Saturday, January 9, 2010

The Double-Standard for Senior Management

In a time when everyday workers are losing their jobs, due in part to the reckless actions US financial institutions made in recent years, I was abhorred to read senior managers at these companies are once again receiving huge bonuses despite the economic conditions and anemic performance of their organizations.

While I tell participants in my project management workshops to be effective they need to be responsible for their actions, when is senior management at companies going to stop rationalizing poor behavior including self-serving politics, taking credit for group efforts, creating fuzzy strategic initiatives and blaming workers for poor performance?

It is time for senior managers everywhere to start acting responsibly instead of mimicking the trait. Senior leadership has long claimed they deserve huge salaries and bonuses because of the value they provide their companies. Well, if companies are not demonstrating growth, profit, and "maximizing stakeholder value" as we say in finance, then senior leaders should fire themselves or voluntarily forgo bonuses and salaries before taking drastic actions such as firing workers..

It is tough to see workers losing jobs, especially when management fails to accept accountability and responsibility for company performance. For some of those workers, loss of income is more than losing their membership at a country club or having to sell a yacht. These workers are deciding if they'll have a home, get medical attention, or how they can even provide basic needs for their families.

I am very much in favor of a free enterprise system. Yet it only works when everyone takes accountability and responsibility for their contribution to organizations and it starts at the top!

1 comment:

  1. First, I gotta say it, "Those GREEDY BASTARDS!!!" Whew! Glad I got that off my chest.

    Once again Charlotte, you've nailed it. You have a very accurate hammer! I don't understand it either.

    From a consumer's perspective, I see that these big banks create this huge financial crisis - in part due to the enormous bonuses they get for signing their bank up for risky investments. The Federal Government uses MY tax dollars to bail them out and ALSO to enable them to loan me money to grow my business. Not only do they not loan me money, but they reduce my credit limit and increase my interest rate - and I'm making my payments on time and have every reason to believe that my business will remain solvent - if only I could get an small additional loan to hold me over for a year or two. I believe that they are only out to screw the little guy. This is the same little guy they've been making their money on for YEARS and now they are screwing him - and not even dinner and a movie ahead of time!

    These big banks just can't see how greedy they've become. No, they are under "contract" to pay out these bonuses. I never understood why any company would pay bonuses to a person who just showed up and did their job (or NOT do their job as in the case of many banks!) - unless the job title was miracle worker and they could twitch their nose or say an incantation and all would be right with the financial world. Well, there is no such job title because EVERYONE knows - even the kid on the corner with his hands shoved in his pocket because he can't afford to buy gloves knows - there ARE no miracle workers! Miracle TEAMS maybe. But the banks seem bound and determined to stick with the status quo. Their favorite meal for breakfast, lunch, and dinner. More status quo. They've gotten addicted to it. It's crack for bankers! "Gimme my bonus, man. I need a fix real bad! I need to see a coupla commas in my check balance soon or I'm just gonna lose it! At least let me smell a few hundreds to hold me over."

    The loans made by these companies over the past year have been minimal and at the highest interest rates. This is at a time when interest rates are at their lowest in recorded history. Banks are NOT sharing and are NOT playing nice. They were only interested in getting the TARP money paid back so they could get back to the status quo and get their "bank crack" back!

    I was thinking last week about all the changes credit card companies have made in preparation for the new regulations going into effect. Reducing lines of credit, increasing interest rates and cancelling credit cards all together. I don't really think the regulations are going to have that much impact. I'm thinking they're just using it as an excuse and doing this so they can make a lot of money before the government REALLY starts looking at their books - like it has time for that. Maybe we need a windfall profits tax for banks like we had for oil companies. Once again, big business is standing on the backs of the financially strapped and those backs just broke last year. We're wiser now - I hope.