I have been thinking about this for several years.
I am still not sure I am going to say this correctly.
But still… Here goes…
There is a trend that has been going on for several years where companies have put a great deal of importance in cutting “costs” to improve the bottom line.
In order to cut these “costs” several companies have chosen to lay off employees and freeze raises for the employees who actually do the work, and provide the services, labor, and products that the company is supposed to be in the business of supplying to their customers.
These companies often get rid of the longest standing employees that have the most experience and highest skills in the company’s product.
This is hindering the capabilities of the company, leading to customer dissatisfaction, and customers going to other suppliers, thus leading to the company seeing their bottom line going further down.
To fix this issue they decide to cut more people from their workforce and continue to hold employee raises at 0%.
What I do not understand is how corporations can look at this self destructive behavior and say “Hey Mr. “Chief-whatever” You did a great job”, then pay obscenely large bonuses to these people with a “C” at the front of their title. Sure they cut costs to make the bottom line look good at the end of the year. However, continuing to shrink the workforce leads to a loss of client satisfaction.
That will lead directly to a further degradation of the company’s bottom line the next year, ruins the companies reputation, eventually leading to potential clients not considering that company for business as the reputation has gone down as they lose quality employees.
Why would you consider giving a bonus to any CEO, CFO, CTO, anyone with a “C” at the front of their title, if they ran the business so poorly that in order to salvage the bottom line, they have to freeze raises, or lay off employees? Isn’t that an abject failure of the “Chiefs” that they have to butcher the company to save the bottom line?