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Circuit City Rewards Execs As Stock Tanks
jamie tipped us to Dean Baker's Beat the Press blog, where Baker comments on a followup to Circuit City's firing of all its highest-paid salespeople last March (Slashdot discussion here). Circuit City's stock has cratered in the meanwhile, and their response has been to offer $1 million retention bonuses to executive VPs. Baker points out that each one of these bonuses represents 35 years' salary for one of the fired salespeople.
Just think how much they could save if they fired all the salespeople?
Lay off all the people that were actually making money for the company, and pay big bucks to keep the people who brought the company to the point where it had to lay people off.
Brilliant!
The higher the technology, the sharper that two-edged sword.
And people wonder why they cannot rely upon employee loyalty these days. Personally, I'm investing all of my money in pitchforks and fire insurance.
The ______ Agenda
I occasionally go in there and buy something, if it is on sale, but no one has ever SOLD me anything.
Retention bonuses are common in situations involving sick companies.
The idea behind them is that without the institutional knowledge that these people have, the company would die even quicker. Few people, including upper management want to stick around on a sinking ship, so in order to keep potentially valuable people from moving to a healthier company, they offer retention bonuses.
Obviously the hard part is sorting the wheat from chaff and only giving the bonuses to the useful people, at least the marginally useful. Seems to be that they just hand them out to everyone in upper management "just to be safe" which in the end may not be all that safe...
When information is power, privacy is freedom.
and they are going to grab what they can before they go the way of comp usa.
It's hard to believe that's how Micronians are made. Why don't we see it right now by having you both kiss one another?
... firing of all its highest-paid salespeopleWant to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
It's typical corporate "head up ass" syndrome.
CC is on it's way out/down, so the execs are going to raid the coffers before everything tanks.
Chas - The one, the only.
THANK GOD!!!
This is the last year for corporations to cash in bush-style on corporate raiding. Watch Wall Street with michael douglas and charlie sheen is still the best movie on this strategy. Hell I never made any money in corporations... might try it 9 years from now myself.
Circuit City had a number of sales employees who were paid far in excess of industry standards, and not based on commission. Circuit City shouldn't be expected to pay its employees far in excess of industry standards. Many of those salespeople were hired back at lower pay. The bonuses now being paid to executives is a completely separate issue. As noted in the post, Circuit City is struggling. After two of their top executives left, the board decided that drastic measures were necessary to keep the rest in place.
"Baker points out that each one of these bonuses represents 35 years' salary for one of the fired salespeople."
Right. There's a small little detail, though: The execs make the decisions that make the difference between making and losing millions of dollars. The sales people, even if they were paid 1 million dollars, would not generate anywhere near that much income to save the company. If Circuit City's business model is broken, then it makes sense they try to keep the decision makers from leaving the sinking ship. If anything, to devise and carry out a new strategy. What they're doing actually makes some sense, even though that little blippet was intended to make them sound idiotic.
But, that's just me responding to sensationalist bullshit. I personally think they should use those retention bonuses to hire new execs, preferably those with a proven track record in this sort of business. Hypocricial? Nah. Still non-sensical? Yeah, maybe.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
That's the last time I buy something from Circuit City. If that's where my money is going, then (1) I KNEW there was more margin in that sale and (2) I'll buy from the same sales people when they move to a different place.
Most of the stuff on
they should consider closing their stores, while outsourcing what little remains. Why those VPs would save all sorts of money.
I prefer the "u" in honour as it seems to be missing these days.
there is a growing trend where all Ex's are being paid more and more and the pay for the people who do the work is stagnating.
many of these Executives never do anything to justify the increases.
it's all industries though, not any one.
Investment funds have huge ownership of shares -- it is the fund managers who should be looking out for the interests of their investors and putting an end to this BS. IMHO, their lack of action makes them complicit. It's the guys at Fidelity and others that we should get mad at.
The real "Libtards" are the Libertarians!
Here's a suggestion: Don't shop Circuit City even if it is convenient. Find a nice mom & pop electronics store. They're harder to find, but worth the effort.
Years ago, I used to work for CompUSA corporate in Atlanta, GA. When they got bought out by the holding company that recently liquidated the company (took years longer than I thought it would), CompUSA fired all their corporate, education, and government sales staff. Oddly enough, I kept my job along with a few others in the southeast, albeit with more responsibilities and better pay. The vast majority of folks working for them weren't so lucky. They got their pink slips on a Monday morning, if I recall correctly, with no advance warning.
Essentially, it's like you put it: let's lay off everybody in the company who had anything to do with generating sales out of three huge markets, and who cares about the personal relationships they had built with customers (especially with respect to public sector folks)? Oh, I forgot to mention... lots of people were offered a "chance" to keep their job if they felt like relocating to Dallas, TX where CompUSA was building a multimillion dollar call center to centralize all their corp/gov/edu sales operations. What a bargain, right?
