Top US management consultant firm advises: "start attacking exorbitant paychecks" of veteran workers

[guruoo]

Ohyeah, thanks to jtuck004 for the lead. :headbang:`

onedit: FYI: Recall, Booz Allen is the Company whose crappy IT security allowed the leak
of "90,000 military email addresses and passwords".




A Tip for Joe the Machinist: Watch Your Back

Corporate America, advises one of the nation's most prestigious management consulting companies, needs to wake up and stop rewarding employee loyalty and performance. With one exception.

You work hard. You do good work. You loyally stick with your employer through good times and bad. Do you have a right to a paycheck that rises over time?

Analysts from one of America’s top management consulting firms, Booz & Co., have an answer that the Harvard Business School last week sent reverberating through Corporate America’s upper echelons. That blunt answer: No.

The notion that good workers doing valuable work deserve to see their paychecks rise over time, pronounce Booz & Co. analysts Harry Hawkes, Albert Kent, and Vikas Bhalla, no longer rates as “tenable.” America’s corporations, the three advise, need to start attacking the “exorbitant” paychecks now going to their most prized, “steady and reliable” veteran workers.

The Booz analysts offer an example of the “significantly overpaid” worker they have in mind. They call him Joe the machinist, “a stellar employee who knows the ins and outs of the organization, the result of his many years on the job.”
...

http://toomuchonline.org/tmweekly.html

The View from Harvard Business
Outrageous CEO Pay? How About Lowering Salaries of Longtime Workers
By Sean Silverthorne

CEO compensation increases continue to be gaudy, but if you think
they are overpaid take a look at the paycheck of Joe the machinist.

In what is sure to be a heavily debated think piece out of management consultancy Booz & Co., the case is made that employers should be reevaluating what they pay to people who have held their same jobs (no promotions or added responsibilities) for a length of time, in light of the readjusting employment market. And in some cases, that pay should be lowered or the employee retrained or terminated.' They lead with the example of Joe, a machinist at the same company for 25 years.

This Joe the machinist has been working at that job for over two decades. His “wealth of institutional knowledge” has become a valued corporate asset. But Joe is making a lot more than he used to make, especially “compared with co-workers who have been doing the same job for just two years.”

Corporate America, the Booz & Co. advice continues, now needs to “address these kinds of wage disparities.” Companies need to start “retooling labor costs” to narrow “the gap between high wages and market value.” A “multifaceted and tailored” retooling, the Booz analysts go on to gush, could net U.S. corporations “labor savings of 15 to 20 percent.” Of course, the analysts acknowledge, Joe the machinist “might have to take pay cuts” along the way.

But what a payoff these pay cuts would produce! Firms that retool successfully, the Booz consultants confidently promise, “will end up with larger and more sustainable improvements in their margins.”'


http://www.bnet.com/blog/harvard/outrageous-ceo-pay-how-about-lowering-salaries-of-longtime-workers/12426

[Sinistrous]

1. What a brilliant way to promote loyalty, skill development, and

top performance in employees. Trackable, documented cost cutting -- how better to enhance the meager compensation of senior management.

:puke:

[KatyMan]

4. Happened in IT a decade ago

I have no more loyalty to my company than I do to the king of Belgium, never have, because we're usually the first to go.

[hootinholler]

12. At least 2 decades ago.

Right about the time the intertubes caught on.

-Hoot

[villager]

2. *When* do we start planning a national strike, again?

we've been vastly overdue...

[guruoo]

13. Like a 'Joe the Machinist shrugged' thing....

[femrap]

3. Let's start w/ the salaries of

these Booz & Co employees!

I hate those f*cking consultants....should be charged w/ treason. They're one of the big firms who sent all the American jobs overseas.

[guitar man]

5. A tale of two guys I know

True story, went to school with both of them . One is a close friend of mine, he's a journeyman lineman, IBEW, climbs power poles and works on electric lines, usually in foul weather to keep the electricity on. Damned hard and dangerous work, just staying alive while doing it is a skill all its own.

