Cheat Your Employees --- It's Good Business!

I’ve noticed recently that there are several unique management seminars being offered.  Now seminars and webinars are not really unusual.  The unusual part about management seminars is their cost.  They are generally expensive.  There is a good reason for this:  The people who give these seminars have to get as much money as possible up front because most of these seminars are useless and they’ll never get repeat business!

By ‘useless’ I mean that most management seminars are either exotic theories akin to perpetual motion or free energy, or they present just common sense like ‘treat your employees right and they won’t leave’.   Which brings me right to the unique seminars.  These new seminars focus on retaining your best employees.  To me, this is common sense.  You treat them like human beings, not like human resources.  Most of all, you treat them fairly and with respect.  This is extremely difficult for businesses to do.

It is extremely difficult for the top management of any company to think of employees as people and not as resources.  This fallacy contributes mightily to a loss of productivity.  If you think of an employee as no more than a desk or chair, that is the productivity you will get.  Logically it is pretty stupid to expect extraordinary effort from a worker who knows that no matter what he accomplishes, he won’t get any credit, respect or reward.  In general, it isn’t all about money.  In fact, when workers complain about pay increases or monetary rewards, that is usually evidence of a more deep-seated management problem.  When workers feel appreciated and that the company is looking out for them, then money fades as a problem.  However, when the company takes every opportunity to increase their profits by reducing 'employee' expenses, then worker loyalty declines.

General George S. Patton put it succinctly:  “Much is made of loyalty from the bottom to the top.  However, loyalty from the top to the bottom is much more important and much less prevalent.”

When management ceases being leaders and become accountants, the company’s fortunes decline.  With the general low intelligence of management, they don’t recognize what they’ve done wrong, but become bull-headed and do more of the same.    

Since I’ve been a considerable amount of time with two different companies in two different markets, I have seen the same stupid management tricks.  For example, when the job market gets tight and it’s hard to find jobs, every company I’ve been with has cut employee benefits.  It’s almost like clockwork.  As soon as the employment market is down, the company begins to cheat its employees.  

In contrast, I have never seen a company come out and cut management bonuses to save money.  I’ve been at some companies where they announced that, but you find out later that they never did or intended too.  My guess is that they thought their employees were stupid.

While at that major medical manufacturer, there was an incident that demonstrated the duplicity of management.  This particular year, sales were down.  The company usually netted a half billion dollars in sales, and their usual ‘big’ sales month was September.  Because they usually raised prices in October.  This particular year, even after September, sales were down by 90 million dollars.  This is an almost 20% decline in sales year over year.  That September I was in the bank that was just down the street and I overheard a teller and a manager talking saying how they had trouble cashing the bonus check of the vice president of sales.  They actually mentioned him by name.  From the implication, they had trouble coming up with enough cash.  I was stunned.  Here sales were down by 20% and the vice president of sales, whose job it was to get sales in the door, was getting a bonus check.  You would bet that if it had been a bonus for the employees, they would have yanked it immediately.

That same company, the second year I was there, cut employee benefits.  During the presentation of the new benefits plan, the presenter kept saying how this was a considerable improvement in the benefit plan.  The problem was that everything that was a considerable improvement was a cut in benefits.  Finally I got it. It wasn’t an improvement for me, but for the company.

The plain fact is that managers cheat employees because they believe they are doing the best for the company.  This distortion of mind makes it easy to rationalize making employees pay more for health insurance, because they are lucky to have a job in this economy.

The plain fact is that management, even the president, CEO or whatever they call themselves, are supposed to be part of a functioning entity.  They are people (or human resources) that have a job to do to make the company successful.  Once they begin to think of themselves as feudal lords guarding their divine rights, the company falters.  As soon as management begins to think of themselves as more than just a common worker, things go wrong.  This is also the behavior that causes workers to create unions.  This is a whole another subject.

Another area where management works earnestly to cheat their employees is the yearly review process.  We’ll take that up in another blog entry.