How do you tell your boss that being cheap is affecting morale?

Question

Money was tight for our first year, but that's no longer the case. Our company is a team of seven total, including our two founders who regularly boast unapologetically about their extravagant recreational activities.

We worked hard all year — lots of late nights — and haven't demanded company outings or anything knowing that we had a lot to prove, but hoping the founders would step up and do a happy hour once in awhile. In the last year, we've had three company activities, usually initiated by one of us. We didn't have a holiday party because we were told it would look bad to investors to celebrate.

The activities we've had appear to be minimally planned with all expenses spared.

Now they've invited us on a weekend trip. We appreciate the gesture, however, they won't really be covering any of the costs. And we weren't offered raises or bonuses this year, even though we were told what a great job we've done. Another thing that's compounded this problem is that they tell everyone who comes through the door how cool it is to work here and how lucky we are. This has culminated in the depletion of our team's morale.

Is there a way to approach the founders about how this is affecting us?

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POST MEETING UPDATE 1/25

Last night EOD we sent an email to everyone requesting a meeting to discuss company culture for today (so it wouldn't feel like an ambush).

Between the time the email was sent and the meeting this morning, there was a small flurry of random activity that suggested that the founders were nervous about what we had to say.

We had the meeting and opened with a clear topic and concrete example of one of their previous successful attempts to cultivate a positive culture. Then we contrasted that with examples to show how the work environment had declined. We were specific that it wasn't fun to work here and that it would be hard to recruit talent given the current situation. We requested more team meetings and suggested that company events didn't always have to involve money, we just wanted them to be initiated by management.

They agreed with our assessment, but readily stated that their business priorities (like making sure we were funded) were always going to trump setting aside time to work on the company culture. They told us that many other startups didn't even make it through the year and that their hard work justified letting the culture fall to the wayside — more or less that we ought to be thankful we still had jobs. As a side note, it's not terribly difficult to find a job in my industry. They appreciated us bringing up our concerns and reaffirmed their commitment to an open door policy. They did say they wanted to do more activities. It felt trite IMO. We will just have to see whether or not they make good on this. They asked if we had any other concerns.

We mentioned the logistics of the weekend trip and tried to give them opportunity to step up and offer to foot the bill. Their response was that they were already covering 90% of the costs (untrue) and they seemed unhappy that it was brought up.

The meeting closed with company updates and on what they probably saw as a positive note. After the meeting, because of the weirdness, the trip was cancelled and replaced with a one day excursion that will be covered.

TBH, our team walked away feeling like we failed to communicate what was wrong. And we didn't particularly feel like they were receptive to our comments. While the advice given here really helped and gave us courage, I think it's clear that it might be time to move on. Thank you everyone for your help. I hope the advice here will help other teams with better managers.

Answer 1

This touches on the core of how the founders are motivating their workers. From your point of view, it isn't working and it sounds like this view is shared by others. There are a couple of ways to bring this up to the founders, though it does depend on their personalities; if they're fundamentally not approachable about your only option is unpleasant direct-action (and most people would rather get another job than bother).

The Argument

The approach to take when you finally get down to talking to them should be the same no matter what route you picked to get there.

All these soft awards are nice and all, but we're tired. Heck, Bob left because he wasn't feeling appreciated. And frankly, some of the others are saying the same things. Maybe we need some hard awards, with money behind them.

Since they're worried about the investors, pitch with them in mind.

Since the investors don't want us throwing money around just for fun, why not do it targeted? Set up some rewards with money behind them, for goals we reach. That's not celebration, that motivation. Which we need.

Sounds like y'all hit them over the head with this once before, but nothing changed, so you may need to work that in too.

A lot of the ideas passed around back when we had that big meeting are still good, but nothing done since then has really helped. We need to do something different.

It sounds like they're perfectly happy with how they're motivating employees, but need a bit of reeducation when it comes to the worker's expectations for How to Have a Good Time With Your Coworkers. The buddy-buddy we all share expenses approach may be the only way they know how to do it, so pitching change will require a delicate hand. Repeated applications may be needed.

