The Origin Of Policies

I was once told by someone in the auto industry that, if you want to know the why behind some feature of the car, just say "It's cheaper" and 99% of the time you'd be correct. Think about that in relationship to the policies in your workplace and you'll notice that the same applies. "It's cheaper!"

Management is almost always about doing things easier, or at doing the least amount of work. If a manager has to dig through the numbers to find out real costs, he will most likely not do the work. For example, and in engineering we see this a lot, we can do a lot of calculations in Excel. However, many times we need something like Matlab which will yield better results faster. In most companies, everyone gets/has Excel. Matlab costs $1200. This is an easy decision for a manager. He says no to the expenditure, because they're getting by with Excel. He makes no effort to discover how much time is wasted using Excel over the course of a year or two. That would require work.

For example, at my current workplace, they made a grand effort to get people to turn off their computers at night, rather than let them run. At the end of the year, they trumpeted how they had 'saved' over $100,000 on their electric bill. We set about and did a quick calculation as to how much time is wasted waiting for the computer to boot & be usable. Given the number of employees & an average salary, we calculated that, in productive time, roughly it cost the company about $2 million waiting for the computer (over the course of a year). Notice how the easy, obvious stat is grasped onto without any thought as to the hidden costs.

Note that with this calculation we did not screen out those functions that don't really accomplish anything even if the computer was up (like HR, Finance, Contracts, etc). So the number might be lower.

Now consider something we encounter everywhere--Labor grades. Have you ever sat down to understand why we have labor grades at all? Here is a system that takes a few people to maintain and the benefit it gives is....??? The only justification I can perceive is that it sets a structure on what job deserves what pay. But that's a moot point in the days of Internet and surveys. If I want a specific type of engineer, I can consult all the job sites on the net and get a good idea, for the job and the location, of what that engineer will cost me. Then with that as a guideline, I can interview people and then negotiate a pay rate. As you notice, the labor grade does not enter into this at all.

What labor grades are designed to do, is to artificially limit the amount of money they pay an employee. Most labor grades have a maximum range, when you hit that, well, sorry you can't get a raise unless we promote you. The more devious way is to begin to limit the max raise as the person gets up in the range. It saves money!!! At my current job, my raise was reduced by 25% because I was at 65% of my labor grade range.

Then again, why would you want to limit the pay a person could get except for the fact of 'saving money'? The plain fact is, that if you have someone doing excellent work, you should 1) Want to retain them and 2)Pay them enough so that they don't want to leave.

I believe that this sort of reasoning is foreign to those in management. But this will lead us onto the change from Personnel to Human Resources and what that change really meant, other than a name change. Next time.