"In 1965, CEOs at America's largest companies earned about 20:1 what their average workers did. The ratio climbed to approximately 59:1 by 1989 and 199:1 by 1994. At the turn of the twenty-first century, these CEOs were earning more than their average workers at an approximate ratio of 411:1." - Page 38, People Over Profits* by Dale Partridge.
Employee Disengagement. That's what happens.
Makes sense. Employees haven't disengaged so much as CEOs have abandoned them in favor of compensation packages that average 411 times their employees' average salary.
And who among us wouldn't? Imagine you're offered 411 times the average pay of your teammates. But you have to abandon them, ignore them, forget about 'em … and the work they do to make you look so shiny and new to the business press. Would you, could you?
Let's say the average pay of those on your team is $50k. And your next phone call is from your company's Chairman of the Board. He offers you … $20,550,000 per year to abandon your colleagues and peers and friends on your team, ignore them, forget about their names and faces … and the work they do to make you in your new position look so shiny and new to the business press. Would you, could you?
Let's say you went home and told your spouse, partner.
"Hey, honey. Yeah, crazy day. Chairman of the Board offered me $20 Point five-five million to be CEO. I said 'Nah. Gotta stick w/ my homies. I'm hungry, what have we got to eat.'"
Yeah, you're laughing now 'cause you know that would be one crazy evening.
But that's what's been happening, not in one phone call because Boards of Directors are just as disengaged from their employees as their CEO, over the past decade.
Despite the cost to the economy, $400 billion or so, and the money thrown at the problem, employee engagement has remained unchanged over the past decade. About 30% of employees remain engaged, intellectually and emotionally, with their work.
Which, honestly is a miracle if you consider the rising workload, the longer hours - more than any other developed nation, thank you very much Jeb Bush - and the paltry average annual raises vs the skyrocketing surge in CEO pay for those same companies during that same decade.
No amount of happy slogans and PC talk and Chief Happiness Officers and gamification ('scuse me, I gagged.) and pizzas and free lunch is going to change employee engagement. Talk about your elephant in the board room. Sheesh.
I guarantee you few employees manage their discretionary effort based on their CEO's average pay as compared to theirs. Besides, they don't have to. It's managed by the company and all its decisions, big and small, that change priorities and values, that stem from those ongoing changes and trickle-down their corporate ladder to the employees and from there out into our communities, culture, economy. These decisions include:
- No we can't afford training
- No we can't afford new equipment
- No we can't afford middle management
- No we can't afford all these employees.
- No we can't afford a fully-funded healthcare plan
- A minimum wage of $15.00?!! Are you kidding. That'll bankrupt us.
- More part-time employees and fewer fulltime employees cause fulltime employees are paid benefits.
- No we can't afford maternity leave. That's not our fault.
- Yes, you have to work more hours than employees in any other developed nation
- No, we can't afford stock options for employees
- Let's celebrate our record stock price
Employee disengagement is what happens when you pay your leaders 411 times the average pay of your employees whose labors and decisions and sacrifices to family life and personal health make that CEO look so brilliant in the business press.
Then again, if we're willing to settle for cool ping-pong tables and free food ( so you won't wander from your workstations for too long) and OMG, OPEN! floorplans in a warehouse set for demolition and the latest shiniest digital tools and its distractions … Look, a unicorn! we've accepted our role as serf, not employee.
If that's the case and the data supports it then 30% engagement among serfs is something to celebrate. And we should stop all this nonsense about "increasing engagement" and "adding meaning" to work and "communicating purpose and mission." None of that will matter to a serf who sees their CEO making 411 times their salary. But that assumes they'll notice and think about it before a cat video pops up on their digital tool/toy and they laugh and go back to work.
Yes, this seems harsh, even more so in the sheltered safe conversations around employee engagement. But employee engagement is a choice, one made by both parties. It's a partnership reinforced everyday with all of our choices that reflect our priorities and values. Sure, one side has an inordinate amount of power and perks and families need a roof and food and … ipads and big-screen TVs. No, I don't have a solution. It's a conversation, one we need to have everyday starting with ourselves about what do we want and why do we want it. Only then can we assess if our corporate "purpose and mission" has any meaning for us.
Sermon's over. Let's bow our heads and pray.
* Dale footnotes this statistic with a link to Derek Thompson's article "What's Behind the Huge ( and Growing) CEO-Worker Pay Gap?" The Atlantic, April 2013.