What are you giving the raise for? None are doing more than previously and all are being paid at or above market average.
Just trying to understand why an employer should pay a premium to an employee for sticking with them during lean times when during the whole lean period the employee was still being paid at or above market average? What sacrifice or risk was the employee making to merit this bonus? The employees could have had no idea of the financial situation if the company was privately held. They certainly wouldn't know that the employee was drawing on his/her own personal line of credit to keep the company going.
It almost makes more sense for the employees to give the employer a bonus for the risks and sacrifices made by the employer by not cutting jobs, paying at or above market and ensuring payroll was always met during the lean years.
becos they could've used the financial crisis as an excuse to jump ship and force you to divert resources to train new employees in a time of transition when having experienced employees would be very helpful. employees also have far less disposable income than even the most poorly paid ceo, so asking them to "invest" in the company is essentially no different from giving them a paycut.
Conversely, if the project had been a flaming failure and I lost all of my money, I would not expect the employees to share the debt burden.
but they would, becos they would lose their jobs due to your failures. employee fortunes rise and fall with the company. if the company does well, its employees should be rewarded. if it does poorly, the employees will suffer.
I would feel personally obligated to give raises. Not a set formula, the size of the raise would depend to a great extent on job performance, but the fact is that regardless of how brilliant my business plan might be, it's worthless without a staff to carry it out. I would give myself a larger raise than those who contributed less.
Hippiemom, if you don't mind me asking, do you own a house?
but they would, becos they would lose their jobs due to your failures. employee fortunes rise and fall with the company. if the company does well, its employees should be rewarded. if it does poorly, the employees will suffer.
but they would, becos they would lose their jobs due to your failures. employee fortunes rise and fall with the company. if the company does well, its employees should be rewarded. if it does poorly, the employees will suffer.
But the company was losing money for years. The employees were not adversely affected in any tangible way. They were given the opportunity to have a vested interest in the company and hence something to lose and they chose not to. They've seemingly adopted just about the most selfish course of action possible. Not helping out the business without remuneration in the lean years. but expecting rewards without risk or additional effort on their part.
Soulsinging, can I get a part of all your future income? After all I've been here for you on the board through all your lean years. I'll continue to be here for you in the future so I think you should start paying me for it once your education starts to provide us income. I'm sure you'll feel a moral obligation to do so, so I feel a little foolish in asking.
“One good thing about music,
when it hits you, you feel to pain.
So brutalize me with music.”
~ Bob Marley
But the company was losing money for years. The employees were not adversely affected in any tangible way. They were given the opportunity to have a vested interest in the company and hence something to lose and they chose not to. They've seemingly adopted just about the most selfish course of action possible. Not helping out the business without remuneration in the lean years. but expecting rewards without risk or additional effort on their part.
Soulsinging, can I get a part of all your future income? After all I've been here for you on the board through all your lean years. I'll continue to be here for you in the future so I think you should start paying me for it once your education starts to provide us income. I'm sure you'll feel a moral obligation to do so, so I feel a little foolish in asking.
no, becos you've never done a damn thing for me. my parents, however, will benefit from the support they gave me in their lean years through gifts i will bestow upon the once i am able.
it is up to management of companies to manage the company well. that is their job. it is the job of the workers to do their work. that is their job. but they all have a role in the company... so by the same logic you use, why should ceo's get a raise for simply doing their job but workers should not get a raise for going theirs? they have different tasks within the company and no company can function or succeed without the efforts of both. when both are doing their jobs and the company prospers, both should be rewarded. ceo's already are compensated more due to the greater difficulties of their role and i have no problem with them getting a bigger cut of the added income. but to not reward those who were there and helped the company get to the greater fortunes is bad business.
furthermore, your example is unrealistic becos i think it is impossible to have a massive revenue turnaround like you are proposing without ANY change at all in what the current workers were doing. they will have to make some adjustment.
