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The Hidden Spreadsheet

Posted on 09 December 2003 by Demian Turner

Robert Cringely has a insightful artice that questions the ethics of reducing company expenditure by outsourcing to India.  The article also explores a management view of what an employee’s worth is within the organisation – good reading.  Thanks to Jeremy’s comments for the lead.

There is somewhere in almost every company a spreadsheet showing a cost-benefit analysis for every worker.  It all comes down to a single lifetime number that is the difference between the expected earnings to the corporation that are made possible by the direct labor of that employee, and the total cost of that employee to the company in current wages and future benefits.  Nobody admits the existence of this spreadsheet, which is probably illegal, but it is there.  And at some point, it indicates in many cases that a worker has reached a condition where they are likely to cost the company more in future benefits than they will earn the company through future labor.  At that moment, that employee becomes expendable.  Forget that the business situation could change, altering the numbers.  Forget that the employee, if he knew his job was in peril, might take action to improve his productivity.  Forget that the negative number could easily be the result of a management error or misstep, and have nothing to do with the employee’s effort.  Forget that the calculation could be just plain wrong.  No matter what happened to get the company and the worker to that place, it is in the interest of the company to get rid of the employee as soon as possible.

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