One more post on the Mass. Health Insurance Plan
I feel that to put another post up about the Massachusetts health insurance bill would be like beating a dead horse, but this horse is very much alive. Liberals nation-wide are clamoring for universal health coverage and any pilot program put in place will have repercussions in every state, not the least of which is our own, where liberals near and dear to us are making plenty of their own noise.
Last night I came across this story, entitled “Mass. Health Care Plan Riles Some Liberals.” As it turns out, some liberal groups are upset over the individual mandate. They feel that it is “unconscionable” to require people to purchase insurance.
Wow, I thought. Have I slipped into some sort of alternate universe where the conservatives are confusing government mandates with personal accountability and the liberals are the ones who see government control as a bad thing?
No; as it turns out, the liberals see the individual mandate as unconscionable because they wanted the legislation to be a mandate on employers instead.
Question liberal readers: Why is it okay to force a person who owns a business and provides jobs to purchase something, but not okay to force an individual to purchase it for himself?
(The right answer is that it isn't okay in either case.)
77 comments:
For interesting thoughts on article placement in the press,check out www.vermonthum.blogspot.com
Ow! Ow!
Stop beating me!
I'm DEAD already.
(Thank you veddy much.)
"because they wanted the legislation to be a mandate on employers instead."
It is, in part, by virtue of the fine on employers who don't provide health insurance.
It's amazing to me that anyone would get upset about the insurance requirement. It only applies to those who can afford insurance, but choose not to buy it. The inability to grasp "user pays" in some quarters is mindboggling.
You're right, anonymous. I should have said, "they want the burden to fall fully on the employers."
"It only applies to those who can afford insurance, but choose not to buy it."
Therein lies the problem. People should have the right to choose not to buy it. What country is this anyway?
The liberals do not object to the restriction of personal freedom, they just object to who's forced to pay for it.
You'd have to be a complete idiot to think that "the employer" actually pays any of this.
Ultimately, all benefits are funded by the productivity of workers.
If a person's not generating enough profit to cover his own wages, insurance, taxes (and even the "employer" portion of Social Security) then he'll find himself out on the street.
"If a person's not generating enough profit to cover his own wages, insurance, taxes (and even the 'employer' portion of Social Security) then he'll find himself out on the street."
It's rarely possible to make this type of determination at an individual level in companies of any size. In any case, wrongful termination laws are extremely effective in ensuring that workers not be fired if they are competently doing the job they were hired to do, regardless of their contribution to the profitability to the company.
There are thousands of corporations in this country that will lose money this year. None of them who stay solvent will fire all of their employees.
"People should have the right to choose not to buy it."
I would agree with this if all loopholes allowing these people to skate on the medical costs that they do incur were closed.
Taxes are the least efficient mechanism of ensuring that people are paying for the benefits that they receive.
Again, the MA bill requires that health insurance be purchased by those who can afford it. Otherwise the burden of their healthcare costs is unfairly spread to other taxpayers when it needn't be.
I don't care if people are paying for their benefits or not. Just as long as they get them.
Do you care if you pay the 'correct share' for the bombs dropped on your behalf?
"I don't care if people are paying for their benefits or not."
So you've even abandoned the socialist tenet of providing for those in need, and moved on to just providing for those who want. Most people in this country do want people who are able to pay their own way.
"Do you care if you pay the 'correct share' for the bombs dropped on your behalf?"
Are you equating the dropping of bombs with the funding of health care? Interesting.
"So you've even abandoned the socialist tenet of providing for those in need, and moved on to just providing for those who want."
I don't see how you get that from what I said. EVERYBODY needs health insurance.
"Are you equating the dropping of bombs with the funding of health care?"
No. I'm comparing the funding of health care with the funding of bombs. It is interesting, isn't it?
The discussion is about whether it's fair to require people who can afford health insurance to pay for it. We are not talking about people who cannot afford health insurance. You said that no one should be forced to pay for anything, and that you don't care if people pay for their benefits. So you believe that those who have no health insurance only because they choose not to buy it should receive it anyway.
"I'm comparing the funding of health care with the funding of bombs."
Ignoring for a second that this is one of the more bizarre post hoc arguments that you've sort of half-thrown out there, what does any of it have to do with whether people who can afford health insurance should have to buy it?
I agree with y'all that people shoudn't be forced to buy health insurance. I think the government should buy it for everyone, rich poor or whatever. It should be paid through taxes. Nobody should be able to "choose" to be uninsured. Everyone ought to be covered whether they like it or not, much like everyone gets to have bombs dropped in their name whether they like it or not.
I'm advocating a single-payer national health plan, paid for by the government (like bombs are) and covering everyone. I don't think individuals should be forced to buy health insurance.
Am I making sense yet?
"I'm advocating a single-payer national health plan, paid for by the government (like bombs are) and covering everyone."
...as you have in multiple other comment threads that actually dealt with that topic. This one, however, is about a specific aspect of the Mass. plan, which is dramatically different from single payer. In fact, the success of this plan may very well be the end of the last lingering groans of single payer support in this country.
You want bombs to cover everyone?
(I know that's not what you said.)
How does the government pay for things? Does it have a job? Is it a trust fund baby? Just wondering.
"Am I making sense yet?"
About as much sense as someone who's never heard of "economics."
"It's rarely possible to make this type of determination at an individual level in companies of any size. In any case, wrongful termination laws are extremely effective in ensuring that workers not be fired if they are competently doing the job they were hired to do, regardless of their contribution to the profitability to the company."
Go back to my original post. In all fairness, you'll note that I said: "You'd have to be a complete idiot to think that "the employer" actually pays any of this."
I'm happy to stand by that.
How does the government pay for things? Does it have a job? Is it a trust fund baby? Just wondering.
The answer is tax. But you knew that, so I don't understand what you're getting at.
"You'd have to be a complete idiot to think that 'the employer' actually pays any of this."
You seem to be denying the entire concept of an "employer" as an entity that is separate from its workers. Employees of medium-to-large companies receive benefits regardless of whether their department, or even the entire company, makes money; and forgo some of the profit that may or may not result from their efforts in exchange for the promise of a reasonable guarantee that their benefits will be funded every month.
Only in a self-employment situation is there always a direct correlation between performance and the provision of benefits.
(Sorry- having a hard time spitting this out...)
Ultimately, all benefits are funded by the productivity of workers.
I agree with that and I've never even heard of economics!
(The corelation between perfomance and benefits may not be direct in the short-term, but unless the business in question is subsidized somehow, the correlation will be there over time nonetheless. Companies don't provide jobs and benefits for no reason.)
"the correlation will be there over time nonetheless."
Not for all employees, yet all employees receive benefits.
There are many types of companies in which none of the current employees' efforts are directly generating enough revenue to keep the company afloat; they are just there as cogs so that a previously developed engine can continue to generate that revenue.
"The answer is tax. But you knew that, so I don't understand what you're getting at."
What I am getting at is that people are going to pay for a government subsidized health insurance system and people are going to pay for a privatized system. The government does not pay for anything. The people do.
That being said, if the government is "paying" for it, they will also regulate and price control and do all other sorts of things that will screw it up. The quality of care will go down, as will innovation. This will do nothing to solve the rising costs because the unlimited supply of tax-payer dollars leaves no incentive for efficiency.
And then there is that little matter of privacy. How any pro-choice leftist can want the government controlling healthcare is beyond me. What will you do when a bunch of pro-lifers get into office and decide that the government insurance will no longer cover abortion? There is no longer a "right to privacy" when the government controls healthcare.
