I want to be a garbage collector

The story that two garbage cleaners in New York were fined and forced to retire after being caught accepting a tip of $ 5 caught my eye.  Not for the reason you might think. This story would provoke hoots of laughter in my country where nothing happens in the public service without a gratuity.  Even in NY, this must be an incredulous story - every man and a dog demands tips shamelessly for just existing in the same space as you. But the real reason this story has prompted this post was buried somewhere in the middle.

The two garbage men apparently netted $100,000 each, including overtime. Granted that they had put in long years of service. Granted that they probably earned lots of overtime. But still a wage of $ 100,000 for a garbage collector shows everything that is wrong about the United States. No wonder they lose jobs by the droves to India and China. No wonder unemployment is a stubborn problem.

But this post is not to highlight the completely unrealistic pricing for labour in the US, as compared to the world. This post is instead about a global problem - automatic salary increases every year.

If you spend enough years on any job, even that of a garbage collector, you will reach levels of $ 100,000. If you start at $ 20,000 a year and get a 5% rise every year , you'll land up with a $100,000 salary in 33 years. That is presumably what happened to these two guys. Imagine the situation in India where anything less than a 10% raise a year leads to a strike. If you start at an annual salary of Rs 5 lakhs, an entry level salary for a qualified graduate,  and keep demanding 10% salary rises, by the time you retire after 35 years, your salary even staying in the same job, will be Rs 1.4 crores.

Now you see why there is age discrimination in employment and the older you are, the quicker you are fired. Now you see why there are large scale job losses.

Salary levels have to follow some form of a normal distribution over the years, if you stay on the same job.  You start low and as you gain more experience and you become more efficient, your salary should increase. It should probably reach a peak when you are say 40, and then begin a slow decline so that you can remain competitive with the younger folks who are trying to displace you. I know this sounds heretic, but I would rather take cuts in my salary than lose my job altogether. The trick is to price yourself, just a shade below the market rate (not go for the highest salary possible). If that involves annual salary decreases, then so be it.

Of course, you can, and should, upskill and move on to a higher value job. But if you stay in the same job, automatic salary increases every year is a one way ticket to losing the job.

So, how about negotiating a salary reduction, instead of a raise. At first read this might seem like an insane idea. But think about it .....

Its an altogether different matter as to why somebody who was earning $100,000 a year, asked and took a $5 gratuity !

Read More [...]

Posted in HR, Labour, United States, US

Reorganisations - the last refuge of the incompetent

There is one ritual that happens in all companies periodically without fail - an organisation restructuring. Old structures and divisions are thrown out of the window and new structures are announced. HR types take great pleasure in redrawing organisation charts, rewriting job descriptions and the like. Communication types have an orgasm designing communication packs and writing words like "restructuring to stimulate growth", "bringing the organisation closer to consumers" and such other waffle. CEOs like to stand up to the press and announce the change , to make up for lack of anything else to say about their companies. MIcrosoft did just that today, the trigger for this post. Steve Ballmer's version of the blah blah is "We are ready to take Microsoft in bold new directions". Balderdash. I have never seen a more futile activity than an organisation rejig. And yet companies do it all the time.

The pattern is all too predictable. If the current organisation is based on product lines, it will be made regional to "get closer to the consumers". If it is regional, it will be made based on product lines to globalise and take advantage of scale. People will be moved around in boxes on organisation charts. The new guys have to go on a round the world trip to familiarise themselves with their new responsibilities. Lots of presentations and power point charts. Every four years or so the charade is repeated.  None of this matters one iota to consumers and shareholders. The only gainers are probably the management consultants who make lots of money.

What a thorough waste of time and effort. Structures are important in organisations, but they matter less than you think. The primal instinct of marking territories and defending against invaders, is what structures are. Structures are boundaries where defences are erected , by petty minded egoistic manages who need to feel important. Much effort is actually expended in organisations in crossing structural boundaries. Seasoned operators build alliances and have informal channels through which they get things done.Formal structures matter little to the determined go getter.

The root of the problem is man's territorial instinct. Man likes to draw boundaries and defend everybody inside the boundary from everybody outside. Alpha males who inhabit the business world suffer from an acute affliction of this instinct. Chief Executives and Boards struggle to overcome this and get the entire organisation to operate seamlessly. Fat chance of that happening. In this quest, organisational restructuring is the placebo. The placebo is particularly touted by the HR function, as a magic cure, which gullible CEOs swallow all to easily.

If Microsoft's leaders think they can solve their fundamental problems and compete better with the likes of Google, by an organisational revamp, well, perhaps its time to write their obituary.

Read More [...]

Posted in Big Business, HR, Multinational