The Philadelphia Experiment – Marriage and Wages

We were running, once again, 5 hours after the deadline.  I’d already been at work for twelve hours and people were leaving before the work was finished.  I remember feeling miserable. I can’t remember if it was despair, depression or fatigue.  I think despair was probably the best explanation.  I’d been doing this for over a month and the 80+ hours week was killing me.  I didn’t know if was going to be able to survive.

In October of 1996 I was asked by my company to take over a QC process in the Philadelphia office.  We were doing work for a large multi-national company.  There were 22 vendors doing this same work.  My company had 8 offices and we were trying to get more of this work from the multi-national.  Missing deadlines and poor quality was not helping our cause.  We were having similar problems in all of of offices and the stress was causing significant turn-over in the offices with both managers and employees.  We had been working on this process for over a year and the situation wasn’t getting any better.

My knee jerk reaction was hire more people.  We already had 25 people and 25 computers. I requested more computers and started running an add in the paper.  People seemed to be quitting at the same pace I was hiring.  Down deep I knew was the solution was  and I started to put a plan in place

Here was the root of the problem.; We were in a production environment and we needed to motivate speed and quality.  However, we were motivating them to be slow and not care about quality.   If you pay people hourly, most people are motivated to go slow and get the most hours possible.  If they make mistakes and have to do it again, that just means more time on the clock.  I had worked in a production environment where I was paid by the amount of items I produced.  I had made a lot of money because I learned how to be very productive.  I knew the answer was putting that motivation in place.   I knew a system like that would help us accomplish the goal; fast and quality.

I created a plan and began to move forward. I got the necessary  buy-in from the boss, even though he wasn’t comfortable with it.  I was way too desperate to care about comfort.  I worked out a rate for the work.   My boss suggested twice what my rate was.

On December 1st I put my plan into action.  I was young and didn’t really know how to present this to the employees, most freaked out.  There were three women that quit the first day.    I continued to hire people.   The people were paid $8 an hour before I put my system in place.

Here were the results it took about 3 months to take effect.  The staff reduced from 25 to 12.  I did not fire or lay anyone off.  They either quit or moved to a new area.  The average wage improved to 12$ an hour, one innovative fellow was making over 20$ an hour.  We were beating the deadline by 2 hours everyday.  The most amazing thing for me was that my system reduced payroll from $32,000 to $16,000 per month.  WOW!

Now for Marriage

You might ask what does this have to do with marriage, well my marriage was seriously strained working on those hours.  With the reduced work hours my marriage was much better.   Because of this success, the company nearly doubled my pay.  Also relieving some of the stress on my marriage.

Surprising results

I thought that type of result was a fluke.  However, I continued to work for the company for 8 more years.  I implemented my strategy many times, and watched others implement similar strategies.  Surprisingly, with similar results.   After leaving the company I started studying motivation strategies at companies.  I was surprised to see similar results across many different industries. Harvard Study,Fredrick Taylor.

I read an article in the Wall Street Journal yesterday, the reason I posted this, As Wage Debate Rages.  This article talks about how employers are not hiring as many employees because minimum wages are rising.  The problem is that hourly pay motivates inefficiencies.   If employers started paying employees for the value they were bringing to the company, then there would not need to be a minimum wages.     Over my 10 years working for the company the average wage for the people I managed was closer to $18 an hour.  It was about paying for value.

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