Wages & Productivity – Building A Cathedral From Scratch
My first job after graduation was at a MNC based in India with an office in Singapore. The Indian programmers I worked with were incredibly intelligent people. They were also very cheap compared to their abilities and the value they were contributing to the company (*).
(*) This isn’t a subjective statement. There is a methodology to determine the costs of projects, both for the company and the clients.
Because they were cheap, whenever there were projects, the solution was to throw X number of programmers to build the cathedral. From scratch. Again. The only way a project benefited from previous projects was through the experience and knowledge of the programmers who had worked on other projects.
There was rarely, actually never, a common pool of source code (i.e. libraries) that was created by one project, subsequently refined, and used in future projects. There wasn’t even a process to ensure that this was done.
If source code was ever shared between projects, it was because a programmer on the current project had done something similar in a previous project, and copied the code over. Ctrl C, Ctrl V.
Now, from a company’s perspective, if the programmers weren’t paid cheaply, the company wouldn’t want the programmers to keep rewriting similar code. The companies would institute a policy to ensure that after each project, a review was done to see what code could be reused for future projects, extract that code, refine it, and create libraries that can be shared. These libraries of code would subsequently be refined as they were used by other projects.
Like my boss would say – more bang for the buck.
Fool me once, shame on you; fool me twice, shame on me.
When an employee first joins a company, I would like to believe he or she would make the best effort to do his or her best. I’ve seen that in my current company. People really give their all with the best attitude.
Then they wait and see. What will management do. What sort of bonuses are given. What sort of pay increment is given. What sort of promotions are awarded. Are promises kept?
After the first year, people start asking the questions:
1. Does the company value me?
2. Do I really want to stay in this company?
3. Where can I get a pay that is equal to my value?
If promises are not kept, expectations not met, then these questions start getting asked by more people in increasing intensity. Sometimes people give the company a grace period. One year is too short a time to judge. Maybe this year was an aberration due to the economic crisis. Let’s wait one more year.
Once they get fooled or disappointed for the second year, you can bet a lot of people will start planning to jump ship. So here is the impact of constantly leading your employees on that you will take care of them.
1. Lots of time is wasted on them planning to jump ship instead of working for the company.
2. Negative energy is generated. People become less productive.
3. People also become less creative. Meaning – they aren’t going to be generating long term intellectual capital for the company if they know they are going to jump ship soon. They just do their job and go home. Nothing more. Nothing less.
4. New recruits look at the old birds leaving and go, fine, it seems the company doesn’t take care of its own. Maybe they weren’t good enough. I am. I’ll give the company a grace period. But on the safe side, I won’t invest 110% into this company. Just do my work. Do it well. And try to stand out with my excellent work. But I won’t build intellectual capital. I won’t give the company something they can use when I’m not around.
The truth is this. Treat people like monkeys. Or give them the impression they are going to be treated like monkeys, and you’re never get your company to grow well sustainably. There is only that much you can scale by adding disposable manpower.
Giving employees reason(s) to build that intellectual capital for you and the confidence that you will share the profits of a well-performing company are the best ways to increase your company’s staff’s productivity.
Some other notes
1. Talk about cognitive dissonance. There was a friend whose boss announced to the staff during a company meeting that there was no pay increment because business was bad. At the end of the meeting, he invited all the staff for a party on his new yacht.
2. I hate it when companies try to extract maximum value from employees NOW promising to reward them in the future.
The AWS (i.e. Annual Wage Supplement) was a way to add a variable component to the employee’s wage. It is actually quite brilliant. The company reduces monthly fixed cost. The company gets the benefits NOW. without really being forced to pay LATER. They only promise to pay later. The bad companies find a thousand reasons not to give AWS. Wait. My opinion is most non-government related and non-MNCs do find at least 1 reason not to give AWS (or if they do give, a miserable amount).