IdentityIQ (IIQ), a private limited company, designs custom software packages for public sector organizations. Shaina Ortiz is the sole shareholder, though she is considering an employee share ownership scheme.

For years, IIQ managed its employees closely, setting individual targets for performance and requiring regular progress reports. Following Adams’s equity theory, IIQ tied financial rewards to frequently measured performance outcomes. Though managers clearly explained to individual employees how additional financial rewards were linked to specific contributions they made, many employees still felt the system was unfair.

After reading Daniel Pink’s theory of motivation, Shaina reconsidered her management style and IIQ’s system of financial rewards. She liked when Pink reported that a major American company allowed employees to work 20 % of their time on projects of their choice. Shaina implemented the following three changes:

• Change 1: Adopting a project-based organizational structure for IIQ projects.
• Change 2: Eliminating performance-related pay (PRP).
• Change 3: Allowing employees to spend 20 % of their time on any project they wish, either one of IIQ’s or their own “dream project”.

Employees’ reactions were mixed. Some employees were thrilled. They had many ideas of their own that they wanted to explore. Other employees, however, did not like the change. In the 20 % of their time given to any project they wished, they chose to work on projects given to them by IIQ. They felt it was unfair. Although they were advancing important projects of the company, they would no longer get performance-related pay (PRP), while others spent their time on projects that might not contribute to IIQ’s profitability.