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bastomatic wrote: The idea that more money brings better performance is ludicrous, and offensive. The same argument is unacceptable when applied to "blue collar" work, like teachers, police, nurses, so why is it applicable to those who already make fortunes like administrators, executives, and other elite positions?
Why is the same argument unacceptable when applied to the workers you mention?
btw.. has anybody here read "the Jungle" by Sinclair? I keep seeing similarities from that book to todays modern society
bastomatic wrote:One of the biggest real problems is that administrative/CEO pay is not directly tied to company performance. If the management has no real incentive to not fail, then failure is an acceptable and lucrative option.
That's been going on for a LOOOONG time. My opinion is that it happened here pretty early, with Jac. His #1 goal was to increase shareholder value. Not make a lot of money making cars people want. But making shareholders happy.
When he stated that, Ford was at about 30 or so.
When he was let go, Ford was at about 4.
So not only didn't he succeed, he failed very, very impressively. And that's just his stated goal, regardless of the condition of the company.
And he was paid quite nicely to leave. IIRC, it was something around $4M just about a decade ago. So for jac, failure was very profitable.
I personally don't buy the "pay the executives what they need" argument, especially when they have to go into bankrupcy. The need of that tells me that they are not capable of running the company. A common "excuse" is that the labor costs are too high, and to blame the Union. Which is another way of saying that they are not capable of negotiating with the Union. So they can't run the company, and they can't negotiate with the Union. Why do they deserve any salary?? Shouldn't they be fired?
(note- if you can't figure why Unions are asking for more money, all they are doing is looking at the top end of the company, and seeing that in good times, they get paid well while the line workers don't. While it's great to get a 5% bonus, it pales in comparison with the 100% bonuses + stock options.)
I feel that there will come a time in the not too distant future, where some CEO somewhere will be held personally responsible by some down and out hourly that was let go due to "downsizing as a result of tough economic times", despite that CEO getting ZOMFGBONUSES - when a person is left with nothing to lose, they will go after those who took it away.
Take Michael Dell...Look into his story, how he go to where he is, and what hes now doing about it - its perverse and disgusting how disconnected he has become from his workforce...or whats left of it. I know a lot of people that have suffered at the might of his greed.
But on a personal level, I feel that if your boss is being a douche, go find a new job, or maybe 2 if need be. You will only get treated like excrement if you let it happen. I had more typed in here, but it began to sound trite and pedantic, so I will just say that I think there will be a renaissance of the small business before long, and then there wont be any company to be the CEO of...
Somewhere or other I read that many top CEOs display psychopathic traits, among them extreme narcisissm. The same qualities which make them drive companies to profitability also make them blind to the problems faced by the rank and file.
I have personal experience with one business owner (second generation) who had the whole company at a big meeting, telling us how things were rough and we all had to tighten our belts to keep the company afloat. That night, at an after hours party, he was telling the story of how he had (within the previous two weeks) been on a fishing trip when one engine of the fishing boat gave out. He bragged about how he spent $12,000 having a new engine overnighted from the opposite shore of Florida and gave the mechanics at the marina a $1500 bonus to get it installed so he and his buddies wouldn't miss a day's fishing. Um. Yeah. Right.
I'm not posting this to say that CEO's shouldn't make money and lots of it. I'm posting this to say that CEO's shouldn't make 400x what their average worker makes. They also shouldn't get paid millions once they do a piss poor job. Who else gets paid a bonus for screwing up?
mad_machine wrote:btw.. has anybody here read "the Jungle" by Sinclair? I keep seeing similarities from that book to todays modern society
Are you kidding????
Seriously... the poorest in our country ARE damn near the richest 1% of the world...
and yet...
How I see the life of an executive:
Oh no, sales are down 5%! Fire 1000 workers. You saved the company money, therefore, BONUS! Oh, well business is now up 20%. Hire no new people, so that profitability is maximized. BONUS! Because your company is run on a shoestring workforce, quality goes down the drain, and revenue plummets as a result. Hours are cut, the workers are blamed, and your best people leave for the competition.
Time to retire. SEVERANCE!
MitchellC wrote:How I see the life of an executive:
Oh no, sales are down 5%! Fire 1000 workers. You saved the company money, therefore, BONUS! Oh, well business is now up 20%. Hire no new people, so that profitability is maximized. BONUS! Because your company is run on a shoestring workforce, quality goes down the drain, and revenue plummets as a result. Hours are cut, the workers are blamed, and your best people leave for the competition.
Time to retire. SEVERANCE!
