Hi allengoogle,
The article is addressing employer's needs to keep morale high while
controlling costs during a time of economic difficulties. Giftgiving
is one means that companies have identified to try to accomplish this
objective. Unlike during the boom period of the late 1990s when
employers introduced all kinds of benefits for all of their employees
(stocked kitchens, concierge service, etc.) and rapidly increased
compensation, companies are faced with the need to control
compensation costs. However, at the same time, they want to keep
morale high, particularly among their star performers.
A variety of tactics are being employed by companies, some of which
cost little or nothing. Some are introducing more casual dress days
or giving employees more impressive titles without pay raises. Some
have shortened hours during the summer. Another approach is onetime
cash awards that don't create an ongoing expense like a raise does.
Training is also increasingly used as a reward. One company took its
employees to a Broadway play on a weekend.
A big change in organizational behavior is an emphasis on
pay-for-performance, whereby top performers are well compensated and
poor performers receive substantially less or are let go. For
example, "Siebel, which makes and sells customer service software and
services, has a policy of regular attrition, said J. Bruce Daley,
editor of the Siebel Observer, an independent newsletter that covers
the company. Periodically, the company ranks all the workers in a
department and lays off the bottom 5 percent, he said." "Siebel
Systems Laying off Workers" By Janet Forgrieve, Rocky Mountain News.
http://www.siebelobserver.com/about/rocky.htm. Ford also introduced a
very controversial ranking system which determined how much of a
raise, if any, employees received.
The benefits of these approaches to companies are clearer in that they
can better control their financial impact and target them towards the
employees they especially want to retain. The difficulty is that it
is difficult to maintain an egalitarian atmosphere. Employees who are
not receiving gifts and raises may feel slighted. While it may not
matter if the worst-performing employees leave, having a lot of angry
employees could adversely affect the company's operations.
Another issue employers face is that a labor shortage is forecast for
the tail end of this decade. If they create an image of being a poor
place to work, they may find it more difficult to attract employees
when they need them once business turns.
For employees, those who are perceived as performing well will no
doubt be happy to receive rewards. However, as companies move to
measure employee performance more carefully, employees will make every
effort to do what is measured. This can have potentially adverse
consequences if what is being measured does not really match the
desired outcome. For example, if a company measures its workers by
how much they produce without consideration for quality, they might
find themselves having made more products but suffering higher
warranty expenses.
Employees who are perceived as performing at an average level may well
become upset and even depressed. They may perform even worse, or may
try to sabotage the company if they feel mistreated. They may make
public statements hostile to the company. In extreme cases, such as
the case at Ford, they may sue and generate a great deal of adverse
publicity for the company. "Ford: Why It's Worse Than You Think" by
Joann Muller, BusinessWeek, June 25, 2001.
http://www.businessweek.com/@@Mwf@S4UQWH9hDg0A/magazine/content/01_26/b3738001.htm
Another challenge with giftgiving in particular is giving something to
employees which they will find valuable. A cruise is obviously
valuable to most people, whereas receiving a T-shirt in lieu of a
raise may be insulting. And, of course, the suitability of the gift
must be considered. A manager giving his secretary lingerie is hardly
likely to be considered appropriate and would probably result in a
sexual harassment complaint.
In my last workplace, it was customary for the manager of our group to
take the group out at the company's expense to celebrate members'
birthdays and for the group to collectively purchase a small gift for
that person. While it was good for group morale, figuring out what
sort of gift to get was sometimes tricky. Fortunately, we were a
small group and knew each other pretty well, so we were successful in
identifying something appropriate. However, for a manager with many
underlings, or for a company as a whole to get large numbers of
employees a gift, personalization is a daunting problem. Some
companies have resorted to catalogs that an employee can choose a gift
from on occasions like employment anniversaries. This allows the
employee to choose something suitable for himself or herself while the
company still controls the amount spent.
For an additional perspective on the subject, which I incorporated
into my response, I recommend the article "Want a raise? Don't count
your chickens" by Eric Wahlgren, BusinessWeek, September 3, 2002.
http://www.businessweek.com/careers/content/sep2002/ca2002093_2713.htm.
I hope you found the above perspective useful. Please ask for
clarification if you need it.
Sincerely,
Wonko |