On the many occasions I visited that new call center on business, I got the distinct impression that things were, well, about as fucked up as a football bat. They had it all; an entire hotel rented out for six months housing only CompUSA employees, a new SAP rollout that kept mysteriously screwing up orders large and small (while sucking up untold amounts of contractor labor and prompting Microsoft execs to hold fun-filled meetings about revoking CompUSA's large account reseller status), midlevel managers running around trying to figure out whether their charges were coming or going.
Let's be fair in Circuit City's case, though... the old expressions goes: Never attribute to malice that which can be adequately explained by stupidity.
512 MB RAM, 20 GB disk, 200 GB transfer, five datacenters. $19.95/month.
Heh, you could say the whole company is on clearance - getting ready to make way for the new model...
This issue is a bit more complicated than you think.
Fucking spammer. Burn in hell.
To others: That's one of those stupid "MyMiniCity" spam games.
Gosh I used to hate Circuit City "salesmen" as they were abrasively aggressive...that is until they found I wanted a stack of disks instead of a $2k wide screen TV, whereupon they literally wheeled off to the next marke through the metal detectors.
The stock is negative 30% since 2000. Ok it's up a bit from the bottom this year so we'll give him that. In the meantime Sam Palmisano I'm sure is wishing for his entire Unites States workforce to quit and then die, for Christmas.
Humans are programmed to worship leadership. There's nothing else to it.
Too bad the laid off workers didn't get retention bonuses to keep them from leaving.
...that Circuit City is a prime example of everything that is wrong with technology retailers.
This is a sig. It is like every other sig in the world, except that it is mine, and it is different.
I will bet that Heinlein never met the neo-cons; reagan and W. If so, then he wold have disavowed that statement.
Most of that figure is going to their regular employees. As a shareholder of the company, I'd even be happy if he were awarded even a larger bonus, based on the performance of the company this year.
Hire the right sales people, and they can turn the company around with astounding jumps in sales. Without these people, management can do absolutely nothing but what they are doing now - sucking the company dry as it sinks.
Circuit City's stocks have taken a dive since this boneheaded maneuver, which you are saying is not idiotic, was carried out. Darwin says they failed the natural selection test by doing this.
I say let all those execs go and hire someone who will oversee a return to a base+commission based sales system.
--- Grow a pair, liberals... stop letting the Republicans bully you!
I think a bankrupt company like CompUSA should be able to recover funds from the executives whose decisions tanked the company.
Instead of bonuses, they would pay for the damages they caused.
I am the unwilling control for my Origin.
IANAL. Slashdot could likely use IANASB too. I Am Not A Stock Broker. Nor are many of the others on Slashdot.
Fidelity, on the other hand, pays people huge amounts of money to be very, very good at that kind of thing.
One possibility is that rewarding execs to keep them from deserting a sinking ship, slowing the speed at which it sinks is a completely crazy idea and that only the geniuses on internet forums can spot this obvious issue whilst fund managers, whose lives and careers hang by the balance of their decisions, are completely blind to it.
Another possibility is that, whilst it's easy to get indignant about "the little people" and hate "the fat cats," the fact that the professionals, whose livelihoods depend on judging accurately, keep on supporting this system anyway implies that, just maybe, it kind of works.
Part of the reason capitalism tends to work is that, unlike say communism, it doesn't rely on how things "should be." Instead, those who react to how things are more accurately (whether intentionally or not) tend to rise to the surface as they make money, whilst those who don't tend to sink as they lose it. It's not perfect - it's a fairly dynamic equilibrium and luck will sometimes play a part along with lag - but it tends to even out over time.
Fidelity is all about money. If they believed an extra 10,000 floor workers and 1,000 less execs would make the company more profitable, you can believe they'd force that change in a heartbeat. That they've allowed the opposite implies that, as shareholders, they've established that that's what will make them more money.
Now, granted, it may make them more money by distorting numbers just long enough for them to cash out.
Still, overall, investment firms like to make money and they keep using the strategies that work for that. That they tend to want to avoid mass senior exoduses, even in failing companies, implies the raw numbers, emotion aside, support that approach.
I'm not saying it's ethically right or wrong. Capitalism has nothing to do with ethics unless they mean you can make more money. But, as a business approach, it's a safe bet that the professionals who do this for a living and learn to act without emotion are far better at accurately judging what makes the most money* than people on forums going off gut senses of righteousness.
* or loses the least - It may well be they've realized Circuit City is in a dying segment as Walmart forces its way in and are simply ensuring it sinks as painlessly as possible.