The Direct Approach: One on One

If your founders are the kind who encourage an open environment, break down barriers between decision makers and product makers, and otherwise state they're always willing to accept feedback, take them up on their word. Be the bold one, and actually schedule a chat with them.

The idea behind this one is that you, the firm believer in the company that you are, are coming to them with a problem that affects the business. And more importantly, you have a solution.

You may have to keep coming to them with this. One-and-done is rarely a viable approach when decision makers have their heads in the sand deep enough, it takes some time to change. Work WITH them, which will keep you in good graces.

The Direct Approach: Many to One

If your peers really feel the same way you do, and your founders are kind of aloof (the previous approach won't work), it's time to come as a group. You'd make the same argument you would in the one-on-one approach, but you add more people behind it.

Maybe they need to hear the same thing from multiple people (iterative one-on-one).

Maybe they need to hear the same thing from a group at the same time.

The second method is big guns, and really should only be done if the corporate culture requires it ("feedback is done where everyone can see it") or the founders really do need a knock that hard to notice the problem.

Hi, we called this meeting because we have a problem. Motivation. What we're doing right now isn't cutting it, and things are getting bad. Now, we believe in what we're doing which is why we're talking about it now rather than walking off the job as a group.

These soft awards are nice and all...

The Indirect Approach

If they really aren't approachable, and you can't get backing for a group to present their grievances, you may need to get subtle.

So they want to take you all out for a weekend. Oh shucks, most of you have conflicts or can't afford it, sorry.

Once the workers have spurned a 'reward' like that, in such quantity, they may be better prepared for one of the previous approaches. They want to know why everyone suddenly doesn't care, and are primed to find out why. So you tell them.

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The key arguments to make are in the one-on-one option: you need to speak their language (small business owner) and demonstrate a way out.

Secondly, you need to speak their culture. Where and how did they grow up (well funded vs hard-scrabble living check to check)? What kind of schools did they go to (inner city public schools, or private schools)? If there is enough of a difference between how they learned their social skills and how their employees learned theirs, it is worth it to underline this to emphasize why their methods aren't working.

Answer 2

Outings and company events are more of a good faith thing and not having them shouldn't affect your morale. The heart of the issue is that people are overworked and they don't feel adequately compensated for their investment of time and energy into the company.

I almost have a similar problem except that I am actually compensated quite well IMHO for the work I do, however I struggle with management that has trouble loosening the purse strings on hardware/software/graphic design and other things.

Why the founders are doing this to you could be for a number of reasons:

• They are cheap, possibly miserly and stingy with their money. Averse to risk though this isn't a common management attitude in a yet to be profitable startup with a large sum of capital investment. They SHOULD be trying to "land grab" and spend whatever it takes to establish a foothold in a new or emerging market.

• They don't value their employees and are possibly egotistical. This may be because they feel you are all completely replaceable. I have encountered startup founders before that had an offputting offensive patriarchal attitude of charity towards their technical talent as if they have the option to quite easily save themselves a few dollars by offshoring it all, but out of their graciousness and the kindness of their own hearts, they are privileging you by allowing you the unmatched opportunity to perform technical work for them. To put it niceley, they are nearly a laugh but really a cry.

• They are possibly also sociopathic. The tendency you mentioned to brag about their extravagant personal lifestyles in the presence of employees that are being undercompensated or overworked speaks of the possibility of a sociopathic mind. This doesn't mean that he/she is evil, just that their brain is damaged or undeveloped in such a way that prevents them from emotionally regarding or acknowledging how others feel. If I were to walk into a soup kitchen and start bragging about how much money I have and how much I just ate, the typical response in myself should be shame, remorse and regret, all emotions that are difficult or impossible for a sociopathic person to experience.

• They are unethical. If this wealth they have was accumulated from previous business ventures then that is one thing, but if they are overcompensating themselves on capital investement for a 1yr startup that hasn't broken a profit yet then this could be highly unethical, especially if that money could be used to hire more developers to lessen workload or to increase compensation that sounds below market value.

