A few years back I asked Scott Adams, the creator of the Dilbert comic strip, how does it feel to be “even” referred to as a management guru these days: “ironic”, was his one word answer! Cartoonists and comic strip writers are usually men of few words. So I guess Adams was just being modest, for I have learnt more about how organisations “really” work, by reading the Dilbert comic strip, than all the tomes that made me fall asleep at the business school.
One of the things that Adams keeps harping on is that employee morale is a risky thing. In The Dilbert Principle he writes: “Happy employees will work harder without asking for extra pay. But if they get too happy, endorphins kick in, egos expand, and everybody starts whining about the fact that with their current pay they’ll have to live in a dumpster after retirement.”
So what is the way out? “The best balance of morale for employee productivity can be described this way: happy but with low self-esteem,” explains Adams.
People who understand this best are managers (the real ones, not just the ones who just come with the designation), who are in positions of authority, and they try and make the best use of it.
As Satyajit Das explains in Extreme Money: Masters of the Universe and the Cult of Risk “If a manager has ten people in their department, then reducing each person’s bonus by $100,000 increases the manager’s own share by $1million,” he writes.
And how does this help? It helps precisely in the way that Adams explained it earlier. “Happy employees man that you have paid them too much. Disgusted employees mean that you have paid them so little that they will leave. The optimal point is between satisfied and dissatisfied – enough to keep you but not enough to make you complacent or diminish the manager’s own bonus,” explains Das.
A simple way of keeping employees happy but with low self esteem is to create some self doubt in their minds. So if your boss often asks questions like, are you sure this is the way we should proceed, or keeps your KRAs a little vague, or doesn’t bother to find out your entire skill-set, or keeps reminding you of how hard he had to fight to get you that bonus you got, or there is no opportunity for any new thinking and it is either his way (the boss’ way) or the highway, you know what he is up to.
There is also an old fashioned way of creating self doubt. As Adams explains “One of the most effective ways…used by managers is to practice ignoring an underling…this sends a message that the employee has no human presence.” All this ensures that enough self doubt is created in the mind of the employee. And he doesn’t look for a very high raise, and at the same time starts to think that “Thank god, I at least have this job!”
Also, it helps managers hide their incompetence. Laurence J Peter came up with The Peter Principle which states that in a hierarchy every person rises to his or her level of incompetence. So all good salesperson do not make for good managers. All good teachers don’t make for good principals. All good derivative traders don’t make for good CEOs. In my profession, all good reporters do not make for good editors primarily because the skill set required for both the jobs are “very” different. So if a boss or a manager has reached his level of incompetence then by creating self doubt in the minds of his underlings and reportees he can continue shielding his incompetence.
These days one grows higher in the hierarchy there is an inherent need to understand more and more things. The specialisation that is encouraged at lower levels thus becomes a handicap. As Das writes in Extreme Money“ few senior bankers understood transactions outside their expertise. Even then, their knowledge was frequently dated. Today, a 55-year-old rarely understands a 25-year-old. In banking, the rapid rate of innovation and change meant that a 35-year-old did not understand a 30-year old.” Hence the rate at which an individual rises to his level of incompetence has become faster now. So there is a greater need to create a level of self-doubt among his reportees.
What works for bosses and managers also works for companies because the days when Henry Ford doubled pay overnight are long gone. “Facing low worker morale and high turnover on the production line in January 1914 Henry Ford raised wages to five dollars a day, doubling at a stroke most workers’ pay,” writes Eduardo Porter in The Price of Everything. “It worked…after the pay hike Ford was churning out 15% more cars per day with 14% fewer workers.”
But Ford could double salary overnight primarily because the company enjoyed a near monopoly with very little competition. “Ford…enjoyed fat profits unheard of it in the cutthroat competitive environment of today. Today, multinational companies scour the globe of seeking cheap labour and low taxes, abundant raw materials, and proximity to consumers. And competition is ruthless,” writes Porter.
The days of monopoly profits are long gone. So in this day and age companies cannot afford to have employees with high morale who would want to be paid very well. Costs have to be kept under control. And extremely happy employees with high morale are not the best way to go about doing it.
(The writer can be reached at vivek[email protected]. The article was originally published on Rediff http://www.rediff.com/business/slide-show/slide-show-1-column-why-bosses-like-unhappy-employees/20120402.htm)