Much as I hate to say it, Microsoft is damn good at making business decisions overall. Most of our beloved causes tend to be pretty terrible at it. It doesn't make Microsoft good "ethically" but, as a financial entity, it makes them a far better bet. That we tend to hate them implies we go with our emotions and ethics, that they succeed anyway implies they make the right business decisions and shows a lot about our judgments. This, looking at Fidelity and others, is much the same thing.
seems the weasels at Circus City didn't want the folks who could answer questions and fit you with the right product, they wanted quick, cheap, and expendable.
so Circus City also became expendable. Haven't gone there, don't intend to go there, the weasels are crowbarring the last loose dollars for their pockets before it goes under.
if this is supposed to be a new economy, how come they still want my old fashioned money?
the rich are just earning the money they deserve, right?
A small Mom & Pop shop is not at all worth the effort. Their prices are higher and the service is no better. I walk into a Circuit City, grab what I need, pay, and leave. There isn't any room for a smaller store to improve that process any, unless they offer lower prices or a larger selection, which they don't. In fact, all three of the local computer stores I can think of can fit their entire stock in a single aisle at Best Buy, and most of that stock is either over-priced "gamer" crap (who pays $350 for a PC motherboard, seriously?) or dubious off-brand cheap crap not worth the savings (yay, let's buy a fuzzy, dim, off-brand LCD TV for 1/2 the price of a super crisp and bright Samsung TV, because 1/2 the price for 1/3 the quality makes it a good buy).
The only thing the local computer store closest to me ("Computerz-N-Us") offers that Circuit City doesn't is a couple of overly chatty nerds who don't really know anything more than any big-chain sales people, but they feel like trying to make you think they do by telling you how awesome their self-built home PC is or about the VB programming they used to do in high school, as if you actually give a fuck.
Circuit City, Best Buy, and all the other big electronics stores are three times as long of a drive for me to get to. They're not more convenient in any sense other than that visiting those stores actually results in me finding what I'm looking for.
I am not a stock holder nor an employee. While I have some sympathy for the current staff,
the only negative I can see to CC driving itself into the ground, is I might have to got to
Best Buy. While not my preference it can be done.
In his book Good to Great, Jim Collins cites Circuit City as an example of a company that made the transition to greatness, bypassing its comparison company Silo. For each GTG company, Collins identified the company's core purpose, which in his theory must be identified as the one thing that company can do better than anyone in the world. Circuit City's concept was the creation of a large number of stores that provided a consistent experience for the customer. I can say from my own experience at Circuit City stores that they seem to have gotten that part right. I always get bad or no service. Does everyone? I don't know. I'm from India and nonwhite - my sister gets the same treatment with the added derision afforded to girls in that setting. Things like customer service can be hit or miss depending on where we travel. Now, maybe the same people who led the company to "greatness" aren't there anymore. It seems more likely to me that Collins' metric of return on money invested is the wrong way to measure greatness in a company.
When the axe came to the forest, the trees said, "Look out - the handle was once one of us."
n/t
It's their business, they can run it how they like.
It's too bad you are modded up for this. I just saw Wall Street for the first time a week ago and thought of corporate raiders.
In case you may not know, there is an upcoming sequel coming out next year. I believe the title is "Money Never Sleeps", taking place in the present day and Gordon coming out of prison to take a piece of the hedge fund market. Michael Douglass is returning as Mr.Gecko.
Interestingly enough, it's amazing that a lot of people who are brokers look up to the fictional Gecko... Here's a quote from a NY Times article:
Speaking by telephone from Bermuda, Mr. Douglas said he wouldn't mind if he never had "one more drunken Wall Street broker come up to me and say, 'You're the man!' "
Pretty sick, eh?
Sounds more like a case of the problem dictating the solution to me.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Circuit City Rewards Execs As Stock Tanks
Well, I'm not sure what a stock tank is (I presume it's where you keep your liquid stocks) but maybe if they'd tried rewarding their execs as people rather than as storage facilities, they might've had better luck.
The higher the technology, the sharper that two-edged sword.
The aforementioned layoffs don't appear to have helped the stock price much, and we're talking nearly full three quarters after the move. ~$18 to less than $5. Gee, wish I owned that stock...
JTF: In your heart, you know we're right.
Why does this surprise anyone? Take a look at the actions of corporate America a few years back, even a decade, maybe two. Things like this happen all the time. Will the retained execs really help the company? Only time will tell, and history shows us mixed results. We'll know if it was a wise decision in about 6 months. Until then, sit back and enjoy the roller coaster ride.
"And people wonder why they cannot rely upon employee loyalty these days."
And what makes you think employees were loyal? How many of you jumped ship for more money? How many up and left when the company needed you the most? It's nice to live the lie that everyone was loyal and suddenly one morning companies were stabbing left and right. But reality is more complicated. Both sides were rewriting the bargin, and now are reaping the pain.
It's obvious to me that the corporate system rewards short-sighted execs. What can be done to fix this systemic problem?
Why The F*unk is this company in business. I see them around where I live (SLC) and think to myself every time I pass one, I can't wait for them to go under.
But then a useful company like COMPUSA (sorry we have no frys here) goes under and now I can't buy parts in town. I'm stuck with newegg or something. Seems to me something is wrong here.
