Friday, April 24, 2009
Recession 09 comparison to previous monster recessions
If the 21st Century Rhymed to history, China would be the new US -- feverish with individual and national drive, manufacturer to the world, growing like crazy, and bigger and populous than the current superpower, which will have a on going demand for products and techonology and the excesses that Americans enjoyed for atleast more than half of this century.
Thursday, April 16, 2009
How to end recession 2009 ? Radical ideas!!
Okay!
USA is now officially in recession for close to 8 months. Unofficially and unfortunately it has been close to 18 months now. Most of us in the service sector know that very well.
Now i was also in quite a confusion that whether Keynes was right or Schumpeter was right when Bush and Obama started the war against the recession. I just love their theories. Both are considered top 2 economists of the century. And
Lets first point out the facts which are pulling the economy down! Though everyone knows the basics of this bloody game. Its all inter-related.
1.
USA is now officially in recession for close to 8 months. Unofficially and unfortunately it has been close to 18 months now. Most of us in the service sector know that very well.
Now i was also in quite a confusion that whether Keynes was right or Schumpeter was right when Bush and Obama started the war against the recession. I just love their theories. Both are considered top 2 economists of the century. And
Lets first point out the facts which are pulling the economy down! Though everyone knows the basics of this bloody game. Its all inter-related.
1.
Executive pay linked to under-performers aka Lowest paid workers!
This argument is like imposing a penalty for being in the position which was actually hard-earned by the executive. There is no rationale for this unless we have a communist system or if the company is not following performance based payroll system.
Executives get their higher pays because they take executive decisions and they have the power to influence, guide and cultivate the ground root workers. Its a human engineering approach and we need to agree to the viewpoint that without executives, the workers, the so called underpaid employees will never go anywhere. The guidance for future is developed by the executives and bricks for the road to that future is laid by the workers. They are all important in the overall step. But if you didn't even know about the road, what would you had, had been laying bricks for?
If you link the salary of that hard working executive to that of their lowest paid employees, essentially you would be forcing the executive to focus on the development of those employees, which is what i assume would be the sole cause of implementing such a policy. On the top, this looks like a thing which should be done. But even in the best productive environment, not all employees contribute equally to the 100% of the goal. A executive achieves this by unequally distributing the goal in his workers. He gives the people whom he trusts more by years of their experience and performance along the way, maximum work. Gradually decreasing portion is given to under performing group. This is what decides the salaries too in the end. Because everyone is in a performance based evaluation and their is room for improvement as competition would be fierce even within the walls.
Now in such cases where unions demand higher pays and site the unequal pays between the management and workers, linking these two levels salaries or components will certainly bring down the costly labor to an extent in the department. But overall effects would be a lethargic, non performing executive, who he knows cant do enough to get a better incentive as there will always be some percentage of his team who will be under performing. I am saying in the wider sense. There might be instances where the whole team is the best team outright. But think rationally and watch the whole system, can this be true?
Stressing the executive out to focus on his lower paid workers, will essentially rob him of his creativity and zeal. It will outright stress him to continually focus on flab and he will never be able to capitalize on the strengths. This means gloomy future for the company. In today's competition, strengths need to materialize to pillars and weakness needs to be flattened out to reduce their impact.
And the answer is only performance based pay.
Yes i agree though the performance should be measured in a 360 degree view. the lower paid guys should have a say in deciding the performance of the executive as well as the guys who did well under that executive. This will create the best possible working culture in the company.
Executives get their higher pays because they take executive decisions and they have the power to influence, guide and cultivate the ground root workers. Its a human engineering approach and we need to agree to the viewpoint that without executives, the workers, the so called underpaid employees will never go anywhere. The guidance for future is developed by the executives and bricks for the road to that future is laid by the workers. They are all important in the overall step. But if you didn't even know about the road, what would you had, had been laying bricks for?
If you link the salary of that hard working executive to that of their lowest paid employees, essentially you would be forcing the executive to focus on the development of those employees, which is what i assume would be the sole cause of implementing such a policy. On the top, this looks like a thing which should be done. But even in the best productive environment, not all employees contribute equally to the 100% of the goal. A executive achieves this by unequally distributing the goal in his workers. He gives the people whom he trusts more by years of their experience and performance along the way, maximum work. Gradually decreasing portion is given to under performing group. This is what decides the salaries too in the end. Because everyone is in a performance based evaluation and their is room for improvement as competition would be fierce even within the walls.
Now in such cases where unions demand higher pays and site the unequal pays between the management and workers, linking these two levels salaries or components will certainly bring down the costly labor to an extent in the department. But overall effects would be a lethargic, non performing executive, who he knows cant do enough to get a better incentive as there will always be some percentage of his team who will be under performing. I am saying in the wider sense. There might be instances where the whole team is the best team outright. But think rationally and watch the whole system, can this be true?
Stressing the executive out to focus on his lower paid workers, will essentially rob him of his creativity and zeal. It will outright stress him to continually focus on flab and he will never be able to capitalize on the strengths. This means gloomy future for the company. In today's competition, strengths need to materialize to pillars and weakness needs to be flattened out to reduce their impact.
And the answer is only performance based pay.
Yes i agree though the performance should be measured in a 360 degree view. the lower paid guys should have a say in deciding the performance of the executive as well as the guys who did well under that executive. This will create the best possible working culture in the company.
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