A Brief focus on Inequality

by tomjaap on

Going beyond Generation Y!!!

I have been doing a lot of international travelling and this has provided the opportunity to interact with a wide range of people. One of the regular subjects has been about how Generation Y has become stereotyped by the media into what appears to be a single category. Most of those I conversed with commented on how different may of the young people were and that many of them just did not fit the media stereotype. In fact there was general agreement that some of the older generations actually displayed many of the behaviours described as being Gen Y.

On another subject that is linked to Gen Y was the feeling that an increasing number of people are becoming really concerned about what they saw as a widening social and finical gap. The rich were seen to be getting richer whilst the poor were becoming poorer. A lot of anger was felt about what many called the obscene benefits being paid to senior manager whilst the people who produce the profits as often paid the minimum wage. The majority of the people considered that the increasing gap in earnings was exacerbating the goal of increasing equality in society. This feeling was not driven by a sense of giving benefits but by a sense of fairness in seeing that everyone was paid an appropriate wage for the contribution they made.

Challenging the concept of the ‘Market Rate’

There was considerable scepticism expressed about the many arguments made by organisations that to keep their best people they need to pay them the market rate. Much of the scepticism was based on the fact that people who were initially hired on the ‘market’ rate somehow or other saw their earning slip compared with new recruits who were paid the ‘market rate’. Therefore they thought that the ‘market rate’ concept was a moving feast that was used to either limit or improve the offer.

Another element of their scepticism was around the whole concept of the ‘market’ as most saw it as a convenient system for HR and senior management to manipulate what was paid. It was therefore very easy for the rates to be manipulated as the data was either taken to represent a higher or lower amount depending on how desperate the organisation was to recruit.

Performance based payment

Here was another area of significant discussion and views as most people have some experience of performance based pay systems. As you would expect there was a wide spread of views from saying the systems truly acknowledged and paid for agreed performance. Whilst others suggested it was another area of organisational manipulation as the performance measures were often fudged and actually did not measure performance or achievement.

A lot of the scepticism expressed about performance pay was expressed by people who were in or had been in senior management positions. There was universal agreement on the difficulty of measuring senior management roles as in many instances they were about functioning in a command/control environment. Objective and targets were often pulled out of the air or made to fit a specific situation in which the organisation was keen to retain a manager. Most of the people thought that performance based pay systems were more about increasing the earnings of managers whilst using it to regulate downwards the earnings of employees.

Tackling inequality and self-managing

The one clear impression I was left with from the various discussion was that earnings inequality was something that needed to be aggressively attacked. Interestingly this was expressed by people from the Gen y right through the other generations. There was real anger felt by some about what they saw as the obscene salaries being paid to CEO’s in both the private and public sectors. There was clearly recognition that not every CEO or senior manager was on what they called the ‘gravy train’ however for them the top salaries were then used to determine the CEO’s market rate thus continuing the upwards spiral.

I invited ideas on what could be done to redress the inequality and beyond the initial scepticism that those in power would not give up anything the following ideas were suggested:

  • All payment packages should be made transparent throughout the organisation. In this way it would make it easier to see where the inequality was and to find ways to tackle it without creating a jealousy based ‘blood bath’.
  • Examine everyone’s role to determine if it actually adds value to the organisation based on measurable criteria. It was felt that most payment systems were in the mode of a ‘black box’ that nobody really understood other that the manipulators in senior management and HR.
  • Encourage an open exchange of ideas about how everyone should be rewarded for their contribution as many of those involved actually have very good ideas on what would be fair and appropriate.
  • Reduce management and supervisory role by at least 50% as their role are generally based on the outdated hierarcical view that employees need close supervision. The notion that it needs one manager to manage eight employees is just an example of how out of touch organisations who believe this are today.
  • A favourite of mine was the suggestion that there should be an increase in self-managing for everyone in an organisation. This was based on the belief that most employees wanted to do a good job and only needed the training and support to make this happen.

These are just some of the main ideas expressed and as an caveat many thought that managers reading the blog would dismiss the ideas as being idealistic and unworkable, which is the usual response to ideas about change. However, I was generally encouraged by the breadth of feeling that things need to change for the better and of the willingness to be involved in making it happen.

The concept of self-managing is based on well tested practices that involved operators in helping to design how they would go about their particular part of an process. When operators felt that what was emerging actually met their needs they were significantly motivated to make it work effectively. This is a natural phenomena in that if you feel forced to do something you will do it with either a covert or overt resistance. Therefore it would make sense to empower a whole range of people to design their work process along with safeguards to ensure that they are legal and safe. The more people feel in charge of their destiny the greater the probability that they will be significantly more productive and satisfied.

If you have any comments on this blog I would appreciate hearing from you by either contacting me by email at tom.jaap@centell.org or leaving a comment on the blog.

Best wishes

Tom

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