Law Firms Rethinking Pay Philosophy

Last week the Boston Globe examined a trend that is a little late catching on in the marble floored hallway of some of Boston’s biggest law firms: pay for performance. You're likely familiar with the practice, and some of you may have even instituted pay for performance at your own organization.

My first thought was that there must be a lot of consulting dollars to be made in guiding the firms through these changes.  But before I could start knocking on the doors of these firms and offering myself up as a consultant, a second, more philosophical took hold; what would happen if we did away with the practice of “lockstep” or “tenure-based pay” in other industries? 

Education - Do you think the American public school system would be in the disarray that it currently is if there was a performance based pay program?  What if teacher and administrator pay was contingent on the progress that students made throughout the year? A USA Today report on pay-for-performance in schools noted that the pay for performance has been a topic in education since the 1950s, but lost momentum due to teachers “not buying into the idea.”

Some cities like Chicago and Central Falls, RI, have gone to the end of the spectrum, eliminating tenure all together and making employment contingent on performance.

Healthcare - If you have had the pleasure of going to the emergency room recently as I did, I am relatively confident that you were lucky enough to experience a long wait in the lobby followed by a long wait in the exam room.  Once your wait was over you might have even have the pleasure of being the subject of an increased level of testing that may or may not be necessary (it really all depends on your insurance coverage).  Last year during the heat of the healthcare-reform debate, the Wall Street Journal reported on the push for physicians to move to pay for performance.

If you're thinking that pay for performance may not neatly apply in these fields, take a minute to examine the reciprocal point. Shouldn’t high-performing professionals receive a wage that is higher than their low-performing colleagues? 

Comments

[Larry]

If pay for performance was more universal, would that make it easier to file a lawsuit for age discrimination when someone is laid off which they believe is due to age.