need to go back to the client to negotiate for more time/money. Occasionally you’ll need to do that, but usually the job will be completed under the cap.
As a consultant, you’re normally measured on your utilisation, and the amount you bill. So what’s the optimum amount of work to do for each job? Funnily enough, it is very close to the amount estimated – no matter what the estimate was. Maximise revenue & utilisation, while still doing the work under budget. There’s no incentive to do the job quicker.
Look at it from the perspective of two different consultants, Alice & Bob:
- Alice is a diligent worker, who gets through her work as quickly as possible. Repeatable tasks are scripted. She doesn’t muck around.
- Bob is a Continue reading
