http://money.cnn.com/2010/01/25/news/economy/workplace_loyalty/index.htm
The article above talks about how workers are getting more and more fed up with the economic situation. The ones looking for work can't find it and the ones with it are getting their pay cut, compensation cut, and their hours increased. I know, before my mom switched jobs, she had recieve 3 or 4 pay cuts in a span of a year and a half. The article posts a statistic from career builder saying 24% of workers no longer feel loyal to their employers. 19% plan to switch jobs within a year. It also gives an example of an airline attendant whose pay and compensation has been cut 33% since 9/11 and his hours his hours have increased. It seems like companies are doing what they can to survive the recession, but maybe some need to pay more attention to their employees or at least have better communication. I feel like loyalty his bigger than most people make it out to be in a business. If employees are happy and loyal they are obviously willing to work harder than an angry employee who feels slighted. I feel like some workers need to realize that these are tough times and a pay cut is better than a lost job. Although companies should try to keep communication high with their work force and give them reasons why things are being cut so at least they know why it is being done and how it helps the company.
Subscribe to:
Post Comments (Atom)
Whenever I hear this, I usually think the same thing:
ReplyDeleteIf you cut wages across the board, you would inevitably be cutting the wages of competent workers who keep a company running. If a worker is competent enough, other companies could lure them with incentives such as increased wages and hire them in order to increase the competition.
If you don't pay a worker what he is worth, he will go somewhere else where he feels adequately compensated which can leave you with employees who may be less productive/efficient, theoretically.
Employee wages are more resistant because they are so directly tied to moral.
Again, maybe this is fundamentally wrong, but it's just something that theoretically makes sense. To me.
Unfortunately, in this economy, the average skilled worker will have a tough time taking his labor to another employer, let alone one that offers better wages/benefits. Delta has slashed the pay of its pilots significantly over the past nine years, but pilots have no recourse as the airlines are declaring bankruptcy or merging everywhere. Budget airlines are just that; they provide very poor comparative compensation to their crews, but are able to take advantage of the thousands of recently fired pilots and attendants.
ReplyDeleteYet as the crisis developed over the past decade, and the average worker took significant pay and benefit cuts, those at the top have had little downward change to their income and still received millions of dollars in bonuses even after declaring bankruptcy.
I'd argue that this is a market failure. Executives argue that their enormous incomes are necessary to attract top-level leadership talent, particularly in this economy. But I would argue that they have used their power in the market to influence shareholders into accepting the price of providing executives this, despite the large supply of educated people who could do the job. This is especially true when, rather than being disciplined, executives have taken enormous profit whilst driving their companies into the ground.
During recession, many people are facing unemployment and there's a huge shortage of jobs. I think probably this is part of the reason many companies are cutting employer's wage, for they can always find job hunters in the market. It's sad for the employers, but at least they still have work.
ReplyDeleteIn an individualistic society like ours, employees tends to look at his/her opportunity cost to working at a particular company. If the opportunity cost is not as high as the original company, then they would stay. This should be the way a rational person thinks.
ReplyDeleteAt any rate, I agree with the article about communication. Afterall, teamwork will really help the efficiency in a company. One of the reason why companies stop gaining economies of scale when they grow bigger is due to miscommunication. With more efficiency, our whole society will be better off.