Employees deliver, upper management doesn’t. Why does management make unilateral decisions to reduce compensation not only for future work, but for work that has already been performed?
|Jon M. Quigley PMP||Kim H. Pries|
“People are our greatest resource.”
“People are our greatest asset.”
This is what many organizations espouse every day. However, these words often don’t match the actions of an organization toward its employees. If you consider a person as a consumable item, then perhaps this perspective is valid.
One company we know, for example, provides a pamphlet describing how they value their employees. This book describes how the company should treat the employees and how the employees should treat each other.
Even during good times we find this dialogue to be suspect. During the down times, the discrepancy from the words “people are our greatest asset” to a company’s actual behavior increases.
It should be obvious that some connection between morale and performance exists. Given the disparity between words and deeds, you can not help but wonder if nearly every motivational issue that an organization may have is self-inflicted.
It is easy to see how these motivational issues can arise and how newspaper and magazine comics such as Scott Adams’s Dilbert are popular. Dilbert is used as the mouth piece of an organized office where employees' skills and efforts are not rewarded. The cartoon appears in 2,500 newspapers in 65 countries and 19 languages, with more than 150 million readers(1).
Many people put the strips near and dear to their hearts on their cubical walls where they can see the comic everyday in their job. Some interpret Dilbert as a reflection of the actions in their workplace—“one where employees’ skill and efforts are not rewarded.”
From the perspective of “employees are our greatest resources,” it seems unlikely that this cartoon represents reality. The scenarios painted in these simple frames are ridiculous, especially for an organization that values their employees.
The movie Office Space is another improbable situation considering “employees are our greatest resource.” It is arguable that the movie does not show an organization treating its employees in the manner consistent with “employees are our greatest resource.”
Is it possible that our employees believe this movie is a valid representation of cubical life? Do the employees believe that Dilbert and Office Space are testaments of life under the organization and its management?
So what is the source of this discontinuity between the rhetoric of an organization and the actions of that same organization? Why are things this way? Every time we hear a comment “our employees are like a family to me” spoken by a chairman of the board or CEO, we cover our behinds with one hand and lay the other one over our wallet. We know the next official act of the company will be to start ‘losing’ family members or removal of family privileges.
So let us look at a few scenarios where what an organization sings the praises of their employees and the organization’s actions present a stronger argument that our employees are a necessary evil.
Dictionary.com defines commitment as “a pledge or promise; obligation: We have made a commitment to pay our bills on time.(2)”
The true measure is the ability to honor your commitments when things are difficult. It is easy to keep your commitment when there is little friction or cost for doing so.
Let us consider the organization that asks their employees to deliver on their commitments. At a specific company, upper management spreads these slogans in meetings with the managers and the employees to make sure the organization’s projects are delivered on time and at the quality the customer desires. These requirements are a fitting thing for management to request of its employees.
Now let us consider this request in light of some other actions this organization takes to meet the management commitments. The story starts four years earlier with intellectual property provided to this company.
The patent process is slow. The remuneration policy in place at the time of ceding the intellectual property provided the individuals generating them with a bonus for this work. Four years later, the patent finally found its way through the process and has a number at the US Patent Office. Now comes the employees much anticipated reward.
Is it based upon the compensation package at the signing? No. The compensation is not the agreed upon dollar amount at the ceding of the intellectual property—it is a fraction thereof.
Management made unilateral decision to reduce this compensation, not only for future work, but for those that had already performed the work and were waiting for resolution at the patent office. When asked the logic behind this treatment, the human resources departmental response was “the company reserves the rights to change any policy at any time. This was a policy change that we are making retroactive.”
Even the U.S. Constitution forbids ex post facto laws. When the questioning of the policy continued, the human resource representative “take away” was the policy change had not been “communicated properly.” Generally, the company will have deeper pockets than the employee, so the courtroom is not an option.
What does this say to the employee? Are only some commitments to be honored? Why is it important for the employee to follow through on commitments and not the organization? What constitutes commitment if a signed document is not a commitment?
