Re: Pay for Knowledge Schemes LO263

Mon, 27 Feb 95 08:53:14 PST

Replying to LO230 --

First, I think you'd have better luck with this question on one of the
HRD lists. But here's one answer, not very positive.

We use something like this here at San Onofre Nuclear Generating
Station. We have a "Nuclear Journeyman Bonus" for union employees who
work here and maintain a certain qualification. The basis is that the
people who work here are responsible to know and comply with a broad
spectrum of federal and state regulations which are peculiar to
nuclear power plants. This bonus is a reward for this added
responsibility. It is purely knowledge-based, they get periodic
training and must pass a written exam every two years (a few crafts
also include a skills test but this is a bastardization of the
program). The exam topics include Fundamentals of Quality Assurance,
Controlling Changes to Plant Equipment and Procedures, and other
similar esoteric topics. It does not include radiation or safety,
which are mandatory topics for all employees.

My experience with this (as steward of the program for the last two
years) is that, like any other management tool, it can be the best or
worst thing you've ever come across. It was very difficult to get the
union to accept this in the first place, the majority of the union
membership is coal miners and they are none too excited about special
deals for nuclear operators. At some point management ceased caring
about the program and it became just one more of those rituals we
forced people to go through. Lately we have totally revamped the
program to make it an effective way to communicate with our people on
these important points, and make it really clear that the reward is
not just a given for "braving" the "threats" of radiation exposure
(most assuredly this was never the point, but some of the craft
workers were led to believe so) but rather a just compensation for
maintaining a level of knowledge above and beyond what one would
normally expect for a journeyman electrician, machinist, ironworker,
or what have you.

Of course there are some problems, such as the fact that a health
physics technician gets the bonus, when there is no equivalent
position outside of the nuclear business, so there is nothing special
about a HP tech having all this knowledge. As I've said, the program
languished for years, we've only recently kick-started it back into
life and it takes a bit of time to work all the bugs out, especially
when that involves give and take with the union.

Personally I think it is most often more trouble than it is worth, but
perhaps this is biased, because I'm the poor soul who has to teach all
this stuff. From that point of view, however, it holds one huge
advantage -- trainees are always motivated to pass those classes,
probably more so than any class I ever teach. You see the bonus is
rather significant, a 9% bonus applied to all earnings, including
overtime, and is directly linked to their passing that class. And I
must admit, some of the topics are pretty esoteric, and without the
financial incentive it would probably be pretty hard for the training
people to maintain the level of knowledge. In the above example of a
HP tech, the bonus was used like a carrot to get people to qualify.
Nowadays if people are so scared of losing their jobs we don't need a
lot of carrots.

We would never create this system today. It was born at a time when we
had money to throw at every problem. If your company seems to be in
this position, then you might enjoy such a program for a while. But
think about a few things:
- will you always have this much money? If not, how much worse do you
think it will be when you have to tell your people that this program
is ending?
- are you going to offer all people the same opportunity to earn this
reward? If not, get set for big legal squabbles. And lots of hurt
- what are your real goals? How much is that knowledge really worth?
Why is some knowledge worth something, and other knowledge not? What
are the alternatives?
- if you go with such a system, keep it as simple as possible. Realize
that whenever possible some will try to beat the system, no matter how
foolproof you make it. Accept that fact, the costs of trying to make a
perfect system are way too high. Keep it as simple as possible,
especially in terms of administrative costs. The bonus paid should be
closely related to the value of the knowledge you're gaining (hence
the above question is important to answer). Don't be too miserly if
this is really important, but don't throw away your profits, either,
because the employees know as well as you do how much it's worth and
they can smell poor management like a dead skunk.

Sean Gawne
Southern California Edison

______________________________ Reply Separator _________________________________
Subject: Pay for Knowledge Schemes LO230
Author: at internet
Date: 2/24/95 1:37 PM

A consultant friend of mine is attempting to design a "pay for
knowledge" scheme for a manufacturing organization with a union
work force. Here's what he means by pay for knowledge:

fax 604 660 5814
ph 604 660 5903

Tim J. Sullivan
Ministry of Health