Tuesday, November 22, 2005

The power of incentive

I was at the carwash this past weekend waiting for my car to be washed and cleaned when something caught my eye. The folks who were cleaning the cars appeared to be in a race, working at breakneck speed and hustling from one car to the next. I couldn't spot a single employee slacking off. These folks were probably making minimum wage, yet they seemed to be in a hurry to get to as many cars as possible.

My best guess is that the owners have an incentive in place that pays employees by the number of cars cleaned rather than a hourly wage. If that is indeed true, I think it is a brilliant idea. Think about it. I as a consumer am willing to pay someone to clean my car, but I want the service to be fast and efficient. The service provider has the same goal; they want to clean as many cars as possible in less time (and do a decent time of it at the same time) so that they can get to more. Talk about synergy!

It's a system that rewards itself, if everyone works as a team and with clockwork precision and weeds out sloths who drag the team down and hurt the team from performing at its best.

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