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There is this strange belief that people should be paid more when they are promoted. Where does this thinking come from? Is it relevant anymore? Some time back while conducting a workshop on creativity, I was introducing Edward de Bono's concept of Provocative Operacy, called PO thinking. I asked the participants what they thought of the proposal that people should be paid less as they are promoted. The response was predictable. This is it, some of them thought, Sam has finally gone round the bend, poor fellow! Had the stress of running a company caught up with me so soon? As we went through the process of learning this wonderful creativity tool, people began to realize the power behind it. Several ideas were generated from this seemingly bizarre proposal, and some of the participants resolved to take those ideas back to the work place and put them to practical use. But my point of relating this incident is not merely the generation of ideas. The point is that I think it is absolutely correct to pay people less as they are promoted. Which reminds me of my father. My father worked with The Tata Iron and Steel Company in Jamshedpur, India. The company employs around 75,000 employees. He worked there for 33 years, doing the same thing. He checked the work of others, and wrote reports. He also pushed papers. He periodically received increments and promotions, and long service awards. The fact is, he never did anything interesting or different during those 33 years. By the time he retired, he had been doing the same thing that he did (albeit with a few more assistants). And he was even paid more for doing that! The company, by the way, has the most phenomenal record of strike-free work (65 years), and makes steel and related products. Why was he paid more when he retired? For the simple reason that our social systems have been based upon certain premises, which have no bearing to the crazy world of today. When you are in your twenties, you work like a dog, doing $400,000 worth of work for which you are probably paid $40,000. By the time you reach your forties, you are most likely doing work worth $40,000 and being paid $100,000. I guess this has something to do with our social structures. In your forties, you have school going children, a mortgage for your house, and your pension plan. So your costs are higher, and perhaps you need more money at 40 than at 20. Tell me, where is it laid down that people should be paid more as they are promoted? Worse, where does it say that your boss should be paid more than you? People should be paid for the work they do, not for the positions they occupy. Just look around yourself. This is the age of super specialization. Rarely do bosses know what exactly it is that their staff do, leave alone how they do it. Isn't this one of the lessons Baring's Leeson taught us? There are so many financial instruments of mind-numbing complexity today that no one - and I mean no one - can possibly comprehend all of them, leave alone monitor what exactly analysts and brokers in the front-line are doing. This is true of everything - finance, marketing, R&D, production, information technology. Talk of information technology. Every company is an IT company today. Where does Walmart derive its edge from? Distribution and logistics based upon IT. How does ABB work on multi-million dollar projects ten thousand miles away from corporate headquarters? By connecting scores of engineers who have done similar work elsewhere but who have never met one another (and probably never will ) through E- mail . What is the bottom line? Are boring CEOs who play golf and wear similar clothes the revenue rakers, the shakers and movers of corporations? No, not by a long shot. The real champions are the little fellows who bring the checks in. Here's a small exercise. Pull out your personnel files and check the median age of your company's decision makers. If it is above 40, you better book your space in the corporate museum. Here's another small exercise. For the next 30 days, study your senior managers' expressions, and draw a chart depicting the number of hours they scowl and the number of minutes they smile (genuinely) in the presence of their subordinates (and suppliers) during the day. Oh yes, I almost forgot - discreetly record the number of times they say yes to their bosses, followed by their return to the safe confines of their offices in utter despair. Why should such people be paid more than their people who do the real work, and who know a lot more of what is actually going on? Don't get me wrong. I am not advocating that people should be paid less just because they are promoted. What I am advocating is that they should not be paid more just because they get promoted. If they do their jobs better (i.e. more smiles, great leadership, bubbling enthusiasm, making it a great place to work, etc.) of course, they should be paid more. The question is - how many people are doing that? Yet, everyone is paid more when promoted. It is also largely true that forty year olds are more boring than twenty somethings. You can bet your last dollar that these people don't leave their boring personalities behind at home when they come to work. After all, motivational theories have taught us about the whole person and all that stuff. With the institution of the Dubai Quality Awards, Dubai has come of age, and is making genuine efforts to transform the place and the way business is done here. A survey on product/service excitement would fit very well with the quality efforts of the Government of Dubai. Now we all know that this place makes next to nothing. It only sells what others make. So when you do your next customer satisfaction survey, ask your customers to rate your service on a five point scale (1- boring to death, 5 - exciting). Better still, if you really have the gumption, why not ask your vendors as well something like: How would you rate us in our dealings with you (1 - disgusting, 5 - pleasure to deal with)? If a company's products and services are dull and boring, you can be dead sure that its head honchos are dull and boring as well. Just look at Rubbermaid. Wolfgang Schmitt is not in his twenties, but his head and heart sure are. No wonder this $2 billion company, introduces one new product every day. And what kind of products does Rubbermaid make? Not some esoteric stuff but plain plastic toys and household items retailing for $2 to $5 each! Don't we need a few Rubbermaids and Wolfgang Schmitts around here? If your survey results disclose that you are in fact boring, and dull, and disgusting, would the people who have been promoted not deserve to be paid less? |
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