A cabal of HR renegades is taking advantage of the economic downturn to push an unorthodox notion: that the current vogue of slashing perks and pay is managerial insanity. Office land may be burning, but Richard W. Beatty, who teaches human resources strategy at Rutgers University, says the tendency to treat everyone the same is “misguided and absolutely the wrong approach. It’s strategic suicide.” Beatty and like-minded thinkers argue that the prevailing attitude is equivalent to an airline sticking its platinum passengers in coach with scratchy blankets and shrink-wrapped food. Once the good times reappear, or so the argument goes, disenchanted top players will bolt for better treatment and more pay. Companies that hew to the status quo will “pay dearly,” says Beatty, who, with Brian Becker and Mark Huselid, coauthored the upcoming The Differentiated Workforce and consults for Sony, GlaxoSmithKline, Lockheed Martin, and others. The Beatty approach has attracted a growing number of adherents. HR czars at companies as varied as Sony and metal manufacturer Precision Castparts are engaging in nothing less than a compensation revolution: steerage treatment for mediocre players—and business-class benefits for superstars. At these organizations, HR departments are morphing into what amounts to a concierge service dedicated to the care and feeding of the people whose positions and performance are making their companies the most money. 

Questions 

1. What are the motivational implications of treating top performers the same as average or below-average performers? 

2. What are the motivational implications of treating top performers better than average or below-average performers?

3. In tough economic times when jobs are scarce, why do managers still need to pay attention to employee motivation? 

4. Are there any potential downsides to trying to “micromeasure” performance?