Sunday, July 20, 2008

Clarifications, Part II

Continuation from Part I.

I'm not going to talk trash about American Apparel. They do some amazing stuff. They treat their employees fairly, provide good wages and support a great work environment. I could not bring myself to be vicious against them especially since they don't bullshit. What I do want to talk about is their wage system and clarify how it works.

For employees they have a base pay and production goals they can reach for bonuses. The group decides how much it wants to make. This is cool because it creates an incentive for the employees. This wage system, however, should not be confused with thinking that employees have much choice or are empowered. They don't and they're not.

The group's decision is one made with limited options and variance.

If the group had more options in the choices they could make, it wouldn't exist. If they could decide on what to work on such as Green shirts or Red shirts, there would too many conflicting opinions. It would take a much longer time to decide on whether the merits of making of the Green shirts is better than the Red shirts or vice-versa. Work wouldn't get done and production would be bogged down.

If there was a greater variance on how much they want to make, it wouldn't exist. The average voter is the only one with the "choice". The majority decides and decides quickly because they are in small groups. Whether or not they choose to reach the production goals, there will be some people that didn't want that option. It isn't and never will be a perfect "work however much you want" type of system.

The idea that the workers are empowered is nice, but a bit inflated. Only the mode vote has a "choice".

What's also important to remember is that American Apparel is a huge company. If they have excess production it's not a big deal because it is mass produced. Variance on output is a minute factor on cost. This sort of "open" management could not work in a small, non-mass producing company. Where supply can be determined by the employees in American Apparel, supply MUST be determined by public demand in other companies.

If a small, non-mass producing company decided to give controls to the employees, they would lose huge amounts a profit through surplus or shortage. They have to take control of the output in order to function. American Apparel has the option while many companies don't.

American Apparel is a great company because it takes advantage of its options to create a friendlier work environment, but it's still necessary to look at things objectively.

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