Training McWorkers for their McJobs

[Nicholas Carey]

Circuit City has developed an interesting management strategy for motivating their employees [and then wonders why the employees have little loyalty or motivation] :rolleyes:
A Dream Short-Circuited (http://www.washingtonpost.com/wp-dyn/content/article/2007/04/10/AR2007041001309_pf.html)

By Harold Meyerson
Wednesday, April 11, 2007

On March 28, Circuit City announced that it was laying off 3,400 of its salesclerks. Not because they had poor performance records, mind you: Their performance was utterly beside the point. They were shown the door, said the chain, simply because they were the highest-salaried salesclerks that Circuit City employed.

Their positions were not eliminated. Rather, the store announced that it would hire their replacements at the normal starting salary.
One can only imagine the effect of Circuit City's announcement on the morale of the workers who didn't get fired. The remaining salesclerks can only conclude: Do a good job, get promoted, and you're outta here.

[John of Phoenix]

And just how much does the bright guy who came up with that idea make?


The proxy statement for Circuit City Stores Inc. uses the old SEC executive compensation rules.

In 2006, W. Alan McCollough raked in $5,470,049 in total compensation.

From previous years' stock option grants, the Circuit City Stores Inc. executive cashed out $3,052,902 in stock option exercises.

[geeman]

Ya I saw that article the other day.It shows what employers really think of their employees.And the sad part is, they dont care.They dont care how it effects their remaining employees,or their future employees.They are a box store with the new box store mentality.And because they'll get away with it as far as customers loyalty is concerned, you'll see more of it in the future from other box stores.
And THEN the box stores will notice a more pronounced morale problem with their employees, and they'll have the gall to wonder what happened.
I wont be buying from Circuit City in the future.

[geeman]

Old rules with one less customer.

[geeman]

Circuit Cities website has a "suggestion" area.I clicked it and made a "suggestion"
Mentioned that I'd never work for Circuit City and more importantly they will never have me as a customer.Made me feel better anyway.

[Concordia...41]

Ditto. Never liked them anyway. They refused to honor an extended warranty for me a few years back - some BS. Seems like I didn't bring the power cord and the charger so they could test both. At 40 minutes each way, that was my first and last purchase. :D

A place having a bad day is fine. A clerk in training, or the utterly clueless - fine too. When a store totally and blatantly screws me, the one strike rule is applied. :D

[geeman]

And we really believe deep in our hearts, that box stores are the answer to high costs? At what cost to the country?Is the money still in our wallets after purchase worth whats happening to the country?

[Domesticated_Mr. Know It All]

I bought a camera there a few years ago.
The salespeople were all young high school or college age kids.
The didn't know anything about the product and had a hard time ringing up my purchase.
I thought the place sucked back then and I guess now I know why.
The place might as well be self serve.

My nephew worked his way up to Manager at Best Buy.
He started part time while in high school.
He has a wife and 2 kids, just bought a house, etc.
He'd be screwed if Best Buy follows that strategy.

[geeman]

Well.I can see this "method' of operation becoming main stream.Due to our love of "cheaper prices"
And people ask
"what is the downside to cheaper prices,how can cheaper prices be bad?"
I have always felt that our cheaper prices love affair was in the long run, a very bad thing.
Imagine if this becomes a normal way of doing business in this country. We teach our kids that if they work hard do things right and they'll be rewarded. Getting fired for being either too good at their job or rewarded for being a long term employee.
So how do we convince our young that working hard, being dedicated is the way now?

[Bill R]

Not just big box stores. Big Corporate America in general. I used to work for a very large radio company. When I was let go, they told me point blank we can hire 3 youg kids out of school for less than we pay you. Only problem for them- they found out within a week of letting me go there was a reason I was paid what I was... Cost them big $$$ in the long run...

[geeman]

Apparently corp America is willing to pay the high price of constant turnover in order to save a few bucks here and there.I'd say in the short run it looks good on paper for the bean counters , but would cost more in the long run to replace those employees in the real world.Especially if they form the habit of doing this sort of thing as a "natural normal" way of doing business.