"You seem to be denying the entire concept of an "employer" as an entity that is separate from its workers."
No, I'm not denying it. I'm merely adding the parts you're forgetting, which is that the employer exists to make money for its owners, and that every hire is a continuous business decision.
As I said, "ultimately, all benefits are funded by the productivity of workers." Now, if your point is that there are some employees whose weight is actually carried by the other employees, then I agree. But it is technically the job of management to get rid of such people.
I guess if someone thinks the state is supposed to redistribute, then we should expect them to believe employers should redistribute too. Some things go all the way to the core.
Finally, if a fee is imposed on businesses and some workers are suddenly no longer profitable to employ, letting them go is not called "wrongful termination." It's a perfectly legal process known as "layoffs."
In response to anonymous-
Your last post didnt' make sense. I'll stick to what I said. Companies don't hold on to people very long if it means losing money. That's pretty basic.
In response to Charity-
The government does not pay for anything. The people do.
Ours is a government of, by and for the people- so I can agree with that.
if the government is "paying" for it, they will also regulate and price control and do all other sorts of things that will screw it up.
It does anyway.
This will do nothing to solve the rising costs because the unlimited supply of tax-payer dollars leaves no incentive for efficiency.
What kind of a conservative thinks there's an "unlimited" supply of tax-dollars in Jon Q Public's pocket? Efficiency will be found by consolidating all the paper-work going around and around hospitals, insurances companies, 3rd party benefit administrators, etc.
And then there is that little matter of privacy.
I'm all for privacy, but that's eroding anyway. I think privacy will be protected when we're all in the same boat, because we'll all want privacy and we'll all be in the same boat. The abortion issue doesn't cause me concern. The right wing is trying to destroy that right anyway. Besides- of all the problems cited with Canada's system, I've never heard anything about privacy issues. Maybe they're there, but it's not what the right seems to go after when dissing the Canadian system.
"Now, if your point is that there are some employees whose weight is actually carried by the other employees, then I agree. But it is technically the job of management to get rid of such people."
That is absolutely not true. This is the nature of the corporate structure in many, many corporations. It is often the case that the majority of benefits that a worker receives are directly funded by the efforts of their current and past co-workers throughout the course of their entire career.
I brought up wrongful termination to point out that companies are not allowed to fire an employee just because they erred in assessing the profitability of the position that the employee was hired for, regardless of their competence in the job. It had nothing to do with the impact of any fines.
"Your last post didnt' make sense."
You're fond of declaring that statements "don't make sense," but when you fail to point out what part of the statement didn't make sense, it becomes clear that you just didn't understand it.
The post that you're referring to would actually be pretty easy for anyone who understands the first thing about corporate America to understand, but to be clearer I'll give you an example: a software company. The receptionist generates no revenue, code that was written by former employees that is running on servers does. The receptionist receives benefits, the server and (often) the past employee do not.
Feel free to be specific if you're still unclear.
This isn't France, people. Your boss can fire you for any reason or no reason.
If a company is paying some money-losing worker through the efforts of other employees- then it will end up like General Motors which will probably go bankrupt next month.
"If a company is paying some money-losing worker through the efforts of other employees"
Not all employees in a corporation are profit centers. This is by design. The receptionist is an example. Just think about it for a second.
Oh my God! If it wasn't in the overall interest of the damn company to have a receptionist- they wouldn't have one. Your example is silly.
All well. Time to stop making money for my company and go home...
The example directly refutes your statement. The receptionist is a "money-losing worker that is paid through the efforts of other employees" - but employing them rarely causes businesses to go under.
"The receptionist is a "money-losing worker that is paid through the efforts of other employees" - but employing them rarely causes businesses to go under."
No. The receptionist is a worker whose employment frees up other employees for more valuable work. The specific business decision that determines whether the receptionist is hired is a comparison of the total cost of hiring the receptionist vs. the cost, in productivity, of having other workers attend to those tasks themselves.
Using your example, if the state raises the minimum wage or mandates a benefit, or if an economic slowdown permits critical workers to answer their own phones and make coffee, then the receptionist may find herself laid off. Similarly, if the receptionist is particularly effective (never misses a call, assumes additional responsibilities, etc.) then she would be more likely to keep her job following a slowdown or wage hike than a different receptionist in the same situation who contributes less.
You may choose to shuffle a collective pot of money in your mind. The business decision does not revolve around an employee's direct contribution to productivity, but it still revolves around a comparison of the cost of having the employee to the cost of not having the employee.
A decision like that is made for every person in the company, from the mail clerk to the CEO -- even if you don't understand or believe it.
Wow.
"If a person's not generating enough profit to cover his own wages, insurance, taxes (and even the "employer" portion of Social Security) then he'll find himself out on the street."
and:
"Now, if your point is that there are some employees whose weight is actually carried by the other employees, then I agree. But it is technically the job of management to get rid of such people."
vs.
"The business decision does not revolve around an employee's direct contribution to productivity"
That's some pretty fancy dancing.
Of course I understand that if all employees and other non-employee assets of a company, in the aggregate, are not generating enough revenue to fund salaries, benefits, and other business expenses, in the aggregate, then cost-cutting measures must be undertaken. These may or may not include layoffs. I've been both the employer and the employee at businesses of all sizes, I understand how it works very well. But none of this has anything to do with your original statements above.
wrongful termination laws are effective in ensuring that workers not be fired An employee with a family who earns $35K will cost a company an additional $15K in employee benefits, matching FICA & worker's comp. As you increase the carrying cost of adding an employee, you start to consider outsourcing, temp agencies, and the purchase of technology to streamline the delivery of a product. At some point, if cost become too high, companies shrink through attrition. (I know somone in Burlington who was unable to find full-time employment. She's currently working two part-time jobs, each of which keep her under the threshold where they would need to provide health insurance benefits.)
- companies are not allowed to fire an employee ... Vermont is an employment-at-will state. My boss can fire me for no reason at all so long as he does not violate federal employment laws against discrimination.
A tax is a tax is a tax. Mandated individual coverage is simply a self-directed tax.
"The percentage of Americans employed by Fortune 500 companies has dropped from 20 percent of the workforce in 1980 to less than 9 percent today."
I can't help but believe that those who rage against corporations who enrich themselves at the expense of their whipped employees are fighting yesterday's fight. Ironically, if you place mandates on the employer you inadventently strengthen the position of larger corporations as they self-insure whereas the smaller employers, who shop for benefit plans in the open market, get squeezed. Be careful what you wish you.
"wrongful termination laws are effective in ensuring that workers not be fired"
Your quote was conveniently clipped. I said "wrongful termination laws are extremely effective in ensuring that workers not be fired if they are competently doing the job they were hired to do, regardless of their contribution to the profitability to the company." Of course any employee, regardless of their contract, can be fired for incompetence, gross negligence etc. but usually not because they simply came out on the wrong end of an ROI analysis.
"Vermont is an employment-at-will state."
This only means that employers are allowed to offer employment-at-will, not that all employment is at will. And it rarely means much - I know a few people who have extracted sizable wrongful termination settlements, despite what looked like iron-clad "at-will" language.
"And, just like auto insurance you should be able to decide if you want pay for the doctor putting the cast on your arm either with cash to keep the price of your insurance down, on a payment plan, or with your insurance."
Unfortunately, many uninsured choose "none of the above," knowing that Fletcher Allen will just write it off. Of course, you know who really pays for it then.
