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Don't Tell, Don't Flaunt Might Be Best Policy For Salaries
10/05/03
By: Bonnie Eksten, WilmingtonStar.com
I once worked for a manager who thought the best thing that could happen for his business would be a recession - it would make employees happy they had a job, cut down on grousing and bring in better qualified candidates.
Well, sure, but it doesn't make for a happy ship - or a crew that doesn't take the first opportunity to mutiny once the economic picture improves.
Have three years of cutbacks in a lean, mean, bottom-line, no-frill approach taken its toll on American workers' psyches? It has been a long time since workers in the private sector have gotten significant pay raises, and the general mood seems to be somewhat darker.
I can't remember where or how I learned it, but one of life's early lessons is to keep your salary information to yourself. I don't think my father sat me down before my first after-school job in the Ben Franklin toy department and said, "Don't tell your friends you're making $1 an hour."
Even if he had, it would not have mattered - everybody I knew was making $1 an hour, and all my friends and I ever talked about was boys.
All grown up now and making more than that, It think the advice is still valid. But we're in an information age and everyone knows what people are making. Sometimes it makes them angry, and that anger can have a cascading negative effect.
When Dick Grasso's compensation package at the New York Stock Exchange was revealed, it apparently precipitated Mr. Grasso's resignation. That resignation opened the gates and a series of resignations followed.
In the public sector, people are questioning salaries and bonuses.
Locally, this week we learned former University of North Carolina at Wilmington Chancellor James Leutze did not retire but is in a transition phase. He is no longer the chancellor, yet he continues to receive his chancellor's salary, $184,000. We were told it is a customary practice. While that may be true for academia, it is not so for most workers in the private sector. Consequently it's a hot topic.
Former Wilmington Police Chief John Cease gave out $60,000 in bonuses just before he was asked for his resignation. He refused and was fired.
Are Americans experiencing wage envy?
I asked Paul Dorf, managing director of Compensation Resources Inc., a New Jersey-based business, if he thought that was the case.
Mr. Dorf, who advises corporations on their compensation policies, said perhaps there is an envy factor, but it's not a bad thing.
He said he would venture a guess that Parade magazine's issue detailing salaries and photos of people and what they make probably gets as high a rating as the Sports Illustrated swimsuit issue.
He believes most people derive a vicarious pleasure from the lives of the rich and famous and use that as an incentive to ask themselves, "What do I need to do to get there myself?"
It's only when wealthy people do wrong, or give the appearance of doing wrong, that Americans begin to get angry, he said. If, for instance, a CEO lays off 10,000 workers and his stock then goes up by 10 points, all of a sudden he appears to be making money off the skin of his employees - the one who are out of work, Mr. Dorf said.
Ethically there's a problem with that.
He suggests that Dennis Kozlowski, former Tyco CEO is a good example. He is on trial now charged with misuse of millions from the company. If it's proven what he did was illegal, Mr. Dorf said, Americans will not be envious of his extravagant lifestyle, they will be mad.
Employers have a duty to motivate staff members, even in bad times.
It's how the message is played out that makes a difference between a happy staff and one that is resentful. If, Mr. Dorf said, an employer tells his staff there won't be any raises because times are tough and then starts driving a Rolls Royce (true story), employees are not going to buy the times-are-tough routine.
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