Sunday, April 04, 2004

Meet the new boss

Here's an article in the NY Times about employers who "shave time," deleting hours from time card records so employees don't get paid for all the hours they work. I sincerely hope this despicable practice is less prevalent than the piece implies. Some quotes:
Compensation experts say that many managers, whether at discount stores or fast-food restaurants, fear losing their jobs if they fail to keep costs down. .... Another reason managers shave time, experts say, is that an increasing part of their compensation comes in bonuses based on minimizing costs or maximizing profits. "The pressures are just unbelievable to control costs and improve productivity," said George Milkovich, a longtime Cornell University professor of industrial relations and co-author of the leading textbook on compensation. "All this manipulation of payroll may be the unintended consequence of increasing the emphasis on bonuses."
Giving managers incentives may be a good idea in general, but if you increase the power of incentives, you'd better also increase the safeguards against cheating. (Another place we should worry about this is with high stakes testing in schools, where teachers and principals can cheat when administering standardized tests.) Instead, it appears the safeguards have sometimes gotten smaller:
In the punch-card era, managers would have had to conspire with payroll clerks or accountants to manipulate records. But now it is far easier for individual managers to accomplish this secretly with computers, payroll experts say. .... Employees at Wal-Mart and other companies complain that they receive no paper time records, making it hard to challenge management when their paychecks are inexplicably low. Ms. Danner, the former Family Dollar manager, praised the system at the McDonald's restaurant she managed for seven years. At day's end, she said, employees received a printout detailing total hours worked and when they clocked in and out. "We never had any problems like this at McDonald's," she said.
Interesting that McDonald's, every liberal's favorite example of a crummy job, is the one doing this right. (Of course, Wal-Mart is every liberal's other example of a crummy job.)

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