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Coming Full Circle: The Journey BACK to Outcome-Based Working

According to PwC, 40% of global CEOs believe their business will no longer be economically viable in a decade, if it continues on its current course. Leaders across all kinds of sectors – tech, telecommunications, healthcare, manufacturing – share these fears. It’s a terrifying thought, isn’t it? That the people holding the keys to major organisations are hedging their bets on expiration, with no recourse to change. Something has to give. Outcome-based working offers a solution – not to all modern-day problems with work, but a hefty majority of them.  

For all the chatter about the future of work, too many have centred on toothless initiatives that hammer old problems into new shapes. Too few have centred on outcome-based work. Research has shown that working to outcome – rather than being present for a set number of hours, in a specific place – increases productivity, boosts value for money and creates agility in fixed business costs, not to mention growing employee morale and flexibility.

But – and it’s a huge but – this model stands in opposition to our current work culture. It’s the chalk to its cheese and there’s a hesitancy to leap in, particularly in today’s economic climate. How can you be sure it works? Where should you look for examples of best practice? To look forward, sometimes we have to look back.

Once upon a time, working to outcome was the rule, not the exception…

…several hundred years before the industrial revolution – let’s call it the pre capitalist era – people were employed to perform a task and paid on completion. Often, workers were paid both in cash and “in-kind”, usually in grain, but sometimes in accommodation, food, clothing or even tools. Labourers had the right to take breaks for meals, possibly a nap, AND a few refreshment breaks, often when it suited them. They rarely worked an eight hour day.

In medieval England, for example, one day’s work by a serf for a lord was actually considered half a day. Calendars were choc-a-block with holidays – not just the usual ones we know now, but numerous saints days and feast days. In fact, holidays took up a third of the year in England, which was on the lighter side compared to our continental European neighbours. Women were also an essential part of the workforce and because of outcome-based work, they were able to to hold down a family farm, juggle a second job on another farm, or a business on top of their agrarian responsibilities.

It was by no means a utopia, but even as new forms of work arose, largely, the payment on results remained. Up until right before the Industrial Revolution, workshops meant workers had autonomy around their work time, entered and left the workshop at their leisure, and spent the day surrounded by family, doing what they had to do and downing tools when the task was finished.  

Okay, so it wasn’t all sunshine and rainbows…

…there were major pitfalls. Workers might never know where the next job was coming from, their in-kind pay could have been a sham, and factors out of their control stopped them from delivering the work or goods (weather, raids, sickness, the Plague…) Clients could refuse to pay, forcing workers to put in extra hours perfecting or redoing the work, with no way of claiming overtime, or seeking advice on how to do so. It was a white-knuckle ride – even with all that delicious leisure time. 

If we were to return to the historical status quo, businesses and employees would be protected and safeguarded from all of this. Since the late 1800s, when outcome-based working was mainstream, a LOT has changed. Countless worker protection laws have been put in place – minimum wage, workplace safety regulations, unemployment benefits, family leave, and employment-based discrimination frameworks. Trade unions have worked tirelessly to give employees a voice, so they can negotiate day-to-day factors like wages and working conditions. 

But then the Industrial Revolution dawned…

…and how we work changed forever. With new manufacturing technologies, like the steam engine, products were no longer made solely by hand, but by machines, leading to increased production and efficiency, lower prices, more goods, and migration from rural areas to urban areas. But one of the greatest shifts, and one that still shapes how we work today, was the move away from measuring work by task, and toward measuring by time. Outcomes were no longer the way to measure what workers produced – instead it was the hours they toiled.

This was notable in every aspect of factory life. Using a mechanical device, time and date was stamped on a card carried by each worker, and the time clock became the gatekeeper to the factory. Through regular inspections, any employee who punched in late or not at all faced a fine. As a measurable resource, time became an obsession and maximising output the norm. Working hours were long – often 12 to 16 hours a day, six days a week – and extremely low wages were common. 

Another major change compounding the death of outcome-based working came in the mid 20th century – pay-as-you-earn-tax (PAYE). Replacing the annual and half-yearly tax collections, it saw the deduction of income tax and national insurance at source to fund public services. Introduced into the UK in 1944, it actually began so the Treasury could finance WW2, while keeping control of inflation. Of course, it stuck around. 

Can a return to outcome-based work fix this mess?

In the 21st century, work predominantly happened in a 9-5 model, five days a week, with minimal flexibility, both in hours and place of work. Mothers and sometimes grandparents were typically the only demographics who could wager flexibility, but even that was hard-won and strictly regulated.

Then the pandemic delivered a wrecking ball to modern-day working patterns. It proved that workers could be autonomous and do all of what was required of them – and that businesses could deliver the same output, with fewer overheads (bye bye office lease!) Understandably, lockdowns fuelled the flexible working revolution, as workers realised they could deliver the same results, with greater flexibility. They appreciated such freedom. It was exactly the evidence needed to pave the way for more widespread outcome-based work.

Despite employees’ efforts to expand and safeguard flexible working, employers are clinging to old ways, claiming that there’s simply no other way. Some are even doubling down on arbitrary, broken measures of productivity (case in point: surveillance software and mouse tracking…) But the fact is, outcome-based work isn’t some newfangled concept of the future. It was how work began – and we can get back there. Rather than racing toward economic viability, businesses can embrace change, in the certainty that this works – for everyone. A paradigm shift is needed – otherwise it really is a race to the bottom.

Keep an eye out for the next installment of this series here.

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