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And now, three words about retention bonuses: Are you serious?

Take the badly misnamed Best Buy (or, as a friend calls it, “Amazon’s showroom”), whose board of directors has awarded big piles of cash and restricted stock to its CFO, EVP/HR, President/International, and President/U.S. to encourage them to stay with the company instead of jumping ship to join Best Buy’s founder, Dick Schulze, as he attempts to take over the company.

Understand, I’m jealous. Can you blame me? Nobody has paid me anything remotely like this for screwing things up badly and repeatedly. Heck, nobody has paid me anything like this for doing a good job.

I should probably leave the EVP/HR out of this. She’s hardly responsible for Best Buy’s failure to provide the best buy … or anything remotely close to it … and its consequent ever-increasing decline in marketplace relevance, especially as she’s only had a couple of years to do any damage. But then, what impact is she likely to have on Best Buy’s future competitiveness that makes her worth a retention bonus like this?

But, the presidents of U.S. and international operations have their names all over Best Buy’s failures. And its CFO, who joined Best Buy in 2003, has been in his current role since before the start of the Great Recession. If the CFO position is important enough that a retention bonus is in order, that means its occupant has been involved in the planning and decision-making that has led to Best Buy’s steady decline.

All of which leads to two questions. The first: Is it a good idea to bribe top executives to stay? And second: If you’re going to bribe some top executives to stay, should they be the ones whose names are all over past failures or who won’t have a significant impact on future success?

The second question is, of course, rhetorical. The first is worth serious thought.

That the sums in question are bribes is by definition. Best Buy is paying a lot of money specifically to get these people to do something they wouldn’t otherwise do — to stay with the captain of a sinking ship instead of joining the band of mutineers (pick a different metaphor if you don’t like this one).

So the question is, should a board of directors want top executives who will only stay if they’re bribed to do so?

Regular KJR readers know my position on this: No (see “Is it time to end incentive pay?KJR, 4/23/2012). Any executive who doesn’t consider their opportunity to achieve something important to be an incredible privilege is an executive you’re better off encouraging a competitor to hire.

As for Dick Schulze’s attempt to take over the company, here’s a question for anyone considering an alliance with him: Why would you do that? He’s the guy who, when he had the chance to crush Amazon.com when it first expanded into consumer electronics and, oh, by the way, to crush Circuit City as an afterthought, instead chose to view Circuit City as the competitor that mattered?

Taking shots at Best Buy is easy and fun. Behind the fun is a question you might find yourself having to deal with in this era of frequent mergers and acquisitions: Whether to offer retention bonuses of your own.

That answer is, yes. There are times when retention bonuses make all kinds of sense, for example, when a company has been acquired, key positions are being consolidated, and you need the services of the good employees who hold those positions in the meantime, to ensure a smooth transition.

That’s assuming, of course, that while these employees are good enough to help with the transition, they aren’t good enough … or a good enough fit … to be worth finding a role for in the consolidated enterprise once the business integration process is complete.

So if you have employees like this — ones who will be essential to a smooth transition but who aren’t worth investing in as long-term highly desirable employees — you only have two ways to keep them on board — either bribe them, or lie.

Unless you lie, they’ll know that when the deal is done they’ll be out of a job. They’ll have no reason to do more than the minimum for you while finding a new place of employment that offers more stability.

If you need them and don’t want to lie, it’s the only solution that will work. Make the amount big enough to work, and no bigger.

Just don’t pretend that you’re doing anything fancy.

You’re offering a bribe.

In July of 1973 I returned from a semester abroad in Guatemala to find that gasoline was in short supply, prices had tripled, and if you wanted to fill your tank you had to wait in line.

A long line.

Then some wise guy started rumors of a toilet paper shortage. Predictably, huge crowds of worried consumers descended on supermarkets around the country like hordes of locusts on wheat crops, snarfing up every package of the stuff they could, stockpiling this vital commodity against the predicted dearth.

There was, of course, no shortage. The expectation, though, had the same impact as a real one, although for a shorter time.

Employers perceive the existence of a serious shortage of IT professionals right now. So why do so many give the employees they have so little reason to stay?

We’re all nuts. As evidence, the June 29 issue of Business Week, citing the Bureau of Labor Statistics, said that over the past decade, programmers’ pay has lost 1.5% to inflation. Here’s a hint to all you capitalist geniuses out there who run our companies: The law of supply and demand says that if something is in short supply and high demand, prices go up or we get a shortage.

If there really is a shortage, shouldn’t companies be trying to reduce turnover by treating employees better and paying them more? It’s more affordable than spending the full year’s salary plus benefits it generally costs to replace each employee who leaves.

Maybe this means there is no shortage. The statistics cited to demonstrate the shortage show that while 95,000 new IT jobs will be created this year, only 25,000 new computer science majors will graduate.

Inferring a shortage from this data turns out to be wrong. I’m indebted to fellow Perot Systems-ite Robert Fendley for pointing me to the evidence – research by Norman Matloff at the University of California at Davis (check out http://heather.cs.ucdavis.edu/itaa.real.html for more details).

Matloff’s research is revealing. It turns out that about 25 percent of today’s IT workers have computer science degrees. Now let’s see … 25,000 computer science graduates divided by 95,000 new jobs comes to … well I’ll be hornswoggled! We’re in exactly the same shape we’ve always been.

What a surprise. Want to quadruple the number of qualified applicants? If you’re screening out applicants who lack computer science degrees, you have an easy solution. (Something to ponder: Since most hiring managers lack computer science degrees themselves, does this mean they wouldn’t give themselves an interview?)

A lot of our shortage is self-inflicted. The absolutely stupid practice of requiring computer science degrees, which causes HR to keep three-quarters of your potential workforce away from you, is the just the most obvious example. (Memo to our competitors: Please keep on doing this. Thanks.)

Here’s another example of how most of the problem stems from our own ridiculous expectations: Many of us hire “only top-quality applicants.”

One of 10 IS professionals I’ve known were top quality. That isn’t surprising, though, since I define “top quality” as being among the upper 10 percent. The entire workforce could double in ability and we’d still have a shortage of top-quality people.

I’m in favor of hiring great people, but you have to be realistic. Want to hire only the best? Pay top dollar and create great working conditions. The best can afford to be very choosy.

Your alternative: Hire some of the best. Also hire some journeymen programmers, and implement great processes so they can maximize their contribution to your success. And be willing to train promising applicants who have the right aptitude and attitude, understand the business, and want to learn technology.

I’ve heard from an awesome number of IS Survivalists whose backgrounds are in mathematics, physics, chemistry, the military, anthropology, international studies, or clerical work. Despite their lack of computer science training, they are successful IS professionals.

Often they are more successful than their computer science co-workers, in fact, because these supposedly less-qualified people acquired their skills solving real-world problems and stayed in the field because they showed both an aptitude and an affinity for the work.

Why, oh why, do so many companies deliberately ignore people like this?