What happened to ‘Earn It’!

Intuitively it makes sense to reward employees and management on the basis of performance. But have the results matched the promises?
Bombardier was back in the news this week awarding their top six executives 50 per cent pay raises that took their annual remuneration to plus $6 million dollars.
The public outcry has been enough that they’ve back-tracked on the egregious pay raises for the moment!
Bombardier has never stood on its own two feet. Since time began both the federal and Quebec governments have been bailing out this company.
Most recently the governments of Quebec and Canada pumped $1.4 billion into the company. Yet Bombardier missed their delivery deadline for transit cars to Toronto, eliminated 14,500 jobs worldwide, many in Canada, and still couldn’t turn a profit last year.
Oh, and then just a few weeks prior, three Bombardier executives were arrested in Sweden on suspicion of aggravated bribery.
There are the recent stories coming out of the five major banks in Canada about the extreme pressure employees are put under to meet sales targets.
Not a surprise to those of us promised portfolios of a million dollars upon retirement only to find much of those gains evaporated into fees.
Of course, the executives at the top of corporations and banks believe themselves entitled to bonuses even when their performance is indefensible.
In the case of the unfolding Bombardier remuneration fiasco, I’ve heard business analysts and Prime Minister Trudeau attempt to rationalize and justify these outrageous pay packages as necessary to keep qualified executives on board.
The point they don’t get, but Canadians taxpayers do is, “if they were doing their jobs properly, they wouldn’t need taxpayer handouts; they would have earned their bonuses based on performance; and nobody except their shareholders would be putting them under the magnifying glass.”
Not only does the bonus culture foster dishonesty, and in some cases fraud, it also creates incivility in the workplace. Bonuses create a dog-eat-dog atmosphere.
I’m not surprised to hear what bank employees have to say about sales pressure and bad behaviour in their workplace. I haven’t talked to a happy bank employee since sales and bonuses took over meaningful advice and customer service.
We’ve put so much emphasis on financial performance that we’ve forgetten that when employees feel safe, happy, respected and trusted, there is more collaboration, loyalty, risk taking, productivity and a significant reduction in staff turnover and retraining costs.
All of these areas are net positives to a corporation’s long-term health and profitability.
CP Rail turned magnificent short-term profits and benefited their shareholders greatly when Hunter Harrison became its CEO.  But he turned CP into an ugly work culture, just as Harrison had done to CN rail years before.
Sure the balance sheet and income statement looked great after his famous slash and burn techniques were dispensed inhumanly. Harrison then leaves a demoralized workforce and moves on to his next big bonus-induced kill and leaves the remaining managers to reconstruct employee morale and productivity.
The bonus-seeking executives of corporations should remember the words of Henry Ford.  “Coming together is a beginning. Keeping together is a process. Working together is a success.”
Today performance bonuses at any level and extreme pay packages for those on top quash all that was good when employee loyalty was indeed a positive contributor to the bottom line.
Let’s be mindful there is not one example in the history of mankind where prevalent and consistent uncivil behaviour resulted in long-term progress.
P.M. Forni ,an award winning professor at John Hopkins University reminds us, “A crucial measure of our success in life is the way we treat one another every day of our lives”.
The promise of the golden age of bonuses based on performance has been an adjunct failure because its structure encourages those on top to abuse those below for their sole personal financial gain.
Unfortunately taxpayers are too often the ones left eating the corporate losses!

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