[brad9798]

Corp. America answers to the general buying public ... it is us that doesn't care about others ... as long as we can save a couple of bucks.

Again, if we all concede to pay 10-40% more for what we buy ... well, we will immediately correct the market and get rid of this type of practice ... and get rid of ALL big box stores ...

Who is the first volunteer?

That's what I thought! ;)

[Tylerdurden]

Not just big box stores. Big Corporate America in general. I used to work for a very large radio company. When I was let go, they told me point blank we can hire 3 youg kids out of school for less than we pay you. Only problem for them- they found out within a week of letting me go there was a reason I was paid what I was... Cost them big $$$ in the long run...


I notice a lot of company's surround themselves with low paid hacks.
They think if everyone in the industry follows their lead then the customers will get used to it then not have much to say.
The customers know this and as soon as they find a qualified tech they hold onto him. Pretty much every market I go into I look for the competition that has that profile and target them. In short order I destroy their base and soon they are a shadow of what they once were.
I tried to come to Maine Years ago except no one would pay.
Finally one outfit got the idea from the suggestion of a manufacturer (carrot and stick). I got hired and a year later two more.
the company went from the smallest market share to domination in three years. We gross three times what the others do combined.
Its demented that some idiots still don't get it.
I hear from the customers "I wish I knew about you guys years ago"

[Nicholas Scheuer]

The monitor I'm using came from there. But I am always thoughtful how much less floor traffic they have compared to Best Buy.

Circuit City needs more floor traffic, not the idiot who dreamed up this policy.

Moby Nick

[Hwyl]

I'm pretty sure it's the same policy in most places

[Phillip Allen]

I suspect this is now taught at university level...they're creating "experts"

[Norman Bernstein]

One can only imagine the effect of Circuit City's announcement on the morale of the workers who didn't get fired. The remaining salesclerks can only conclude: Do a good job, get promoted, and you're outta here.

There are people in this forum who disparage me every time I bring up the issue of rising income/wealth inequity... yet the Circuit City example is a clear harbinger of things to come... and I wonder how people are going to feel about it 20-40 years down the road when this sort of thing becomes more and more commonplace.

It's not hard to find a wealthy conservative who will tell you about personal responsibility and hard work, as the keys to success in America... but if we continually degrade the value of work, as reflected in the share of economic success enjoyed by ordinary employees, the entire nature of the country is going to change.....

...and those workers aren't going to continually tolerate it. Income/wealth inequity is the classic reason for revolution throughout the ages, and it can and will happen again, if things continue to get worse. I may not see it happen in my lifetime, but my children might... and my grandchildren most certainly might.

[geeman]

Norman, I dont see it that far ahead.I see it at most say,,,,,,, 5 maybe 10 years off.
When the masses catch on to whats going on,there'll be a price to pay.
As far as Brad's statement goes,, We dont shop at Walmart as an example as much as we used to. We now try to find what we need at a local retailer if we can.Only if its not possible to find what we want on a local do we buy at Walmart.And yes we do pay more,sometimes,but in the LONG RUN I think its worth it.But getting the masses to understand that buying habits as we know them now is only a short term fix.Long run,we're in deep trouble.

[Norman Bernstein]

Norman, I dont see it that far ahead.I see it at most say,,,,,,, 5 maybe 10 years off...

Boy, and people see ME as a cynic!

I don't think it will happen that soon. The two party system acts, to a very limited degree, like a safety valve on a steam boiler. When discontent from the classes other than the uber-rich rises, Democrats tend to gain more power, and the angst is (only very slightly) defused.

The problem is that even when Democrats obtain power, the underlying ills don't end up changing all that much. The trend continues, unabated, because the Dems then become more beholden to powerful money interests, in their attempt to STAY in power.

However, you could be right... all it would take is a few more major companies like Circuit City to adopt similar policies, publicly, and we could see a meaningful uprising.

