It was reported the other day that American International Group, known better as AIG, has acquiesced to the harsh criticism from New York Attorney General,Andrew Cuomo, and has rescinded a $10 million severance package to its outgoing Chief Financial Officer, Steve Bensinger. According to one article in the Boston Globe, AIG’s new chairman “agreed of all compensation paid to AIG senior executives and to assist in recovering any illegal expenditures.”
Well, I think most will agree that this an okay but belated start in recovering from what has become the stupid practice of overcompensating those who run their companies into the group. In some cases they run them into the ground and then go on an expensive retreat, like AIG, for example. What were they doing, celebrating their abject failure?
AIG has received $85 Billion in government bailout funds. So recovering severance packages from failing executives seems fair to me. I can’t say for sure if it is the case with AIG, but with so many companies the senior executives are awarded millions in bonuses while they reduce employment among the rank and file. It seems it should be the other way around. In the case of AIG, it was an icon of American business, now turned into a pathetic example of what can go wrong.
Human Resource managers should work with manager of respective departments in reviewing the deleterious effects of a reduced staffing program. Loss of employees results in morale issues, and those who are, what? fortunate enough to retain their jobs are often overworked, which results in quality of life issues. If you can’t have a few minutes to yourself, or you can’t see your kids, then it seems as working becomes a game of denying all the diminishing returns.
So instead of paying big money to people who seem to heavily compensate themselves for ruining great American businesses, perhaps it’s best to increase staffing, which would in turn increase productivity. Conduct thorough preemployment screening to make sure you are getting the truly qualified employment candidates.
Increased staffing with qualified and skilled employees should make you more competitive. More competent. Less people who are overworked at the middle and toward the bottom may greatly improve performance. They are usually the ones who know how the business works, after all. And when you do hire them, treat them well, so they don’t feel the unemployment axe at their necks every other day.
Who knows? Maybe you will run a successful business. Maybe you won’t be among the ones needing a government bailout.
