Monday, 7 February 2011

Why? Why? Why?

OK, dear readers. Examine the following three statements:
If you pay exceedingly generous bonuses to a select few individuals at the pinnacle of any management hierarchy, it will inevitably lead to those businesses being better managed, and consequently improving shareholder value.

If you remove the ability of employees to request the right to work flexibly, it will inevitably lead to increased productivity within the workforce.

If you remove the practice of collective pay bargaining in the NHS and education sector (presumably requiring each region to undertake such activities independently), this will also boost productivity.
All three of the above statements are ones which form the backdrop to much debate within the UK’s management community at the moment.

OK, the debate is never put in such stark terms, although the recent proposals put forward by the Institute of Directors for the drastic curbing of employee rights come pretty close to it.

'Axe' public sector union rights, say business leaders

Management, especially where it involves people, is never a precise science, and therefore the laws of cause and effect don’t exactly apply.

But for a generous bonus culture to lead to better financial performance or reduced rights for employees to lead to improved productivity there must in theory be an unbroken chain of causality that can be observed and investigated.

If the statements above are true, it doesn’t matter how many links there are in the chain, but there must be a connection between the cause and the effect.

Can someone help me out here: why do we believe that our generous bonus culture has led to increased financial performance? And why do we believe that reducing the rights of employees will similarly lead to increased productivity?

I’m not looking for an explanation of every link in the chain. Just the first one will do.

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