A Surviving Facts Blog
As another year ends, workers across the US are rushing to meet end-of-year goals and close company books. Many employees are documenting self-assessments or reading managers’ assessments of their work. Employees are writing next year’s goals, anticipating ever-increasing goal expectations for which they have neither the resources nor tools for success.
Most employees want to do well at work. In the US, we preach “effort equals reward.” I myself have lived this mantra for decades. My CEO-father used to say, “there will always be someone smarter or more attractive. But no one can work harder.” So I worked harder and longer. Got in early. Stayed late. Worked evenings. Worked in the middle of the night. Turned in work early. Made sure work product was stellar. The ingrained message was that personal sacrifice brought success. And I believed it with fervor.
I know many employees feel the same way. “If I just work hard enough, I’ll get…” Fill in the blank.
And so, as they turn to annual assessments, employees try to convey the hours of effort dedicated to making a company succeed. They’ll receive guidance such as “focus on outcomes, not effort” or “give concrete examples, with numbers.” Employees will try to determine how their efforts resulted in end-of-year numbers.
Sounds easy enough. Except it isn’t. Many jobs require daily effort without obvious connection to business results. This doesn’t mean these jobs are less valuable. Many of these jobs make a company run. Human resources, executive assistants, accounting and finance: None of these have a direct line to revenue, but a company wouldn’t function without them.
I used to hear over and over again that employees found the annual review a bureaucratic task rather than an opportunity for learning and growth. Partly, this is because managers do not use these occasions well. They meet with employees rarely through the year and then see the review as a tick-the-box task. The employee gains no insight, no direction, no relationship… and the process is pushed aside until the end of following year. Some HR departments preach the importance of meeting regularly with staff through the year so that the annual review is part of a year-long process. While this is a better approach, it still misses the point. The problem with the annual review is inequity and power differential between management and staff.
Let me explain.
Staff know they dedicate countless hours to the company’s benefit. Companies, on the other hand, treat labor as an exchange: we pay you a salary and benefits to do X. While this is true- our labor is an exchange for money- this viewpoint devalues human effort and time. It says, “our right to determine your worth as an employee supersedes the inherent value of your contributions.”
This is why the annual review is another broken corporate process. The company creates records of employee performance, mostly for self-protection, and the employee gains little from it. Moreover, employers retain the ability to determine an employee’s career progress- at least within that company- and employees are left feeling disconnected and undervalued. Our labor laws and labor philosophy in the US support this stance, thereby providing the employer with the power and the employee with few rights and disconnection from company results. Management- which receives bonuses and other incentives- wonder why employees are no longer loyal or are unmotivated. It’s simple: if a person is told to dig a hole, but they don’t know why they are digging it, the outcome means nothing to them. Even more, if the laborer is told “dig the hole and then I’ll tell you what I think about how you dug that hole, and by the way, I’ll pay you the same anyway…” well, that’s a devaluing of the labor itself.
The truth is that employers need the labor contribution as much as the employee needs a salary. Rather than payment in exchange for labor, the labor is a company asset which derives its value from future economic outcomes. This is actually a significant shift from our current approach to employee performance assessment, which comes after the labor is completed. It means that the labor has an inherent value before the labor begins. Tell an employee, “this role has the potential to provide X% of the company’s future value,” and the employee will think differently about their contribution.
This is all sounding a bit academic. I’m not an economist and don’t intend to be. But one of the goals I’ve had in this year’s columns is to challenge traditional notions of work and the relationship between those in power and those who are not. In this case, it’s the employer and the employee. It may sound far-fetched but I intend for it to be. I am questioning the basis of work as we have come to accept it- at least in the US. Other countries have given employees more power to shift the weight. We haven’t done so. And this has exacerbated the differential between the “owner” and the “ownee.”
