Morgan Stanley’s CEO, James Gorman, essentially offered an ultimatum last Monday (June 14) at a conference focused on financial payments and commercial real estate (consider that perspective on his motivation). He ‘joked’ that he was speaking from 1585 Broadway and was in a suit and tie.
Gorman’s actual quoted comment is, “If you can go to a restaurant in NYC, you can come into the office. And we want you in the office.” Adding, “If you want to get paid New York rates, you work in New York.”
I’ll let others discuss the pros and cons of this kind of legacy management thinking. It’s also worth contrasting top-down decision making with a servant leadership style and our current efforts to transform business into a more agile work environment but, I do have two hypotheses to share:
The value of our work, i.e. the compensation we are paid, should align with what we produce for those who pay us regardless of place and time. That might not be New York or Silicon Valley wages but, whether we do it in Manhattan or San Francisco, Calcutta or Budapest, if the agreed-on result is the same quality, then the same base wage should be expected.
That might mean that someone living in a developing area is actually getting a step up in wages. (As opposed to a low-wage market being added to the unholy bonus of a C-level MBA who is eking out a greater profit margin on the backs of the low-wage earners…until they have to move the ‘center of excellence’ to a new low-wage arena.) It might mean that hires in high-wage areas are offered a face-to-face or location subsidy and therefore are paid a base + subsidy…but that requires an offer that is fully transparent around equity that won’t be misunderstood with respect to gender, race, age, etc.
My hypothesis is that by making a base value visible for most jobs – independent of location and time (which can be assessed separately) – we will see a significant change in the perception of candidates and employees about the fairness of our hiring and management practices and consequently higher rates of engagement leading to improved corporate performance
Making a base salary visible for most jobs - independent of location and time - will improve the perception of candidates and employees about the fairness of our hiring and lead to higher engagement & improved performance.
My second hypothesis is that there are other, equally important factors to consider for the current generation of candidates. If we were to survey the top 10% of every graduating class from which we aspire to recruit our best and brightest, we would find:
Fewer of these high-quality students accepting offers with large firms. A trend that’s been noticed for at least 5 years now. (Someone get NACE to do the survey.)
Fewer employees in every age cohort, but especially early career employees, reacting positively to leaders dictating where and for how long they work. Rather, they will be willing to be held accountable for quality, deadlines, and other performance agreements in exchange for control of how that gets executed including all where and when agreements.
More employees expecting the diversity needle to move quickly. The idea that it might take the Fortune 500 70 years for their Boards of Directors to reach parity in race and gender is unacceptable.