You have post-high-school education? Where did you go?
Because it matters a whole bunch. Everyone if referring to these company executives as if they were some kind of borg aliens, as opposed to regular human beings that need to take daily shits. Which they are.
All tin foil hats tossed aside, we are talking about a very inclusive (secret handshake type) groups here. Speaking as an Architect, you could be the biggest drooling moron ever born, but if you have an M Arch degree from Harvard or MIT or Columbia any job you want is yours. That's how strong alumni and reputations are. Doesn't matter that the formal education is only a stepping stone, and 99% of your knowledge will be of practical nature. You're Ivy league, man! Unfortunately for architects, there is not much money to be made in the field, so the worst you will ever see is a whole lot of fluffed up feathers. You chose the wrong field to make your millions, junior.
But architecture being what it is (you are often dealing with billions of dollars worth of construction), I have had my share of meeting the developer businessmen. All ivy league. They make ten times as much, know half as much, they talk in naive lingoes. It doesn't matter. I'm not in it for the money, so it's a good laugh at least. Modern architecture is shit. Just look around. But please don't blame the designers. We tried...
Back to the topic. T H E R E A S O N for such efficient corporate swindling can be traced back to a very organized source. The inclusive (private) educational institutions. Do you have $200.000 sitting in a penny jar? Perhaps your child can become part of this corporate price-is-right.
I mean, it's true. The first million IS the hardest one. After that it's salami and cheese time, baby.
But having just been in a Circuit City looking for a TV, I can tell you that company is doomed. The customer experience in there is so bad, mostly due to the lowest-common-denominator employee. Young, dumb, surly, and don't give a rat's ass about the company or the customer. From a business perspective, CC retail is a disaster. The CC execs shopuld walk into an Apple (up 120% this year, and the most profitable retail business per square foot on the earth) store (advice I have just written to them) and see how the customer experience differs from that in a CC (stock down 66% this year) store. Yes, Apple pays a lot more, but it is a pleasure to walk in there. Now that is an argument for better pay.
If they wanted to have crappy, harmful employees that alienate customers, they sure are going about it the right way.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
many of these Executives never do anything to justify the increases.
Actually, they do quite a bit in the short term to "justify" the increases, but to the detriment of the rest of us.
A year ago, I read a speech by Sir Edmund Hillary explaining how horrified he was that climbers of Mount Everest violated the ethical code of climbers, ignoring a man in trouble on their climb upward and letting him die without help. These summit-seekers were intent on reaching their own self-gratifying goal. They spent their tens of thousands on the "trip of a lifetime" and weren't about to let someone else's misfortune spoil it. Instead of setting aside their summit-reaching goal to rescue someone in trouble, they choose to let him die while they kept on seeking great returns.
As a professional operational risk manager, I see the same behavior in countless execs. It's called leptokurtic risk (or kurtosis) - the condition of seeking artificial enhancement of returns at the center of a distribution while also taking on excessive outlier risk in the tails (called "fat tails"). These executives take on excessive risk for all of us as they seek their own personally-rewarding summits. The company I work for has struggled through significant catastrophic risk due to the neglect of systems maintenance by previous executives. Instead of spending money refreshing hardware, maintaining trained staffing and continuing license agreements with vendors, they threw it all overboard so they could puff up quarterly numbers and reward themselves for their "achievements." They left before the disasters began to occur, millions richer. They cashed out with hundreds of millions while shareholders and employees were left holding the bag. Their summit-seeking behavior let them seek greatness and riches while screwing the rest of us.
A simple example of this would be a airline pilot who is rewarded for getting to his destination faster. Once he realizes all the safety equipment (mid-air collision avoidance, oxygen systems for depressurization, fire retardants and other items taking up weight) can be discarded letting him fly faster, he tosses it all overboard and takes on excessive risk for all the passengers. He flies this way until he's realized the plane's certain to crash, and jumps out with a golden parachute, letting the gutted aircraft collide directly into the side of a mountain, taking the lives of everyone on board. Increasingly, this is a common practice for public company and private equity executives.
As Circuit City witnessed, there is a direct correlation between this behavior in executives and the failure of the company they harvested. The only thing I can recommend for those who find their behavior disgusting is to flee any and all companies that you observe rewarding executives for summit seeking. If they're taking on excessive risk (usually by ignoring it and dismantling all the safeguards so they have even greater funds to line their pockets with), abandon these companies. Let them collapse while the parasites are within, taking them down with them. Until capital markets become savvy to this parasite racket, we're all at risk. Watch for this summit-seeking behavior in the companies you work for and invest in.
It is heartening to read just before the Christmas holidays that employees that were pink-slipped this year were being offered to come back to work at Circuit City. Nothing is ever better than coming back to work for a company where you loved to work for many years when suddenly, as in this case, you may have been let-go for actions that were not yours in the making.