The bigger point of the OP's original scenario, and the one he ended with, was whether the GOVT should obligate (force) you to share those profits.
Seems everyone's missing that.
The bigger point of the OP's original scenario, and the one he ended with, was whether the GOVT should obligate (force) you to share those profits.
Seems everyone's missing that.
And no, they shouldnt.
Thats socialism.
I call it the "Hillary Plan".
Its against what America stands for.
i understand exactly what his point was. i simply dont think it's as black and white as he makes it seem. im not very comfortable with the government regulating some sort of profit sharing ratio... it would be a nightmare trying to work out the details and only worsen the situation becos companies would do their damndest to find loopholes. but i dont think social pressure deterring greed and elitism/aristocracy while promoting more equitable and charitable wealth distribution is a bad thing as a social value.
i understand exactly what his point was. i simply dont think it's as black and white as he makes it seem. im not very comfortable with the government regulating some sort of profit sharing ratio... it would be a nightmare trying to work out the details and only worsen the situation becos companies would do their damndest to find loopholes. but i dont think social pressure deterring greed and elitism/aristocracy while promoting more equitable and charitable wealth distribution is a bad thing as a social value.
Basically everyone who wants wealth distribution wants it done because it makes for good business practice. But many of these same people then also want increases to minimum wage because business is too stupid to follow good business practice. It seems they believe in a free market when it profits them and believe n government intervention when it profits them. Looks to me that the individual worker is driven much more by greed than any employer.
“One good thing about music,
when it hits you, you feel to pain.
So brutalize me with music.”
~ Bob Marley
Imagine this scenario. You are the owner of a company that has been losing money for the past few years. You've drawn on both a personal and a company line of credit to keep the company solvent and meet payroll. Your staff are all paid at or above market average.
You've spent considerable time coming up with a new business plan. You've come up with a plan you are sure will work that will involve investing in technology and additional staff. You invest a considerable amount of your money, have had a few private investors commit some money and have given allyour employees a chance to invest but no employees do invest.
Three years later your plan has been a fantastic success. Not a single employee has been asked to do more than they previously were as the plan included hiring new staff.
Do you feel obligated in sharing the new huge profits with your staff? Do you feel the government should obligate you to share the profits with the staff?
they should have invested, but that is why you are the owner and they aren't. i would invest 25% in some way that would affect employee moral and performance based stuff.
the gov't should have no right to tell you how to share your profits.
you're a real hooker. im gonna slap you in public.
~Ron Burgundy
*full disclosure: I took a hefty dose of dilaudid about an hour ago, so if this gets complicated, I'm bailing until tomorrow
Hehe...this shouldn't get complicated (but if you need to go, I certainly won't be insulted).
Now, if you've owned that house for 16 years, it's probably worth a hell of a lot more than you paid for it. So if you sold it, you'd stand to profit quite a bit. Therefore, I have a very basic question for you, or anyone else who stands to profit from a sale of something they own:
What percentage of that profit will you give to the men who built your house, any previous owners of that house who maintained it, any bank that helped you purchase that house, and anyone else who helped make your profit from selling that house possible?
Basically everyone who wants wealth distribution wants it done because it makes for good business practice. But many of these same people then also want increases to minimum wage because business is too stupid to follow good business practice. It seems they believe in a free market when it profits them and believe n government intervention when it profits them. Looks to me that the individual worker is driven much more by greed than any employer.
kinda like how so many christian free-marketeers whine about how government is depriving business of freedom and sticking its nose where it doesn't belong while at the same time doing their damndest to ban gays, contraception, evolution, and anything else they dont agree with?
Hehe...this shouldn't get complicated (but if you need to go, I certainly won't be insulted).
Now, if you've owned that house for 16 years, it's probably worth a hell of a lot more than you paid for it. So if you sold it, you'd stand to profit quite a bit. Therefore, I have a very basic question for you, or anyone else who stands to profit from a sale of something they own:
What percentage of that profit will you give to the men who built your house, any previous owners of that house who maintained it, any bank that helped you purchase that house, and anyone else who helped make your profit from selling that house possible?
