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Reader Mail: Should Wells have Canceled its Bash?'
By Bill Catlette

This issue of Fresh Milk was inspired by a reader, Carol, from a California accounting firm, who sent us this great question:

Carol: "I'd be interested in your thoughts about the whole Wells Fargo thing where they canceled their annual bash to reward their top salespeople, due to pressure about the cost of the event and the losses they've sustained due to taking over struggling Wachovia. I know your stance is normally not to cut back on encouraging and rewarding employees during hard times. What do you think about this situation? I don't know what to think."

Bill: Thanks for your note, and a worthwhile, vexing question. Some facts:

1. Wells is one of the best managed large banks in America. Witness the fact that investor Warren Buffett is a major stockholder. Indeed, Wells neither needed nor wanted money from the federal Troubled Assets Relief Program (TARP), which was set up toward the close of the Bush administration. However, former Treasury Secretary Hank Paulson is credited with having strong-armed Wells Fargo's participation so as to not identify the banks that really needed it and were about to fail. In the final week of January 2009, Wells said it won't need additional government capital, after Citigroup and Bank of America required a second round of bailout funds.

2. Notwithstanding the above, Wells DID dine at the public trough, to the tune of $25 billion, and thus subjected themselves to added public scrutiny and oversight.

3. According to the San Francisco Chronicle, "the event in Las Vegas had been intended to reward members of its mortgage division who wrote $230 billion in loans in 2008. The San Francisco-based bank is said to be among the lenders with the least exposure to subprime loans."

Our Opinion: Wells Fargo management is between a rock and a hard place. On one hand, they can ill afford to do anything to lose the motivation and discretionary effort (we call it Oomph!) of their best performing people. On the other, anything that smacks of being an expensive, glitzy, celebration invites howls from all of us tax payers who are seated in the cheap seats.

And yet, as you pointed out in your question, our stance would generally be NOT to withhold rewards for people who have earned them and deserve them. Especially in tough times.

What to do? Wells Fargo management (and every other employer tasked with getting high levels of performance from its workforce, especially in challenging times) would do well to recognize that expensive parties and junkets aren't the only way to recognize good performance and maintain esprit de corps. (But let's also be careful not to confuse extravagant reward trips with important training and education meetings.)

As I said in a recent column written by Lan Nguyen (Retain Employees Without Extra Costs, November 20, 2008), people are also motivated by participation in activities designed to benefit those who are less fortunate than themselves.

I rather suspect that they could get equivalent (if not greater) motivational impact by inviting those employees who would have attended the Las Vegas celebration to participate in building 20 Habitat for Humanity houses in chosen markets, naming those houses for the very best performers, and giving all participants an extra week of vacation.

Besides that, they would have a PR home run instead of a nightmare.

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Perilous times demand extraordinary leadership.

Are you struggling to manage the fear and uncertainty your employees are experiencing as a result of the current global economic crisis?

Are you being asked to balance cost cutting measures, potential layoffs and other major organizational changes against employee engagement and higher productivity?

Are you stuck in neutral, unsure how to lead in such times?

If so, Bill Catlette and Richard Hadden can help.

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* How to identify and address the "what if's" your workforce is imagining. And how to answer them with truth, integrity, and hope.
* How to pinpoint the new opportunities the current economy has created for your organization.
* Tips for building and maintaining a reputation as an employer of choice - which is critical, even in times of higher unemployment.
* At least six ways to keep people fired up and focused in difficult economic times.
* Strategies and examples from real organizations, and real leaders who are getting it right.

Find out about bringing Bill or Richard to your organization. Contact Geoff Knue at 317-873-0011, or

Richard Hadden and Bill Catlette
Contented Cow Partners, LLC

phone: 904-720-0870
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