But wait! Did I read that they were being offered entry-level positions for the same jobs they held before for even less money?
If I were one of the pink-slipped employees, I would send my resume and cover letter direct to corporate HQ and apply for an Executive entry-level position. After all, many "entry level" positions advertised rarely specify what salary or role in the company is being offered. Perhaps then, these employees were being offered entry-level executive positions, but a misguidance from HR never indicated this to them. Executives have to start somewhere and these million dollar bonuses sound entry level to me. Many executives command significantly higher bonuses.
I don't buy at Circuit City because of stupid mail-in-rebates. BestBuy switched to Instant Rebates a long time ago and is the best local electronics store. Their stock is kicking a$$ too!!
It seems as though the insulation between corporate executives and shareholders has now reached a level equivalent to that between public school personnel and taxpayers.
P.S. I think Circuit City and Comp USA are merely the first casualties of the "bricks vs. clicks" debate that raged during the dot-com era. The bruising just started happening 8 years later than predicted, and even then starting out only in niche areas well-suited to e-commerce (as in NewEgg.com). Another niche is used bookstores -- bookfinder.com is dropping them like flies, but again, it's only a recent phenomenon.
Actually, in some cases the problem can be that when you have a company that is losing money, it's hard to incentivize people to come aboard or stay aboard. If a company isn't making money, no one wants the blame for that. And that's understandable.
It's one thing to try to hire a company that's going down the tubes and tell the person you're hiring "look, I don't expect you to fix everything, but please don't make it worse and preferrably make it a lot better". It might be quite appropriate to have someone turn a company that's losing a billion dollars and bring it to something that is only losing a hundred million and to reward them handsomely for that transition. That is a positive thing. Not every turnaround works instantly and people can sometimes only do so much.
But this doesn't appear to be such a case. I only have the information in the article to go on, but from what it says, it sounds like the problem is that the person who's giving out the bonuses is afraid to work with any other team than the one he personally picked to get him into the mess. At that point, someone with higher authority--the stockholders if need be--should be saying, "It sounds like an over-reliance on friendship, rather than good solid business process, got you into this mess. I don't think friendship is what's going to get you out."
Also, the notion that this should be a retention bonus (for merely being there after n years) rather than a merit bonus (for having caused a particular effect) is quite suspect. Especially if the desire to fire for non-performance is as low as it apparently is.
You know, it's hard to know from one article--sometimes these articles can paint the truth a fair amount and might be just getting scapegoated. I can't tell and don't mean to be opining on the truth of who did what, only to be commenting on what to do about the situation assuming the account of the facts is accurate. However, with that said...
If these guys were really the ones who came up with the plan that drove things down the tubes maybe they should just offer them the chance to work for zero dollars trying to fix the problem and to only be paid at all if they turned the entire operation around within a certain time. It's not like anyone's going to be racing to hire up these guys. What's going to be on their resume? "Got Circuit City into a big mess, then bailed." They should be thrilled at the opportunity to get their name out of the gutter. Why should they need a million dollars as incentive to continue?
Or maybe the company just plans to hold them around until almost that time, and then callously "let them go" just before their retention bonus time. (I've had that happen to me before, with stock options, and I didn't get a pro-rated amount. That never seemed right. But business is often cold. And maybe that's why they're phrased it as a retention plan.)
Kent M Pitman
Philosopher, Technologist, Writer
Having worked for CC for almost a year, I can honestly say that this is the last thing that the executives currently in power are the last people that that company needs.
They fire all of their highest paid employees, only to award a $750 MILLION dollar contract to IBM to take over their IT infrastructure. That's more than double of what it took to ran their infrastructure in the first place.
They have a continued lack in judgement when it comes to any sort of business decision what so ever. Take a look at their renowned "firedog" services. They design a name brand to directly compete with Geek Squad, but everything from naming to execution of this division was flawed from the start. The beauty of Best Buy's assimilation with the Geek Squad was that they started off in just PC repair. They started small, then moved onto bigger things. With Circuit City, they wanted to tackle it all at once with no regard to the overhead maintaining a division that large, or the quality of the services performed.
Now, granted Circuit City did have some good ideas with their Firedog services, especially with their PC repair business. They required techs to have a MCP certification within 90 days of employment. They even paid for it!
Now, instead of what Circuit City should be doing as a company, which is firing all of their executives, they are instead encouraging bad practices, and bad habits to continue to manifest and grow. What this company needs is a fresh start, and that only happens with new leadership. This company, as a whole, cannot compete with Best Buy under its current leadership, and if they have any hope to survive, they need to clean house.
I wonder if these geeks still think unions are "outmoded" and "unnecessary." In other words, the real world is slight at variance with your Ayn Rand masturbation fantasies in your parents' basements, right?