Well, in my case it's pretty easy. The house is 86 years old, so the men who built it are dead. We bought it from the daughter of the original owner, and she is also dead. She was an only child and had no children, so there are no heirs to think about. We paid the bank for their services during the eight years that we used them. Anyone who helps us sell it (realtors, title companies, etc.) will indeed take a percentage of the proceeds.
"Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity." ~ MLK, 1963
Hehe...this shouldn't get complicated (but if you need to go, I certainly won't be insulted).
Now, if you've owned that house for 16 years, it's probably worth a hell of a lot more than you paid for it. So if you sold it, you'd stand to profit quite a bit. Therefore, I have a very basic question for you, or anyone else who stands to profit from a sale of something they own:
What percentage of that profit will you give to the men who built your house, any previous owners of that house who maintained it, any bank that helped you purchase that house, and anyone else who helped make your profit from selling that house possible?
A purchased house and an existing business cannot be compared as a relevant example. try again.
War is Peace
Freedom is Slavery
Ignorance is Strength
Well, in my case it's pretty easy. The house is 86 years old, so the men who built it are dead. We bought it from the daughter of the original owner, and she is also dead. She was an only child and had no children, so there are no heirs to think about.
Ok. So if those people were still alive or they had heirs, how much would you give them?
We paid the bank for their services during the eight years that we used them.
Ahhh....but did the employer in this example not also pay the employees their full salaries?
Anyone who helps us sell it (realtors, title companies, etc.) will indeed take a percentage of the proceeds.
kinda like how so many christian free-marketeers whine about how government is depriving business of freedom and sticking its nose where it doesn't belong while at the same time doing their damndest to ban gays, contraception, evolution, and anything else they dont agree with?
probably. or like atheist who admit they don't give a fuck about anyone and still somehow feel good about themselves. or wallow in personal self hatred and try to become lawyers.
“One good thing about music,
when it hits you, you feel to pain.
So brutalize me with music.”
~ Bob Marley
Ok. So if those people were still alive or they had heirs, how much would you give them?
Nothing. They stopped contributing to the value the day they signed the deed, at which point they were compensated for everything they had done up until that point. If I'd expected them to continue to show up and make improvements every week, I'd certainly pay them.
Both involve people. Both involve basic economic exchange. Both involve potential profits. Both involve potential loss. Both involve specialization. Both involve the application of labor and resources. That's just a start. I can't think of a way they're different.
Regardless, please back up your statement that they cannot be compared.
but they would, becos they would lose their jobs due to your failures. employee fortunes rise and fall with the company. if the company does well, its employees should be rewarded. if it does poorly, the employees will suffer.
But the employees didn't contribute ANY CAPITAL. They are being paid for services! NOT CAPITAL CONTRIBUTION. Their contribution is rewarded in the form of wages/salaries.
When they lose their jobs, they don't lose any capital contribution (stock). The stockholders DO lose this money because stock is not guaranteed to be repaid. The contract they sign indicates the payment terms.
The employees can get a job anywhere and receive similar wages/salaries, but the stockholders CANNOT get their money back if its lost. They take the risk, not the employees.
All I know is that to see, and not to speak, would be the great betrayal.
-Enoch Powell
Nothing. They stopped contributing to the value the day they signed the deed, at which point they were compensated for everything they had done up until that point. If I'd expected them to continue to show up and make improvements every week, I'd certainly pay them.
I have to admit that you've lost me here.
Ok. This is good stuff.
How do the employees in the original posters story not fit this same description? They too have already been compensated for everything they had done up until that point. Each one was paid for their labor at the price they agreed to when they took the job or got their last raise / pay cut.
What I'm trying to understand is on what grounds these employees can believe they're obligated to collect additional funds for services already purchased and paid for. If they have that right, why doesn't your dead architect?
