Category Archives: Ethics

Nasty People Drain Productivity in the Workplace

Nasty People

I recently re-read the Robert Sutton article entitled Nasty People.  This article, which helped lead the way to his recently published book The No Asshole Rule: Building a Civilized Workplace, discusses the impact that employees who create a hostile work environment have on others and the organization itself.  I immediately began to reflect on the various nasty people who I have worked with over the years.

I thought of two people in particular who didn’t know what a carrot is, but they have a mountain of sticks.  They need a mountain of sticks because they wear them out so quickly – figuratively bashing those that don’t do exactly what they want, when they want over the head.  More frustratingly they will often employ their clubs when they only have a small amount of facts, often clubbing an innocent person.  And once proven wrong, they can not muster the strength to say “I apologize,” instead they are out clubbing the next person.

 

By clubbing I am referring to the nasty, accusatory and public emails (conference calls and face-to-face meetings) that a large number of us have had the displeasure to witness (or experience).  You know the type – the one that has nearly every member of the organization on copy – and it serves to public point the finger at an individual(s).  More often than not, its purpose is to cover the butt of the person sending it.  This is because they are admitting that, while the subject of the email is near and dear to them, they couldn’t manage to stay engaged in the project to help keep it on track.  But they will now cast blame, after the fact, where they believe it should lie.  Go back and re-read these emails, as a key stakeholder do they accept any responsibility?  I am willing to bet that in 98% of the cases the answer is NO.

 

What these individuals don’t seem to understand is that this behavior does not accomplish what they hope.  My belief is that they feel that by publicly chastising people, it will motivate that employee to work harder the next time.  While I am not a Psychologist, I have to believe that this actually de-motivates people as well as it creates bitterness and resentment.  As Professor Sutton points out, it can often lead towards the escalation of this nasty behavior as people begin to lob verbal hand grenades at each other.  I would also argue that as a result of these behavior productivity decreases, which is exactly the opposite effect that the “club” holder would argue they were trying to accomplish.

 

If there was no management intervention following a “clubbing” the employees learn that they need to “CYA” from this point forward.  So they begin to document every step and wait for countless approvals and signoffs before they move forward.  Projects begin to take much longer than they could or should, often because the employees are covering their butts by documenting where the problem has probably always existed – with the person(s) doing the clubbing.  The net effect is that the mood of the group drops and so does productivity.

 

I disagree completely with publicly embarrassing a colleague and those that do it should be disciplined.  And when it is done with a lack of evidence the penalty should be more severe – up to and including termination.  People who are too busy to pick up the phone, or visit with a colleague that they “believe” missed the target, in order to gather data and possibly council them (if necessary) are too busy to continue to work for the organization.

 

Because of the nature of business, we ask employees to deal with a lot – from 50+ hour work weeks, nearly 7 day work weeks, and on and on.  We should not hire or tolerate nasty employees who make work life even more difficult.  And when you consider the price of unproductive behavior and possibly future legal activity, they can produce a very tangible negative financial impact on the organization.

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Filed under Corporate Culture, Ethics, Harvard Business Review, HR, Leadership, Nasty People, Productivity, Rant, Robert Sutton, The No Asshole Rule

Executive Compensation

Executive Pay

 

Everywhere that we look we see articles, reports and blog postings about excessive executive pay.  Now, I admit that I am a bit conflicted.  I do not consider myself a greedy person, but I do believe that I am willing to accept as much as someone is willing to pay me for my absolute best efforts.  But, when you see some of the examples of executive pay over the last few years – some have gone past fair compensation to pure greed.

 

One such example is Occidental Petroleum Corp. CEO Ray Irani who, according to the LA Times, received $460 million in total compensation in 2006.  But the all-time “best” was William McGuire, CEO of UnitedHealth Group who in 2006 earned $1.6 Billion.  Luckily only $333 million of the compensation was tied up in a stock options backdating scandal that may land him in jail.

 

“From 1992 to 2005, the average CEO saw his or her pay rise by 186.2%, while the median worker saw wages rise by 7.2%.” (2007, PBS.org)  According to Anderson et al. in “Executive Excess 2006,” for every $1 earned by the average worker, a CEO earns $411.  No single employee is valuable enough to command such a wide disparity in pay.  No one will argue that a CEOs job isn’t stressful and we recognize that if is nearly a 24×7 position.  But a CEOs base salary and bonus make up for the nature of the position.

Ratio Executive Pay

 

So while the chief executive has a base salary that is significantly larger than the average employee – understandably so.  What is inexcusable is when an executive breaks the law in order to line their own pockets.  “Fourteen percent of option grants to top executives between 1996 and 2005 were ‘backdated or otherwise manipulated.’” (2007, PBS.org)

 

The largest gap in executive pay is when we focus on the industry that has seen the largest jump in the price of its products – energy.  “CEOs of the top 15
U.S. oil companies are paid 281 percent that of the average CEO in a comparably sized businesses. The top 15
U.S. oil CEOs received an average of $32.7 million in 2005 compared to an average of $11.6 million for CEOs operating in a similar market size.” (2007,
PBS.org)  The poor oil companies are seeing the costs of crude oil go up, while their profits and executive compensation both go through the roof.  How will they manage to survive?

 

When you consider that they executive compensation committee is made up of senior executives or CEOs of other companies, is it any wonder that they approve these incredible pay packages for their “buddies?”  Imagine if there were caps on executive pay and these additional profits were either returned to the shareholders in additional dividends and/or reinvested back in the business – instead of lining one person’s pockets.

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Filed under CEO, CEO Salary, Ethics, Executive Excess, Executive Pay, LA Times, Occidental petroleum, Options backdating, PBS, Ray Irani, United Health Group, William McGuire

Oracle files suit against SAP

When I read the article on the suit filed by Oracle against SAP, I found myself wondering about Oracles license management system.  Time and the courts will tell if SAP is guilty of the charges filed against them by Oracle, but I was surprised that Oracle customers (or SAP employees as the suit claims) would be able to download software that the Oracle customer had not licensed.

 

Is it legal to pretend to be your competitor’s customer and download software?  If it is legal, is it ethical?  In a competitive business environment, is “all fair in love and war?”

 

I personally believe that even if the practice is deemed legal, it is definitely unethical to pretend to be a competitor’s customer for the purpose of downloading confidential materials and software.

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Filed under BusinessWeek, Ethics, Oracle, SAP, Technology