Circuit City often offers new PC games at $10 less than retail. My guess is that they hope you start going there regularly for all purchases. Well from my experience they ran things horribly and I don't return unless its a deal, which means little profit for them. They had a game for sell at $10 off. Multiple people in the game section couldn't find it and I couldn't either. I leave the store, get online and order it for in store pickup since it says it is available at that location. ($21 gift card if they can't provide it in 21 min) Magically when they had $21 on the line they find the game in less than 2 minutes (they said they were looking for it for at least 10 min before that) Maybe they truly couldn't find it...but I felt like it was more of a scam to get you in the store then they say they are out of it so they don't lose money on the discount. It sure didn't help build my confidence in the store.
I knew a lot of people who worked at a local Circuit City, and from what they've told me (since they left for greener pastures) Circuit City shot itself in the foot when it took away the commission program from its salespeople. The best salespeople could earn a living wage or more on commission. True, a lot of them seemed like they were pushy, but that's just their job. It's how they put food on the table.
After commission left, experienced salespeople left and the new employees were paid minimum to do the same work. Then they stopped selling kitchen appliances. And then Best Buy came in. But I am not surprised by their business practices over the past five or ten years. They just took their employees for granted and that made the quality service suffer.
Well, is it?
How, exactly, have CEOs convinced moronic jackasses that they're soooo hard done by when they get their multimillion dollar golden parachutes?
It's ridiculous that's it's so hard to fire people.
In the service industry, a competent employee is a gem, a thing of wonder and beauty to be treasured. Although they certainly are as cheap as the shitty ones, they are extraordinarily difficult to hire because they're so rare. Companies that are well-run identify those competent employees and hang on to them, work aggressively to retain them, because they make a HUGE difference in the bottom line. Failing companies routinely purge the competent employees, because they're often somewhat better paid or get more benefits -- because someone had the good goddam sense to try and retain them.
When I say competent, I'm not referring to some kind of genius wunderemployees here. I'm just talking about people who can be trained to do the job properly, who don't leave the customer/client with a bad taste in their mouth. They truly are rare.
Indeed. Nacturation has obviously never worked in the service industry. Either that, or he's a fucking moron. Minimum wage is pretty much the norm for these jobs, with maybe a tiny commission on the side.
People really don't mind trying to buy a $5000 television set from someone who doesn't speak enough English to know what phrases like "picture quality" mean. When they go to whip out their credit card to buy that new inkjet, they truly do confident when the girl at the cash register is so disaffected that she doesn't even bother to look at the card before swiping it, let alone check the signature, or even verify that you signed the receipt at all.
All this talk about retaining the useful employees... just the mad babbling of lunatics.
Comment removed based on user account deletion
It's like how you almost never see wild birds with broken wings. Sure, birds break their wings -- but then they're dead and gone so fast that people rarely see it. As a result, most wild birds are relatively healthy.
Hey, speak for yourself. Some of us despise leaders. I send hatemail to the guy I voted into office in the last election. You can't call yourself a patriot unless you despise the people at the top.
Now I have a lot of sympathy for all three groups -- learning English is difficult, particularly for those who immigrated as adults. Being stupid is generally not something that can be easily corrected. And having a disability is certainly beyond a person's ability to control.
Nevertheless, these people make horrendous employees. They drive customers away. Their deficiencies simply can not be trained away, and no amount of good treatment or excellent management can turn them into the kind of competent, useful worker that these stores really need. Yet they make up a remarkable percentage of the people who work in the service industry. It really doesn't take much to get a better job in, like, a warehouse or an office or something. There's always construction, reception, administrative assistance, and so on. With just passable English and enough intelligence to read an entire newspaper, adults can typically do better than minimum wage in a place like Circuit City.
There is absolutely NOTHING the government does that encourages corporations to pay CEOs one thousands times more than the rank and file, or to lay off their best salespeople and retain their worst.
I'm not saying that government regulation is awesome or wonderful or anything like that. I'm just saying that it's a naive fantasy to pretend that this is all the government's fault. Government regulation had absolutely nothing to do with this at all.
Economy of scale is a fact of life -- government doesn't create it, and government regulations are only the tiniest element of it. There were corporations long before there were health codes and business licenses, and they were crushing small rivals right from the start. A mom & pop business can't afford to put a satellite into space, or research a new polymer from which to make toys, or buy parts in lots of 100,000, or get a better price from the supplier just by threatening to switch to a different supplier.
The main reason that corporations can buy power is that voters don't give a shit -- they're too caught up in stupid, asinine issues like whether the government is "liberal" or "conservative", whether it cracks down hard enough on types of sex that offend superstitious retards, whether it considers tumor-like growths in people's wombs to be people or not, and so on. Not to mention shit like how tall their politicians are and how nice their hair is.
If people would vote based on how competent and trustworthy politicians were, rather than on asinine bullshit, corporations buying power would not be a problem. But at least we have the chance -- any power that is NOT collected into the government is inherently for sale. Hell, as it is, the only reason people don't sell their votes to corporations is that it's prohibited by the government. The only reason people can't sell their children into slavery to cover debts is that it's prohibited by the government.
