Employee Contracts


Six years for $120.6 million. I mean, don’t you remember that at the end of the 2012 REGULAR season the local Baltimore media were discussing how Joe Flacco needed to be traded? How they backed into the playoffs and certainly were no Superbowl contender? Well, then they won the Superbowl and you forgot that Joe actually turned down a contract extension after the 2011 season because he believed that he was worth more. I would say that decision paid off as he became footballs’ all-time highest paid player at the time of the 2012 contract. We can debate all day whether he is worth that kind of money, but at least you had years of performance and information to base your hiring decision on and it ends in 2018, good or bad.
Now let’s go to the workplace. You don’t exactly have 26 years of film and scouting to watch and scour through before you make an offer to a potential employee. You don’t have anything even close to that. You have a series of interviews and maybe a day of experience on the job. And that is about as good as it gets. How meticulous can a handful of long discussions really be? There is such a thing as ‘professional interviewers’ and what about people who aren’t good at interviews but are great employees? Even as scrupulous as we may think any hiring process may be, it’s still just a shot in the dark.

To make matters even worse, not only are you hiring someone to a contract with substantially less information to base the decision off of, but you are making a permanent decision as opposed to one with an expiration date. “Oh, I liked the conversation that we had over this past hour; I’m now going to offer you a contract that never expires. I mean, talk about thin slicing! That doesn’t even sound right. Versus in the sports world, “Oh I’ve watched all the film from every play that you have ever had and based on all of that information (and these tedious interviews) I’m going to offer you a very limited contract. Why are the two so far apart? It doesn’t make sense that in the sports world you sign people to limited contracts with an abundance of information and in the working world, you sign lifetime contracts with little or no information. So let me tell you why we should evolve to contracts in the workplace.

I’m sure that some of you are now worried about your job security and will cry about how this isn’t fair. Slow down, remember that most of us are very mediocre and thus, this will lead to the majority of employee contracts being lumped into the same bulk categories. This is probably 95% of the population; yes unfortunately, most of us are very average. There will be a contract that fits everyone. Who this WILL benefit is the remaining 5% of the population. The 2.5% that are great will now have a motivation to become better, and the 2.5% of people that are less than average will now have an easy walk out the door when your contract expires! Sorry, but I think we have all experienced a situation when someone around us is bringing down the rest of the team. That person is making everyone else worse, and in today’s age of lawsuits, it’s next to impossible to get rid of them without risking some type of repercussion. This makes it easy and maybe it will motivate that person to make them self better.

“Listen Mr./Mrs. Employee, your contact expires after this year and we are not interested in resigning you at this time. In fact, we would like to offer you a 25% buyout of next years’ expected salary if you discontinue working here immediately.” BAM! I think the fear of having that conversation might leave enough of a lasting impression on your underperforming employees to improve work ethic. Just maybe..

Alright, now let’s tie all of this into a knot. Your good employees are now working harder because they have a new motivation to do so… their next contract. Your bad employees are motivated to work harder for the same reason, and they aren’t as difficult to get rid of if they don’t. We are eliminating complacency! This sounds phenomenal for all business owners, managers, and top performing employees! The only people disagreeing are those living fear based lives… have I talked about why you shouldn’t live your life making fear-based decisions…?