Paid The Big Bucks

$$ People are upset about the huge bonuses that have been handed out to CEOs, presidents, and other high level employees of companies. Some of those companies aren't exactly doing well, and some of those bonuses have been paid with "bail-out" money. Many people's anger is misplaced. They shouldn't be upset that the bonus was paid - that's a matter of contract law. Perhaps the bonus was tied to the employees annual evaluation, or some other measurement such as customer satisfaction surveys. If a certain goal is met then they will be paid a certain amount. These people were hired under a contract that included those bonuses - therefore they should get paid those bonuses, even if the company is now failing (many employees at these failing companies were still individually performing well).

However, people should still be upset. They should be upset that the contract was signed in the first place (not that it was paid). The problem is that these types of bonuses should also be tied to the company's performance. At the very least to the performance of a certain well defined area of the company. So it might read that a person's bonus depends on how well they score on her/his annual review AND on the financial performance of the company. This is especially important for the high level management and executives.

At this level the employee should be taking personal responsibility for the organization's performance as well as the performance of all subordinates. If the organization isn't doing well it is the executive's fault. Using the auto manufacturing sector as an example it is clear that not all companies are suffering equally. And yet the CEO of one particular organization (the one that used to be #1) insists that the problems are not their own organization's. Instead he blames entirely different sectors (banking for one) for his corporation's problems. Then he has the temerity to say his company just needs some money to get through this period. It doesn't need to "fix anything" just survive another year or so and all the problems will go away. He clearly is not accepting any of these problems as his own - no wonder Obama told him to resign if he wants his company to get anymore money (he is now known as the ex-ceo of GM).

The excuse by these companies for the salaries and bonuses offered is often "we have to pay the big bucks to attract the best talent." I say that's a crock. It is similar to high level sports where the difference between the best is measured in hundredths of a percent. Just like high level sport, having the absolutely best person does not guarantee that the team will do well. Having a well organized and motivated team that are individually "pretty good" will always beat a poorly organized, under-motivated, team that happens to have a superstar.

Most of us aren't paid "the big bucks" but if offered them we would probably take them. Don't blame these people for accepting the money that they were promised when they signed their contract. Blame the organizations that are stupid enough to have such contracts.