[High C]

This kind of stuff is self correcting. The market doesn't tolerate such poor service, especially in a technical area where customers need capable help. It's already begun. As someone else said, traffic in a typical Circuit City store is low, while it's high at a nearby Best Buy. Same thing here. I give our shiny new Circuit City another year or two before they throw in the towel.

I'm no big fan of Best Buy, but their people (here, anyway) are clearly superior to those at CC. Customers are voting loud and clear with their pocketbooks.

[Norman Bernstein]

This kind of stuff is self correcting.

I don't think it's self-correcting at all. Some huge chains like Circuit City face two choices: paying high salaries to knowledgeable salespersons... or lowering the expectations of the buying public so they don't have to.

We've seen the same effect all across the consumer spectrum. Virtually all home electronics these days, for example, carry 90 day warantees... 20 years ago, it was far more common to see one year warrantees. You may have noticed that the big box stores try to sell extended warrantees... but those 'devices' are just statistical gambits, since most electronics aren't repaired these days, they're replaced. The net effect: the expectation of the consumers has been lowered, and the net price is trhe same, or higher.

[High C]

I don't think it's self-correcting at all. ...

I'd call a lack of customers self correcting.

[Norman Bernstein]

I'd call a lack of customers self correcting.

Maybe so... but it's not like the customers initiated it... nor is it likely they could really do anything about it... not when consolidation is the trend, when competition gets reduced to the battle between just a small handful of retailing giants.... instead of a richly diverse chain of distribution that includes many more smaller retailers.

But it goes far beyond this example. Circuit City employees have no means of 'correcting' the personnel policies. The workplace used to be a place where experience and competence were valued, where compensation and job security were the commonplace rewards, to almost the exact opposite.

Who has job security anymore? Certainly not the average working man. Who has long term security anymore? Middle income wage-earners were no more capable of insuring their long term security on their own 40 years ago than they are now, but they had a reason to expect that if they remained faithful to their employers and worked hard, that they would be rewarded by raises, advancement, and pension plans. Nowadays, those 'standards' are pretty much gone... and Circuit City is an extreme example.... that is likely to become more and more commonplace. The working class has no leverage, especially in a full employment economy.

[S.V. Airlie]

I'm still trying to figure out why you just pick on Corporate America,
Anyone here a teacher with 25 yrs. experience that have been given an option to retire early.. Why because of the pay. Theory is.. we can hire two or three new teachers for what you are costing the school system.
It is the American way..

[brad9798]

EXCELLENT example, Jamie!

The politically correct way of firing is called 'early buyout,' or 'early retirement,' or any number of other euphimisms ...

[S.V. Airlie]

Yes, members of the admin. may make 100,000.00 a year.. not the teachers..
Now I started teaching at 6grand/yr.. fact.. I stopped teaching after 12 yrs at 22,500.00 okay private school.. but my premise is the same. A school can hire three newbies for the price of one as the one has experience and deserves the pay. Hence, get rid of him and hire three with no experience... Yup.. sounds like a plan.

[Henning 4148]

In Germany, certainly on electronics, there seems to be a trend away from big box shifters back to mid size shops with knowledgeable staff.

Pay peanuts, get monkeys.

[S.V. Airlie]

I taught AP Biology one year... Was given this duty one day before school started... I said okay.. gulp! I taight it..out of nine studdents.. nine took the AP exams, five had fives, three had fours and one had a three.
Now in my hometown, the school decided to give an AP Bio. course... To prepare, the school gave a course duriing the summer to teach teachers how to teach the course.
Experience counts here... I had already taught for 11 yrs.

[Keith Wilson]

Hey where's that "suggestions" thing on the Circuit City website? I think I'll tell 'em why I'm not going to shop there anymore - not that I did much anyway, the service was too lousy. Even though I don't much like Best Buy, at least you generally can find somebody who can answer a simple question. That's exactly right: Pay peanuts, get monkeys.

