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And now, three words about retention bonuses: Are you serious?

Take the badly misnamed Best Buy (or, as a friend calls it, “Amazon’s showroom”), whose board of directors has awarded big piles of cash and restricted stock to its CFO, EVP/HR, President/International, and President/U.S. to encourage them to stay with the company instead of jumping ship to join Best Buy’s founder, Dick Schulze, as he attempts to take over the company.

Understand, I’m jealous. Can you blame me? Nobody has paid me anything remotely like this for screwing things up badly and repeatedly. Heck, nobody has paid me anything like this for doing a good job.

I should probably leave the EVP/HR out of this. She’s hardly responsible for Best Buy’s failure to provide the best buy … or anything remotely close to it … and its consequent ever-increasing decline in marketplace relevance, especially as she’s only had a couple of years to do any damage. But then, what impact is she likely to have on Best Buy’s future competitiveness that makes her worth a retention bonus like this?

But, the presidents of U.S. and international operations have their names all over Best Buy’s failures. And its CFO, who joined Best Buy in 2003, has been in his current role since before the start of the Great Recession. If the CFO position is important enough that a retention bonus is in order, that means its occupant has been involved in the planning and decision-making that has led to Best Buy’s steady decline.

All of which leads to two questions. The first: Is it a good idea to bribe top executives to stay? And second: If you’re going to bribe some top executives to stay, should they be the ones whose names are all over past failures or who won’t have a significant impact on future success?

The second question is, of course, rhetorical. The first is worth serious thought.

That the sums in question are bribes is by definition. Best Buy is paying a lot of money specifically to get these people to do something they wouldn’t otherwise do — to stay with the captain of a sinking ship instead of joining the band of mutineers (pick a different metaphor if you don’t like this one).

So the question is, should a board of directors want top executives who will only stay if they’re bribed to do so?

Regular KJR readers know my position on this: No (see “Is it time to end incentive pay?” KJR, 4/23/2012). Any executive who doesn’t consider their opportunity to achieve something important to be an incredible privilege is an executive you’re better off encouraging a competitor to hire.

As for Dick Schulze’s attempt to take over the company, here’s a question for anyone considering an alliance with him: Why would you do that? He’s the guy who, when he had the chance to crush Amazon.com when it first expanded into consumer electronics and, oh, by the way, to crush Circuit City as an afterthought, instead chose to view Circuit City as the competitor that mattered?

Taking shots at Best Buy is easy and fun. Behind the fun is a question you might find yourself having to deal with in this era of frequent mergers and acquisitions: Whether to offer retention bonuses of your own.

That answer is, yes. There are times when retention bonuses make all kinds of sense, for example, when a company has been acquired, key positions are being consolidated, and you need the services of the good employees who hold those positions in the meantime, to ensure a smooth transition.

That’s assuming, of course, that while these employees are good enough to help with the transition, they aren’t good enough … or a good enough fit … to be worth finding a role for in the consolidated enterprise once the business integration process is complete.

So if you have employees like this — ones who will be essential to a smooth transition but who aren’t worth investing in as long-term highly desirable employees — you only have two ways to keep them on board — either bribe them, or lie.

Unless you lie, they’ll know that when the deal is done they’ll be out of a job. They’ll have no reason to do more than the minimum for you while finding a new place of employment that offers more stability.

If you need them and don’t want to lie, it’s the only solution that will work. Make the amount big enough to work, and no bigger.

Just don’t pretend that you’re doing anything fancy.

You’re offering a bribe.

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Everything is easy if someone else has to do it.

A story about Jack Benny:

He saw a chimpanzee act and decided he wanted it on his show. Excited, he described the act to his writing team. “Wait!” one of them shouted as Benny turned to leave the room. “What do you want them to do on the show?”

“What do I want them to do?” Benny replied as he started walking out the door. “How should I know?” And just before the door closed behind him his team heard him say, “That’s why I have writers!”

Jack Benny, of course, knew how hard the job of a television comedy writer is, unlike those of us who, to draw a parallel, complain that Dilbert isn’t funny as often as it should be.

There was, for example, a colleague, back when I worked for a large services firm, who, while explaining the sophisticated management consulting services she and her team were going to provide, decided some contrast would help. And so, “The technology is the easy part,” she explained to the CEO.

Of course it is … if, that is, you’re a management consultant in a position to describe it with all the detail a passenger in a Boeing 737 can provide about a crime that took place on the ground below.

Or there was the colleague — a programmer this time — who was quite certain that managing manufacturing was really a very simple proposition. Which was why he saw no reason to ever actually set foot in the factory, even though he supported the company’s manufacturing system.

And there was me, back in the early days of client/server computing, sneering at the unnecessary complexity associated with setting up and provisioning a mainframe computer, when in the world of PCs I just had to insert the Turbo Pascal installation disk, let it whir for a few minutes, and the PC was ready to go. Knowing what I now know about what’s required to set up a modern n-tier environment these days (very little), IBM’s old mainframes, complete with VTAM, CICS, and all the other holiday trimmings, seem like simplicity itself.

We all do this. We criticize the CEOs of struggling businesses for failing to anticipate a marketplace change we ourselves saw with perfect clarity through the magic of 20/20 hindsight. We complain about employees who report to us who fail to get the job done in the time we alloted when we couldn’t even begin to do their jobs ourselves. We ridicule HR, when we aren’t ridiculing Accounting, or Marketing, or, for that matter, members of Congress, the Supreme Court, or the President of the United States, for their ineptitude.

No matter what the issue, we say, “It’s really very simple,” its simplicity correlating perfectly with our lack of detailed knowledge.

This phenomenon seems to be getting worse. There are, I think, two root causes: compensation practices, and 24/7 career demands.

Compensation practices first: Increasingly, actual work that creates real value is considered less valuable than managing that work, which in turn is less valuable than managing those who manage the work, and so on, ad infinitum. The human mind being what it is, those who make the big bucks have to rationalize their compensation to themselves. Why are they worth so much more? Well it’s obvious: The work must be much, much easier than providing oversight to the managers of those who who supervise it.

That leaves the 24/7 career demands — the merging of personal and professional time that has become the default condition for so many of us. It’s a culprit because it has led to the decline of the hobby.

Beyond their obvious value in helping people leave the office at the office, thereby reducing stress, making life more enjoyable, and as a fringe benefit giving everyone who has one an additional topic of conversation, hobbies provide one other benefit: People with hobbies learn that even a seemingly simple field of endeavor contains endless complexity for anyone interested enough to explore it. Whether the field is bridge, chess, cabinet-making, golf, home auto repair, guitar-playing, photography, knitting, or pottery, learn just a bit to get started and you mostly learn how much more you have to learn.

Which, perhaps, back when people had time for hobbies, might have led them to conclude that other fields held just as much unexplored complexity.

Is there a solution? Beats me. Looking for one is something of a hobby of mine. All I can tell you so far is, it’s complicated.

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