Monday, April 26, 2010

The Relentless Pursuit of Unhappiness

Here's another nugget of management wisdom for all managers-wannabe out there, and it's free so consider yourself very lucky. This advice goes pretty much against what management textbooks are saying, but it is the absolute truth. Never doubt The Roach. Ready?

Here it is: Employees do not have to be happy for your business to be efficient and profitable, in fact the state of happiness has to be avoided. Are you stunned now? If you're still with me at this point and you're not looking frantically for a Prozac in your drawer or purse, read on.

Generally speaking, employees' state of mind can be categorized on the following scale: happy, disillusioned, disgruntled.

Of course you don't want your staff to be totally disgruntled, because at that point they are updating their resumes and actively calling competitors to see if there are openings. Simply put, your revenues might tank during the next quarter because of their resignation. That is bad. Sure, you'll always be able to find other deadbeats to fill the spot, cheaper ones probably, but I gotta admit it's a lot of work to hire someone, and this activity cannot be billed to any client. The attention of any decent manager should be on delivering outstanding financial results, not interviewing Gen Y slackers who are just shopping around for perks.

The ideal balance is between disillusioned and disgruntled, simply because employees are not pissed off enough to go shop elsewhere, they still plan to remain employed by you, but at the same time they are not happy due to (insert your favourite reason here). It's a limbo state with just the right dose of unhappiness.

This stage to me is the perfect balance, as employees do not cost too much and yet they are billable to customers and provide a nice fat revenue stream. Your HR team should be able to provide you with the standard salary let's say for an analyst with 10 years of experience, for instance $60K. You then must pay between $50K and $55K, no more than that, so the analyst will be slightly pissed off but $5K is not enough for him to jump ships. You see what I mean? Of course you need to publicly say that you are offering salaries that are "in line with market conditions", which is the BS line that gets you covered. Nobody wants to be in line with market conditions, there's always this spread.

If you continue to go on the scale, you enter a state where employees are basically happy. Salaries are above market conditions, work is fun, they have nothing to complain about. This is really really bad from a management standpoint, because this means your staff is costing you too much. Sure, your turnover rate might dip below 5%, but trust me this is not the way to build profitable growth. You cannot short happiness. It's just a bleeding hole that requires attention. You need to trim the benefits and raises the next quarter and enforce new policies to reduce expenditure.

Once you understand this very basic concept, you'll understand why all the retards on Glassdoor systematically complain about their salaries / conditions / environment. They're blowing off steam, they vent their frustrations but they are not sending their resumes. The subtext is that their manager is actually doing a fine job - hence they work for a great company. Go buy their stock now.

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