The other is a day trader, and has made himself a small mountain of money sitting at a computer in the comfort of his home.

when Mr Day Trader found out how much money our union lineman friend made for risking his life at work every day he HOWLED with anguish! How could he? No wonder my electric bill is so high!!

My lineman friend just smiled and took it all in stride, but after listening to the day trader go on for about 6 minutes I physically reached out and slapped him in the back of the head. When I had his attention I explained to him that if our lineman friend didn't RISK HIS LIFE on those poles every day he wouldn't have any electricity to do what he does at all. Then I walked over to the lineman's truck, grabbed his climbing spikes, walked over and handed them to Mr day trader and pointed to a power pole and said "go ahead, climb it.

Naturally, he declined...

[Brickbat]

6. Do CEOs' duties change and accumulate so quickly and heavily they need those massive

increases every year? Seems to me that Joe the machinist is probably having to learn new equipment every few years, new "efficiencies" that MBA-toting "efficiency experts" install every year, new "safety" rules that people from the home office 100 miles away have come up with while sitting at a desk, and, most importantly, "increasing productivity" as the person on his left is laid off, and then the person on his right.

And if he's covered by a union contract, Booz & Co. can feel free to fuck right the hell off.


This kind of hot bullshit just goes to show how bizarrely focused many companies are on the short term. This is like nanosecond-level thinking, and it's disgusting.

[Shandris]

7. Pretty certain they forgot part of this company's name.

CLEARLY, this idea was touted by DrinkingTooMuch Booz & Co..

They really won't be happy until everything that isn't in the hands of the robber barons...is. Don't they realize that they're like that guy you see in fantasy films, the one who summons the big power-mad demon under the promise that the demon is going to give him great power. They don't stop to realize that once the demon HAS its power...it has no desire to give it to a flunky that now has NO PURPOSE. Ironically enough, they're counting on the big demon -- the robber barons -- to reward them for their loyalty when they have all the power.

There's a sick sense of irony in that, really. I hope their end is...well-justified.

[Initech]

8. Argh I'm completely sick of this BS logic!!!

What's gonna be the straw that breaks the camel's back? How much longer are we going to sit here and get screwed over by these greedy motherfuckers before we say enough is enough?? :argh:

[TwilightGardener]

9. "In light of the readjusting employment market"--in other words, the shock doctrine

of the last three years has worked. Now we must expect nothing beyond starting pay, no matter what.

[damntexdem]

10. As employees become more valuable to you, you can screw them out of any reward for this.

And the floggings will continue until morale improves.

What booze has Booz and Co. been drinking?

[YvonneCa]

11. Josefine, the Teacher here. This is what is happening...

...everywhere, including in public education. Josephine is "a stellar employee, who knows the ins and outs of the organization..." She...and others like her... are being replaced by TFA teachers, some of whom may go on to become great teachers.

It's the motivation of the (so-called) CEOs that is in question, IMO. It's being done to save money. Period.

[SoCalDem]

15. It has always been this way (at least since unions went out of "fashion")

Employers offered new-hires more than the raises that longtime, loyal employees got.

In 1970, the bank I worked for routinely ran ads offering starting salaries lager than what most of us made (after a few raises)..

Once IN the job, raises were miniscule, so people often quit and went to rival banks. by ping-ponging from job to job every few years, they ratcheted up their wages.

Loyalty & longevity are often not rewarded, except in times of layoffs. Many companies found that when they had to tighten belts, the loyal ones were likely to work harder than the "new guys"..

[surrealAmerican]

14. They seem to have forgotten that, once your new ...

... cheaper, less proficient employees learn that they will never be paid more, they will not make the attempt to become "more valuable" to the company, and will be as loyal to to company as the company is to them.

It's like that old Soviet Union quote: "They pretend to pay us; we pretend to work."