Pay them or lose them

McDonalds began making headlines in July when the company worked with Visa to create a budget guideline for employees. According to Clare O’Connor of Forbes, this budget has not only backfired, but more likely caused increased support for political campaigns aiming to boost minimum wage. No business, big or small, is immune to the ethical pitfall of under-paying employees. But, this situation lends itself to a great case study on emotional intelligence when it comes to paying employees.

Emotional Intelligence and McDonalds’ Payroll

Wikipedia describes emotional intelligence as the ability to identify, assess and control the emotions of oneself, others and groups. So what does the emotional intelligence process look like for McDonalds in this situation?

Identify.

Credit: MarketingProfs Daily Fix

The budget assumes employees would earn $1,105 from one job and hold an additional second job in which they would earn $955. There are a couple problems right off the bat. Because they are earning minimum wage, that means those employees are working approximately 38 hours a week for McDonalds. Based on the $955 from the second job, McDonalds also expects those employees to work about 32 hours a week at a second job.

An organization aiming to be emotionally intelligent should stop and realize that a seventy hour work week is going to leave employees stressed, tired and unhappy. Here the organization has identified the feelings of employees.

Assess.

Another issue with the budget arises when one realizes that even if the worker is able to hold a second job

and work 70 hours, many of the budget items are unrealistic. In most locations, $600 rent isn’t practical. Beyond that, the national average for health insurance is at $215 where McDonalds listed the item at a $20 monthly expense. The moral of the story here, is that even with both jobs, workers would still be struggling to survive.

Credit: Detroit15.org

Here again, companies like McDonalds have an opportunity to put themselves in someone else’s shoes. Here there should be an acknowledgement of conflict. The next step is going beyond realizing the situation exists to empathizing. This involves moving past knowing the workers are upset and assessing why they are unhappy, which is a key aspect of both emotional intelligence and conflict resolution. Understanding these worker’s emotions involves asking: what is like to work 70 hours a week but still not bring in enough money for a comfortable living? What is it like to have to choose between a safe apartment and being able to eat? Or having to decide between buying a reliable car or having health insurance? It is likely these workers are continually stressed, insecure because they don’t have options in emergencies, and hurt because they are under-valued.  

Control.

At this point in our study, the organization would acknowledge the hardship for their employees and empathize, which would lead to taking control. Now, emotional intelligence isn’t about completely yielding to the demands of others and people pleasing. The key here is to manage sympathy and empathy with a level head. So, should McDonalds automatically yield to recent strikes and pay workers the $15 an hour they are demanding (as reported in The New York Time’s A Day’s Strike Seeks to Raise Fast-Food Pay). Not necessarily. However, McDonalds should take the time to ponder how much they can improve wages. University of Kansas School of Business’ student Arnobio Morelix performed a study which revealed that if McDonalds paid these workers the $15 they seek, the price of a Big Mac would go up only %.68. The company doesn’t have to worry about loss of business with such little change in cost. If McDonalds’ CEO made $8.75 million in 2012, surely there is room to move some figures around.

Beyond considering how the problem can be fixed, emotional intelligence is about acknowledging the other side’s feelings and having a conversation, which can be further understood by learning the principles of conflict resolution. Though it would be jaw-dropping to imagine it would actually happen, in this situation, McDonalds could make the effort to not only increase wages, but make budget explanations available to employees so they understand why they earn what they do, rather than simply feeling like a kicking-post. The more the company is willing to truly start caring about the employees, the happier and more productive employees will become. In return, employees need to be willing to meet the organization in the middle.

Liar Liar… is someone’s business suit on fire?

Truth is a tricky thing. The movie Liar Liar, illustrates this well. Fletcher Reede is a man who builds his life and career on lies, which in the end comes back to haunt him. He learns that his perpetual dishonesty has forever damaged his home and professional relationships. On the other hand, when Reede is forced to tell nothing but the absolute truth, he hurts people’s feelings and still damages relationships. So we know that blatant deceit isn't good, but is honesty always the best policy?

 Why We Don’t Always Tell The Truth published by the Harvard Review provides interesting insight. Author of the article, Ron Ashkenas, focuses on the concept of “shading the truth” at appropriate times. He says “there are times when a little white lie or the absence of key facts might be appropriate.” In his writing, a salesman serves as an example for the type of role that may involve limiting the truth and figuring out how to deliver it later. Realistically, his argument is even backed by performance statistics. Research referenced in Honest Workers at a Disadvantage on the Job found that honest employees didn’t perform as well, had lower customer satisfaction scores and yielded fewer sales conversions. In essence, this is the case because customers felt satisfied with the transaction upfront when they talked to a fibber.

At first glance higher scores and more sales seems great. In fact, it feels good to tell someone what they want to hear and make them happy. But as demonstrated by Fletcher in Liar Liar, there are consequences down the line. Customer satisfaction scores for dishonest transactions would likely plummet upon further investigation. The real truth would eventually surface after receiving the misrepresented product or service and it would not only damage that employee’s scores, it would also create a bad image for the company.

Furthermore, within the same research which demonstrated on the job liars performed better, it was ironically revealed that dishonest employees stayed with companies for significantly smaller periods of time and required more supervision. Understandably, dishonest employees weren't trusted with as much by their employers.  

As a general rule of thumb, there are pros and cons for more and less honesty when it comes to “getting the job done”. Less honest employees tend to benefit immediately while honest employees see long term rewards. But there is an important factor that hasn't been addressed yet, which is the delivery of honesty. What about the new breed of employees, whom we’ll call “Kind Truth Tellers?” These are individuals strong in their emotional intelligence and leadership skills. Kind Truth Tellers avoid jobs that involve offering a service they can’t tell the truth about. As positive people, they understand how to highlight the best aspects of their service or product, while being completely honest. After an up-beat friendly conversation about the product of interest to a customer, a Kind Truth Teller might say “It sounds like you might really enjoy this ______ and I’m so glad I could answer your questions today. As it is very important that you’re completely satisfied, I want to make sure you know that this product has a delayed shipping date of July 20^th.” Including the less appealing truth may lose the sale. More likely, it will gain the trust, and respect of the customer.

Be it a sales call or a conversation between a manager and an employee, honesty is the best policy. As individuals, everyone has the ability to remain honest if they work at it. All that being said, even when the truth can’t be softened, it is still best in the long run for everyone involved. Better the customer knows upfront that they don’t want that product, than they never buy from the store again due to lack of trust. As shown by research, the employee who is treated kindly, but occasionally challenged through honest feedback, will grow and likely gain ground in their career.

No one is saying complete honesty is easy or that it is even continuously sustainable. We are all human and we all slip up. However, the goal is to continue developing ourselves and try. It seems appropriate to close with one of history’s most famous honesty quotes, which was coined by Thomas Jefferson “Honesty is the first chapter in the book of wisdom.” 

Additional Topics of Professional Interest:

Lions and Tigers and Confidence, oh my!
Leadership Qualities of Nelson Mandela
How to avoid bottling Emotions

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