The United States faces one of the worst job markets in years – check. Wages are low and bonuses almost non-existent – check. Both fresh graduates and trained professionals are jobless – check. In these hard times employee trust is one of the hardest things to gain as new and old employees try to come in terms with the times we face today. Read how Morgan Stanley lost employee trust to low bonuses:
James Gorman, the head of Morgan Stanley, said that if his workers are so angry about their latest, trimmed-down paycheck, it’s probably time for them to go. Gorman stands in contrast with many of his executive counterparts, who have largely stayed silent on the issue of declining compensation, despite an industry-wide restructuring.
“I say [to disgruntled Morgan Stanley employees], listen, you’re naive, read the newspaper, number one,” Gorman said in an interview with Bloomberg Television. “Number two, if you put your compensation in a one year context to define your overall level of happiness, you’ve got a problem that is bigger than the job. And number three, if you’re really unhappy, just leave. Life’s too short.”
Morgan Stanley announced earlier this month that it would cap cash bonuses for 2011 at $125,000 and that its executives — including Gorman — wouldn’t be getting any cash bonuses, according to The New York Times.
Gorman and his employees at Morgan Stanley aren’t the only ones on Wall Street contending with smaller paychecks. Anxiety over the state of the global economy, slow dealmaking and a boost in public anger over the financial industry’s high pay have likely pushed firms to slash their compensation pools to the lowest level since the 2008 financial crisis, the Wall Street Journal reports.
And that’s for those that’ve kept their jobs. All told, Wall Street laid off more than 200,000 employees in 2011 alone.
“The world has changed and the banking industry has gone through a fundamental change and we have to readjust,” Gorman said in the interview.
It’s true, we live in perilous times, what are companies to do – it seems all corporations have to cut costs somewhere. Is it worth cutting benefits and bonuses at the risk of losing employee trust? Is it fair to tell hard-working staff just to take a hike? Should employees actually be supporting the firm in times like this instead of being ‘disgruntled’? Is employee trust and loyalty dead in the 21st century? What’s your take on it?