EDWARD S. SUCHERMAN & ASSOCIATES LTD.

This is a bit off my marketing focus, but it very much affects business:

One of the big issues in health care that both parties agree upon (!!!) is our need to change from a system that pays physicians for patient visits to one that pays for keeping them healthy. Ditto, teachers tied to test scores. I am thinking, and I’ll bet you are, too, that perhaps merit pay might apply to all American workers, from manual laborers to professionals and top executives.

In Hollywood, crews, directors, producers, writers and stars are now hired by the movie. They used to be under contract to a studio. And guess what? Everyone is making more than ever, including the studios (sans permanent overhead). I believe that the films and performances are better than ever.

In China, Japan, and Singapore, the highest performing students are selected for upper level education and training as early as ten years old. Should we be doing the same? Am I spouting Ayn Rand? I am a lifelong bleeding heart liberal Democrat. Have I forgotten about the underachievers? What happens to them?

I have no answers, just questions.

How would the system work? Would it be like Wall Street, where stockbrokers are paid a minimal wage until the end of the year – and then receive outrageous bonuses based strictly on performance, as dictated by the numbers? That would not be a bad system at all. It would allow every employee to get by and reward those who do the best jobs. For years, raises or bonuses for most us have been a small percentage of our regular pay. Maybe it is time to change. Certainly, such a system would jack up our nation’s performance in all areas.

What about factory jobs? Performance in that case would need to be based upon team performance and success. Again, this is not a bad thing in theory. Do you think it would work well in practice? How would you bonus only the best guy on the assembly line? If everyone is paid the same, we have socialism and proven failure.

Would a marketing man like myself be paid according to company sales? But we don’t make the final sales – that’s basing our pay on a significant variable that we cannot control. What about a retail store sales clerk? Isn’t much of his or her performance based upon the traffic driven to the store by the marketing department? What about intangibles, like brand building, image, identity, or positioning? What role does pricing have in sales? Or quality? Or package design?

Would lawyers only be paid if they won? Right now, they are paid according to the amount of business they bring into the firm and the number of hours they can bill. What is best — and more important, what is right?

What about those unable to perform? I mean, individuals who are mentally, emotionally, or physically challenged? Certainly, merit pay would favor the educated and experienced and end most age discrimination. That would be nice, not to mention fair. But who ever said life, or capitalism, is fair?

Would merit pay favor kids who went to the top colleges? Would there be a special bonus for the person who just graduated from Harvard, vs. the person from a Junior College. There probably should be – guaranteed, the Harvard student has worked longer and harder to get into and through that school. Or should that person have to prove him or herself in the real world?  Would this all lead to a European-type aristocracy, the kind America fought a Revolutionary War and a Civil War to eliminate?

And what about aesthetics? How does one put a number on excellent art or music or dance or design or writing? Life isn’t all left brained.

Merit pay is a revolutionary way of thinking that would change our culture, our economy, and your business.

Any ideas?

Ed Sucherman

THE MARKETING MACHINE

edsucherman@gmail.com

www.edsucherman.com

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