[S.V. Airlie]

Jim.. I just looked up teacher's salaries.. okay I googled and I did not look at current stats.. three years old... The max pay was in CT.. ( well close ).. For a teacher it was 52,000.00 plus a few bucks.. Where are you getting 90,000.00 from?

pss.. googled..

Teacher Salaries by State

The American Federation of Teachers issues a Teacher Salary Trends report each year to survey the pay levels of U.S. educators. In 2001-2002, the average teacher salary was $44,367.

So, okay add five years.. The salary ain't gonna jump to 90 grand.

[Kaa]

As a union member you can't be fired and if anyone wants to buy you out they have to make you an offer. What's wrong with that?

The usual. Accumulation of deadwood and marked reluctance to hire people. Why do you think Europe tends to have much higher unemployment than US?

Kaa

[Memphis Mike]

Until people decide to stand up for themselves, this kind of thing is going to continue.

Corporate America needs to be sent a strong message.

What we need in this country today is another labor movement and some strong labor organizers.

I just don't know whether it's possible or not, today. There's no support network anymore. People have distanced themselves from their neighbors, relatives, etc.

[S.V. Airlie]

Labor unions protect their own even if the teachers can't teach.
As someone has mentioned.
Now at private schools, if ya can't teach, you are outta there.. seen it happen.. No unions..

[S.V. Airlie]

Jim.. I'm impressed..
I'm gonna get out of the retirement mode.
Then again, to live in NYC or the subs.. I'll need 100,000.00

I'm still impressed...

[Another One]

I've just got to point out that just before active duty military members were being involuntarily extended due to the first Gulf War, they were being shown the door under an "early out" program. The rational was that new recruits were cheaper to keep than trained NCO's. (If I remeber correctly, an E-1 made about $996 per month at the time, gross.)

It's not just the corporate world . . .

[Norman Bernstein]

My new son-in-law is a young high school history teacher, just finishing his third year in one of the lower-paid communities in the boston suburban area. He arns in the low 30K range.... and the top salary, for a teacher with a PhD and 30 years of experience, is around 78K in his system. (Point of reference: the sup't of schools in my own town of 20K people makes around $130K a year, which seems pretty reasonable, to me).

I wouldn't at all be surprised that teachers salaries would be far higher in selected counties in the NYC metropolitan area... where houses that, in my community, would be worth $300K, are valued at $750K-800K.... as 'tear downs'!

Furthermore, it's damnably hard to fire a teacher, in most systems.... so I suspect that the business about firing a $100K teacher to replace him with three $33K teachers is either an isolated anecdotal incident, or a canard.

Personally, I think teachers are fairly paid, once they've been in the system for 10 years.... but the new ones are underpaid. I know several, myself, and most do a great deal of additional work, after school and/or in the summertime, to supplement their income.... resulting in a lot more than their base salary. My son-in-law, for example, coaches hockey, noth after school, as well as in the summer, and that increases his gross earnings by 30% or so.

[geeman]

Keith,
On the Circuit City site, look down at the very bottom of the page.
You'll see several items, one will be "suggestions"
very bottom of the page

[S.V. Airlie]

Norman. the way around firing someone is to buy them out. That is not firing them per se.. It's all in the wording.

[Another One]

Furthermore, it's damnably hard to fire a teacher, in most systems.... so I suspect that the business about firing a $100K teacher to replace him with three $33K teachers is either an isolated anecdotal incident, or a canard.


Norman, for what it's worth, I'm told there were over 400 applications in our school system last year for their one elementary teaching position. Also, my cousin graduated with her elementary teaching license in Michigan last winter and has been substitute teaching and student teaching all over the area, but can't even get a nibble on a full-time classroom position.

Jami

[geeman]

Just imagine tho, if this catches on among the box stores and large companies.What effect will it have on worker morale?This is an important point I think.

