Value System

As reported in the New York Times on 19th August, 2019, “Chief executives from the Business Roundtable, including the leaders of Apple and JPMorgan Chase, argued that companies must also invest in employees and deliver value to customers.”

And if you don’t believe that such a day would ever dawn, CLICK HERE for proof, sorry URL. Is there a difference between the two?

And Pepsi and Walmart too. And not just employees and customers, suppliers too will be dealt with fairly and ethically. “While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders.

The Business Roundtable, incidentally, is a lobbying organization that represents many of America’s largest companies.

Revolutionary, isn’t it? And not a moment too soon. It is important these views are articulated because such things have never been done in the past.

After all, in a competitive world, driven by free-market principles, a business could be successful without delivering value to customers. What businesses in the free-market driven world do is not deliver value to customers. And no competitor would be ready to step-in and deliver value. Nor would customers notice the absence of value. 

The reasons customers buy from businesses are well known. At least from what we may call successful businesses. They buy because they don’t get value. They buy because they are forced to; they don’t have choices. They buy only things they don’t need. They buy because they are weak-willed with a low self-esteem and unable to withstand relentless messaging of big companies that tells them they are losers if they don’t have the product. If customers queue up overnight to be amongst the first to buy a device in the morning, it must be the fault of the maker that the offered device does not deliver value.

After all, in a competitive world, driven by free-market principles, a business could be successful without bothering to invest in employees, or worrying about their aspirations. That is what businesses in the free-market driven world do. And no competitor would notice. Nor would their employees.

The reasons employees work for a business are well known. At least for what we may call a successful business. They work for a particular business because they have better opportunities elsewhere. They work because their qualifications make them suitable for better jobs. They work because they prefer the risk of a monthly salary over the security of self-employment. They work for the enrichment of the employing business and not their own compensation and advancement. They work so that they can walk out on a whim if they get a better opportunity. This is why jobseekers claim they cannot find jobs and businesses claim they cannot find employees.

After all, in a competitive world, a business could be successful without treating its suppliers fairly and ethically and destroying value for them. That is what businesses in the free-market driven world do. And no competitor would notice. Nor would the suppliers. 

The reasons suppliers work with a business are well known. At least for what we may call a successful business. They work for a business because it treats its suppliers unfairly by paying less than what has been contracted and agreed. They work because the business will pay much later than the timeframe for payment agreed in the contract. They work because they don’t salivate at the prospect of large future orders from that business. They work because they don’t dream of some day making their business as big and successful as the business they are supplying to. They work because they are forced to. And a situation where a big company is a supplier to another big company, or a small company, just cannot exist.

The rising global discontent over income inequality, harmful products, domination that hurts competition and unethical practices cannot be the fault of our lawmakers whose job it is to ensure equity and fairness and justice. It must be the fault of business corporations since they are not representatives of the people voted into office to safeguard the interest of the common man. Since they have been able to establish themselves as a force in the world of business earning a lot of money, they can be trusted to create value for customers, invest in employees and deal fairly and ethically with suppliers. And work for the upliftment of the downtrodden in society. And world hunger. And global peace. And environmental conservation.

Can someone please tell me why we spend billions on elections in India, and in many countries around the world. If it is the large business corporation that is going to deliver value to customers, invest in employees and treat suppliers fairly, and work towards global peace and world hunger and environmental conservation, why exactly do we need elected representatives? 

In an explicit rebuke of the notion that the role of the corporation is to maximize profits at all costs that has held sway over the last hundred years, leaders of the Roundtable have ruled out obvious options like cutting executive compensation, or paying higher taxes, or increasing wage levels. They believe that their noble ideals can be achieved without doing any of these. They believe that their noble ideals can be achieved without doing anything.

But I am being unfair. It is not without doing anything their ideals will be achieved. After much deliberation, and as an example to the world of their commitment to achieving their ideals, the Roundtable has developed a Vision Statement for all members which is to be prominently displayed in the CEO’s office:

‘The purpose of our corporation is no longer to advance only the interests of shareholders. Instead, we will create value for customers, invest in employees and deal fairly and ethically with suppliers. We vow to protect the environment by embracing sustainable practices across our businesses and foster diversity and inclusion, dignity and respect. We will work for the upliftment of the downtrodden in society. And world hunger. And global peace. And…’

And now that the problems of the common man have been effectively solved by the Roundtable and its members, our political leaders are counting the days to the next election when they will be able to tell us how they will solve our problems.

Not my fault

Senior Manager A is with the CEO, for his annual appraisal.

CEO : So, how has the year been ?

Senior Manager A : Reasonable, I would say. Could have been much worse.

