Hey, Management Guy! My company has been doing big layoffs. This has been a huge trauma for everyone because the company is known for coddling and indulging its workforce, and layoffs were never, ever something you had to worry about. Well, now it’s time for the cuts to hit my staff, and frankly, I’m just not into having to be the bearer of bad news, especially since some of those getting let go are senior members of my staff. Can I avoid this bad scene altogether, perhaps by just conveniently going on vacation when the dirty deed is done?
If you get paid the big bucks to be a manager, you gotta be able to handle both good and bad. That means having the huevos grandes to let people on your staff go, if and when it ever comes to that.
“Vanity Fair … took some of the deepest staff cuts at Condé Nast, but Editor Graydon Carter didn’t deliver the bad news himself,” the Post reported. “Although Carter was said to have been at his restaurant, The Monkey Bar (Note from The Management Guy: How can some schlub editor afford to own a restaurant?), Wednesday night, he was a no-show in the office yesterday because he had jetted off on a vacation.”
The Post also added this little tidbit: “Vanity Fair’s layoffs were said to be in the double-digit range, and hit as high as senior editors and as low as fact checkers, and were deep, in part, because Carter largely ignored the edict to chop 5 percent late last year.”
So, Graydon Carter first ignores a corporate edict to cut costs, then runs out on vacation when his staff is getting whacked? Here’s a piece of advice for Condé Nast senior execs from The Management Guy: You would do well to let Mr. Carter permanently retire to managing his Monkey Bar when he returns from vacation, because he’s completely worthless as a manager, especially one you can count on when things get rough.
And that, Don, is what you should always remember: If you can’t handle the tough work of being a manager—like layoffs and staff cuts—you have no business being a manager at all. Yes, you may work in management or flatter yourself with a management title, but if you can’t look your co-workers in the eye and do the dirty deed when it needs to be done, you’re just a manager wanna-be. And in these tough economic times, those are the very first people who should be shown the door.
We’re into the dog days of summer and I’m just back from vacation, so here are some interesting workforce odds and ends worth catching up on:
• Should the government mandate diversity in the boardroom? Yes, it may sound like the latest from the Obama administration, but it’s actually happening in Scandinavia, according to NPR.org. “In Norway, gender diversity in the boardroom isn’t just a nice idea, it’s the law,” the story says. “The boards of all publicly traded and public limited companies in Norway must have at least 40 percent female representation.”
The law has teeth in it too.
“Companies that fail to comply can, in theory, be shut down,” NPR notes. “So far, all are complying and none has been closed. But there is sharp disagreement in Norway over whether quotas have really changed the status quo.” And, many are skeptical that the mandate has actually had much impact. “While few in Norway want to go back to the status quo, many are questioning whether the state can really mandate corporate diversity,” the story adds.
Of course, there is a lot of back and forth in Norway from experts who think this is a good thing to those who don’t believe the mandate has had much of an impact. But here’s my view having worked in a corporate culture that made diversity a priority: Without a big push from leadership at the top, diversity in the workforce just doesn’t happen.
• Everyone knows that it’s a tough time for workers in the Big, Bad Recession, but who knew that porn workers would also be struggling? According to the Los Angeles Times, “the adult entertainment business, centered in [Southern California’s] San Fernando Valley, has weathered several recessions since it took off with the advent of home video in the 1980s. But this time the industry is not dealing with just a weakened economy. A growing abundance of free content on the Internet is undercutting consumers’ willingness to pay for porn, and with it the ability of many workers to earn a living in the business.”
The story quotes one porn actress who has seen her annual income drop from $150,000 to $50,000 annually, but as the Times notes, “the effects of the downturn have been felt most severely by the thousands of [behind-the-scenes] people who work in the adult entertainment business. Kelly Labanco doesn’t need industry estimates to know what’s happening. The makeup artist, who has worked in porn for five years, is landing half as many jobs as she did a year ago and has seen her pay drop from a high of $250 an hour to less than $100.”
I know; it’s hard to feel sorry for someone making around $100 per hour, but it just goes to show you that when it comes to the Big, Bad Recession, no industry or group of workers is immune.
• Here’s another recession-driven workforce trend: Desperate people are willing to take previously unpleasant and unacceptable jobs, according to an Associated Press story in the Fort Worth Star-Telegram. “People who have been out of work for months are lining up for jobs at places they once considered unthinkable: slaughterhouses, sewage plants, prisons,” the story says.
