Blog: Excellence in Leadership - Pay What You Do Not Have

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Pay What You Do Not Have

The public will always fascinated by the amount of money paid to managers who lead a company through the chapter 11 procedures. Not because of their knowledge, their wisdom, their ability to save jobs and the business. But the mere fact that more then once there have been companies which could have been saved if it was not for the payouts to new or old managers.

Have you ever been asked to pay back your bonus—because the company could not pay the bills anymore? The willingness of the blue collar workers to give back; go without or raise or even cut back their income is traditionally higher then the one of white collar workers. A while ago the upper management of Daimler-Chrysler decided to cut the managers income. Many hoped it would lead to a change in the minds of many managers.

Did it?

Would you ask for a bonus or even give back when it could save the company?

Would you trust management when they tell you it would save jobs?

Tags: amount of money blue collar workers bonus chapter 11 company daimler chrysler give back higher then jobs managers pay the bills payouts save the company their ability to save jobs their knowledge their wisdom trust management upper management white collar workers willingness wisdom would you trust management

Filed by Frank Kanu under Business, Ethics, Leadership, Management, Teams

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Two other Opinions:

panasianbiz
07:52 on Monday, May 22nd, 2006
Hi, I just wanted to say that you pose very interesting questions here. I think that I personally would give my bonus back if I were told that it could save the company. After all, from an employee’s perspective, it would be better to have a job and salary to go back to then just one bonus. But I think you’re right when you say that top-level executives wouldn’t give back their bonuses. My answer my change if we were talking about a few million dollars rather than a few thousand!
Coleen Davis
22:22 on Thursday, May 25th, 2006
When it is not abused, adversity and shared sacrifice - including give backs of salary and bonuses - can strengthen employee loyalty at all levels of an organization - from nonmanagement up through senior executives.

If one works in a company that has a strong adherence to the
“psychological contract” - basically this occurs by treating all employees fairly, communicating what is occurring, and administering the policy in a way that allows employees to retain their dignity - the give back can happen and can make the company stronger.

This seemed to happen at AMR in the wake of 9/11. Don Carty and other senior executives gave up their entire base pay from 9/11 through the end of 2001. People really seemed to come together and to be willing to make such sacrifices. Why? The company had a history of being loyal. Many managers made far less that flight attendants and pilots (union employees). However, they were willing to make sacrifices because they were respected, empowered, and allowed to make a difference.

Trust became an issue down the road because of inadequate communication on a special package for key executives.

Because I value your thoughtful opinions, I encourage you to add them.