I just read that the “Making Work Pay” tax credit is going to expire soon. The purpose of the credit was to put money back into the hands of the middle-class to stimulate the economy. Rather than cutting a check to everyone, as was the case under Bush, this time it was opted to just put the money into everyone’s paychecks prorated across the year.
So, the impact was small – an extra $15 or so in your paycheck. It was easier, logistically, to do this than to cut those checks. I actually thought it was a great idea at the time, but today I saw this article on CNNMoney.com.
I think this is a good lesson in leadership and managing your company. You need to think through all the steps, not just see that something is easier to implement now and not consider the reactions down the road. Say you did this with your employees. You are going to give them a $500 bonus for the year, but you are going to split it out across the year. Then, the company isn’t doing as well, so you say there isn’t a bonus the next year.
Here is the difference between perception and reality. The perception part is what can really screw you in the end. In reality, your employees aren’t getting a bonus. But from their perception, you just cut their pay. They are used to that extra money and now you are taking it away from them. If you were the employee, would you be more upset if someone cut a bonus or cut your pay?
The moral of the story, consider the end result and don’t use crazy tactics if the final perception is worse than the reality.