I see this at work here in Atlantic City. One of the places I work at.. Harrahs Hotel Casino and Spa.. is one of the largest casinos in Atlantic City (and one of the largerest in the US) and we operate on one of the smallest staffs.
This really sucks because they also own Showboat, Ceasars, and Ballys.. and while they do not have any more people.. their properties are smaller and they do less.
Everytime there is even a hiccup in the economy, they lay off people and never bring them back.
MitchellC wrote:How I see the life of an executive:
Oh no, sales are down 5%! Fire 1000 workers. You saved the company money, therefore, BONUS! Oh, well business is now up 20%. Hire no new people, so that profitability is maximized. BONUS! Because your company is run on a shoestring workforce, quality goes down the drain, and revenue plummets as a result. Hours are cut, the workers are blamed, and your best people leave for the competition.
Time to retire. SEVERANCE!
This describes what retail has become over the past 15 years. Just replace "layoffs" with "reduction of hours for hourly staff".
It's resulted in low-quality/low-paid workers, insane turnover rates, terrible customer service and nonexistent morale. It's so shortsighted, I could scream. 
DILYSI Dave wrote:bastomatic wrote: The idea that more money brings better performance is ludicrous, and offensive. The same argument is unacceptable when applied to "blue collar" work, like teachers, police, nurses, so why is it applicable to those who already make fortunes like administrators, executives, and other elite positions?Why is the same argument unacceptable when applied to the workers you mention?
Sorry for the late reply - by this I mean it is traditionally unacceptable to argue that better pay is a necessity to hire the best blue collar workers. The same people who defend the salaries of the highest-paid CEOs will in their next breath bemoan how blue-collar workers are overpaid, as if salary and benefits had nothing to do with attracting quality workers after all.
bastomatic wrote:DILYSI Dave wrote:bastomatic wrote: The idea that more money brings better performance is ludicrous, and offensive. The same argument is unacceptable when applied to "blue collar" work, like teachers, police, nurses, so why is it applicable to those who already make fortunes like administrators, executives, and other elite positions?Why is the same argument unacceptable when applied to the workers you mention?
Sorry for the late reply - by this I mean it is traditionally unacceptable to argue that better pay is a necessity to hire the best blue collar workers. The same people who defend the salaries of the highest-paid CEOs will in their next breath bemoan how blue-collar workers are overpaid, as if salary and benefits had nothing to do with attracting quality workers after all.
Some blue collar workers are over paid. Some are under paid. Just like executives. $25/hr for menial assembly work is BS. On the flip side, the best welder I've ever known made $10/hr. Couldn't do better because he was illiterate, but he could lay a bead like no other. He was certainly underpaid.
I think that there is an unfortunate leveling of the pay of skilled labor. The semi-skilled probably benefit from this leveling, but the uber-skilled definitely suffer.
Considering that pay for these skilled blue-collar positions has not even kept up with inflation over the last 30 years, I find it hard to believe that workers in these positions are overpaid. Registered Nurses in 1992 made on average $37k. In 2010 dollars that's $57k, but the average nurse actually makes about $54k in 2010, and benefits have taken a nose dive as well over that time period.
I have yet to hear about big bonuses or pay increases for RNs, but I'm sure health care executives have done quite well over the last 30 years.
gamby wrote:MitchellC wrote:How I see the life of an executive:
Oh no, sales are down 5%! Fire 1000 workers. You saved the company money, therefore, BONUS! Oh, well business is now up 20%. Hire no new people, so that profitability is maximized. BONUS! Because your company is run on a shoestring workforce, quality goes down the drain, and revenue plummets as a result. Hours are cut, the workers are blamed, and your best people leave for the competition.
Time to retire. SEVERANCE!
This describes what retail has become over the past 15 years. Just replace "layoffs" with "reduction of hours for hourly staff".
It's resulted in low-quality/low-paid workers, insane turnover rates, terrible customer service and nonexistent morale. It's so shortsighted, I could scream.
You can't help but laugh at how much money is just getting E36 M3 out of a company with this cycle. There is always a gap between people leaving and people getting hired, and then there is a gap between people getting hired and people getting trained, and then there's the gap between someone getting trained and actually working proficiently. Let's not forget how much it costs in expenses and labor to interview, run background checks, run relays with HR, and all of the other ancillary BS it costs to hire or lay someone off.
So many companies cash in their reputation (which is, IMO, a company's most valuable asset) to appease the shareholders. Yet, who actually pays the bills? Is it the shareholders, or the customers that the company is inevitably sending to the competition?