If the organization can change their commitment—after the fact—it should be possible for the employee to change their commitment. The employee might say “yeah I know I said I would have that completed in two weeks, but, well I think it is going to take more like twelve weeks”—for no particular reason. Worse than that, the decision was short-sighted at best. The company not only mistreats the employee but also promotes a self-defeating behavior.
Low Merits In Boom Times So We Can Give You Merits During Bust Times
Things are not always bad, economically. Sometimes businesses make a profit—or most times they had better make a profit or they will not likely remain in business for long.
We know about a company that provides its employees with (almost) Cost Of Living Adjustments—although they call this a merit increase. When the department questioned why “merits” were so low, the response from the human resource staff—“we give you small increments during the times we are making money, so we can give you small increments when we are less profitable.”
When less profitable times show up—the “merits” are conspicuously missing, in direct opposition to the human resource response. This situation continues for two years. Consider also those human resources departments that have also been known to spout “that you are not here for the money.” At the same time, the company announces an increase in the executive bonus compensation from and already exorbitant 50 percent to 65 percent. We suspect that this was, in fact, a “no merit” increase, since the increase was clearly without merit.
What is the lesson for the employee here?—“You are here and we, your leadership, can do what we want, how we want, when we want. You are lucky (be thankful) you have a job.”
The benefit to the employee of working diligently for the company is to watch their real earning power reduced or, at best, remain the same year after year—even in the years when the company boasts about the money it makes.
The poor times will be pushed down to the employee. Yet the organization wonders why its employees have low motivation, must work night jobs, leave promptly after eight hours of work, or as a friend of ours says—have a WBB (Work-Based Business).
When companies “brag” about their profitability and do not share this benefit with the employees, what is the impact upon those employees? Some of these employees will leave your company, and these will likely be the most skilled and capable people in your company—they leave because they can leave. Others find second jobs, diffusing their efforts to keep pace with the inflation or their desired financial goals.
What is the lesson in this instance—or at least a reasonable inference? How is it possible to derive “people are our greatest resource” from actions such as these?
Be Thankful, No Matter What
We say “employees are our greatest resource.” However, do we really treat employees like they are our greatest resource?
Believe it or not, an organization’s successes are derived from the creativity, intellect, work ethic, energy and enthusiasm of the employees. There are plenty of examples of the disparity between an organization’s rhetoric and their behavior.
The actions win out every time over the drivel; the words will not matter in the face of a disparity between the two. If you want and need commitment from your employees to deliver, for example, then you had better “walk the walk”—the words alone are barren. It may seem that unilateral decisions made by the top of the organization that have an impact on the employees do not have any repercussions.
Unintended consequences happen all of the time and are the result of lack of attention to the details and consideration of future impacts.
An organization that expects the employee to be beholden to the company is not showing the sort of sentiment consistent with “people are our greatest resource.”
“Be thankful you have a job”—no matter how we treat you. No merit increases when the company makes big money—be thankful you have a job. It is more consistent to say “I am glad you are here”—thank you and then share the wealth of the company when it happens.
People that enjoy their work are happy with their company and feel like partners in the company will give more commitment to that company. To be sure there are some things other than money that motivate a person to produce their best effort.
It is equally true that employees work for a living. Taking money out of the employees pocket or changing the compensation after the fact can not be “communicated away.” That should not be your take away human resources department.
When words collide with an opposite action, the words will always lose.
Kim H. Pries, APICS CPIM and, as a senior member of ASQ, the CQA, CQE, CSSBB, CRE, CSQE, CMQ/OE certifications. Kim is a principal with Value Transformation, LLC, a product development training and cost improvement organization. During his career in manufacturing, he has been responsible for all test and evaluation activities including a hardware laboratory, instrument calibration, hardware-in-the-loop software testing, and automated production test equipment and, at other times, managing a software development team, the plant ISO organization, printed circuit board design, and engineering services. Jon M. Quigley PMP is also a principal of Value Transformation.. He is a founding faculty member of Practical Project Management. Jon has twenty years of product development experience, ranging from embedded hardware and software through verification and project management.