"The business decision does not revolve around an employee's direct contribution to productivity"
...because it may revolve around an indirect contribution.
But it always comes down to the cost -- on the bottom line -- of having the employee work for you versus the cost of not having the employee work for you. That difference must cover the all the wages, benefits and mandated expenses or by definition it becomes profitable to terminate them, and managers compensated on profit will let them go.
An employee -- every employee, receptionist included, is expected to have a positive effect on the bottom line, after salary, benefits and mandatory expenses. Period.
If you cannot see how indirect contributions affect the bottom line, then you obviously are not responsible for hiring and firing.
Any charge to the company on a per-employee basis will force all employment to be reevaluated in light of the added cost. Any employee whose release represents a savings to the company should be rightfully released. Companies have receptionists because they would lose money without them.
"wrongful termination laws are extremely effective in ensuring that workers not be fired if they are competently doing the job they were hired to do, regardless of their contribution to the profitability to the company."
That is simply incorrect.
Wrongful termination laws do not prohibit companies from firing employees whose function is no longer profitable. They can let you go if they decide they'd be more profitable without you.
There's nothing "wrong" about that.
Hardy said: "Five minute clinics are opening up in Wal-Marts around the country so while you are shopping you can get a quick checkup. This will cost $10 versus $60-$100 in a traditional doctors office."
According to the May 2006 edition of Kiplinger's, the cost of the clinics you reference in Wal-Marts is not $10. Instead: "RediClinic, with kiosks in three Wal-Marts, charges a flat fee of $45 for all its basic services. A sore-throat checkup with a strep test costs $62 at a Minneapolis Minute-Clinic, compared with $109 at a doctor's office, $125 at an urgent-care center and $406 at an emergency room...." (Kiplinger's, May 2006, p. 96)
The point: The cost-savings are not as great as you state, though there are savings nonetheless.
Curiously, most hospitals are private enterprises as well. Considering we've had private enterprise handle our health care since the beginning of our parents' generation (failing miserably, I might add), a government-run system would at least be accountable to voters.
I like what Hardy was talking about. I agree. Every month I don't go to the doctor, which is like, 11 or 12 per year- I've totally thrown away the money I spent on health insurance. It makes me feel like a f*ckin' sucker to tell you the truth. The only reason I have it is if I get hit by a bus or something. I wouldn't want to incur the debt or bankruptcy that would follow if I went to the hospital.
Part of the reason health care costs are so high in this country is because there are so many people with disgusting unhealthy lifestyles, because all the friggin food is pumped full of preservatives and fake color, all the meat is full of hormones and anti-biotics, because so many drive three blocks instead of walk and we have this stupid collective belief that we're just machines and doctors are gods who can always fix us regardless of what we do to ourselves. The truth is doctors are no more than professional guessers and you have to take care of yourself.
Medicine is not a sacred trust in America. It is a business. Why do pharmaceudical companies advertise prescription drugs to the general public? Can we write our own scripts? That right there indicates a systemic corruption of what medicine should be about.
"That difference must cover the all the wages, benefits and mandated expenses or by definition it becomes profitable to terminate them, and managers compensated on profit will let them go."
"Not generating enough profit" gets qualified by "direct or indirect." "Employer" changes to "managers compensated on profit." Wouldn't it have been much more efficient to just say what you meant in the first place?
You are still implying that there is a continuing ROI analysis being performed on every employee in every company, measuring their direct or indirect contribution to the bottom line. This may be your experience, but you can trust me that it is not the case for many employees at most larger companies. For example, R&D at major software, pharmaceutical and other companies is a vast, vague line item on annual budgets that is set annually or quarterly. Highly competent scientists and software engineers can go years or even entire careers without discovering a single thing that ends up making the company money. But when such a company is profitable, for whatever reason, it is almost always good business sense to continue to fund R&D as much as possible, to let that person keep trying.
"They can let you go if they decide they'd be more profitable without you."
They "can" in the sense that they "can" do lots of things that aren't supported by the law, but there are consequences. In the absence of at-will language, any gross incompetence, or other individual action justifying a firing, an individual (i.e. not part of a larger layoff) may or may not win a wrongful termination suit. But they will certainly get far enough in the court system to extract a hefty settlement. Most written or implied employment contracts do not have ROI provisions in them.
"a government-run system would at least be accountable to voters."
When's the last time you met a bureaucrat who acted like he was "accountable to voters?"
"a government-run system would at least be accountable to voters."
Voters wouldn't understand whether things were being run properly if you made a cartoon out of it.
The perception is that the individual is maxed out but that the employer can withstand the blow. (And, to a large extent, people are maxed out. On 50K a year, it's hard to support a family, to buy a house, to drive a reliable car, to set aside funds for retirement and your kid's college education.)
Our private system is failing in part because it's carrying a government-run system. Up to 50-60% of all individuals are already on a government plan which does not reimburse providers for the full cost of their care. And, the quasi-private system has been accountable to voters in that voters demanded and received additional mandated comprehensive coverage - chiropratic care, mental health care, substance abuse coverage, birth control, and so on. (I believe voters, perhaps rightfully, broke the HMO concept.) I think our medical system has been too successful. When my 86-year old grandfather was recommended a cat scan because he was anemic, I thought, this is ludricous.
(Just curious, on the wrongful termination settlements, did they stem from a hostile work environment or a violation of the family medical leave act? Did the employer not accomodate a stress-related illness? Employers and their insurers will often pay a settlement than defend against a lawsuit but the individual is canned all the same.)
"Just curious, on the wrongful termination settlements"
Mostly during the dot-com days when everyone was hiring and firing with little regard for the rules. A couple outside of that realm, never got the whole story but it wasn't for what the law considered good cause. The bottom line is that unless someone blatantly violates their employment contract somehow, you're better off offering the employee a settlement up front if you want to get rid of them. If an employer's squarely in the right then the case never gets to court, it still costs some $ but not as much as settling.
I thought the statistic I threw out was wrong.
The percentage of people with employment-based health insurance has dropped from 70 percent in 1987 to 59.8 percent in 2004. nchc.org
Employers are the primary source of health insurance in the United States, covering 120 million people. But the government provides coverage to a large number of Americans both as an employer (39.2 million for Federal, State and Local government employees, including the military) and through public insurance programs such as Medicare (39 million) and Medicaid (41 million). pbs
You guys live in a different world than I do. Fist of all, 50K per year is rich. Who the hell makes that much? Well, around here anyway.
Secondly, most of the jobs I've had have been as a dishwasher, a warehouse worker, a clerk, housepainter or some other crappy thing like that-
Those jobs pay about eight bucks an hour, there's no benefits and they can fire you for no frickin reason anytime they please.
Have you ever heard of a dishwasher winning a wrongful-termination settlement? That's crazy!
"Not generating enough profit" gets qualified by "direct or indirect." "Employer" changes to "managers compensated on profit." Wouldn't it have been much more efficient to just say what you meant in the first place?"
Are you saying you think I mean something different now than what I meant when I started? Do you believe the substance of my message has changed?
"Not generating enough profit" gets qualified by "direct or indirect" because the feeble-minded seem inclined to think that receptionists, for example, are employed at a loss. "Employer" gets changed to "managers compensated on profit" because the feeble-minded are apparently unaware that "managers compensated on profit" is the mechanism by which an employer assures itself that unprofitable employees are trimmed from the ranks.
"They can let you go if they decide they'd be more profitable without you."
