Q: My company is looking to improve accountability for self-employed agents. What is the best way to set up accountability for independent contractors?
Adam Kruse, Realtor
Hermann London Group
A: Accountability includes being held liable for outcomes, not just being responsible for completing a task. Independent agents are responsible for more than making sales quotas. Contractors are essentially fiduciaries to organizations that must manage the assets as if they own those assets. Gifford Pinchot III in 1984 called this "intrapreneurship," where the person takes on the risks and rewards for their actions, much like entrepreneurs. While entrepreneurs are accountable to themselves, contractors are accountable to an organization.
Organizational structure can help or hinder the outcomes contractors' desire based on the access they have to information, authority, rewards and kinetic returns that advance their personal agendas. While functional employees put their stake in the well-being of the organization's success, the contractor is looking for more temporal and highly tangible returns for their personal professional outcome. Traditional functional structures place the accountability on the functional manager, who shares responsibility with the contractor, but the returns for being accountable usually do not flow to the contractor outside of a paycheck.
A more project-centered structure can move more of the accountability to the contractor. Not only can the contractor be more accountable for the outcome, but so can the functional employees. In this structure, dependency is placed on all practitioners to produce. If they cannot function well, they could receive a negative consequence, from remedial training to dismissal. Productivity and collaboration can be assessed quickly against the organization's objectives with clear rewards spelled out. The key element is to know what motivates the contractor. Clearly, combinations of any of these strategies might be desired, drive incentives and produce effective accountability.
Each contractor must be held accountable for their performance to the agreed upon outcomes, and the organization must act proactively to help develop their capabilities and responsibilities.
Ernest Owens is an assistant professor of management at the University of St. Thomas Opus College of Business.