Both involve people. Both involve basic economic exchange. Both involve potential profits. Both involve potential loss. Both involve specialization. Both involve the application of labor and resources. That's just a start. I can't think of a way they're different.
Regardless, please back up your statement that they cannot be compared.
Many things involve your above examples. That doesnt make them relevant to the discussion.
A business has employees that are a continued factor in the increase in wealth. A house doesnt rely on continuing employment to become more valuable -- location, location, location.
War is Peace
Freedom is Slavery
Ignorance is Strength
This grand business plan you describe revolved around putting more money into the business...greater funds for research, development, technology, etc. Personnel is an asset just like those other investments. Employees are a component of any successful business. Common sense dictates that those employees are an asset that should also be invested in as the business grows.
Say the owner dipped into his own pocket to invest in research. Well, research departments aren't just something that you go and pick up at Staples, that investment will most likely include people as well as equipment/facilities. So you say that this broadened investment in this research team results in skyrocketing profits. Are you just going to let that research team walk out the door because they didn't personally invest in ownership?
Ownership is a completely different animal...it is not an asset like employees. Ownership obviously should, and does, earn the greatest benefits from a burgeoning business. Any business owner knows that you HAVE to invest profits back into the business. Those employees are part of the business in the form of assets. You can't just shut them out. It's the equivalent of an owner choosing to stop paying rent on his headquarters because the headquarters didn't chip in money when he needed it. Employees, by the very definition of the word, are NOT required to become part of ownership. The owner certainly isn't "obligated" to share profits, but to NOT do so is a serious tactical error, imo.
"Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the nation while patriotic blood is crimsoning the plains." -- Abraham Lincoln
Comments
becos they could've used the financial crisis as an excuse to jump ship and force you to divert resources to train new employees in a time of transition when having experienced employees would be very helpful. employees also have far less disposable income than even the most poorly paid ceo, so asking them to "invest" in the company is essentially no different from giving them a paycut.
but they would, becos they would lose their jobs due to your failures. employee fortunes rise and fall with the company. if the company does well, its employees should be rewarded. if it does poorly, the employees will suffer.
Hippiemom, if you don't mind me asking, do you own a house?
Tell that to the UAW.
Soulsinging, can I get a part of all your future income? After all I've been here for you on the board through all your lean years. I'll continue to be here for you in the future so I think you should start paying me for it once your education starts to provide us income. I'm sure you'll feel a moral obligation to do so, so I feel a little foolish in asking.
when it hits you, you feel to pain.
So brutalize me with music.”
~ Bob Marley
i have as many issues with unions as i do with ceo's.
no, becos you've never done a damn thing for me. my parents, however, will benefit from the support they gave me in their lean years through gifts i will bestow upon the once i am able.
it is up to management of companies to manage the company well. that is their job. it is the job of the workers to do their work. that is their job. but they all have a role in the company... so by the same logic you use, why should ceo's get a raise for simply doing their job but workers should not get a raise for going theirs? they have different tasks within the company and no company can function or succeed without the efforts of both. when both are doing their jobs and the company prospers, both should be rewarded. ceo's already are compensated more due to the greater difficulties of their role and i have no problem with them getting a bigger cut of the added income. but to not reward those who were there and helped the company get to the greater fortunes is bad business.
furthermore, your example is unrealistic becos i think it is impossible to have a massive revenue turnaround like you are proposing without ANY change at all in what the current workers were doing. they will have to make some adjustment.
Fair enough.
Seems everyone's missing that.
And no, they shouldnt.
Thats socialism.
I call it the "Hillary Plan".
Its against what America stands for.
www.myspace.com/jensvad
i understand exactly what his point was. i simply dont think it's as black and white as he makes it seem. im not very comfortable with the government regulating some sort of profit sharing ratio... it would be a nightmare trying to work out the details and only worsen the situation becos companies would do their damndest to find loopholes. but i dont think social pressure deterring greed and elitism/aristocracy while promoting more equitable and charitable wealth distribution is a bad thing as a social value.
when it hits you, you feel to pain.
