My guess is that you don't run a company and have never run one. You probably never risked it all to start a business in your garage and grow it to the point where you can employ dozens of people. Self funded, not with other people's money. There's a huge difference there as well.

If you spoke to any one of my employees you'd quickly understand that the 18th. century mentality claim would be an insult. For example, it wasn't uncommon for people to request a couple of days off to go see a concert out of town in the middle of the week. I can't think of any instance of not approving such outings AND also paying for the days they were away. In other words, treat people as you would like to be treated.

I ended my post with this:

"Pay your employees fairly, treat them well, be generous about vacations, be considerate, help them if they run into tough times (sick kid, parent, financial problem, etc.), pay for conferences and training courses, take them out on morale building trips and, if finances allow, be generous with bonuses and your recognition of their contribution to the enterprise."

That is far --VERY FAR-- from an 18th. century mentality. How dare you!

As for your question, well, any number of scenarios come to mind. Not the least of which is --as someone already pointed out-- voting yourself a pay INCREASE and using the time to FIND A NEW JOB.

This is a natural reaction to "the ship is sinking" type news. People are going to look after themselves and their families. And, at one level, there's nothing wrong with that. In the process they might exacerbate the problem and create a bigger problem.

Understanding business economics is NOT something you can learn in two weeks. The idea that this can be taught to every employee in an organization, regardless of station and education is simply ridiculous. I am not being elitist here. It's just reality. When I started off, as an engineer CEO, I knew fuck-all about finances, marketing, sales, accounting, inventory turns, accounts receivable, supply chain management, channels of distribution, taxes, regulation, leasing, and a million other things you need to understand to run a business effectively and efficiently. These things took years to learn and to learn them the hard way, making mistakes along the way. It was only later in life that I found myself wishing I had gone for an MBA. It probably took me ten years to get my "street MBA" the hard way.

Just about the only thing you can teach someone in two weeks is probably how to read a balance sheet and not necessarily how to understand it. That's useless. A business is not a balance sheet. That's just a snapshot in time and is meaningless in terms of understanding where you are going and all of the micro inputs driving your current and future states (if I may inject a little state machine talk here). This state machine is very complex. You want employees at all levels working on what they were hired to do, and not busy trying to decipher states with faulty input information. It is counterproductive and it has the very real probability of cause horrific results (people leaving because they panic).

The topic at hand was this idea of letting employees select their own compensation through voting. That's just nonsense when applied to any real organization outside of perhaps a few very narrowly defined outliers.

One example that comes to mind is that of sales people. This can be a really odd group. They are generally very aware of finances at a transactional and COGS level. If you let them vote for their own compensation you'd probably be shocked by the results --and I don't mean "pleasantly surprised".

I have never had a sales person come to me and say something like: "Hey Martin, I haven't sold anything in three months. How about we lower my salary so I have a chance to pull out of this hole I am in and show you guys that I can bring in the sales.". Ha! Never. They keep flying the plane right into the ground. Even after repeated talks where we look at numbers and I highlight the fact that they've been receiving advances on commission they have not earned yet for weeks, not one person has ever suggested a cut in pay. That is NOT how people think.

If, on the other hand, you put someone (or a group) in a do-or-die situation and the options are a bunch of people are fired or all of you take a pay in cut things are different. The decision to go for the pay cut has NOTHING whatsoever to do with understanding finances after a two week class. Nothing. I'll let game theorists dissect this one if they deem it worth their time. The mechanism is very simple:

- If I don't take a pay cut they will have to lay people off.
- I could be one of those people.
- Without private information from management signaling that
I am safe, I could be gone.
- Therefore, the best way to ensure that I don't lose my job
is to support the idea of an across-the-board pay cut.
- We all win and I don't have to worry about losing my job.

That's how it works. Again, people are not analyzing business finances. Management puts a fork in the road in front of them. Two choices. Choice number one means you might lose your job. Choice number two, you don't. No brainer.

In many ways it is one of those "Interesting game. The only way to win is not to play." moments.

This is very much a "Tragedy of the Commons" case. As you scale up the hippie approach. They are bound to destroy the very entity that feeds them.

The best example we have of this are highly unionized businesses. The unions, effectively and by force, get to vote for their own compensation and benefits. If they don't get what they want they go on strike and cause untold damage.

In nearly every case I can think of in the US, unions have succeeded in extracting pay and benefits that are absolutely ridiculous in the context of anyone living in the real world. They have also succeeded at killing-off or seriously damaging entire industries and even cities.

For example, in a rational framework a city should not devote 40% of their budget to pensions. Yet it is happening. Cities and businesses are going bankrupt because of this. If these people were rational and truly cared for the enterprise (city or business) they would analyze the numbers, understand the problem and not vote themselves these ridiculous compensation and benefit packages. The would voluntarily scale them down. That is not happening. And that's not 18th. century thinking, that's people in the US today. That's how they behave. That's reality.