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While piecework payment systems can go far toward boosting productivity, too many CEO's have seen them lower
quality at the same time. Does that mean that piecework has to go?
Walter Riley, CEO of G.O.D Inc., a Kearny, N.J., overnight express freight service, doesn't think so. Riley,
whose business depends on speed, has kept his piecework program, but he has added incentives that specifically encourage quality.
Four years ago, Riley took his freight dock loaders off hourly wage scales and paid them for each shipment handled.
Freight loss and breakage become epidemic. "All of a sudden, there were problems all over the place. This system just sped them up.
The dock loaders thought, 'If there are mistakes, there are mistakes."' So Riley changed the system: on top of the shipment rate, freight loaders get
weekly bonuses of 25% of their total week's earning if all shipments go through with no breakage, misloading or short cartons. For a dock worker
earning $600 per week, that means an additional $150. Some 85% of dock workers meet the weekly bonus requirements. Plus. dock loaders now
double as critical quality checks throughout the whole freight-hauling operation, improving companywide productivity as well.
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