Should you be a good employee?

When I worked at Morgan Stanley there was a running debate among the analysts about whether it was better to be a good analyst or a bad analyst. The theory went that if you were a great analyst you were rewarded with more work (but not much more pay, given how few analysts actually made it to the “outstanding” category at bonus time) and if you were a mediocre or bad analyst you were passed over for projects and had a much much better lifestyle (i.e., you worked 60 hours a week instead of 90 or more). Banks never really fired analysts, so one could pretty easily coast by for the time of their indenture.My own views on this are pretty clear based on prior posts, but there were a handful of people I worked with who went the other route and were rewarded with a social life.

A recent article in the Times (link here, although there have been plenty of articles in the news in the past months on similar topics) got me thinking about how often companies reward failure – sometimes in obvious ways, in the case of large severance payments for failed execs or big bonus payments for execs to work a company through bankruptcy – the same execs who brought the business into financial crisis in the first place; sometimes less obvious in the case of companies who offer their first wave of lay-offs more severance or longer tails on their benefits than later lay-offs.

One would think that venture-funded firms are generally able to avoid this type of behavior, but you’d be wrong – it happens in all types of companies. I think it sucks and I’m going to be more conscious of this phenomenon. High performance organizations reward individuals who truly contribute and, while treating their employees fairly, don’t let people take advantage of sub-par performance.

  • I worked for a non-profit company in the Marketing Dept. I worked my tail off. Running here and there and I was doing a great job. Never heard a bad word just “look at that kid go!”, “She’s got drive” and from the CEO herself, “Are you staying late??” I loved my job until the day they asked me to be head of the shipping dept. as well as the assistant to the marketing director. It all sounded great until the talk about an increase in my pay. There was none. zip. zilch. nada…. The reason was because they were non-profit. Had no money to give. Yet one person quit and their salary was trickled down to a few people but not me… that’s when I knew I was being used. I looked for another job – got it- left company A for company B and company A called me at company B asking how to do my old job and I told them, “I charge a $65 an hour consultation fee.” They didn’t call me back. 😉 The fine line between being nice and being evil! MMM haa ha ha!

  • Dave Jilk

    I used to think that executives with big severances and other special non-performance-related deals deserved it because they had abilities that were in demand, and that’s what companies had to pay.
    That’s sort of true. The problem is not skills, but attitude. If you’re negotiating with a skilled CEO, and he/she demands a large severance, guaranteed bonuses, non-performance-based stock grants, etc. — there is a different problem. This CEO has either no confidence in his ability to be successful, or is not, at the end of the day, taking the job to make the company successful.
    The job of the CEO is to make the company successful. That’s it. No other job description. And any serious upside comp should be completely correlated with that success.
    Consequently, if your CEO candidate asks for such things in large quantities, it should be a no-go signal, as sure as if he showed up drunk for the interview.

  • It’s not even just companies. Portland spent some $250K+ over a year for an “Executive Search” for someone to head up the city school system. Mr. Ben Canada came in as superattendent of the citywide system and had a huge Golden Parchute (something like 2x or 3x his yearly salary, which was also outrageous considering what his second-in-command got.) He did nothing for about two years, then took a job back near where he was from at a huge salary increase, golden parchute in his back pocket. Great system if you can make it there and work it. How has it come to this?