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  • 1.  Re-examining Employee Compensation in a 4-Day Work Week

    Posted 03-11-2023 11:20 AM

    Possible future changes like a 4-day work week raise questions about compensation methods. Many engineers are technically salaried but still get paid per hour billed, which can limit innovation and efficiency.

    If a 4-hour work week is implemented, employees could lose 20% of their salary under the current system. One solution is to bill contracts as a lump sum to maintain salaries and encourage faster project completion.

    Is there a benefit to changing project compensation to a lump sum contract, and are there associated issues?

    Christopher Seigel P.E., M.ASCE
    Civil Engineer

  • 2.  RE: Re-examining Employee Compensation in a 4-Day Work Week

    Posted 03-13-2023 11:28 AM

    There are a few benefits in moving to lump sum projects:

    -A tighter correlation between project cost and deliverables received.

    -More incentives for productivity gains.

    -Easier to track work metrics for staff (pay for production rather than for time).

    -Faster rewards for innovative and productive staff (they'll see the gains in their time immediately).

    -Lower management costs, since you're checking products instead of both products and hours.

    There are some drawbacks:

    -Unpredictable projects may result in losses for the firm or overpayment by the customer.

    -Possible drop in quality with the temptation of the firm or employee to focus on quantity of projects.

    -Some services don't have clear deliverables.

    My employer prefers lump sum just for the management savings (no hours spent checking time sheets), and I think the industry as a whole is going more towards a production focus that tracks task metrics rather than butt-in-chair time. High performers appreciate a more clear correlation between their productivity and their rewards (pay or spare time). With a lot of the new workforce software available and the trend towards hybrid offices, tracking people's work has become far easier than tracking their time. However, this won't work for every job function or employee. Quality management will be a higher priority to ensure that the incentives for productivity don't lead to cutting corners.

    Lump sum would also be a better employee management model for anyone that can work out the right metrics and tracking processes. Pay an employee a base salary for a certain number of tasks(projects/sheets/etc) per time period, and a bonus structure for more tasks than the baseline. It would have to be a business very experienced in its field, however, and a clear understanding of the core project workflow. This could be prone to abuse by employers who set an unreasonable baseline, but the market would self regulate when unreasonable employers find that they can't hold onto top performing staff. Top performers would appreciate the agency of being able to choose between having more time or a bigger bonus.

    Ronny Lackey L.S., M.ASCE
    Survey Section Director
    TX DOT
    Austin TX

  • 3.  RE: Re-examining Employee Compensation in a 4-Day Work Week

    Posted 03-13-2023 06:15 PM

    Thanks Ronny. I appreciate the detail you added to your thoughts. I echo the same concerns you have listed, but will admit I am personally still hopeful that this compensation method becomes more broadly utilized due to all of the benefits you highlighted as well. 

    Christopher Seigel P.E., M.ASCE
    Civil Engineer

  • 4.  RE: Re-examining Employee Compensation in a 4-Day Work Week

    Posted 06-19-2023 12:55 PM

    The company I work for found a workaround regarding tracking productivity in projects instead of salary. The group of workers I'm in has a weekly Staff Meeting where we catch up on activity from the previous week. There, we all state our billiability (work hours spent working or with paid leave out of 40 work hours) so that our bosses know our productivity, even though the base biweekly salary will be the same each time.

    From there, I have an Action Items meeting with only my boss every week, for reviewing my progress with projects. There, I have time to demonstrate my productivity with each step of projects and learn where to improve my work strategy. I think both will be major factors with my annual reviews.

    Alexander Granato
    Transportation Planning Engineer
    Indianapolis IN

  • 5.  RE: Re-examining Employee Compensation in a 4-Day Work Week

    Posted 03-14-2023 11:46 AM

    Lump sum contracts could fuel scope creep.  Most of us have had clients who expect us to redesign everything twice a month, sit through meandering weekly meetings, write their deliverables for them, reply to 15 emails a day, and teach them physics while we're at it. If our clients feel like they're paying for the project rather than for the work, they may ramp up requests for out-of-scope services.  Legally, we're always within our rights to refuse out-of-scope requests large and small, but when everybody else is doing it, we'd start to have trouble getting work as scope hardliners.

    I also share the concern about quality of work.  If engineers are setting competitive lump sum fees, I'd expect more relience on unvetted software outputs, and cuts to QC reviews, continuing education, level of development, and constructability consideration.  Peeling back engineering oversight becomes "efficiency" from a business perspective, until things start to fail.

    Christian Parker P.E., M.ASCE
    Structural Project Engineer
    Washington DC