Comment removed based on user account deletion
A good analogy here is that when a sports team is under performing, generally the owner fires the coach, not the entire team.
Circuit City has turned that rule upside-down and seems to be suffering the consequences of it.
If I was a shareholder, perhaps I'd want to fire the entire management team at this point.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
"It's ridiculous that's it's so hard to fire people."
Just look at how hard it was to get rid of JohnKatz and some of the present Slashdot employees.
The stock's down, what, 75% for the year? The stockholders have been selling...
The SCO lawsuit makes me wish my company were in Utah. We need a new building.
You want to get rid of him, but, since being CEO for this sort of company is an intrinsically high-paying job, he obviously resists getting the boot. Assuming you don't have anything strong enough to outright fire the CEO, You may have a hard time firing him quickly, but you can easily put him on paid leave and keep him from screwing up any further. The amount of money at issue then is just his salary, not the corporate earnings or losses.
And if they're not incompetent, that, more often than not, means they're very adept criminals. I honestly try to assume the best about people, I really do, but I really can't find anything about MBAs that I find tolerable. They're quite literally ruining the world and profiting from it.
If I mod you up, it doesn't necessarily mean I agree with what you've said, sorry.
The problem is that it's socially acceptable; until we, as a western culture, make these actions a social taboo, nothing is going to stop. That, or start killing execs; but I vote for the legal dept. first. That way we can all get away with it for lack of representation at the trial. Just my $0.02.
If I mod you up, it doesn't necessarily mean I agree with what you've said, sorry.
who agree to a salary of $1 (http://moneycentral.msn.com/content/P143257.asp/) to serve as CEO with the rest of their compensation being based on the performance of the company's stock?
Yeah, any company who'd hire a CEO like that is just going to go from bad (1996 http://www.businessweek.com/1996/07/b346257.htm/) to worse (2007 http://articles.moneycentral.msn.com/Investing/Dispatch/AppleProfitSoars.aspx/.
Often people at this level get contracts that guarantee them $ on early leave. Its designed partially to protect them in the event the board suddenly decides they don't like his tie and wants to can him. The company going under would qualify im sure, so hes gets the agree upon severance.
---- Booth was a patriot ----
those capital markets are the mama parasites that spawn those execs. Thanks to the joys of "opportunity cost" (http://en.wikipedia.org/wiki/Opportunity_cost/, if an exec doesn't make tons o' money each and every quarter then their companies capital will be taken away and given to someone else who will push for that extra fractional percent of return.
As long as the markets think papa Fed will bail them out when they make an excessively bad play they will continue doing this. The so-called sub-prime "crisis" is a great opportunity for the markets to be re-educated on the fallacy of the broken window http://en.wikipedia.org/wiki/Broken_window_fallacy/
Rather than say 35 years of a salary, why not say, 35 sale-persons could remain employed for a year?
This is retail - companies fail all the time and they need a way to "help" the workers want to leave.
Perhaps this is the way to encourage many of the skilled people really doing the work to leave. What they have left are people who are either too lazy to leave or can't leave for some other reason. That means - cost cutting measure will be coming in 6 months - salary reductions.
I've seen it happen more than a few times.
What the company ends up with are inept workers who are pissed off about working there. Then, 8-14 months later once all the retention bonus time ends, the VPs leave too. This is a way to keep a sinking ship a float just long enough for the CEO/COB/CIO types to get out first.
Oh, and an extended warranty from a company that goes under is worthless.
... of a while back, about 5-6 years ago, when I worked in a warehouse dealing in electronics.
Basically, the boss came down into the warehouse early in December and told the warehouse guys that we wouldn't be getting a Christmas bonus that year, money was tight blahblahblah.
Shortly after, we got several orders placed to ship a plasma TV out to each of the executives.
(the company has long since tanked)
Just look at the stock price over the last 3 years. Circuit City Stock Price for past 3 years
They were riding high in '06. What they've been doing for the past year ain't been working.
Perhaps mistreating workers isn't so profitable after all.
Wansu, th' chinese sailor
The big problem I see in all this is that US executives have a huge upside (Goldman Sachs CEO got a $68 million dollar bonus this year), but with no downside (Merrill Lynch fired its failed CEO with a $160 million golden parachute).
This is the kind of thing that makes many upset with the rich. People in the US don't mind if those who are truly great get big bucks. But, when crooks and croneys get big bucks, they get really upset. Middle class wages have been sinking of late compared to the wealthy, and cronyism will be less tolerated as politicians who complain about excess wealth will get a wider audience.
Table-ized A.I.
his theory must be identified as the one thing that company can do better than anyone in the world. Circuit City's concept was the creation of a large number of stores that provided a consistent experience for the customer. I can say from my own experience at Circuit City stores that they seem to have gotten that part right. I always get bad or no service.