“I have to just shut my mouth because I can’t do anything about it,” said Nichole McRoberts of Sedalia, Missouri, who says she pictured more for herself at age 30 than working in a poultry plant, cutting diseased or damaged flesh off chicken carcasses that speed by on an assembly line.
I don’t know what the future holds for outgoing Chrysler CEO Bob Nardelli (you can see his farewell letter to Chrysler employees here), but maybe if we’re real lucky, he’ll go off somewhere and simply kick back and quietly count all the cash he’s earned from screwing up companies over the years.
For my money, Nardelli represents the worst in American management—a guy with a lot of great business skills but one major, game-breaking flaw—he was born without a humility gene. Nardelli is the arrogant, abrasive guy you hate to have as a boss, because he has never, ever been wrong, at least in his own mind.
In Nardelli’s mind, all those experts weren’t really needed, so he got rid of a lot of them, reduced the hours of others and hired more part-timers to cut costs. Seemingly overnight, Home Depot went from a place with great customer service to one where it became difficult to find anybody who could help you.
Later, Nardelli was in the news for presiding over one of the worst shareholder meetings of all time. Not a single Home Depot director was present, Nardelli gave no speech and he limited all questions from attendees to one minute. Nardelli refused to explain why the board wasn’t present, and in a nod to his arrogant nature, declined to explain anything to anyone at all.
The New York Times described his behavior at the shareholders meeting as “appalling,” “disgraceful,” “arrogant” and “contemptuous.”
Unfortunately, there is a crazy notion in this country that the ability to be a chief executive is some God-given skill that only a few special people are blessed with. That’s why guys like Nardelli keep resurfacing as CEO, as he did at Chrysler. I cringed when I heard that, knowing what he did at Home Depot, but I also knew that the damage might be limited given how screwed up Chrysler was when he came on board.
To be fair, Nardelli only took a $1-a-year salary at Chrysler (a magnanimous gesture that’s easy to make when you just walked away from Home Depot with a boatload of money). And, some accounts say that Nardelli worked on being less arrogant and abrasive while at Chrysler, although some of his old ways surfaced when he crammed a new vacation policy down workers’ throats.
Nardelli wasn’t able to perform any miracles at Chrysler—no surprise there—and as the Up to Speed blog in the Los Angeles Times noted, “Nardelli has run the smallest of the U.S. car companies since August 2007. Since then, Chrysler has seen its sales crash more deeply than any other major manufacturer, been forced to borrow $7.8 billion from the government to remain solvent and has had to submit to a shotgun marriage with Italian automaker Fiat to save the company.”
So, is it fair to rag on Bob Nardelli as he departs Chrysler? I think so, especially since he made so much money as a CEO for so little actual performance. He’s part of the reason executive compensation is out of control, and he’s a great object lesson for how someone who gets on the right CEO rocket can ride it to the stars no matter how badly they act or how poorly they perform.
I hope—no, I pray—that we have seen the last of Robert Nardelli as CEO. I wish he would just go somewhere and quietly count the hundreds of millions he’s made milking his arrogance and somehow getting smart people to pay him so much money for his dumb and willful behavior.
I only want to hear about him again as part of a case study for business students and would-be MBAs on how NOT to manage or act in a leadership role. That, and only that, is the way I can see Bob Nardelli ever adding any business value to anyone, anywhere, anymore.
And they give people east of the Sierras the sense that everybody who lives here in California must be a complete and total lunatic.
Here is another one of those trends, and it’s a doozy: The Los Angeles Newspaper Group, a division of Denver-based MediaNews, sent out a memo telling all nonunion employees that “for at least the next three months, they won’t earn vacation,” according to the blog LAObserved.com.
Fred Hamilton, one of the publishers in the group, wrote to his staff that this decision was yet “another step our newspapers are taking to tackle the difficult economic challenges that we are facing. In short, we’ll be suspending accrual of employee vacation time from April 5, 2009 through July 4, 2009.”
Now, vacation isn’t a God-given right, but as we have noted here at Workforce Management, it is a “cornerstone benefit … that should be examined as [a] potential tool for employers to use in boosting recruiting and retention efforts especially when budgets and bottom lines are being carefully scrutinized.”
It’s also extremely popular with employees, and “studies have found that given a choice between more time off or more money, roughly half of those polled would select time off.”
I’ve worked for a lot of different employers, and even the most stingy and miserly of the bunch had some sort of reasonable vacation policy. And although it is not out of line for an organization to change or make a vacation policy more restrictive, I’ve never, ever heard of a company doing it in the middle of the year.