CEO : How long have you been in this role ?

Senior Manager A : Exactly a year.

CEO : That’s a good long stretch.

Senior Manager A : Yes and no.

CEO : Hmmm. Anyway let us begin. Firstly, your Net Profit has gone up and you are meeting the target numbers. Well done !

Senior Manager A : Thank you sir. You know how hard I have worked on this. It is a result of some key initiatives I was able to deploy during the course of the year that have yielded these results.

CEO : I see. But then your Revenue numbers have slipped. Both against last year and against the target for this year.

Senior Manager A : I know sir. The Sales Plan that was in place before I took over had a residual impact during the year which impacted on overall achievement.

CEO : I see. So you could implement hey initiatives to impact the Net Profit but you could not implement key initiatives to impact the Revenues.

Senior Manager A : No sir. It takes time to fix Revenue isues. Profitability reacts faster to tactical measures. I assure you that we will perform much better next year.

CEO : I am sure you will. Coming back to this year, the client survey done in the middle of the year of the year has shown a marked improvement over last year. That is a good sign.

Senior Manager A : Thank you sir. You know how hard I have worked on improving client perception. The survey results are on expected lines I would say.

CEO : I am glad you identify so closely with this measure.

Senior Manager A : I do sir.

CEO : On the other hand, the employee survey done around the same time as the client survey paints a fairly dismal picture of the internal work environment.

Senior Manager A : The policies practiced by the last Senior Manager, unfortunately, have had a trailing impact. We are working on it and I am sure the survey next year will have much better feedback from employees. You know how hard it is to change the work environment.

CEO, after a deep breath : I see. Thanks anyway for your inputs. I will let you know the final assessment in due course.

Senior Manager A, getting up : Sure sir. Thank you.

The CEO takes a bio break and calls Senior Manager B for his annual appraisal.

CEO : So, how has the year been ?

Senior Manager B : Reasonable, I would say. Could have been much worse.

CEO : How long have you been in this role ?

Senior Manager B : Exactly a year.

CEO : That’s a good long stretch.

Senior Manager B : Yes and no.

CEO : Hmmm. Anyway let us begin. Firstly, your Revenue has gone up and you are meeting the target numbers. Well done !

Senior Manager B : Thank you sir. You know how hard I have worked on this. It is a result of some key initiatives I was able to deploy during the course of the year that have yielded these results.

CEO : I see. But then your Net Profit numbers have slipped. Both against last year and against the target for this year.

Senior Manager B : I know sir. The Budget that was in place before I took over had a residual impact during the year which impacted on overall achievement.

CEO : I see. So you could implement hey initiatives to impact Revenue but you could not implement key initiatives to impact the Net Profit.

Senior Manager B : No sir. It takes time. I assure you that we will perform much better next year. Revenue reacts quickly to tactical measures. Profitability, on the other hand, is slow to react.

CEO : I am sure you will. Coming back to this year, the employee survey done in the middle of the year of the year has shown a marked improvement over last year. That is a good sign.

Senior Manager B : Thank you sir. You know how hard I have worked on improving employee conditions and perception. The survey results are on expected lines I would say.

CEO : I am glad you identify so closely with this measure.

Senior Manager B : I do sir.

CEO : On the other hand, the client survey done around the same time as the employee survey paints a fairly dismal picture of our standing in the marketplace.

Senior Manager B : The policies practiced by the last Senior Manager, unfortunately, have had a trailing impact. We are working on it and I am sure the survey next year will have much better feedback from clients. You know how hard it is to change perception in the marketplace.

CEO, after a deep breath : I see. Thanks anyway for your inputs. I will let you know the final assessment in due course.

Senior Manager B : Sure sir. Thank you.

More employee friendly policies

 Today’s post is a contribution from my friend S Subramanian who finally took pity on me and relieved me of the important (read only) task of “creating” the post from scratch. He asserts it is not an original but something he read and which stayed with him (source unknown).

So here goes….

TRANSPORTATION : It is advised that you come to work driving a car according to your salary.

  1. If we see you driving a Honda, we assume you are doing well financially and therefore you do not need a raise.
  2. If you drive a 10 year old car or taking public transportation, we assume you must have lots of savings therefore you do not need a raise.
  3. If you drive a Pickup, you are right where you need to be and therefore you do not need a raise.

ANNUAL LEAVE : Each employee will receive 52 Annual Leave days a year (Wow! said 1 employee). – They are called SUNDAYs.

LUNCH BREAK:

  1. Skinny people get 30 minutes for lunch as they need to eat more so that they can look healthy.
  2. Normal size people get 15 minutes for lunch to get a balanced meal to maintain their average figure.
  3. Fat people get 5 minutes for lunch, because that’s all the time needed to drink a Slim Fast and take a diet pill.

