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|In: Industry Commentary|Last Updated:

There are times when all choices are of the Hobson’s variety. Take the upcoming election: We’ll all get to choose between Al (The Buddhist) Gore and George (The Real Reformer) Bush.

And if you think choosing between these two yutzes is Hobsonesque, IT salaries must be driving you nuts.

A recent Wall Street Journal article described the sad plight of managers who are forced to pay new hires far more than loyal, longstanding employees, thereby running the risk of ticking off said long-standers. The Journal presents this dilemma as a thorny corporate issue. Probably because it interviewed only managers, it did not report the dilemma for what it is: Poetic justice rather than Hobson’s choice. The problem arises because employees believed what they were told.

In the early 1980s, corporate America adopted the market theory of compensation. According to this theory, companies should pay employees what the labor market will bear. Neither seniority nor value is relevant. The price of labor is a commodity, subject to the same laws of supply and demand as cinder blocks and lentils.

At the time, with inflation high, jobs scarce and job hunters abundant, this theory was convenient – it justified salary increases below the rate of inflation. Not only that, but administered fairly it did and does makes sense, since it sets compensation at the balance point where companies have no incentive to replace employees with applicants willing to work for less and employees aren’t tempted to look elsewhere in order to obtain large salary increases.

Alas, with the current labor shortage driving labor rates higher, the market theory has become inconvenient for corporate America.

Corporate leaders gripe that they can’t keep salaries competitive, so they lose valuable talent, pay premium prices to replace it, then experience morale problems and more attrition when formerly loyal employees find out they’re paid a lot less than newcomers. But it isn’t that they can’t keep salaries competitive … they simply won’t. Proof? Fuel costs are also skyrocketing right now, also because demand exceeds supply. Executives aren’t refusing to pay the higher fuel prices because if they did they’d run out of gas.

Want some advice? Schedule a meeting with your CEO and HR director as soon as you can. Explain that within IT at least, the company has three options, and that while you’re willing to accept any one of them, you want to make sure the company has made the optimal choice.

The options: (1) Keep employee salaries competitive with the marketplace to minimize unwanted attrition and maximize morale; (2) keep employee salaries where they are and watch them drift up anyway as employees paid less than market rates leave and are replaced by new ones who are paid at market rates while they spend months becoming effective; (3) keep employee salaries where they are, refuse to pay market rates for new hires in the twin interests of frugality and fairness, and instead pay premium prices for contractors to fill the empty positions for which you can’t attract applicants.

The market does set the price. Your choice is in how you choose to pay it.

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|In: Leadership|Last Updated:

New York City recently pulled the plug on its psychic training program.

While the program has successfully trained welfare recipients in the arcane craft of psychic hot-linery, officials apparently wanted to avoid criticism such as that leveled by “legitimate” psychics such as the manager of Abracadabra Productions Ltd, who described the program as “…totally a scam.”

Satire shrivels in the face of such reality.

The popular image of welfare recipients as lazy feeders off the public trough fades in the face of such clear evidence of willingness to work, and one presumes these same individuals, having mastered the art of prognostication, will easily follow the logical career progression from ordinary psychic predictor to Wall Street analyst.

Preconceptions are hard to let go, whether about psychics, welfare recipients, or end-users. Nonetheless, one of our most cherished preconceptions about end-users … that they obstinately reject new technology, tenaciously clinging to old ways of doing things, thwarting IT-driven progress … has to go.

If this image of the typical end-user ever was true, it is no longer, at least according to a recent study which polled 1,000 end-users and found that about 750 of them figured technology generally translates to personal benefit. Reinforcing this finding is a second recently-published study which reported that on the average, most employees use computers more than an hour a day.

Employees no longer fear information technology. That, apparently, is a fact, and it’s one that shouldn’t surprise us. Most adult Americans master the art of driving at an early age, prefer ATMs to live bank tellers, and hook up VCRs and DVD players without fear or hesitation. We live in a world in which information technology is as ubiquitous as oxygen. Ubiquity and fear rarely coexist for any length of time.

If we recognize that the age of computer-phobia is largely behind us, what should we do differently?

For one thing, we need to facilitate change differently.

Increasingly, IS recognizes that the job isn’t done when the software runs without crashing. Until the business puts new technology to use, preferably in the way originally envisioned, the entire effort is irrelevant.

Part of the process of making sure technology gets used is facilitating change. Many practitioners of this art start with two false assumptions, though: (1) Resistance to change is the province of end-user employees whose jobs will be directly affected; and (2) the major cause of change resistance is instinctual — people “naturally resist change”.

But it turns out end-users like new technology — they like change, or at least some forms of it. This challenges the basic assumptions many change management pundits use as a starting point for their process, usually described as “managing resistance to change”.

Here’s my experience: The biggest change resistors reside in the executive suite. In general, they have the biggest stake in the way things are now, have the least to gain, and have the most to lose when the company changes how it does business. Worse, many executive compensation systems reward exactly the wrong behaviors.

As to employee resistance to change … it’s very common, but it isn’t instinctual, in part because nothing about human behavior is purely instinctual — everything is a complex interplay between genes and environment.

Employees resist change for the simplest of reasons — in the absence of communication, they assume the worst and yell “BOHICA” because in their real-world experience, “corporate change” means layoffs or longer hours for them while executives receive the bonuses and accolades.

When employees resist change it’s because the information they have tells them they ought to.

What this means, then, is that facilitating change is easier than most of us thought. All you gotta do is to: (a) Make sure the average employee will benefit from it; (b) communicate a lot, so they understand how they’ll benefit; (c) involve them throughout the change so they can make sure they benefit from it; and (d) keep those change-resisting executives where they can’t sabotage the effort.

Nothing to it.

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