Jeffrey Saltzman's Blog

Enhancing Organizational Performance

Respect as a Commodity

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IBM factory employees, more than 1000 of them, are on strike in China. These are workers associated with a piece of IBM that made servers which was recently sold to another company, Lenovo, for 2.3 billion dollars. When you hear about a story like this, your mind is immediate drawn to working conditions or salary as a potential point of contention and the reason why the workers may have walked off the job. But as the New York Times reports (3/6/2014) the workers on strike were carrying banners with phrases such as, “Workers are not a commodity,” and “Give us back our respect.” When I first saw this I was a little surprised. But then as I thought about it, it made complete sense.

Pay, benefits and physical conditions are often the driving force of labor unrest when they are felt to be poor or substandard. And there are certainly plenty of workers in China who still toil under horrible conditions with low pay. However, as the article points out, in the last decade the average worker salary has risen 5 fold in China. And as the Chinese population growth continues to slow workers are not queuing up like they were for each opening, requiring jobs to be more attractive to entice people. The upward tick in pay and conditions has likely removed them or shifted them to a lower priority on the typical grievance list. In a standard Maslow hierarchy fashion, the more middle class standards that the workers now enjoy has shifted their concerns from physical needs to higher order needs such as respectful treatment.

Interestingly in the USA, up until fairly recently, when workers went on strike it was often about treatment. Then with the decline of pension plans, cuts to wages, as well as an increasing health care burden being shouldered by employees, labor unrest began to turn back towards the basics of pay and benefits. A few years ago, in 2005, when subway workers in NYC walked off the job it was all about pensions and health care as the union wanted to resist “roll backs” in the standards of pay and benefits that their members had previously received. Union workers, by the way, often rate pay and benefits more favorably on employee surveys because in general unions have been successful at getting higher levels of pay and benefits for their workers. And when you pay a worker more they rate that pay more favorably. Go figure.

I am not going to argue that pay and benefits are no longer an issue for workers around the world. In many places around the world there has been a “race-to-the-bottom” with transnational corporations searching out the lowest costs of labor to build products or provide services. And their freedom to allocate resources across borders has made that search global in nature. Workers, with more restrictive mobility to move across national boundaries, cannot relocate as easily to areas with labor shortages where pay rates would presumably be higher. This imbalance, where corporations can relocate more easily than workers, creates only a semblance of a free market with the advantage belonging to the corporations. Certainly in the USA with stagnant wages, pay and benefits are once again becoming more and more of an issue. Global Employment Trends, put out by the International Labor Organization states that in 2011 approximately 30% of the world’s workforce earned less than $2 per day and 14% earned less than $1.25 per day, defined as extreme poverty. So pay and benefits are going to stay a global issue for the foreseeable future.

When a workers is walking a picket line with a sign that says “Workers are not a commodity” what exactly do they mean? A fungible worker is someone who can be substituted by another worker with the same skill sets and ability. With fungible workers it does not matter if I have worker A or worker B, as they are the equivalent and can both do the job as assigned.  A fungible worker is a commodity. If they leave they are easily replaced and they are laid off or rehired as conditions require. If something is a commodity, like milk or a loaf of bread, I want to buy it at the lowest possible price. People though don’t want to be treated as though they are nothing more than a gallon of milk.

A while back for a Fortune 50 firm that was rapidly expanding through Asia I was hired to help them understand the differing drivers of what would make them an “employer of choice” in various Asian countries. Since they were a USA headquartered company we used the USA employees as a control group and were looking for differences by country. While there were slight differences country by country (mostly in dimension rank order and not dimension inclusion), the largest difference was found to be in China and it was on the notion that the company becomes part of the employee’s “family” along with a greater sense of community or we are all in this together, than was found elsewhere. So beyond being engaged with their work, these employees in China felt that the workplace was part of their family, part of how they defined themselves. So here you have IBM selling off part of their family to another company and the employees did not like it.

This notion of “company as family” is not restricted to China. In many organizations in the USA, especially small ones, perhaps still run by founders, you get employees stating that the company feels like family. A sense of we are all in this together. And as the company grows, and perhaps founders retire, they begin to lose that sense and it is quite common to have employees complain that what is wrong with the company is the loss of this sense of family.

When the IBM workers on the picket line in China ask for their respect back, they are quite possibly asking for their family back.

Written by Jeffrey M. Saltzman

March 7, 2014 at 4:52 pm

2 Responses

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  1. Thank you for this. I can see how Maslow’s hierarchy can be seen to track the maturity of an organisation as well as an individual. You are I think referring here to human dignity, its importance to people and its relevance to the health of the culture/community and enterprise family.

    The other link of course is to the value of an organisation’s discoveries and the connections in any enterprise that are needed for them to be harnessed and exploited. Dialogue or ‘social engagement’ relies on the sense of ‘all being in this together’.

    Martin Price

    Martin Price

    March 8, 2014 at 2:16 pm

  2. Really interesting amd insightful Jeff. Great food for thought.

    Kirsten clark

    March 13, 2014 at 7:00 am

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