Onion Blood Squeeze

 When you pay attention to developments in the business climate that we see in the business news sections of our local newspapers, a new to the business paradigm is immediately detected.  It’s strange when we realize there will often be abrupt waves of lay offs in businesses that we know are doing well, even in excellent economic times. 

Anyone who has been the victim of a lay off knows understand the upheaval and emotional agony that such a change can create.  The phenomena of big scale business lay offs has been far more widespread in the recent ten years than other eras in the history of our corporate communities. This has been recorded in studies in business trends.  One has to wonder then what has prompted this change in behavior by employers?

Of course, economic situations and rapid upheavals in the marketplace can play a role in how companies manage their workforce, but that alone doesn’t explain this significant change of behavior in the business relationship between employer and employee.  The fundamental base reason of this transformation is a change in mentality of employers.  

Historically, the economic paradigm between employers and employees has been a contract of mutual assistance.  Whether the contract is agreed to or only understood, the understanding is that the employer will pay the employee and provide them with the essential needs they have to work on site for them.  In return, the employee will fulfill his or her job on time and well, will arrive to work reliably and be a devoted employee.  This model is mutually helpful, innovative and trust based.

The business paradigm that has lead to a lay off based model with a fundamental shift in how employees are seen such that…

§ The employer often feels that the employee is a bother and a cost.  The boss feels the employee benefits, including insurance and vacations, are none of his business, and they are a particular sore point with him.

§ Employees are expected to do their part in the prior company model but just with appreciation for the payment. Nothing more.  The company wants the same return from the prior model but they want to tweak the model in terms of employer expectations with no change from the employee side.

§ Frequent turn over of the personnel base may hinder long term advantages.  The company maintains the work force at entry level position forever. When experienced personnel are replaced, the need for salaries to rise, for vacations, and eventually for retirement benefits is minimized.

§ The basic premise of this new paradigm is that there is an endless supply of competent labor “out there” in the jobless labor pool.  This creates an exploitive human resource equation . Present workers are easily replaceable by willing unemployed persons .  

This business model does make some economic sense but like any equation the underlying assumption has to be constantly true for the model to succeed long term.  But this equation is only true in a depressed economy with a significant supply of talented workers on the labor market.  This approach to human resource management might backfire spectacularly, however, if there is a movement in the labor markets that eliminates that ample supply of replacement personnel.

This exploitive approach to the management of employees turns the assumption of trust between employee and employer into an assumption of distrust.  It can have a disastrous influence on employee morale so that even employees still being employed will provide poor performance since they no longer are in a supporting relationship with management.  The retort of “Well, then we will just fire those dead beats and get new ones” is not a working solution since once the employee morale is down, the productivity across the work force falls down and stays down.  

This impacts the ability of the enterprises to sustain current initiatives and supply quality commodities and services to the marketplace.  And as the exploitative attitude toward workers results in terrible products and services for consumers, then the business will start losing market share which are the early symptoms that the business is doomed for extinction.  This alone is a solid cause to revisit the employment business model and to think about going back to a trust relationship with the labor base in our organizations, for their good as well as our own.

Location:

Share :