Relationships between Employees and Employers

Today I read an article from about Caterpillar’s view on making money in light of recent staff reductions. It made me think about the relationship that used to exist between employers and their employees and how that relationship has changed over the years. If you’ll indulge me for a minute, I’ll put on my old-man beard and glasses, pull up my rocking chair, and tell a tale of days gone by.

Back in my days…

Black and white factory image
Image from Flickr courtesy of Cornell University’s Kheel Center.

As I envision things, workplaces in the early to mid 20th century were home to more cooperative relationships. Employers treated their employees well, and in exchange, employees felt a loyalty to their employers. It wasn’t at all unusual for a person to start at the bottom in a company and gradually work their way up to a manager position until they retired. The employee left with a good pension that they had built up over the years. The employer got the benefit of not having to keep retraining new people for the same position.

Back to the present

Today, it seems like the situation is reversed. Employers see staff as a line-item cost on a spreadsheet. Cutting staff improves the bottom line and gets the management a bonus for cutting cost and improving profits. Because employees can’t count on having a long-term job, they’re willing to hop from place to place in search of short-term gains. After all, if your employer can let you go at any time, why should you be loyal to them?

When both parties act in selfish self-interest, everyone loses. It reminds me of the Prisoner’s Dilemma in game theory. The gist of the Dilemma is this:

pursuing individual reward logically leads the prisoners to both betray, but they would get a better reward if they both cooperated with each other

Does this sound like modern business?

Relationships in the future

Imagine a scenario where employers tried to retain the staff. Training costs go down. Employee morale goes up. Knowledge grows. New ideas are formed by people who have enough experience to see a better way. Efficiency improves. And lo and behold, profits go up. Everyone wins when there is a positive nurturing relationship between the employer and the employees.

Granted, not every business operates in such a cutthroat manner. During the tech boom, the Silicon Valley employers were doing everything they could think of to acquire and retain talented employees. Maybe we don’t have to go that far, but cooperating instead of competing might be better for employee/employer relationships, and ultimately, for the business.