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Are Contract Employees More Productive

Saturday, January 14, 2012 by Slaughter Development

Employee productivity is always a hot topic. But is there a relationship between employee productivity and their status as a contractor?

That’s the topic our own Robby Slaughter covered in a recent guest post for MaverickPR. The piece is titled “Are Contract Employees More Productive?” From the article:

On the one hand, contractors and employees couldn’t be more different. They are classified differently under tax laws. Contractors are typically exempt from benefits, and employees typically have a higher status in the organization. Contractors tend to get called in to work on a particular project until it’s done, but employees are hired on a permanent basis.

On the other hand, every job is a contract job. When you’re a full time employee, you work under an employment contract. This might be an implied contract or a written job description. It might be a verbal understanding that gets reiterated in periodic reviews. In the case of a sales role, your work contract might be your commission structure. In essence, the contract is: work and you get paid, don’t work and you need to get out.

We’ve covered similar topics before here on The Methodology Blog. As we’ve noted, the most importance connection is between employee productivity and freedom. In this sense, traditional employees might be lagging slightly behind. As Slaughter concludes:

In summary, we can’t say conclusively that contractors are more productive than salaried employees. But we can say that contracts themselves—written descriptions of work, expectations and compensations—are the foundation of productivity.

Talk to your accountant about how to pay people to help you do work. But no matter what the tax code says, develop clear expectations and provide employees with autonomy. The secret to maximizing employee productivity is often getting out of the way. Whether your team members are part-time, full-time or provided through an employment agency, the best management technique is to ensure you are not micromanaging.

Work collaboratively to define a contract for the results you need. Then let people find their way and shine on their own.

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Like this post? Here are some related entries from The Methodology Blog you might enjoy:

Effects of Micromanagement On Employees - Being productive as an employee isn’t just about getting work done. It’s about performing assigned tasks thoroughly, efficiently and in a quality manner—whether people are watching or not. Read on »
What It Means To Be Productive - There’s an old adage that suggests “the cobbler’s children have no shoes.” As a productivity expert however, I don’t think this saying is acceptable. I make it a point to get a tremendous amount of work accomplished in a given day.
Read on »
14 Tips to Motivate Employees - A recent article lists “14 Management Do’s and Don’ts to Motivate Employees.” Yet, unlike many opinion pieces on this topic, every one of the suggestions is fantastic advice.
Read on »
Want to learn more? Register now for the 2012 Productivity Series

4 Responses to “Are Contract Employees More Productive”

  1. Pete DiSantis Says:

    I agree, expectations for the employee and contractor need to be defined very well. And, there needs to be a bit more. There needs to be a feedback loop.

    Are the expectations being met? How do you know?

    You do not want to micro manage, yet you do need to manage. Milestones and planned periodic goals and reviews will keep the project on pace and on target.


  2. Robby Slaughter Says:

    Thanks for the comment, Pete!

    You’re right that periodically, the expectations must be revisited. The challenge is often that expectations were set (wrong) in the first place, and no one ever looks at them again!

  3. Bryan Hart Says:

    I much prefer the contractor model for both “employee” and employer.

    The employer has the ability to hire a person for a very specific job that, if organized and established properly, will have very specific boundaries. It is a more fluid and adaptable exchange because the contractor understands that he or she is only on board temporarily. The difficulty of “entitlement” is much less likely to be introduced because of this as well.

    For the contractor, it can be like having 5, 10 or 100 employers. It is “risky” to not have the established full-time position, but it is much less risky to have the ability to be hired by such a variety of businesses.

    In my opinion: with the right boundaries and clearly defined expectations, the contractor has more motivation to make the job count on a continual basis.

  4. Robby Slaughter Says:

    Thanks Bryan! You make some great points.

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