Friday, July 4, 2014

From the Top

I’ve been watching the fallout from the recent Hobby Lobby decision along with the rest of the country, and I have truly been amazed at the amount of scorn and derision being heaped upon the company, its ownership, its management team, and anyone who supports it by essentially everyone on the left side of the political landscape – and a fair amount of the center, as well. So far we’ve heard about how this is indicative of a war against half of our population, how it’s the emergence of a plutocracy that will destroy the very fabric of our country; how it’s the start of a theocratic state in North America, how it is discriminatory, racist, sexist, classist, and generally horrible for anybody who isn’t an ultra-right-wing white male religious fanatic. And I have no difficulty accepting any of these claims; but what strikes me about the situation is that the management policy that started the whole this sorry mess was a bad idea in the first place…

Consider, for a moment, the purpose of offering benefits to your employees. All pious mouthing aside, benefits are part of the compensation package which the company uses to attract the best available workers – or, at least, employees of sufficient quality to suit its requirements. If a given company offers better compensation than others in the same industry, whether that means higher pay, better health insurance, dental and vision insurance, retirement plans or other benefits, then jobs offered by that company will be more desirable, creating greater competition for those positions and giving the company access to a greater selection of possible employees. It is important to note that while access to adequate health care may be considered a basic civil right, having somebody else pay for it generally isn’t, which is why there are so many jobs that do not offer acceptable medical insurance – and why the Affordable Care Act was required in the first place…

Given that this is the primary function of all compensation elements from the company’s standpoint, intentionally degrading any part of the compensation package is counterproductive to the point of idiocy. Any measure which makes the package less attractive – which eliminating coverage for desired services most assuredly does – lowers the company’s ability to attract or retain the best personnel. This lowers productivity, lowers profitability, and generally decreases the overall value of the firm. In this specific case, negative feelings generated by the policy (and the lawsuit to protect it) also represent an excellent chance of angering or alienating employees who already work for the company and do not have the option of quitting – including member of the workforce connected to the issue by politics or ideology as well as by biology. This will lower productivity still further, and that doesn’t even consider the impact the company’s position is having on public relations and customer retention…

Now, as already noted, there are companies that do not offer health benefits of any kind, and from a purely strategic standpoint we can understand why. If employee relations are not a priority – if the labor situation in their industry is effectively a buyer’s market – then a company may not need any advantage to obtain the best employees, and if workers in that industry are considered easily interchangeable there may not be any great pressure to retain them, either. Alternately, a given company or industry may have an operating margin so thin that offering any additional compensation would make their business model untenable; the choice might be between higher wages and other benefits, for example. This is the first case of which I’m aware in which a company has decided to intentionally hamstring itself because of the religious convictions of the ownership, though – even assuming that’s actually what is happening…

Personally, I find the religious argument difficult to accept – especially since nothing the company does can prevent its employees from using the disputed birth control methods if they can find another way to pay the resulting medical bills. If the owners of a business actually support any religious belief, it seems obvious that it would be preferable to run the business effectively and use the resulting higher profits to support whatever ministry or other activities those beliefs require, rather than destroy the business and galvanize the opposition into the kind of action that could actually set back the owners’ religious goals. Or, to put it another way, in addition to the various legal, ethical, political, civil, social, customer relations, community relations, public image, employee relations and financial arguments against this policy, the whole concept is also stupid to the point where I can’t even think of a bad metaphor for how stupid it is. And the worst of the legal implications may be yet to come…

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