SICK DAYS : We will no longer accept a doctor Medical Cert as proof of sickness. – If you are able to go to the doctor, you are able to come to work.

TOILET USE : Entirely too much time is being spent in the toilets.

  1. There is now a strict 3-minute time limit in the cubicles.
  2. At the end of three minutes, an alarm will sound, the toilet paper roll will retract, the door will open and a picture will be taken.
  3. After your second offence, your picture will be posted on the company bulletin board under the “Chronic Offenders” category.
  4. Subsequent pictures will be sold at public auctions to raise money to pay your salary.

SURGERY : As long as you are an employee here, you need all your organs. – You should not consider removing anything. We hired you intact. – To have something removed constitutes a breach of employment.

Annual appraisal and increments – maximising value

Discussion to finalise annual increments

Manager : While I am in agreement with the overall guidelines of the company of an increment of 8% for the top 20% of my team, I would like to use managerial discretion, also permitted by the company, in a couple of cases.

Senior Manager : Which ones ?

Manager : The first is Peter. Though he has made it to the top 20% bracket, he has not performed well. In fact, on a couple of occasions his actions have cost the company financially. I would like to bring him down to 6%, in line with the next 40% of the team. At the same time, Paul has shown himself to be an outstanding performer right through. He is of immense value to the company. Though no individual is indispensable, his value is immense. I would like to up his increment to 10%.

Senior Manager : I agree with your decision to reduce Peter’s rating. It will also save the company money. I am, however, not in agreement with your proposal to increase Paul’s increment. I don’t think he has done anything special. Any employee in his position would have done what he has done. He should be grateful to the company for having been given this responsibility. Besides, giving additional increment costs the company money. In these times, a penny saved is a penny earned.

Manager : May be additional increment costs money. I daresay it will become a lot more expensive for the company if he decides to leave. And I think he is considering options.

Senior Manager : That’s an illogical argument. Employees cannot start holding the company to ransom by threatening to leave.

Manager : I fully agree sir. However, this is not a case of an employee holding the company to ransom. It is a question of fair reward for work done keeping in mind the marketplace realities.

Senior Manager : He will not go anywhere. Take my word for it.

Next week

Manager : Sir, Paul has given in his resignation today.

Senior Manager : What ? How did you not see this coming ? You are expected to know about the people working for you. If we had known in advance we could have done something, like an additional increment.

Manager : I did tell you when we were finalising the increments. I did recommend an additional increment for him of 10% which you shot down.

Senior Manager : Don’t make excuses. What will happen to the Project he was doing ?

Manager : It will continue. But we will need to rework the timelines. And hire someone in his place.

Senior Manager : Let us try to keep him back. How much increase is he getting in his new job ?

Manager : Not sure, but I believe about 12%. Senior Manager : He is important to the company. Offer him a 15% increase and retain him.

Manager : As you say sir. I hope you will fund the extra 5% cost that we are having to pay Paul, from your Budget !

Appraisal – good only if it is better

The annual performance ratings have been finalised and informed to individual employees. There is a mood of despondency in the office as people meander around the office like zombies complaining about the unfair rating they have been given. Everyone is talking to everyone else despite company guidelines clearly stating that an assessment rating is private to the individual and should not be shared with others.

Employee A to Employee B : This company is doomed if it continues its selfish and high-handed way of treating employees. I am going to quit the job. I put in so much hard work through the year and what do I get for it ? A paltry 8% annual increment. Just about enough to cover inflation. In a year when profits have been good.

Employee B : Hey, that’s not bad. You got away light. My increment is only 6%.

Employee A : Really ? Sorry to hear that.

Employee A continues meandering around the office.

Employee A to Employee C : Hello mate. How are you ? How do you feel about the appraisal ? I seem to have got a bit of a raw deal. My increment is 8%.

Employee C : Hey, that’s not bad. I must congratulate you. My increment is only 5%.

Employee A : Really ? Sorry to hear that.

Employee A continues meandering around the office.

Employee A to Employee D : Hello there. Looks like reasonable appraisals this year. I got a raise of 8%. Hope you got a decent one as well.

Employee D : Judge for yourself. Mine is 4%.

Employee A : Really ? Sorry to hear that. Better luck next year.

Employee A continues meandering around the office. By this time he is positively beaming and ready to spread good cheer around.

Employee A to Employee E : What a great company to work for. Never imagined a company could be so fair in annual assessments. Got an 8% hike, cannot believe it. Enough to beat inflation and put away some. I am an employee for life here.

Employee E : Good for you mate.