Certainly, raising questions for thought can’t hurt. This one blog isn’t going to change anything. But perhaps readers may begin to think about concepts we automatically buy into. What if this is something to be rethought and dismantled- not for the sake of it, but in order to make human lives better? What if rethinking this makes economic sense- better standards of living, increased wages, more motivation to meet (company) goals? We’ve seen the kind of catastrophic event necessary to create work-life change- the pandemic. The pandemic shifted the way many of us think about work- where and how it can be done. And now, as many of you see, employers are trying to wrestle back employee gains by demanding return to onsite work. (Please don’t lecture me about commercial real estate value. This had taken a hit long before Covid. Online shopping made that happen with big box stores closing and spaces sitting empty for years. And besides, it would be a red herring if you did- that’s a logical fallacy of bringing up tangential information to challenge a notion rather than addressing the argument itself.)
This isn’t just wordsmithing, nor is it sleight of hand income asset accounting. It actually means the employee gets to determine the value of their contribution and barter with the company rather than passively receive income for tasks they don’t even understand the purpose of.
Fundamentally, the employer-employee relationship has become disconnected, frustrating and contentious for many. The employer isn’t getting the best from people with our current thinking. And with employee rights eroding even more- which will happen when employee protections are removed if Project 2025 is enacted as written- the exchange will become even more abusive and unfair.
For example, the incoming president has stated several times that he doesn’t support overtime pay. This is also noted in Project 2025. No overtime pay means that an employer will only pay for 40 hours of labor per week, even if the task requires more time. See what I mean about devaluing the intrinsic value of human effort and time? Most management have no idea how long a task takes- they are too removed from daily activity- and yet they will determine what a task takes to get done. Who benefits from this approach? Certainly not the employee. The company makes more revenue and these rewards are passed to shareholders and executives who had little to do with making it happen. Their bonuses soar, and the employee receives a 3-5% increase.
That’s a broken system. We have all sat by and supported a system that prioritizes the higher echelons of a company rather than the people the company needs to actually do the work.
Employers are using- yes, using- staff rather than humanizing and valuing them. In addition to devaluing employee labor, they often also fail to provide the tools and resources to support employee success. Some employers also willfully disregard work volume and stress. That’s why burnout is at an all time high.
Even more, company technology often is woefully inadequate: new websites don’t work or lack basic capabilities. The company refuses to upgrade or in some cases leaves a hodgepodge of poorly integrated and outdated software that makes seamless work impossible. Workers spend hours trying to complete basic tasks. Even though desperate for time off, employees use remaining vacation days trying to meet goals. They can’t roll unused days into the next year so another year passes with a broken promise: use paid time off!
A few examples.
A friend works for a major health insurance company (not United Healthcare). This company makes more than $50 billion annually. Its CEO takes home an 8-digit salary, including an annual bonus. And yet, this company still uses Lotus Notes for its email. It hasn’t upgraded to MS Outlook. It saves the company money, but imagine the hours lost to ancient technology. If employee labor were valued, such a problem would have been solved long ago.
Another friend’s employer, also an insurance company, has just implemented new software “to make claims processing easier.” The problem- all of the information needed to facilitate claims is in other systems not hooked up with the new one. Because of this, employees navigate five other programs and enter information manually. This not only slows processing but also increases the risk of error. Again, labor is devalued by unnecessarily wasting time.
I’m sure you’ve all heard of United Healthcare’s use of AI. The AI wrongly interpreted information and made errors- and yet employees were required to use it. Errors simply led to rejections. United gambled that most customers wouldn’t appeal. Most didn’t. Good for the company? Well, not any more. With recent events I don’t need to elaborate, the company has lost reputation and value.
I have another acquaintance who leads a team designed to partner with strategic and production teams to drive outcomes rather than nice to haves. Sounds great having a partner in success, right? These new partners are underskilled in the company’s subject matter and not close enough to understand how work gets completed. The outcome? Role confusion and frustration. The company designed useless roles. This devalues labor itself.
And yet another friend works in a fragmented and siloed organization. Teams duplicate work and customers receive disjointed communications not meeting their needs or preferences. They are ending yet another year with a significant deficit.
