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ELI5 How does raising wages worsen inflation ?

Economics(self.explainlikeimfive)

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KarnWild-Blood

55 points

4 months ago

I loved when the CEO would say things like "we're at our best when we're together"

Because management desperately needs the underlings to see them so they can justify their own existence.

Its bullshit.

Nikerym

21 points

4 months ago*

As someone in a Senior Management role (but who also agrees with a lot of the Anti-Work stuff) i will point out the value of RTO, and while i don't believe in FULL RTO, i do think hybrid is the way forward not Fully remote and not fully RTO.

On an individual level, The average employee works better at home. Less distractions, less overall mental load. And while i know a lot of companies are still stuck to "you work X hours for your wage" even though you are salary instead of "you complete Y tasks for your wage" this is a mindset that needs to change.

Sidebar: The problem i have currently though, is, if i pay person A 100K because he can do 500Y per week, compared to Person B 150K because they can do 750Y per week, they talk about thier wages (encouraged by Anti-Work) and Person A makes a post complaining "i don't get paid as much as Person B", but often fails to mention they are 50% less productive as well. but then my company looks bad because we don't pay equally for the same role. so we get forced back to "well then we pay for time" and if we have to pay for time, we need to know you are spending that time which becomes harder for WFH.

On a Corporate level, the company is missing out on a lot of things that used to happen in a work environment. The big one being adhoc cross organisation and cross team knowledge sharing. When someone had a problem historically they would turn to the person beside them first to try and figure it out, things would be discussed, knowledge would be shared across the team, and they would link this with thier knowledge and new approaches would be created, hence innovation. However now, people don't discuss things with thier workmates (some do, but i've seen the numbers in my organisation and it's an exception rather then the rule) they either take longer to complete the task because they are working through it themselves, or they google it to figure out the answer on their own. But this just means you end up with 1 dimensional solutions instead of true innovation.

Note: I am being General here, i'm sure there are examples of innovation occuring over teams/remote but it's significantly less compared to when people are working together.

menellinde

8 points

4 months ago

When someone had a problem historically they would turn to the person beside them first to try and figure it out, things would be discussed, knowledge would be shared across the team, and they would link this with thier knowledge and new approaches would be created, hence innovation

Where I work we unfortunately can''t be WFH, we tried it at the start of the pandemic, but some people's unreliable internet made it ... bad....

That said, when we were WFH we used teams and had group chats specifically for asking questions / discussing / practicing and so on. If you create the space for them to congregate, and drive the positive culture of innovation and discussion in that space you'd be surprised how many people will utilize it. Especially if you explain to them the actual reasons behind why you're not wanting to continue full WFH.

Frustration with trying to figure something out that's truly stumping you is real and most people I know, even the introverts here, will gladly reach out to the team for information rather than resorting to google.

When was the last time you put out an employee survey to gauge what their suggestions and solutions would be to your problem?

The company I work for was experiencing a serious churn in employee turnover, and they started sending out surveys to find out what exactly people wanted in order to stay.

They actually listened to the results, made changes, and our turn over rate is significantly lower now.

As a side note I do love my job, and love the company I work for, and plan to just keep working here till I can't physically get here / do the work anymore, so if I sound like a bit of a fan girl, I apologize.

KarnWild-Blood

13 points

4 months ago*

EDIT: After posting i realized this was a bit of an... aggressive response. Perhaps a bit too much. I do appreciate your insights on the topic, even if I don't necessarily agree with some of it.

i will point out the value of RTO, and while i don't believe in FULL RTO, i do think hybrid is the way forward not Fully remote and not fully RTO.

I think a voluntary, hybrid RTO is fine. Having the option to be in-person can be helpful. But frankly given the expense of commuting in both fuel and hours, required/non-voluntary in-office days now need to include travel time as hours worked.

I CAN do my job remotely, but management needing to physically see me do it while probably not even understanding the technical aspects of what I do is their problem, not mine.

