Management Buzz 1/04

The current state of employee salaries, why camera phones might be a danger to your business, and more
Magazine Contributor
4 min read

This story appears in the January 2004 issue of Entrepreneur. Subscribe »

Raise Ration?
Nearly everyone is feeling a little poorer these days. And it's more than a feeling: It's reality.

The IRS reports that in 2001, taxable income declined by 5.2 percent nationally. This pattern continued in 2002, with top earners-those in the 90th percentile-earning 1.4 percent less than the year before, according to the Economic Policy Institute, a Washington, DC, think tank.

Employees may not feel richer for a while yet. Mercer Human Resource Consulting LLC reports salaries won't increase much in 2004. The HR consulting firm predicts the average raise will be about 3.6 percent-less than one percentage point above the inflation rate.

"Companies are going to be extremely cautious about fixed costs, and salary increases are an expensive fixed cost," says Charles Peck, compensation specialist with The Conference Board Inc., a New York City-based think tank.

Escalating health-care costs are one reason business owners aren't likely to be generous with raises. "The money for health-care benefits is coming from the same pot as compensation," says Peck. Employees need to know this so they can put thin raises in perspective. The good news for small companies, he says, is they aren't as likely to be outspent for talent since big firms may not be any more generous.

Candid Cameras
Cell phones with built-in digital cameras pose the latest danger to companies' trade secrets. In fact, camera-phones are so easily used to snap photos of prototypes and other sensitive information, at least one manufacturer, Samsung Electronics, reportedly banned its own products from its offices and factories. Sneaky idea thieves have long used hidden cameras to snap photos of sensitive information. But camera-phones are insidious because they can be used out in the open, says George L. Spinelli, a former FBI special agent and chairman of Spinelli Corp., a Scottsdale, Arizona-based firm that specializes in combating corporate espionage. Businesses that operate in the public eye, such as retailers, can't reasonably expect to keep anything private, he says. But those that have security-protected areas where they develop and test new products have every right to protect their ideas. Says Spinelli, "If I were taking clients or journalists into an R&D area, I would request that cell phones [be] checked at the door."

Equal Time
Function, not form, is finally dictating who gets the corner office. "The corner office went out with the three-piece suit," declares Kimberly Marks, president of The Marks Design Group Inc., a commercial design firm in San Antonio.

"It's the metaphor for the command-and-control management style that has gone by the wayside." The image of the corner office as the ultimate corporate destination still dominates the popular imagination. But some companies are rejecting the entire corner-office setup-literally-in favor of a more democratic layout.

Nila Leiserowitz, vice president of architecture and design firm Gensler in Los Angeles, which has studied the impact of office design on employee performance, says the waning importance of corner offices reflects flattened management structures and the emerging significance of cooperation in the workplace. "Executives are trying to provide a platform to employees that says, 'I'm working with you, and you're not just working for me.'" Cool bosses use that precious real estate, still coveted for its sunlight and 180-degree views, for the benefit of many, not just themselves. Common uses include meeting spaces or space dedicated to teams whose projects require a common space for the duration of the project. Marks often recommends using it as a "war room," with the high-power location connoting use for high-voltage brainstorming strategy sessions.

But democratizing the corner office conflicts with some industry cultures, warns Leiserowitz. So if clients tend to judge your power to negotiate by the prestige of your office, make sure the top dog in the company gets it.

of employees laid off from spring 2000 to spring 2003 were given no severance or other compensation from their employers.
SOURCE: Work Trends

of executives say they would rather run a private company than a public company.
SOURCE: Statistic Source: Clark Consulting

Joanne Cleaver has written for a variety of publications, including the Chicago Tribune and Executive Female.


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