Another friend’s company has already laid off hundreds of employees who will be “made redundant” by AI. No AI system is set up yet, however, so remaining employees will need to work double until a system is found.
And then there’s the friend working in compliance on the corporate side. Her company spends enormous amounts on antiregulation lobbying. Rather than focus on compliance, the company spends 8-digit numbers to fight against it.
In each of these situations, employers task employees with solving problems and increasing revenue without the necessary tools, systems, staffing and support to do so. In all of these situations, the employee’s labor is devalued by the company. Labor is simply an exchange of effort for pay rather than a determinant of future outcomes. If any of these issues were resolved, future outcomes would likely improve. With an income asset approach, however, the employee would need to benefit more and management less.
And perhaps that’s why the current system is embraced: employees gain little and management gains a lot. The employee receives a measly “cost of living” salary increase in exchange for their effort. Management, meanwhile, gets bigger bonuses, regardless of success. The cycle repeats year after year.
Most Americans live paycheck to paycheck. They don’t challenge management disparity because the inequity keeps them in check. As long as they do what is asked, they can pay the mortgage and feed their families. Challenging the inequity only results in more inequity. So employees say nothing and push forward. Rarely, an employee speaks up. They don’t last long if they do.
This is late stage capitalism wherein the elite maintain advantageous positions while the average worker scrambles to achieve. The worker buys the belief of hard work and uses their own skills and time to succeed for the small reward that comes at the end. Meanwhile, management gets the bigger paycheck and bonus. To hit the point I’ve made several times: this devalues the intrinsic value of labor and rewards position over progress.
What can American workers do to change a system that hurts them more than helps?
They can unionize. Unions get lots of criticism but let’s not forget why they were developed: to protect the worker from employer abuse. Unions mandated working conditions, hours, paid leave, overtime and more. Management balks because this takes away from their own riches. Next time your employer starts fighting unionization- I was recently disappointed to learn that Trader Joe’s is currently fighting unionization- ask who will benefit most from not having a worker representative. Management benefits most when employees have few rights and do not understand the value of their work.
Employees can also make change through voting. Vote for representatives who understand labor realities. Most of today’s billionaires didn’t start penniless and scramble their way up. More and more, they are born into wealth, and that privilege provides opportunities for more wealth. No amount of “work hard” is going to level the field for the employee. The harder they work, the more management gains.
In addition, employees can stop working en masse. Huh? Yes, stop working en masse. Just imagine if every worker in the US took a few weeks off. The entire system would crumble. The value of labor and its future-outcome purpose would become very clear.
Employees can also protest. It’s been a long while since the US has had really big protests in Washington, D.C. A march for the American worker would surely get some attention and wide media coverage.
We need to look at the disparity between management and worker pay as well. I’ll save this topic for another blog. I guess I’m just l getting started.
The point is this: annual reviews are worthless in determining employee or labor value. In general, labor itself has lost value because employers rarely connect the labor to future outcomes. Management in companies retains power and receives the rewards while employees receive insignificant salary increases that underscore the unappreciated value of their labor. We must shift this dynamic and give the American worker more participation in value and more correlation with future outcomes. Only then does “work” become democratized so that workers themselves experience the benefit of their work and not just management. It’s the right thing to do, but recent political thought is putting the American worker at more risk of devaluation rather than increasing value.
I’m intentionally being provocative. I could easily offer counter arguments to many of my points. I’ll let my readers do that. My goal is to stimulate- shock- both employees and employers into reimagining a system that is making the rich richer, ending the middle class and increasing poverty. If we are to remedy this situation, the average American worker will need to gain more from work and not less.
I would love to hear from you, even if, especially if, you disagree. Perhaps we can bring back the American tradition of civilized debate. Please like and share this blog with others. Subscribe to receive it by email and go directly to the Walk the Moon website to peruse the full collection of articles and updates.
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