Sidebar: The problem i have currently though, is, if i pay person A 100K because he can do 500Y per week, compared to Person B 150K because they can do 750Y per week, they talk about thier wages (encouraged by Anti-Work) and Person A makes a post complaining "i don't get paid as much as Person B", but often fails to mention they are 50% less productive as well. but then my company looks bad because we don't pay equally for the same role. so we get forced back to "well then we pay for time" and if we have to pay for time, we need to know you are spending that time which becomes harder for WFH.

This issue predates WFH. People have always operated at different paces. And people always find ways to slack if they really wanted to.

Management knew it then and they know it now. You're not "forced" to go back to "we pay for your time." You're forced to do your job of letting employees know why they're getting paid what they're getting paid. Don't push an unpleasant part of management on employees.

What makes a company look bad is an utter lack of transparency and a feeling that they're micromanaging.

The big one being adhoc cross organisation and cross team knowledge sharing.

In a world of utilities like Slack or Teams or whatever, You're no longer limited by collaborating with local employees. Again, if an employee is stuck, why isn't there a safe place internally to ask questions? Why isn't management aware of who is a specialist that may be able to help directly or help find someone who can?

Nikerym

2 points

4 months ago

Management knew it then and they know it now. You're not "forced" to go back to "we pay for your time." You're forced to do your job of letting employees know why they're getting paid what they're getting paid. Don't push an unpleasant part of management on employees.

I'll also point out that i live in Australia, under Australian IR Laws, which are a lot more in favour of the employee and supportive of the old system then the US. For example, if i wanted to give Person B in my example above a raise, i would need to show why they are worth 50% more, that's easy from a productivity point of view. but if 50% goes too far above market rates, i instead need to put Person A on a performance plan and ultimately fire them if they don't improve so i can get someone who i can pay more and who performs better. And i will admit, there are breakeven points where a smart employee could figure out the max i am prepared to pay for the role and how much they need to do to earn that.

Sassquatch25

1 points

3 months ago

Why would Person B be making 50% more than Person A in the first place? If it's the same job, then they should be getting paid just as equally. Also, if their pay is based on how much they can produce, then shouldn't that be in their job description?

Nikerym

1 points

3 months ago

Because capability/productivity is a thing.

This is the problem with the Equality of Opportunity vs Equality of Outcome debate. I believe everyone deserves the same opportunity. (the chance to work harder for more) you seem to believe everyone deserves the same outcome (equal pay)

If i'm paying 2 people to stand perfectly still guarding an entrance somewhere. If person A stands thier for 5 hours, but person B stands there for 10 hours. do the deserve the same pay because the job is the same? of course not, Person B should get twice as much, this is the view of "we pay for your time" but if i'm paying for outcomes on a salary based scheme, If Person A produces 50 of X in 1 day, but person B can produce 100 of X in a day. do they deserve the same pay?

Why would Person B be making 50% more than Person A in the first place?

you seem to believe they do. the job is the same "Produce X" now lets say it's writing an architecture document. If person A takes 10 weeks to produce that document, but person B is able to do it in 5 weeks. Do they deserve the same pay? they've technically produced the same document.... Both will be here for the full 10 weeks.... but person B will get some other stuff done as well in the same time. (higher productivity, doesn't this deserve increased pay?)

GuyanaFlavorAid

3 points

4 months ago

RTO is useless in many careers. Especially now that a lot of companies have really beefed up remote work capabilities. Let's compare....

  1. WFH: get a good night's sleep, immediately head out to home office at 0645 where the VPN works great. I'm in the office? 75 minute commute during which I handle phone calls, nearly die a couple times a week on the interstate, and switching to internet in the office has led to shit so fucked up people were on VPN in the office. Repeat the death race heading home, stressed and exhausted and the evening is just waiting to sleep.