[S.V. Airlie]

geeman.. Worker Morale!!!!:eek: Where have you been?
A guy works for a comapny for twenty years and gets a pink slip in his in box on Monday morning...
Yup.. that deserves a little morale and loyalty...:rolleyes:

[Norman Bernstein]

Norman, for what it's worth, I'm told there were over 400 applications in our school system last year for their one elementary teaching position. Also, my cousin graduated with her elementary teaching license in Michigan last winter and has been substitute teaching and student teaching all over the area, but can't even get a nibble on a full-time classroom position.

Jami

Interesting, Jami.

Youi might find my son-in-law's story somewhat interesting. His undergraduate degree was in Criminal Justice.... but when he graduated, the only jobs available were cop jobs, and only in places he didn't want to go to....he really had decided he didn't want to be a cop anyhow.... so he took a job as a security guard at Boston Medical Center (a horrific place, with the dregs of society), strictly because it would give him free tuition at Boston University, from which he graduated with a Master's in Criminal Justice (grad school tuition in BU is $17K per semester!).

He had decided he wanted to teach... and managed to get hired as a history teacher in one of the lowest paid suburban Boston communities... they do hire teacher without teaching degrees, on a provisional basis. He's now 6 credits shy of a Masters in Secondary Education.

He'd love to move to a higher paying community... but the competition for those jobs is fierce.... and since all Boston suburban communities are hamstrung by 'Proposition 2.5" ( a law which prohibits tax increases in excess of 2.5%, unless the town meeting overrides it), many towns who really need the teachers simply can't afford them.

But the more pressing reason he probably won't be able to move is that the economic forecast for the next five years is pretty dour.... and he'd be a fool to trade his tenure in his present job to become the low man on the totem pole in another town.... only to be let go in the next crunch.

So, he's biding his time, and his strategy is a sound one: he believes that in another 5 years or so, the baby boomer wave will result in the retirement of far more teachers than are retiring today... at which point, he'll have his M.Ed., and enough experience to get a much better paying gig, in a nicer community.

It's a hard life.... certainly no featherbed job, as some have suggested.

[Nicholas Carey]

Two houses down from me lives a $90,000/yr kindergarten teacher...If you had put in 25 years you'ld be well over $100,000 which is why they want to buy you out. As a union member you can't be fired and if anyone wants to buy you out they have to make you an offer. What's wrong with that?Where are these $90k kindergarten teacher jobs? I have friends that would be very interested in one of them. :rolleyes:

[S.V. Airlie]

I don't know Nicholas.. living in a city. Probably half the salary is to entice you to do so.
Personally, I would rather live in an area where there is a lawn to mow, not much traffic, not much crme.. relatively speaking.. etc..etc..
I gues it comes down to location..location..location.

And that's a reason to live on a boat...:D

[GregW]

If there is one place where it doesn't pay to create Macjobs is teaching. Teaching is like any other profession, you get what you pay for. You'd think one would want to attract the best of the best to train the future generations. It's really hard to attract someone with a graduate degree in math to teaching if all they can possibly aspire to is $70K-$100K a year, after 25-20yrs of work.

[Bob Adams]

Circuit City has a form letter for those who leave a "suggestion" :

Dear Valued Customer,

Thank you for sharing your thoughts. We value our customers' feedback.

As we stated in our news release yesterday, we are taking a number of actions to improve our cost and expense structure. We are holding ourselves accountable to our associates, our customers, our communities, and our shareholders to build a strong company that generates sustainable growth for the future.

Our goal is to provide superior service while effectively competing against low-cost retailers. We are working towards this goal by making changes, such as announced yesterday, and with the help of over 40,000 associates who keep our customers at the center of everything we do. We hope you will allow our Circuit City team to serve you in the future.

Sincerely,

M. Garcia
Customer Support Coordinator
Contact ID # CALL11377943

I replied that I will shop at a place that does not reward years of service with termination.

[geeman]

Bob Adams,
I got no such response,from CC, I must have sent mine before it was crafted.I take it from the e mail you got that CC is taking heat and felt that was an appropriate response.Personally, I think its weak,and will "respond" to THEIR response with another of my own.