Show me a wrongful termination lawsuit where a plaintiff claimed he was wrongfully released when the employer correctly determined they were losing money on him. Show me one example where that reason was challenged as "wrongful." It may be wrongful to fire someone because they're too fat or too old and then to claim you were losing money on them, but it's still legal to fire them if they really are losing money.
Continuous ROI analysis doesn't have to be done on every employee. It only has to be done on the positions.
Impose a fee on employee headcount, and you can bet the employer will carry it on the books in the payroll account. Make the fee high enough and you already know instinctively that some employees will eventually get cut. Now, the feeble mind may choose to think of those fired workers as "just the poor unlucky slobs who got cut to pay the fees for everyone else," but the decision that's really been made is that those are the employees who do not add enough to the bottom line to justify their continued presence under the new rules.
One more thing: Do you think a corporate decision maker ever reaches the conclusion that a worker's employment is costing the company money, and then decides not to fire him? Don't kid yourself.
"If a person's not generating enough profit to cover his own wages, insurance, taxes (and even the 'employer' portion of Social Security) then he'll find himself out on the street."
That's what you said. That's what I disagreed with. If you meant "in some cases," you can feel free to qualify the statement as such and I will agree with you. As it stands, it is an incorrect statement in millions of cases, and it is not even tracked in millions of others, even in the vaguest "indirect" sense. I've given you examples, I'm sorry they're outside your frame of reference but they're legitimate. I never said that a secretary was "employed at a loss." The roundabout, "indirect generation of revenue through the support of general corporate productivity" explanation that you used to dismiss the receptionist example is a far cry from your statement above.
"'managers compensated on profit' is the mechanism by which an employer assures itself that unprofitable employees are trimmed from the ranks."
You are talking about very specific situations. Large corporations do not work like used car dealerships. The notion that most non-sales white collar employees in larger companies are viewed as "profitable" or "unprofitable," as opposed to "competent" or "incompetent," is just bizarre. I specifically chose the R&D example because it seemed a very clear illustration of my point, did you not understand it?
"but it's still legal to fire them if they really are losing money."
I'm also sorry that you seem to have no experience with employment law. Maybe you don't realize that you can't call the firing of a single employee a "layoff." Maybe you forgot to mention that you're talking about at-will employees. A full-time employee who is not laboring under an at-will clause, and who has done nothing to justify being fired, will have recourse if they are fired if it was only because it was determined that they are not profitable despite competently fulfilling the job that they were hired to do. In the corporate world, people in this position are typically bought out, not fired, for that very reason.
In the absence of a written agreement to the contrary, an implied agreement that the employee will not be fired without good cause is typically assumed. An employer whose defense in a wrongful termination suit is "it had nothing to do with her, it was a business decision," if the employee is not at-will, is going to lose. I would give you an example of this approach failing if I had one handy, but I've never known a corporate attorney who would have been foolish enough to try it.
"If a person's not generating enough profit to cover his own wages, insurance, taxes (and even the 'employer' portion of Social Security) then he'll find himself out on the street."
Let me put this as clearly as possible.
1. Every employee contributes to the bottom line. Sometimes it's purely a judgment call by some executive, as to how much an individual position is worth, but they are all expected to add something after all their costs are considered.
Your ridiculous statement:
"The receptionist is a "money-losing worker that is paid through the efforts of other employees""
That is probably the most ignorant mischaracterization of my position that you could possibly make.
Actually, the greatest money-losing occurs when expensive key employees are answering their own phones, greeting visitors, and making coffee. The receptionist not only does these tasks for less money, but the resulting productivity of the other workers may more than offset the cost of employing her. Sometimes a person's contribution exists to eliminate other, greater, losses. That is not "money-losing" -- it is money-saving. And it's always expected to move the bottom line in the same direction.
2. Every employee represents a set of costs to the company. In addition to salary, there are benefits, taxes, insurance and any other costs that must be paid. The checks may be written by the employer, but in the decision-making process -- when it comes down to evaluating whether a prospective employee's contribution will offset his costs -- it is clear that items like Social Security match and the Massachusetts healthcare fee are expected to be recouped from the productivity of the hired worker.
Now, let's remember my original point -- that these costs are invariably borne by the worker. And here's how we know this is true: whenever someone doesdo ROI analysis on a position (whether and how often they are done is, quite frankly, irrelevant) invariably that analysis will demonstrate that the employee is responsible for earning back those costs.
Beyond that, if you want to pick nits over whether "out on the street" is substantially different from "out on the street with a severance," then as I see it what you're really doing is changing the subject.
3. An employer has 5 people doing R&D because they only get paid for the one in five ideas that works, and because they don't know which idea that will be until they've paid people to explore them all. And it is possible to distinguish a "good" R&D employee from a "bad" R&D employee even if both employees' projects fail to develop.
4. The vast majority of American employees work under "at-will" circumstances. And under the Model Employment Termination Act, releasing an employee for strictly economic reasons is considered "just cause."
If Massachusetts were to impose a very hefty charge on these employers, then I see no reason why they couldn't let unprofitable employees go. In reality, I don't see anyone losing their jobs over this. But that is because I believe employees can afford $295/yr. -- since employees are the ones who actually pay it -- not employers.
Hey anonymous, johngaltine...
Get a room, already!
"And it is possible to distinguish a "good" R&D employee from a "bad" R&D employee"
Of course it is, but no one even attempts to distinguish a "profitable" R&D employee from an unprofitable one. That was my point. There are thousands of highly skilled R&D researchers out there right now who will never be profitable, whose weight is always carried by other employees, who will never be terminated because they're fundamentally good at what they do.
"releasing an employee for strictly economic reasons is considered "just cause.""
In a layoff scenario, not in an individual "that person was unprofitable so we fired her" scenario. Surely you understand the difference.
"invariably that analysis will demonstrate that the employee is responsible for earning back those costs."
In a few cases, far from all. Again, these types of analyses are typically done on departments, not people or individual positions.
You keep backing up to companies cutting costs by laying off less competent employees in unprofitable departments, which of course does happen, and trying to bring it back to the termination of individually "unprofitable" employees, which just almost never happens in the absence of incompetence in companies of any size. They're two very different things.
I wasn't disagreeing with your main point that the burden of added fees may fall to workers in the form of layoffs. You said that individual employees' "unprofitability" will get them terminated, I've demonstrated where that isn't true. You said that if an employee's weight is carried by another then they should/will be terminated, I've shown you where that isn't true. If you simply chose your words poorly, as you seem to be admitting, that's fine, but you could have saved us both some time by just saying so up front.
First, as you correctly suggested, I'm going to get completely off the subject of employee competence. I allowed myself to get sidetracked. Going forward, all employees are presumed to be competent.
Second, let's reduce the debate to a series of arguments.
Argument A:
"If a person's not generating enough profit to cover his own wages, insurance, taxes (and even the "employer" portion of Social Security) then he'll find himself out on the street."
Now, it's really up to management to decide how aggressively this is applied. Obviously (to me, anyway) you don't layoff everyone in a recession, for the same reason you don't resort to layoffs just because not everyone happens to be profitable in the short run. The I in ROI may very well be a long run notion.
Furthermore, argument A is not the only criteria for laying off employees. When redundant competent employees exist, some other criteria must sometimes be used to determine who must be laid off -- seniority, salary, etc. Argument A does not preclude that.
Argument B:
"It's rarely possible to make this type of determination at an individual level in companies of any size."