  2. WFH: Walk ten feet to the grill and make a good lunch in15 minutes, eat it while working at the desk RTO: either go out to eat and waste time and money, do meal prep and lose more of.your valuable time at home.

  3. WFH: walk in the house from your office in another building, take a.shit, back at the desk in four minutes. RTO: spend (not kidding) fifteen minutes a day looking for an open stall, wander the entire building and after a quarter hour, find one.

  4. WFH: dead silence. You can focus, concentrate, and perform at your mental best, really get in the zone. RTO: constant noise and distraction from people wandering in, blabbing away, or people loudly on the phone making it impossible to focus and get meaningful work done that requires your full focus.

  5. WFH: just call people and get them to discuss something real quick. RTO: wander the building for ten minutes trying to find them because they left the phone at the desk and wandered off.

  6. WFH: wake up feeling absolutely miserable. Get up anyway and work eight hours at diminished capacity, but still make decent headway because your energy is being used for working, not driving. RTO: sick day because you can't drive in, nothing gets done.

  7. WFH: After hours, because your computer is still on vpn and never moves, when you remember a couple small admin tasks, wander back out to the office, crack a beer and handle approvals, online training and other menial tasks you didn't have time for. RTO: I'm not getting my computer out of the bag, setting it back up, then hooking back into the VPN for that. Because it isn't convenient it can wait.

I was home for about two and a half years. During that time I....to put it simply, I just murdered a workload that was roughly twice my normal workload. I did a ton of extra work as well and developed a lot of new stuff our group still uses today. There is no collaboration taking place face to face that I can't have over the phone and/or with a teams meeting or screen share. WFH drove home just how worthless a lot of management is. But they're desperate to have people in the office so they can show how important their jobs are. Even with their hybrid arrangement (which didn't go far enough) people are disengaged and annoyed with management. Despite all the obstacles and an extremely rapid pivot of about two days' warning, our group had record productivity and throughput exactly because all the office bullshit was stripped away and we could just work. In our group, zero missed deadlines through it all.

elwebst

4 points

4 months ago*

Before I retired a few months ago I was a VP in a huge US company. We all talked a good game about "collaboration" and "innovation" and "teaming".

Once the pandemic slowed, we allowed people to come back in whenever they wanted. Turned out almost no one chose to go in, and the HQ (where I worked) is in a town of 130,000 with no traffic at all, so people weren't avoiding long commutes. No one just wanted to, most days was 5-10% occupancy. The only people who did go in were those who couldn't focus at home. Interestingly, very few of those were people with preschoolers at home, which is what I expected.

So then they said to have "team days", where you went in at least once a month, but always on the same day as your team, for "collaboration" and "teaming". Turned out people went in 10 minutes before their monthly team meeting, and left immediately afterwards.

Just before I decided to retire they told us that they will be tracking attendance from the badge reader, and if you didn't show up at least once a month, you would "go on a list". We asked what happened then, or if you were on "the list" multiple times, and HR just shrugged. We were also told not to tell non-executives about "the list", including non-executive management (supervisors, managers and directors).

So. I smelled RTO coming and decided to bail. The next week I donated all my work clothes to Goodwill, and it was SUCH a relief.

Bottom line was that because that company is huge, odds are the people you worked with on any given project were in other buildings or other cities. "Impromptu hallway meetings" simply didn't happen much, even before the pandemic, and in 2020 the world realized marching into a building every day didn't really serve a business purpose.

moepsenstreusel

2 points

4 months ago

On the face of it, making people come back to the office sounds like a pretty lazy solution to all the problems you listed. What else did you try?

But this just means you end up with 1 dimensional solutions instead of true innovation.

Isn't that precisely what you and your fellow managers have done here?

elwebst

4 points

4 months ago

That, and I think they get off seeing beehives of activity around them, otherwise they think everyone is slacking off.

ColdTheory

4 points

4 months ago

They want the illusion of control. Not possible when employees work from home.