Many businesses pay workers just to show up

Can you show up to work on time?

That may be all it takes. Though times are trying, many small-business owners admit they're paying employees just to show up and not much more.

According to a recent telephone survey of 1,000 randomly selected U.S. small businesses with revenues between $1 million and $200 million, 41 percent said their workers are paid for their attendance rather than their performance. Of those surveyed, 45 percent said their employees don't have any daily, specific or measurable goals.

Meanwhile, 45 percent said the employees don't contribute directly to the bottom line.

"Too many small businesses still reward employees for just showing up, for being a warm body every day," said Paul Rauseo, managing director of George S. May International, a consulting firm that conducted the survey. "You're setting the stage to destroy profits when employees expect compensation for participation in collaborative activities, regardless of results."

Pay-for-performance doesn't guarantee profitability, but it has advantages in a down economy, Rauseo said.