So brutalize me with music.”
~ Bob Marley
Ok. How long have you owned that house?
*full disclosure: I took a hefty dose of dilaudid about an hour ago, so if this gets complicated, I'm bailing until tomorrow
they should have invested, but that is why you are the owner and they aren't. i would invest 25% in some way that would affect employee moral and performance based stuff.
the gov't should have no right to tell you how to share your profits.
~Ron Burgundy
Hehe...this shouldn't get complicated (but if you need to go, I certainly won't be insulted).
Now, if you've owned that house for 16 years, it's probably worth a hell of a lot more than you paid for it. So if you sold it, you'd stand to profit quite a bit. Therefore, I have a very basic question for you, or anyone else who stands to profit from a sale of something they own:
What percentage of that profit will you give to the men who built your house, any previous owners of that house who maintained it, any bank that helped you purchase that house, and anyone else who helped make your profit from selling that house possible?
kinda like how so many christian free-marketeers whine about how government is depriving business of freedom and sticking its nose where it doesn't belong while at the same time doing their damndest to ban gays, contraception, evolution, and anything else they dont agree with?
A purchased house and an existing business cannot be compared as a relevant example. try again.
Freedom is Slavery
Ignorance is Strength
Ok. So if those people were still alive or they had heirs, how much would you give them?
Ahhh....but did the employer in this example not also pay the employees their full salaries?
Certainly.
Hehe...why not?
when it hits you, you feel to pain.
So brutalize me with music.”
~ Bob Marley
How
are
they
similar
??
Freedom is Slavery
Ignorance is Strength
I have to admit that you've lost me here.
Both involve people. Both involve basic economic exchange. Both involve potential profits. Both involve potential loss. Both involve specialization. Both involve the application of labor and resources. That's just a start. I can't think of a way they're different.
Regardless, please back up your statement that they cannot be compared.
But the employees didn't contribute ANY CAPITAL. They are being paid for services! NOT CAPITAL CONTRIBUTION. Their contribution is rewarded in the form of wages/salaries.
When they lose their jobs, they don't lose any capital contribution (stock). The stockholders DO lose this money because stock is not guaranteed to be repaid. The contract they sign indicates the payment terms.
The employees can get a job anywhere and receive similar wages/salaries, but the stockholders CANNOT get their money back if its lost. They take the risk, not the employees.
-Enoch Powell
Ok. This is good stuff.
How do the employees in the original posters story not fit this same description? They too have already been compensated for everything they had done up until that point. Each one was paid for their labor at the price they agreed to when they took the job or got their last raise / pay cut.
What I'm trying to understand is on what grounds these employees can believe they're obligated to collect additional funds for services already purchased and paid for. If they have that right, why doesn't your dead architect?
Many things involve your above examples. That doesnt make them relevant to the discussion.
A business has employees that are a continued factor in the increase in wealth. A house doesnt rely on continuing employment to become more valuable -- location, location, location.
Freedom is Slavery
Ignorance is Strength
Say the owner dipped into his own pocket to invest in research. Well, research departments aren't just something that you go and pick up at Staples, that investment will most likely include people as well as equipment/facilities. So you say that this broadened investment in this research team results in skyrocketing profits. Are you just going to let that research team walk out the door because they didn't personally invest in ownership?
Ownership is a completely different animal...it is not an asset like employees. Ownership obviously should, and does, earn the greatest benefits from a burgeoning business. Any business owner knows that you HAVE to invest profits back into the business. Those employees are part of the business in the form of assets. You can't just shut them out. It's the equivalent of an owner choosing to stop paying rent on his headquarters because the headquarters didn't chip in money when he needed it. Employees, by the very definition of the word, are NOT required to become part of ownership. The owner certainly isn't "obligated" to share profits, but to NOT do so is a serious tactical error, imo.