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My company's management wants to deduct from the salary of under performing employees. I'm a member of the Core Strategy committee and they want my opinion also. I believe that the throughput from an employee depends on a lot of things such as the particular work assigned to them, other members of his/her team, other reasons etc.

Such penalizations will be demoralizing to the people. How can I convince my management not to do so?

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Very bad way of Management!!! No win-win policy!!! –  Tech Jerk Sep 6 '12 at 9:29
Is this policy supposed to apply to management salaries too? –  Patrick Sep 6 '12 at 9:33
Their job is to manage people, so if people are underperforming they are underperforming in their role of manager. So if an employee gets a paycut, his/her manager should also. –  Pieter B Sep 6 '12 at 9:48
Consider replacing the management - it may require replacing the company too. –  user1249 Sep 6 '12 at 9:51
Your management should work on better employee motivation and performance review. Also on better planning the projects and their outcomes. –  Yusubov Sep 6 '12 at 14:44
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closed as off topic by gnat, maple_shaft Sep 6 '12 at 10:56


3 Answers

Implementing such a strategy will inevitable lead to

  1. inflated estimates
  2. cherry-picking.

Management's logical next reaction will be:

  1. take estimating away from those who should do it (i.e. those who have to execute)
  2. eliminate team decision making

The result of 1. will be bad estimates, while 2. will lower team satisfaction and efficiency.

My take on the whole situation:

  • Some perceived performance fluctuations must be expected due to the nature of our profession and the work we are doing.
  • If someone constantly underperforms, don't lower the salary, but simply fire him.
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Managing anything should always stick with win-win policy. There cannot be anything that will lead to either side losing something.

This will not only demoralize the under performing employees but also the others. Negative thoughts would start prevailing across the company which is not a good sign for development.

Its better to ask people to resign than deducting the salary.

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I also think that you're better off firing bad employees than deducting salary. –  Carra Sep 6 '12 at 9:39
"Managing anything should always stick with win-win policy" - Like that. –  Sparky Sep 6 '12 at 9:46
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Look for any resources that deal with employee motivation. I'm sure there are plenty of articles out there that reaffirm the notion, that punishing failure is a worse motivator than rewarding success. Even in a perfect world where you could measure productivity completely objectively and independently. Most of such articles are in managment speak, so they should be easy to digest for them and will likely proove your point better than you using logic on them.

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