Sam Pizzigati writes on Talking Union
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 sentreverberating 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.”
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.