Talk about letting customers and shareholders down. Robert Nardelli, the former CEO of Home Depot, is walking away with a $210 million severance package. Not bad for a company whose stock fell 8% during the boss's six-year tenure.
And this occurs concurrently with Home Depot's policy of cutting payroll hours, reducing overtime hours, and generally cutting back on customer service. And what message does this send?
According to Scott Burns' recent Universal Press Syndicate column, "...the messages also come from current and former Home Depot employees. As one put it, 'If you think being a customer at Home Depot stinks, try being an employee.'"
Messages from Home Depot employees at locations across the country and in Canada tell the same story: The bonus system for managers is geared to cutting payroll hours. So that's what line managers do.
As a result, whole departments are ludicrously short-staffed, with reported instances of a single employee to cover multiple departments. Overtime is verboten. The problem is compounded by short-staffed checkouts.
For you and me, the result is simple: Home Depot maintains its return on shareholder equity and pleases Wall Street. It does this by reducing what one consulting firm calls Shopper Return on Investment – SROI. We value our time, but Home Depot's management metrics have systematically devalued it, just as Home Depot treated employees as liabilities rather than assets.
This is a sad state of affairs for a company founded by Bernie Marcus and Arthur Blank with a vision to, "to give the best customer service in the industry."
Now, the new guy is trying to turn things around. Burns' column goes on to say, "Frank Blake, who replaced the disastrous Robert Nardelli as chairman and chief executive, answers (in message 3,860) that he is sorry 'for all the stories you have shared.' He admits that Home Depot has let its customers down."
Then he tells us that it is already increasing staffing at its stores and that Home Depot is "'launching a nationwide program to recruit and hire skilled master tradespeople to staff our stores.'"
Time will tell. It is a bit confusing that a company this big could take its eye off the customer-centric ball, then reward the boss for a job poorly done.
MSNBC story is here.
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