Argument B is simply false. It may not be possible to make such a determination, about any given individual, from an enterprise level. But it is certainly possible to identify a department whose return is falling short of their investment goal, and to then task that department with identifying the individuals or groups whose costs outweigh their benefits, and so on, until cost/benefits have been assessed down to the individual level. And that is exactly how it is done in the real world.
Argument C:
"There are thousands of highly skilled R&D researchers out there right now who will never be profitable, whose weight is always carried by other employees"
There's a false premise in argument C somewhere. In a company that sells needles extracted from haystacks, there must understandably be teams of people who search haystacks. Now, the entire venture may indeed be funded by the proceeds from needles. That is not the same as saying that the team who's lucky enough to get assigned to the section with a needle is somehow carrying the team who is not. Either team would have found the needle if it had happened to be in their stack; that is why they're paid to search rather than to find. Giving them a bonus for finding does not imply that they're paid to find; instead it's simply an incentive to make them search harder.
Argument D:
"Only in a self-employment situation is there always a direct correlation between performance and the provision of benefits."
Does not refute argument A. Argument A does not require the correlation to be "direct."
Argument E:
"The receptionist is a "money-losing worker that is paid through the efforts of other employees"
You should be embarrassed by that one.
Argument F:
"I never said that a secretary was "employed at a loss.""
See Argument E. Did you mention something about "choosing words poorly...?"
Argument G:
"you can't call the firing of a single employee a "layoff.""
Yes, you can -- it is entirely possible to layoff one person. All that is required is good faith.
I'm only interested in reducing the argument to your "Argument A" and your statement about employees who don't pull their weight should be terminated. These are the two statements that I have taken issue with.
"Now, it's really up to management to decide how aggressively this is applied."
So now it's, "sometimes this happens, sometimes it doesn't." So much for "Argument A."
"to then task that department with identifying the individuals or groups whose costs outweigh their benefits"
Remembering your condition that each of these individuals has been determined to be competent, and that I have repeatedly pointed out that employees in the aggregate are clearly irrelevant to your original statement, describe to me how this is done in marketing, R&D or accounting departments.
"Argument A does not require the correlation to be 'direct.'"
Only because you later clarified that you didn't mean it literally. As it reads, it certainly does.
"The receptionist is a "money-losing worker that is paid through the efforts of other employees"
Of course no one actually sees receptionists this way, any more than they see the fax machine as a money-losing investment. I phrased it that way to refute your "Argument A," which deals with each employee's "profitability."
"it is entirely possible to layoff one person"
Not directly because of the "unprofitability" of that person, in the absence of incompetence or at-will language. We are not talking about the elimination of a position for reasons having nothing to do with a particular employee. Your "Argument A," as well as your statement about employees "pulling their weight," deals with individuals, not positions.
You're both fired.
"So now it's, "sometimes this happens, sometimes it doesn't." So much for "Argument A.""
No, it always happens when management reaches the requisite conclusion about the employee's profitability. That does not in any way preclude management choosing a long run definition of "profitability," or establishing a policy of cyclical -- rather than instantaneous -- review. The decision is admittedly a subjective one, depending on how the analysis is done. I never specified a method; I only generalized the factors that would be considered in the analysis.
"Remembering your condition that each of these individuals has been determined to be competent, and that I have repeatedly pointed out that employees in the aggregate are clearly irrelevant to your original statement, describe to me how this is done in marketing, R&D or accounting departments."
Relative competence (releasing the lowest-evaluated individuals), seniority (releasing the last-hired). Maybe an overall value judgment that considers both these and the fact that equally valuable employees may not all be paid the same. BTW, in case you haven't considered it, it's also possible to issue salary cuts to restore profitability. But if an employee quits over salary cuts then technically he's still out on the street.
"Argument A does not require the correlation to be 'direct.'"
Only because you later clarified that you didn't mean it literally. As it reads, it certainly does."
Oh, I meant it quite literally, whether the contribution is direct or indirect. I only had to make the distinction after you started depicting receptionists in a way in which you now admit "no one actually sees them."
""The receptionist is a "money-losing worker that is paid through the efforts of other employees"
Of course no one actually sees receptionists this way, any more than they see the fax machine as a money-losing investment. I phrased it that way to refute your "Argument A," which deals with each employee's "profitability.""
So in other words my statement is supposed to be incorrect because you could refute it if you could identify a class of employee who doesn't exist -- specifically, employees who make no contribution to the bottom line. Now that we've established that the clerical employees do not fall into that class, are there any other employees for whom you need me to demonstrate how profitability is determined?
""it is entirely possible to layoff one person"
Not directly because of the "unprofitability" of that person, in the absence of incompetence or at-will language. We are not talking about the elimination of a position for reasons having nothing to do with a particular employee. Your "Argument A," as well as your statement about employees "pulling their weight," deals with individuals, not positions."
Rephrased: "It is entirely possible to eliminate one position." I don't see the difference as it applies to the competent person who happened to be in that position before he was laid off. But I think it does apply to the person above and beyond the position, because one person can often make the position more valuable than another person would. It's how you get to be one of the researchers who survive the layoff when other competent researchers are released. It's what defines the receptionist who isn't replaced by an automated attendent because she takes it on herself to do more than just answer the phone.
BTW, at-will language is the rule rather than the exception, and that even the most common exception to at-will -- META -- permits such terminations when conducted in good faith.
And I would still love to see a terminated employee claim that a layoff for genuine profitability reasons is "wrongful."
"No, it always happens when management reaches the requisite conclusion about the employee's profitability."
Again, determination of an individual employee's "profitability" is the exception, not the rule, in companies of any size. Position is not the same as person.
"Oh, I meant it quite literally, whether the contribution is direct or indirect."
"An unprofitable person" is different from "a person selected for reasons having nothing to do with competence from an unprofitable division or company." I'm sorry if you still can't see that.
"Relative competence (releasing the lowest-evaluated individuals), seniority (releasing the last-hired)."
So you're saying, for example, that the least senior employee in a department affected, for whatever reason, by a layoff is considered the least profitable? Quite a stretch. The disconnect between losing a position in an unprofitable company and losing a person because they are unprofitable is inescapable.
"I don't see the difference as it applies to the competent person who happened to be in that position before he was laid off."
Well, I'm sorry for that, but there is a difference. When a position is eliminated, the person filling it, if competent, is often moved to another position within the company.
"And I would still love to see a terminated employee claim that a layoff for genuine profitability reasons is 'wrongful.'"
If they were told that they were individually unprofitable but competent, and that their position wasn't being cut, they should only fail to do so if they couldn't afford a lawyer of if they wanted to avoid the hassle for other reasons.
"Good cause" under META only covers layoffs, or elimination of positions independent of individual performance, which again are not relevant to your statement regarding individual unprofitability; and "inadequate or improper conduct." And there is significant precedent blunting the effectiveness of at-will language. I have seen completely incompetent employees reap huge buyouts, or simply shuffled around throughout a company, for this very reason.
"Position is not the same as person."
""An unprofitable person" is different from "a person selected for reasons having nothing to do with competence from an unprofitable division or company.""
"Well, I'm sorry for that, but there is a difference."
So, it looks like you're pretty much reduced to splitting hairs over definitions that won't make an iota of difference in how the real world works. In fact, it appears that's all you've been doing since the beginning, really. Do you have any other strategies? Feel free to resume debate over my actual point whenever you've got actual arguments.
