Aug. 17, 2012

Salaries VS Wages



        Many of these tirades are based on a series of works I wrote when a graduate assistant.  At that time I called them "Wardisms" and several of my professors used to present them in class for discussion. I hope they give you something to think about.


         We've all heard this old saying.  In general we all probably agree with the philosophy it expresses.  But, there is a problem and it is elemental to effective management.  Not only do managers need to be aware of this problem but it has to be constantly explained to the workforce.


    At some point in the late 70's Americans began to relate everything to the hourly employee.  Probably a great deal of this perspective was developed as companies and governmental agencies that had never been "unionized" became so and the union's views were infused upon the workforce.  Coupled with "promotion from within" this resulted in an eventual impact upon management's views. Slowly, organizations began to view ALL employees as hourly workers. Pay and benefits began to be discussed and evaluated on a basis of working hours for executives and labor alike.


      So, you say, what is the problem.  Well, it's necessary to step back and examine the objectives we are trying to achieve. The distinction between labor and management was developed because labors efforts could be accurately measured and compartmentalized into specific time frames which allowed an objective production comparison.  This allowed for a specific wage rate for each position. On the other hand, some jobs, usually management or professional were so fluid that no accurate measurement was available and as a result they were paid based upon the "accomplishment of the objective". This became the foundation for wage rates and salaries.  The wage rates were applied toward hourly employees whose production could be accurately measured. The salary was reserved for management or professional duties that might require more or less effort at various times to reach the desired objective.



        So, what's the problem?  By slowly skewing our perception toward the "hourly" production we have done an enormous disservice to the professionals and actually reduced overall effectiveness. Today, teachers who work ridiculous hours of their own time are often required to log in and out and can't take time off without "giving up" leave time.  Why, because they are being held to a specific number of hours of work. This is true of many professional or salaried positions, partially because we have developed this viewpoint but also because our "promoted from within" managers lack the courage to simply say, "Ah take the afternoon off".



    A true story: When in the Military (an organization that is virtually all salaried positions) I was a maintenance chief for a very large organization.  The military was performing "man-hour accounting" and found our organization was outperforming every other unit.  A team came from Washington to investigate whether or not we were "cooking the books" to make our numbers look better. While they were there, on a Friday afternoon, one of the officers on the team came into my office and asked me, "Where is everyone, at training?" I had 305 men and only 26 were available.  My reply was, "They're at the beach." Immediately the officer began literally screaming, "They are paid by the taxpayers............." I asked him if he had found that we were out producing other organizations and explained that the work that had to be accomplished was done and my men needed a break so that they could be able to outperform other organizations when asked.


         The point is that they would be paid no matter what and keeping them there just to keep them there was counter-productive and a morale killer.  This same issue is what is invading our entire workforce.  That officer was looking at the workers as though they were hourly employees who had to "earn" their pay by spending "time on the job".


      I once saw a dean of a college tell instructors that they had to work two extra days because of a loss in two days due to a hurricane.  The classes were all taught and the reports all submitted.  Why were these individuals required to be "in their offices"?  Because the administration was viewing them as hourly employees. I let mine go on vacation, no one noticed but I had gained employee loyalty.


      So, you say, without these procedures people would take advantage of the system.  Let me tell you a secret, people will still take advantage of the system and even more so because you are illustrating how inane your directives are.  I'm not saying its easy, you have to be able to discipline abusers and must be willing to be the "bad guy". It will, at times, cause that most dreaded issue, conflict, that modern managers avoid at all costs.(even productivity) It can be done if we accept that we must be willing to constantly earn our salaries as we manage our workforce.  My father once answered a question I asked him.  I asked how he knew his salesmen were doing their job between contracts.  He answered, "Alan I know the two most important words that should be used sparingly but resolve that problem". He set me up. I asked him what they were and he answered, "You're fired".


    Keep in mind that a salary is designed so that an individual that you must trust to do his/her job will be adequately compensated for a desired outcome.  It is not a reflection of his/her hourly efforts.


Just one more "Grumpy" thing to think about.