[BrianY]

Two houses down from me lives a $90,000/yr kindergarten teacher. Around here admin is $200,000 plus. We get TaxPac letters yearly detailing salaries and nobody has any cause to complain. If you had put in 25 years you'ld be well over $100,000 which is why they want to buy you out. As a union member you can't be fired and if anyone wants to buy you out they have to make you an offer. What's wrong with that?


Hey, my wife's a teacher and after 24 years of doing it she's not making anything like that. In her school system the teacher's union is pathetically weak and unable/unwilling to protect their members. Where do you live? I'm going to tell her to look for a job in your town.

[BrianY]

Ok. I read the article.

A little perspective:

from http://homes.point2.com/Neighborhood/US/New-York/Nassau-County/Merrick-Demographics.aspx

Nassau County:
Median Household income:$96,084
Average Household Income: $126,606
Average Home Sale Price:$547,743

Westchester County:
Median Household income:$71,505
Average Household Income: $100,453
Average Home Sale Price:$716,954

Suffolk County:
Median Household income:$72,809
Average Household Income: $102,350
Average Home Sale Price:$499,008

Given the above, it seems reasonable to me that someone with 30 years of experince with a master's degree plus additional college credits living in one of these communities would make $100,000/year.

But they're teachers, right? They don't deserve to be paid so well, right? It would be O.K. if they were, say, computer engineers like my nephew who is one year out of college with a Bachelor's degree in Computer Engineering and he's making about $70,000 at his first job.

[peb]

I hate to do it, but it is sometimes fun. I said it first. On the walmart thread a couple of weeks ago I pointed out how I was going to stop shopping CC because of this new policy.

Now that I have gloated, a couple of points.

High C says the market will take care of it. He is kind of right. I believe over time, especially in "specialty" big stores (ie home improvement, electronics), people will start paying for better service. The big box stores will have to start providing a better level of expertise. There are already signs of this. CompUSA and BestBuy are recognized as superior in this area.

CC will continue have a furthur business detoriation. Not because of this policy per se. But because they already have major competition problems and these type of reactionary approaches to appease Wall Street never work. Private analysts are already giving lack of confidence to the approach. Wall street will abandon them, and then who knows??? I won't predict utter collapse, but it is a historical pattern that they are on track to copy. An example would be contrasting Target's success in the walmart battle with KMart and Sears failure.

Also, this is an example of the stategic failure of unioins in this country to adapt to the changing economy the last 30 years. They have been stuck in a rut, stuck in a manufacturing mindset. They are way behind the game in the service sector. They have no strategy to catch up. Can they pull off in the service sector now what the pulled off in the manufacturing sector starting in the 20s? I don't see them taking the correct approaches. When they try to unionize a business, they do a very poor job selling the idea to the workers and management. And it is possible to sell the idea to a companies senior management, it was done at SWA a few years back with they ground personel.

Finally, the world is not ending, we are not going to have a worker uprising in this country in the near future. The CEO pay scandal has got to be addressed, and there are signs, albeit to early to say definitively, that Wall Street will get involved and solve this problem.

[Norman Bernstein]

IFinally, the world is not ending, we are not going to have a worker uprising in this country in the near future.

Maybe not in the near future.... but if the trend continues unabated (as it has, for decades), I wouldn't be so sanguine about the long term. Resentments tend to simmer.

[Tom Hunter]

CC is in trouble.

Best Buy and several others are eating their lunch. Management is under a lot of pressure, which in a situation like this has several effects:

They start to look for ways to cut costs in order to buy time
Under pressure the quality of their decision making tends to suffer

It is possible that this will work, that they can take the moral hit and subsequent decline in customer satsifaction and then recover. But frankly I think it is doubtful.

I don't think you can say that CC is a stand in for the entire economy. They are a good example of what happens when a company is in trouble. But I will point out that their more successful competitors will be looking for the best of the CC layoff pool and those people will soon be helping Best Buy and Costco drive another nail into CCs coffin.

I don't like it when a company does something like this, but I try to understand the root cause and the likely consequences.