Furloughs or Commitment

I read a very perceptive post on Harvard Business Review's blog by Tammy Erickson called How the Recession Is Changing Talent Management. You need to read the article because she presents a compelling case for how the actions of businesses contribute to the prevailing attitude of free-agency in managerial and professional workers.

She claims that reducing hours or exercising furloughs for knowledge workers further disengages those same workers. What does a manager do when asked to work 32 hours a week for 80% of their regular pay? The managers and knowledge workers generally work to get a unit of work done. Can you only lead your team 80%? If this professional associate was working 45-60 hours to get the job done, do they cut their effort 20% to match their pay cut, or do they cut to 32 hours? Why would any employer want to incent a managerial worker to do something less than a complete job?

She mentioned that the problem went back to the 1981 recession, but I think it goes back further. This is a problem of engagement and sustainability.  We haven't done a very good job of creating a sustainable culture in industry.  Relationships between people and profits have always been tenuous since the industrial revolution began.  Over the last 60 years, we have witnessed many task-oriented jobs becoming commodities. In the book, A Whole New Mind, which I review here, Daniel H. Pink points out that if it can be done overseas or by a machine, you can expect that to eventually happen. If the position can be cut into chunks and priced by the hour, then you can expect it will soon be done by workers in a country with different economics or by a computer somewhere at little or no variable cost. He suggests that the highest valued jobs in the future will be jobs that require the right-side of the brain; the artistic, creative, relational side. These are the most difficult skills to put in a time and money box.  How many hours does it take to create a painting? How long must one work at building a client relationship?

The engagement slide began early in the industrial age. Compensating someone fairly for contributing their life to the well-being of a company is very complex. First there were unions and pensions; then contractors and 401k's and options. Furloughing knowledge workers further disengages knowledge workers, accelerating the devaluation of several types of jobs, companies or even entire industries.

Can a business actually exercise the courage to choose? Does anyone know of any businesses that have chosen not to trade people for profit? Would it kill the company to lose a little more money for a short period of time in exchange for demonstrating that their people matter more than this quarter's numbers? How would the associates react if their company decided to lose money this quarter but keep everyone? Those very people who stayed might come up with the solution to the short-term financial difficulty without furloughs or devaluing the very people necessary for survival.

What do you think? Can a business actually have the guts to put its people before one quarter's numbers? Should they? I'm sure some readers would think that a business should never lose a cent.  Commitment must always be demonstrated before received.  Organizations making that kind of commitment will receive it in return.  If you know of any, mention them in the comments so we can give them some kudos.


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