"So you're saying, for example, that the least senior employee in a department affected, for whatever reason, by a layoff is considered the least profitable?"
Nope. I never said profitability was the only criteria that could be used. In fact, I specifically said: "When redundant competent employees exist, some other criteria must sometimes be used to determine who must be laid off -- seniority, salary, etc. Argument A does not preclude that."
By and large, it is possible for an individual to make such a superior contribution that he will be the last position eliminated/person laid off (choose one, the results are the same).
"If they were told that they were individually unprofitable but competent, and that their position wasn't being cut"
Nonsensical. Obviously, if a competent person cannot make a position profitable, then by definition the position is cut. That's what a layoff is -- whether you're cutting one person or one thousand.
"When a position is eliminated, the person filling it, if competent, is often moved to another position within the company."
If, and only if, they're deemed profitable in the new position. See Argument A.
"So, it looks like you're pretty much reduced to splitting hairs over definitions that won't make an iota of difference in how the real world works."
Pointing out the difference between a position and a person relative to your statement - which is all this discussion is about - is far from splitting hairs. In large companies, it is the rule rather than the exception that positions survive the termination of people, and vice versa. Your statement was about people.
"Nope. I never said profitability was the only criteria that could be used."
We're not talking about all of the various reasons that someone can be laid off any more than we're talking about why I get pulled out of line every time I take a one way flight. I had asked you how one determines that an individual's "costs outweigh their benefits" in certain types of departments, and your answer was, in part, seniority. Go back and re-read the thread.
"Obviously, if a competent person cannot make a position profitable, then by definition the position is cut."
Of course this is not always true, and when it is the person is not always fired. I was clearly referring specifically to a scenario in which the competent person was terminated but the position was not cut. In the absence of at-will language, and often even with it, this would be an employment lawyer's dream.
"If, and only if, they're deemed profitable in the new position. See Argument A."
I'm not sure how you think a person can be deemed profitable in a position before they're moved into it, but in any case, I'm sure you realize that a person can spend an entire career bouncing between unprofitable positions within a company. If a position in a larger company is unprofitable through no fault of the employee holding it, he will usually not be terminated, because it is recognized that HE was not unprofitable, the POSITION was.
"Pointing out the difference between a position and a person relative to your statement - which is all this discussion is about - is far from splitting hairs."
Um, the discussion is about argument A. Whether we talk about a person or the position does not matter. Wording does not affect the results.
Shirking? You're not pulling your weight -- you're fired. Misconduct? You're a liability that outweighs your contribution -- you're fired. Incompetent? You're not producing enough to cover your costs -- you're fired. Competent? If you're not producing enough to cover your own costs, you're laid off. The position's gone, and the person's out on the street just as surely as if he'd been laid off. Hopefully there are other opportunities in the company for you, but -- get this -- you won't get one of those positions unless you can more than carry your salary.
"I had asked you how one determines that an individual's "costs outweigh their benefits" in certain types of departments, and your answer was, in part, seniority. Go back and re-read the thread."
No. I said that some other criteria must be used to determine who to release when a group's productivity does not cover the group's payroll, assuming all members perform identical duties and are competent. Since none of the employees are incompetent, the termination's a layoff. In that case, a single productive employee is released because there are too many for the workload. Argument A does not say that this cannot happen. Argument A is not refuted by this.
"I was clearly referring specifically to a scenario in which the competent person was terminated but the position was not cut."
Does not refute Argument A. The scenario is nonsensical; for it to occur somebody must know something that you're leaving out. Perhaps it's a false pretense for releasing someone. Obviously it's not an application of Argument A, which was never claimed to be the only way a person can be terminated. Argument A does not say that improper terminations do not occur.
""If, and only if, they're deemed profitable in the new position. See Argument A."
I'm not sure how you think a person can be deemed profitable in a position before they're moved into it"
Actually, that describes every new hire in the history of employment. But in this case, since we're talking about an existing employee, it's presumed that the employee's abilities are known.
Argument A does not preclude the possibility that a worker can be kept profitable through reassignment or retraining; only that a non-profitable employee will be released. You're suggesting that the company can make an investment in a person to make him useful for some other purpose. They certainly have that option. But if he is ultimately not profitable they will still let him go. Argument A stands.
"Shirking? Misconduct? Incompetent?"
So this is what you meant by "unprofitable?"
"Competent? If you're not producing enough to cover your own costs, you're laid off. The position's gone, and the person's out on the street just as surely as if he'd been laid off."
Really? I better tell my friends who work in corporate accounting and law to start "producing enough to cover their own costs." I don't think they realize that they're at risk of being deemed "unprofitable."
"No. I said that some other criteria must be used to determine who to release when a group's productivity does not cover the group's payroll"
I asked you to reread the thread, I guess you decided not to. So I'll highlight it for you:
"to then task that department with identifying the individuals or groups whose costs outweigh their benefits, and so on, until cost/benefits have been assessed down to the individual level."
"describe to me how this is done in marketing, R&D or accounting departments."
"Relative competence (releasing the lowest-evaluated individuals), seniority (releasing the last-hired)."
How do you determine which individuals' costs outweigh their benefits in these departments? "Relative competence, seniority."
"Actually, that describes every new hire in the history of employment."
Actually, you can't "deem" that someone IS profitable in a job they don't have yet.
"You're suggesting that the company can make an investment in a person to make him useful for some other purpose."
No, I'm suggesting that companies DO simply reassign people between positions. Additional investment may or may not be required, often positions were simply ill-conceived in the first place. Or it's an identical position in another division. Or the employee is simply well-liked. This shuffling can and does go on throughout entire careers. Corporate America, it's a crazy world, you ought to pay it a visit sometime.
"The scenario is nonsensical; for it to occur somebody must know something that you're leaving out."
It's *your* wrongful termination scenario, unless you're saying that every person terminated as part of the elimination of an unprofitable position is incompetent.
"Whether we talk about a person or the position does not matter."
Of course it matters. I have given you several examples of why it matters.
I forwarded a link to this thread to a friend of mine who has long suffered the indignities of the mid-to-upper ranks of corporate America, and now he's now busting my chops about expending any energy at all to help a complete stranger understand a concept for which he clearly lacks context, when I have no vested interest in doing so. I think he makes a good point, so let's wrap this up.
Define for me how you believe corporate America determines that an employee is "unprofitable," such that he or she will always be let go. If the definition is one that a reasonable person could recite with a straight face, and I can't provide an exception from personal experience, then you win; I'll even send you a certificate to pin to your cubicle wall.
"Really? I better tell my friends who work in corporate accounting and law to start "producing enough to cover their own costs." I don't think they realize that they're at risk of being deemed "unprofitable.""
No need to be alarmist. I'm sure that if they weren't profitable they would have already been fired. Are you suggesting your friends might not be profitable? Then maybe you should tell them you have your doubts about them. If any of them are actually in the corporate world maybe they can explain how it works.
"No. I said that some other criteria must be used to determine who to release when a group's productivity does not cover the group's payroll"
I asked you to reread the thread, I guess you decided not to. So I'll highlight it for you:
"to then task that department with identifying the individuals or groups whose costs outweigh their benefits, and so on, until cost/benefits have been assessed down to the individual level."
"describe to me how this is done in marketing, R&D or accounting departments."
"Relative competence (releasing the lowest-evaluated individuals), seniority (releasing the last-hired)."
