Enough time has passed so that I can talk about one of the more puzzlingly boneheaded decisions I’ve seen in the drug industry. Some years ago, the company I worked for decided to try out a new salary-based incentive plan. Nothing particularly unusual about that – the existing system was pretty generic, with the usual performance ratings, salary bands, and so on. (Finding out what salaries were tied to what levels, and which raises were tried to which ratings was difficult, but there’s nothing unusual about that, either).
But this new plan, rolled out first to the people in the Clinical division, was definitely something new. Here’s how it worked: your pay got cut 25%.
Well, that was an attention-getter, eh? But that’s how it worked. Everyone’s base salary was reduced, but (and here’s the good part), you could earn your way back to what you used to make by. . .meeting the goals that you’d outlined in your beginning-of-the-year Research Goals Statement! Hey, as the HR people pointed out excitedly in the rollout presentations, with this plan you could even earn more than your base salary if you exceeded the goals – what could be better?
You can probably guess the consternation with which this was greeted. It was immediately noticed, as in within the first few seconds, that such things as the profit-sharing plan payout were based on a per cent of base salary. That was going to get cut no matter what. But there was another (non-mathematical) problem with this brainstorm: the research goals statements that it all depended on were, as everyone knew, worthless.
How could they not be? How are you supposed to write down what you’re going to discover and what you’re going to do about it? These folks didn’t want broad general statements this time; they wanted specific, quantifiable goals that could be used to decide just how much you’d be paid. I remember arguing with someone from HR during an “informational meeting” about all this. I told her that if I knew what I was going to be doing in six months, it wouldn’t be research, would it? And I told her that no matter what the org chart said, my real bosses were a bunch of mice in cages and cells in a dish, and they didn’t know what the corporate goals were and they couldn’t be “Coached For Success”, the way that poster on the wall said.
This did no good. I got the impression that she thought that I was either making a joke, misinformed, lying to her about all this, or just rather slow in the head. At any rate, it turned out not to be a problem for me, or for anyone in research. As I mentioned above, this plan was first applied, on a test basis, to the people over in the Clinical department, and within two or three weeks several of the best people over there had found new jobs and hit the road. As, of course, anyone should have been able to anticipate.
There’s an awful lot of job mobility in the drug business. Everywhere you go you work alongside people who’ve worked somewhere else, and every year there’s some migration in and out. This salary plan might had worked out had our company been located on a remote tropical island, but even then people would have been chopping down palm trees and building rafts. Located where we were, with plenty of other companies around, it had no chance.
A hard-copy memo came out early one morning to the Clinical people, and it spread rapidly throughout the site. It was poorly formatted and grammatically incoherent, and once decoded it stated that the proposed salary plan would not be implemented and that no further ideas of that sort were coming. Some people suspected a poorly executed hoax, but to me the memo had all the signs of being authentic (which it was). It read exactly like something a VP-level person might compose, without the aid of his secretary, while his immediate superior stood behind him with a raised golf club. And so things returned to what passed for normal.