Blogger Damian Saunders posted a detailed and apparently deeply resonant critique of a recent across-the-board pay cut at Hewlett-Packard, calling it "an unfair act of economic opportunism and greed."
CEO Mark Hurd and his management team are singled out for what Saunders pretty clearly demonstrates is a painless 20% sacrifice to their base salaries that barely touches their massive total compensation. (Hurd earned more than $42 million last year.)
Meanwhile, for Joe Employee, a 5% cut in salary is a 5% cut in total compensation.
And all this because the company made a profit of only $1.9 billion in the first quarter, down some 13% from the same quarter last year.
Weeks after it went up, the post is still "spreading like wildfire from employee-to-employee throughout HP," according to a middle manager at HP who has asked that I withhold her identity.
The 349-and-counting responses, many of them from employees of HP and its acquired partner EDS, universally laud Saunders for his reporting and analysis, many of them using it as a springboard to thoughtfully and convincingly expand on Saunders' criticism. In total, the post amounts to a wikipedic collection of everything that's wrong with HP—and everything that's ever been wrong with HP.
Here's what it's meant to my source:
to implementing a "fair" across-the-board paycut has failed because of
the fact that upper management accepted such high bonuses last year
(and there's nothing saying that they won't do it again this year).
This Damian Saunders thing has just emphasized it and gives specific
details about the bonuses that people may not have known previously (me
included). You could argue that the bonuses were based on 2008 earnings
which were relatively good, but employees are not buying it because
bonuses were given in December—after the economy tanked—when it was
clear that 2009 was going to be rough. …
How has the company responded? Publicly, not at all as far as I can tell. A colleague of mine has a query in with HP's public relations people and I'll update this if we hear back.
As for a response to the employees who are still gobbling this up and spreading it around the organization, my source hasn't seen one: "At this point, I'm not sure what the company could respond with that would resonate with employees."
Saunders predicts employee revolt with a run-on sentence:
"People power has toppled Governments, a
disgruntled employee base has the potential to bring HP to it’s (sic) knees
in days, surely that time bomb’s ticking."
But listening to my source, I'm not sure anyone has the energy to mutiny; she describes the mood as "pretty gloomy."
Seems to me this kind of dynamic could play itself out at lots of organizations over the coming months, at a certain cost to short-term productivity and the long-term health of the institution once the economy does rebound.
Communicators ought to think now—not, as may be the case at HP, when it's too late—about to stand on ground that has shifted, beneath management, beneath employees and beneath the philosophical and economic foundation of every organization.
What should organizations be doing this quarter to avoid an unanswerable, morale-busting blog item like this next quarter?