Ah yes, that all came right after this: "Furthermore, argument A is not the only criteria for laying off employees. When redundant competent employees exist, some other criteria must sometimes be used to determine who must be laid off -- seniority, salary, etc. Argument A does not preclude that."
"Actually, you can't "deem" that someone IS profitable in a job they don't have yet."
What a brilliant point there, Captain Obvious. Nevertheless, the screening process is designed to ensure that the applicant probably will be profitable in the specified position. And if he's not -- then he's out on the street.
"No, I'm suggesting that companies DO simply reassign people between positions."
Yes, if the company believes the employee will profit in the position. Not if they don't think so.
"Additional investment may or may not be required, often positions were simply ill-conceived in the first place. Or it's an identical position in another division. Or the employee is simply well-liked. This shuffling can and does go on throughout entire careers."
All done with the expectation that the employee makes a net contribution to the bottom line. And if it's ever determined that he's no longer profitable, then Argument A applies.
"It's *your* wrongful termination scenario, unless you're saying that every person terminated as part of the elimination of an unprofitable position is incompetent."
No, it's your scenario. It calls for an unprofitable but competent employee to be released even though the position is not eliminated.
If the company really believes the employee was competent, then it knows that the problem lies with the viability of the position, and it would eliminate it. On the other hand, if the company keeps the position but releases the employee, then that indicates the company believes the problem lies with the employee.
It's not rocket science, but it's not psychic, either. If the company is trying to conceal its motives then it's probably not applying Argument A -- even if it says so. The fact that a wrongful termination occurs under the guise of Argument A does not invalidate the Argument. Argument A states that an unprofitable employee will be released. It does not exclude termination for other reasons. If a competent person is released as unprofitable and the company keeps the position open for a similarly-qualified person, then all we know is that the company made some other judgement, above and beyond profitability, about the employee.
"Whether we talk about a person or the position does not matter."
"Of course it matters. I have given you several examples of why it matters."
Starting with Argument E (receptionist), and going on to R&D (where they have to choose a person because the positions are all the same), you have not said anything that shows Argument A does not apply, or that anyone is exempt from it.
You have not given an example of a person who is decidedly unprofitable, yet who would not be fired.
"I forwarded a link to this thread to a friend of mine who has long suffered the indignities of the mid-to-upper ranks of corporate America, and now he's now busting my chops about expending any energy at all to help a complete stranger understand a concept for which he clearly lacks context, when I have no vested interest in doing so. I think he makes a good point, so let's wrap this up."
Perhaps instead you should ask your friend if he thinks he makes money for his employer, or whether he thinks they'd keep him if they thought he didn't make money for them. Better yet, ask him to describe some people in his company whose jobs are secure even though they themselves are red ink on the bottom line. Maybe then you'll have the one thing you're really missing: an example of a mythical employee who disproves Argument A.
Let me know when you've got that example. I won't hold my breath.
"Define for me how you believe corporate America determines that an employee is "unprofitable," such that he or she will always be let go. If the definition is one that a reasonable person could recite with a straight face,"
Do you think it's particularly difficult to calculate whether any individual employee's termination would result in a net gain or a net loss? It's not my job to perform those kinds of calculations, but I trust that they're easy enough to do for the people who are paid to do them.
"I'll even send you a certificate to pin to your cubicle wall"
Trust me: nothing would make me feel more like I'd won the Special Olympics than beating you.
"Are you suggesting your friends might not be profitable?"
I'm suggesting that corporate accountants and lawyers aren't seen as being "profitable" or "unprofitable." Actually, I'm telling you that from long experience. It's simply an invalid label to place on such employees. If you'd ever been employed at a mid-to-upper level in a large company, you'd know that. Then again, if that had been the case, you wouldn't have thrown out your charmingly naive "Argument A" in the first place, and we wouldn't be here.
"Ah yes, that all came right after this:"
They were two completely different sidebars. The fact remains that you're using "seniority" as part of the equation that determines whether an employee's "costs outweigh their benefits." That is patently ridiculous.
"What a brilliant point there, Captain Obvious."
Still one that needed to be made for you, apparently.
"And if it's ever determined that he's no longer profitable, then Argument A applies."
Using your one of your definitions of an "unprofitable employee," namely "an employee occupying an unprofitable position," the reassignment takes place because it was ALREADY determined that he was unprofitable. Yet he is being reassigned, not terminated. Often repeatedly, for his entire career. So not only does "Argument A" not apply once, for this person, it does not ever apply. Imagine that.
"Do you think it's particularly difficult to calculate whether any individual employee's termination would result in a net gain or a net loss?"
It isn't just difficult, it's literally impossible to perform such a "calculation" on many employees in large companies.
"It's not my job to perform those kinds of calculations"
No kidding.
"and going on to R&D (where they have to choose a person because the positions are all the same)"
Because a person is chosen to be laid off obviously does not prove Argument A. The fact that people in the same R&D department who will never discover anything of value will never be terminated disproves it.
"You have not given an example of a person who is decidedly unprofitable, yet who would not be fired."
The employee who spends an entire career bouncing between unprofitable positions. The R&D person who never produces a single revenue-producing product, yet retains his job throughout a full career. I have known these people personally. Of course I could come up with more, I'm not sure how many you need.
Now that I ask you to provide a comprehensive definition of an "unprofitable employee," you refuse to do so, because you realize that it would allow your statement to be definitively, not just partially, disproved with examples.
It's clear at this point that you have no direct experience with the types of positions or companies that we're talking about, and that you have no interest in putting a point on this whole thing, especially given its inevitable conclusion. So at this point I'm just trying to convince the obstinate neighbor kid that pigs can't fly.
Good luck with your future corporate adventures, I'm pretty sure you're going to need it.
Say, did you happen to get that single example of an employee who is employed despite the company's awareness that they lose more money keeping him on the books than they would if they just let him go?
Just one example would do. You know, like a receptionist who is a "money-losing" employee (except that nobody actually thinks of receptionists like that). Do you have any examples of employees who are thought of like that?
Where's that one example to refute the one argument to which you object. Just one.
How about: "At some companies they have (insert job title here) who lose money, but the company endures the loss because (insert non-economic reason here)."
One exception disproves argument A in its entirety. So easy to visualize, yet so hard to do. You're a smart guy -- let's see the example.
"Say, did you happen to get that single example of an employee who is employed despite the company's awareness that they lose more money keeping him on the books than they would if they just let him go?"
I gave you two, repeatedly. R&D employee who has never participated in developing a revenue-generating product. Competent employee in an unprofitable position. Please, call upon your vast corporate experience to enlighten me as to how those don't meet your criteria.
"When's the last time you met a bureaucrat who acted like he was 'accountable to voters?'"
Let's see, how about every election cycle?
"R&D employee who has never participated in developing a revenue-generating product."
Nevertheless, the company knows it makes more money from keeping him than it would save by firing him, even if you don't understand how. And the day they decide otherwise, they will let him go.
"Competent employee in an unprofitable position."
So now you're submitting Santa Claus as your example?
"Let's see, how about every election cycle?"
Bureaucrats aren't elected, sport.
"Nevertheless, the company knows it makes more money from keeping him than it would save by firing him"
On the contrary, they realize that they may never make a dollar from employing him throughout his entire career, and they're certainly not making money on him now. They are willing to gamble that he will come up with something eventually, while realizing that they may not, hence... not terminated.
"So now you're submitting Santa Claus as your example?"
Nope, the same guy that I referred to before. A good employee in a bad department, he is "unprofitable" at that point by any definition. Eventually he's reassigned to another department, same story. Repeat until retirement. He is not terminated because he's "unprofitable" through no fault of his own.