Answer 3

I had one CEO who was completely clueless back in 2000. He wanted my engineering team to participate in a sales leads contest. We all told him that we were more than happy to provide him the sales leads as part and parcel of doing our jobs, that his silly rah-rah-rah sales contest was demeaning to us as professionals and we didn't want to participate even if participating in the sales contest involved getting prizes. We had a meeting with him where he stated that if we didn't want to participate in the sales contest, the next paycheck would be our last one. We told him we understood what he said. We participated in his stupid sales contest until all of us had jobs lined up - It took a month. Then we all handed in our resignations. On the same day.

I understand from those who stuck around until the last day of existence the firm ten months later that he never tried that sales contest idea again. In general, the leads that he generated from his sales contest turned out to be garbage because everybody else was gaming the contest in an attempt to win the prizes.

From my life experience, the way to deal with stupid people is that unless you make them pay a price - preferably a stiff price, for being stupid, they'll just keep on acting stupid and driving you crazy with their acting stupid. But even then, there is no guarantee that your message will get through to them.

Answer 4

OK as crazy as it sounds, if your employees are complaining about money it means that there are other factors in their work that is not being met (assuming they are being paid enough for the job).

If they were to give you a pay increase, it is not going to solve the underlying problems for you.

I recommend reading "Drive" written by Dan Pink. Here is brief presentation on it.

http://www.youtube.com/watch?v=u6XAPnuFjJc

So I would start with what is causing the friction that you would want more money. This sounds like long hours, less recognition of your work vs their bonuses.

Once you have a list of what is the problem factors, are there solutions that will improve morale in changing those processes? Are these solutions you can bring to them to make the work style easier?

Answer 5

They agreed with our assessment, but readily stated that their business priorities (like making sure we were funded) were always going to trump setting aside time to work on the company culture. They told us that many other startups didn't even make it through the year and that their hard work justified letting the culture fall to the wayside — more or less that we ought to be thankful we still had jobs. As a side note, it's not terribly difficult to find a job in my industry.

Actions speak louder than words.

If it's relatively easy to find a job in your industry, then why go through the trouble of trying to make a tiger change his stripes? Success is not likely.

Furthermore, you have to remember: A for-profit business exists to make money; not to be a country club. A raise in morale may improve productivity, but only management has the authority to decide if extra-curricular activities are worth the time, effort, and money. And who knows? Those extra-curriculars may be worth it, and management may be making a bad move. But that's their right, and in most cases, you'd be wasting your time trying to change their minds. Life is too short.

Answer 6

Your founders do not value you very highly.

It is an entirely classic setup for bosses to think they are doing you a huge favour by employing you, undervalue you and underspend on things that would make you happy. Often, that is why people start their own companies.

I don't think the problem is that being cheap is affecting morale, or that you are not communicating clearly enough. They just don't think you're worth it. What they want is a set of compliant workers who are just so happy to work at such an exciting company that it doesn't matter if there's no money being spent on them.

Just look at the contrast in your question; the founders boast of their extravagant lifestyle, yet expected you all to pay for a team event that they had picked. That is at best myopic, and at worst you are being screwed.

Unfortunately, some people work on this level; it's dog-eat-dog, they really only care for what they can take and they will do the bare minimum to stop you all leaving. If they have investment money, they probably barely care if you aren't working so hard; if they can justify the extra expense to the investors, they can get more money. They only care if you leave because it would look bad to the investors. In this environment, where the management does not show any real care for the workers, the answer is to unionize.

Unionize for some R&R? What am I thinking? I'm thinking that this is more than the culture, or the occasional trips out being funded: It is about the management taking the workforce seriously. If you do not stand up to them properly (or quit), they will continue to pay you all poorly, fail to look after you, and generally drive you as hard as they dare. What's to stop them, if they don't have compassion for you? You are incentivising them to do just that; they can keep more of the money by just pushing you all harder for less reward.

Some bosses do care for their workers, and those are the companies you want to work for. The rest you have to force into behaving better by threatening to strike, leave, etc. Most are just weak and only need you to show some mettle before they will back down and treat you better. They just don't see the world your way, and can't justify spending more money on you unless you might leave, because nothing is as important as their immediate bottom line.