Smart organizations work to carefully manage highly negative news like this, generally giving workers plenty of advance warning, guidance and counsel from management about exactly why it is necessary. Getting in front of the issue and talking it through can help a company get people to buy in to the larger business need for doing something like this, even if they don’t personally agree with it.
This isn’t the first time that MediaNews and the Los Angeles Newspaper Group have abruptly dumped a terrible workforce policy change on their employees.
Right around this time last year, they ordered more than 100 full-time newsroom professionals to report to a job site different from the one they were hired at, sometimes as far as 40 miles away. This was also dropped on workers without any warning, and the message from upper management then, as it is now, was “tough luck if it causes upheaval in your life.”
I understand that companies are being forced to make a lot of difficult and unprecedented decisions to get through the bad economic recession we are in. No one likes the notion of furloughs or unpaid vacations, or pay and salary cuts. And I’m sure the organizations that are having to resort to them would be the first to say that they were not decisions that made easily.
That is surely true, but it is also just one more thing that will demoralize and depress a workforce, especially since so many workers put so much stock in getting paid time off. And as the most recent MetLife Annual Employee Benefits Trend survey pointed out, “In this environment, benefits are taking on a heightened importance for most workers.”
Plus, any manager worth his salt knows that workers are no different from any other animal on this planet. They need time off the job to rest, refresh and rejuvenate. Good companies recognize this basic human need and plan for it, and that’s why vacation is such a cornerstone of almost any forward-thinking benefits plan.
I pray that this terrible idea won’t spread from California like a noxious virus, but in this economic environment, who knows? If we’ve learned anything from this downturn, it’s that there’s no end to the kooky, shortsighted cost-saving “strategies” that organizations can come up with. Let’s hope this is one that doesn’t take on a life of its own.
There’s one good thing about tough economic times (if you’re willing to say there are any good things): It makes people have a greater appreciation for what they have.
Nowhere is this truer than in the world of employee benefits, because we’re seeing more and more evidence that many perks workers used to take for granted, and perhaps even felt entitled to, are now the very things that they have come to really count on and appreciate as the economy tightens up.
“In this environment, benefits are taking on a heightened importance for most workers. They are more actively involved in managing the benefits provided by their employers, says a new study conducted by MetLife,” and reported in The Arizona Republic.
“MetLife’s 7th Annual Employee Benefits Trends Study said 46 percent of workers surveyed say they are taking a greater interest in understanding the benefits they get through their employer,” the story said. “More than half say they appreciate the benefits more than ever before and 41 percent said their workplace benefits are the foundation of their financial security.”
What’s interesting to me about this MetLife study is that the company felt the need to do the survey twice—first in August and then again in November—because of “the recent volatility in the markets.”
Clearly, MetLife felt that data and opinions collected in the relative good times of last August just wouldn’t be representative of how workers feel today. And although I applaud MetLife’s decision to re-survey in November, I think the findings would probably be even more pronounced had they done taken them again—perhaps in February—after the economy REALLY took a nose dive.
You get a hint of this from the concerns workers expressed in the study.
“A third of workers are worried that their company will cut benefits in the next 12 months,” the Republic story said, “although the study shows only 15 percent of employers said they planned to make such cuts. This also indicates that company officials recognize the importance of benefits to worker morale—39 percent of employers believe that workplace morale is strongly linked to the quality of employee benefits.”
“Focusing on retirement has taken on a bigger role for many individuals. Six out of 10 employees say they have been motivated to look at the level of income they’ll need in retirement. That figure rises to 73 percent for Baby Boomers, participants born between 1946 and 1964 … [and] the biggest concern, cited by 65 percent of workers, is affording health care in retirement. The second biggest worry was a tie between outliving retirement money and having the money to care for a spouse’s long-term needs, both issues cited by six in ten participants,” the story added.
I don’t find it surprising that employees are more appreciative of their benefits, because most workers who still have jobs are concerned with keeping those jobs and all the perks and extras that come with it. That hasn’t really changed, but what has gotten people’s attention is the notion that losing a job doesn’t just mean losing a paycheck.
It also means losing health care, dental and eye coverage, paid vacation and probably access to a retirement plan. If those benefits were taken for granted in the past, they certainly aren’t anymore, at least not in this economy.
“Employees are looking more and more to the workplace for advice, education and guidance so they can make better decisions about their benefit programs … to help them craft a financial safety net for themselves,” said Bill Mullaney, president of MetLife’s institutional business.
Yes, benefits are one part of the safety net that workers depend on, in both good times and bad. It sometimes takes something like a huge economic downturn before people finally really appreciate what they have—and what they should never, ever take for granted again.
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