Failure Allowance

There are many cool benefits that many tech companies provide these days. Benefits like performance bonuses, medical insurance, free lunch, free transport etc. are the norm now.

But I think companies tend to ignore an important benefit which I’d like to call “Failure Allowance”.

Failure Allowance is kind of an individual performance based bonus that the company should provide, but this is not financial!

Here’s the deal…

Most companies will have employees who pro-actively seek to add value to the organization by trying out new things and coming up with crazy ideas. Such employees should be allocated higher amounts of failure allowance.

In contrast, I think passive employees who are more inclined towards “just” finishing their assigned tasks for the day should be allocated a lower failure allowance.

New employees should be allocated a certain base amount of failure allowance but the allowance grows based on the employee’s extra pro-active attempts to add value to the organization.

So what does failure allowance look like? Simple, when a pro-active employee tries something out and for some reason it turns out to be a bad idea perhaps with some negative result he or she should be encouraged and acknowledged instead of being “convicted of the crime” :). Obviously a lesson will always be learnt but in this case the employee’s pro-active spirit is not broken.

For example, a software developer might try out some cool new technology and implement what seems to be a useful feature but may later find out it’s causing some serious performance problems in the product. Similarly a manager might want to try out a new HR technique to improve communication between employees but in fact it causes a bigger communication breakdown than before. In both these instances the employee wanted to make things better for the company.

Failure allowance is more of a heuristic that managers should come up with based on feeling, since it’s hard to quantify an employee’s value adding pro-activity. But it shouldn’t be too hard to figure out the relative amount of failure allowance each employee deserves.

I also believe that non-management staff should also have some sort of failure allowance allocated to their peers and managers. The important thing to note here is that failure allowance is not explicitly allocated or documented anywhere it’s only used when the need arises by managers and even non-management staff.


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