Maybe it's the McDonald's concept: No matter where you travel, you know you'll always get a C-minus burger at McD's. If you're travelling and stop into the Roadkill Cafe, you may get an A burger or an F-minus burger. Rather than gamble with indigestion, you go to McD's and settle for the known C-minus burger.
Table-ized A.I.
This is also something ripe for a shareholder suit against the board of directors. If there was a specific action that the board members performed that did not meet with the corporate charter (usually to maximize profit and minimize risk is stated explicitly in the corporate charter), there may be grounds to go after the personal wealth of the board members. "Honest" investing mistakes are fine, but in this case the shareholders could legitimately claim that by firing the experienced help, they shot themselves in the foot and caused the profits of the company to drop like a rock.
Usually, most experienced help has proven themselves worthy simply by longevity alone that they can keep their noses clean and are mostly good workers. Especially if they don't have "special" protections that keep them from getting fired, such as special contracts from labor unions that allow under-performing employees to remain on the job.
This is also something that has "class-action lawsuit" written all over it as well (the class being shareholders of record as of a certain date). As an investor going into one of these lawsuits, it is a bit tricky as you might just make more money by simply selling the stock and not bothering with the lawsuit, but if you think you can make more money from the lawsuit or simply want to get revenge from some stupid board members, it can be a shareholder tool to force the board to shape up.
Where a dropping share price starts to hurt is when the top tier of executives have a large number of stock options that are available to them, but the stock price is below the option price. Usually most executives like the situation to be the other way around (like being able to buy Microsoft or Apple stock for $10/share). For this reason, stock options are usually given as a performance bonus for top executives so their interests are also similar or the same as the shareholders. I don't know what options are available for Circuit City execs, but I would presume that they are worthless or nearly so at the moment.
They're one of the two who have interviewed me. Both times, the interviews were laughably bad, or insultingly bad.
CompUSA was the first one, when they were at where CC is at now. The manager was this woman who looked like she was afraid of being there and was nervous as hell (wait a minute, wasnt I supposed to be the nervous one?) and she was generally weird about hiring me.
Tried them one more time and they asked me a ton of illegal questions and even tried to make me hop on one foot (no joke) I left quickly.
Circuit city was recently, and I got the wonderful situation where the manager was leaving the store and the one in training was in on the interview as well, and he acted like the biggest asshole I ever met. He insulted me about everything, he slammed my two previous jobs and said they "couldnt compare the circuit city's reponsibilities" (for fuck's sake, I worked at a movie theatre and a radioshack at the time, you want to see hectic crowds and making sales, there you go. movie theatres are the devil on opening nights, they make black friday look like a normal day. and radioshack gives you plenty of training when it comes to sales.)
and then went on to insult anything he could find about me, called me some various names, etc.
If this is their new "attitude" to whip employees "into shape" to sell more, they're definitely going down.
They cut commission from employees to save money.
Maybe, just maybe they could actually be competitive with best buy, they'd survive. But no, corporate monoculture in some office building away from said stores has taken over where they only see their paychecks and want to keep said paychecks the same amount, no matter how much of the business they destroy.
Best buy is next if fry's electronics takes off and sprawls out all over the US.
but to be honest, I prefer newegg over any of the stores, all the stores are good for is demo'ing products, or picking up something you need the same day.
I have enormous intolerance for statists posing as libertarians. That doesn't mean I can't comment on bad business practices while still slamming the "workers of the world unite" crowd. I'm just that talented.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
As I have said before, one of the scariest words for a libertarian is "you should," as in, "you should do this" or "you should pay someone that." That is liberal talk, not libertarian talk. A libertarian would only say, "you should do whatever the fuck you want, so long as it doesn't hurt me." It's the liberals, not the libertarians, that think they know better than the free market and therefore should tinker with it and institute their morality in place who sells what cheapest.
As far as the gratuitous trolling of neocons, I hope that is modded appropriately. Apparently, you don't like neocons imposing their democratic morality on Iraq? But you want to impose your pay equity morality on Circuit City. Neither is libertarian, but at least the neocon knows it.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
stop complaining or work somewhere else?
CEOS graduate from top universities and DO work the hardest..
you people don't..
hence you dont really deserve shit, or to put it another way, you deserved to be raided..
have a nice day
Hmm.. so you reckon there aren't many people on the corporate ladder that are hungry for promotion?
Replace 'fired' with 'killed by angry customer'. If a CEO was killed by an angry customer, how much effect would it have on the company's earnings? How long before 'Sorry, but Mr X is in a meeting right now' is replaced by 'Sorry, but Mr Y is in a meeting right now'?
Management is as interchangeable as shop-floor staff, but pay and conditions for upper management is decided upon by upper management.
They whose government reduces their essential liberties for temporary security, receive neither liberty nor security.