Wednesday, April 4, 2007

Who has the loyalty problem?

There are an endless number of bizbooks on how to recognize, reward, retain and otherwise gain the loyalty of employees, but the bottom line is that companies earn the loyalty of their employees by being loyal to their employees. That's simple enough and shouldn't require undue amounts of pizza.

Of course, then there are companies, like Circuit City, that don't deserve anyone's loyalty. This is a business that just fired 8 percent of its workforce, announcing:

"The company has completed a wage management initiative that will result in the separation of approximately 3,400 store Associates. The separations, which are occurring today, focused on Associates who were paid well above the market-based salary range for their role. New Associates will be hired for these positions and compensated at the current market range for the job."
In other words, these are loyal employees who have stayed with the company long enough to earn a few bucks an hour more than the norm. Circuit City figures that experienced employees are no more productive than inexperienced employees, so why pay more? In a gesture of largesse, the company is allowing the fired employees to reapply for their jobs -- after 10 weeks and at starting pay rates.

An article in NYT says that Wal-Mart is thinking along the same lines. (There's a surprise.) Now, I'm not saying that Circuit City or Wal-Mart shouldn't have the right to treat their employees like disposable raw goods. I'm just saying that nobody in their right mind would want to work for companies that offer no future or patronize their stores or ultimately, invest in them.

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