Remember, "If a person's not generating enough profit to cover his own wages..." -present tense. Neither of these guys are meeting the standard in the present tense. Neither of them may ever meet the standard. Yet neither of them are fired.
If you wish to boil it down to tense, then you will find that virtually nobody's profitable in an immediate context.
Most employees' contributions don't reach a company's bottom line until well after the salary has been paid. It's why companies require investment to operate; because you can't ask people to just work and create money. The work is an investment bought up front, and the money comes later.
If we follow your reasoning, no employee is profitable; we're all just lucky to have jobs at places where money magically makes itself.
Argument A never left it up to the employee -- or you and me -- to establish profitability. That's the prerogative of the employer, who obviously (and necessarily) takes a longer term view of the concept than an individual does.
The company recognizes the way the investment operates in both cases. The employees remain because the company believes they are good investments in the long run.
Also, R&D is not typically a sandbox full of "idea men" doing whatever they want. Research is directed; the company at least knows the nature of the work being done, and the researcher is paid to explore the possibility whether it pans out or not.
If we eliminate a good researcher over his profitability (which is determined by the luck of the draw that assigns him to projects), then we must ask a profitable researcher to assume his duties. That comes with an opportunity cost as the new researcher is pulled off the profitable project, and it will not affect the outcome of fruitless ideas that have not yet been identified.
The company would lose money releasing the researcher.
"If you wish to boil it down to tense"
I didn't "boil it down" to anything, I quoted your statement.
"If we follow your reasoning, no employee is profitable"
What reasoning is that? In both cases, the employee is not generating enough revenues to cover their costs, regardless of how long of a time period you use to perform the comparison.
"The employees remain because the company believes they are good investments in the long run."
You now seem to be saying that if the employer believes that at some point the employee will become "profitable," even if they're wrong, then the standard for Argument A is met. "Is generating enough profit" is not remotely equivalent "may potentially generate enough profit."
"the researcher is paid to explore the possibility whether it pans out or not."
Right, he is "unprofitable" through no fault of his own. That's why he is an "unprofitable" employee, who may remain so throughout his entire career, that isn't terminated. The same is true in both examples.
"What reasoning is that? In both cases, the employee is not generating enough revenues to cover their costs, regardless of how long of a time period you use to perform the comparison."
No, in one case the employer benefits from having a researcher do unproductive research so that the other researchers won't have to do it. He searches the part of the haystack without the needle so that somebody else can find the needle. If the employer did not divide the haystack like this, then he could go broke waiting for one researcher to find all the needles. By dividing up the haystack among researchers, they work as a team to find the needles, even if the needle is only actually in one researcher's portion of the stack. The other researchers contribute to the search effort like the receptionist does, even if they themselves never find anything.
Production, for the researchers, is defined as a completely searched haystack. More researchers search the haystacks, finding all the needles, faster and more profitably than fewer. If the employer fired an effective researcher who simply happens to be searching a lot of worthless hay, he saves the expense of one researcher. But in the pursuit of developments he now has to have the other researchers check that hay at a greater expense. That implies a loss. Even if he's not finding the needles, a researcher is profitable by sparing the employer that loss. It's an indirect contribution, like the receptionist, which can be measured in the losses that occur when the employee leaves.
The optimum number of researchers is a number below which the cost of firing one researcher is greater than the expense that would be saved. Thus the researcher is profitable, because if the employer terminated the researcher the employer would lose money. Whether the researcher has ever actually found anything is irrelevant. The same math applies to researchers who have developed successful products, assuming competence is not the determining factor.
In the other case, it appears that management is not competent enough to define viable positions. So you're saying that management guidelines do not apply where mismanagement exists. Gee, no kidding.
"If the employer did not divide the haystack like this, then he could go broke waiting for one researcher to find all the needles."
The worst case scenario built into an R&D budget typically doesn't involve the employer "going broke" if no one finds anything, because it's recognized that it's entirely possible that no one will find anything in any given year.
The researcher chasing his tail for years on his own idea that never comes to market produces no revenue and does not take the burden off of anyone else, unless they were going to have an identical idea and came up with a marketable one instead. That is the nature of R&D. The fact remains that the researcher has not generated revenue sufficient to cover the cost of employing them, and they are not terminated.
"In the other case, it appears that management is not competent enough to define viable positions."
Inviable positions are constantly being defined in segments of every large company in the world. Creating business units and then shutting them down when they don't work out is usually not considered to indicate "incompetence" on anyone's part. It is often a necessary component of innovation. Sometimes it's just a bad call by an otherwise competent manager. They can spring forth for a variety of reasons having nothing to do with anyone's competence or lack thereof.
I understand that the corporate America I'm telling you about is a far cry from your idealized version, but it is the one that exists, and the second example I provided is far from a fringe case. Your Argument A is not excused from being disproven because exceptions to it typically arise from imperfections in corporate America - anyone who has been there can tell you that corporate America is imperfect more often than not.
"The researcher chasing his tail for years on his own idea that never comes to market produces no revenue and does not take the burden off of anyone else, unless they were going to have an identical idea and came up with a marketable one instead."
Research is not conducted that way in the private sector. Researchers do not chase their own ideas. A company decides what ideas it wants explored, and assigns teams to explore them. Observe how any pharmaceutical company works. If a scientist proves that a proposal is not workable, he frees up another scientist to make a discovery. Without the first researcher, the second researcher would have taken that much longer to explore both theories.
Suppose you divide all your research between two competent scientists, and one of them just happens to develop a project each year while the other does not. If you release the scientist who produces nothing, the remaining scientist now produces something every other year, because he's now handling all the unsuccessful ideas as well as the successful ones. The difference is the contribution of the first scientist, even if he never developed anything successfully.
Now, if you want to propose that there's something about a certain scientist that keeps him from producing while all his colleagues succeed, then I cannot account for managers who don't act on a problem simply because they haven't recognized it. Obviously, he's only there because they still think he will produce something.
"Inviable positions are constantly being defined in segments of every large company in the world."
Nobody ever argued that. Your suggestion was that employees go entire careers without ever being placed into a profitable position. That's hardly "typical." But either way, it amounts to a failure of management to recognize the problem and then effectively act on it -- it's not an example of an unprofitable employee who is being given a pass.
"Researchers do not chase their own ideas."
I'm sorry you've no experience with this, but they often do. The ones that I've worked with do all the time. There is an enormous amount of self-directed R&D going on in this country whose scope is bounded only by the general business of the company. The bigger the R&D budget, and depending on the industry, the more prevalent this is.
"If you release the scientist who produces nothing, the remaining scientist now produces something every other year, because he's now handling all the unsuccessful ideas as well as the successful ones."
That would make sense if the same number of ideas were to be explored regardless of staffing levels. That is, of course, not the way it generally works. The bigger the budget, the more ideas explored. The budget shrinks, some ideas get shaken out.
"But either way, it amounts to a failure of management to recognize the problem and then effectively act on it -- it's not an example of an unprofitable employee who is being given a pass."
It's not always a "failure of management to recognize the problem and then effectively act on it," it's often a calculated risk gone awry, a victim of market changes, or any one of a number of other things. Employees regularly reside in unprofitable positions for months or years for a variety of reasons. Regardless of why they were there, while they were there they did not generate revenue sufficient to cover their costs. Argument A didn't specify "throughout an entire career."
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