Herman Miller: a Role Model Disappoints

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Herman Miller is an office-furniture maker in Michigan and has long been celebrated as a model of superb employee relations and it stood at the forefront with modern environmentally friendly policies such as: The company organised “silver parachutes” for employees who lost their jobs in an economic downturn so that they received big cheques Herman Miller limited top execs salaries to 20 times that of the line worker (it was not uncommon to find top execs earning 100 times that of a line worker) Employees were organised into work teams and every six months both workers and employees would evaluate each other They ensured career development prospects for employees by scrapping nepotism in the company – the owner’s family was not even allowed to work in the company in any capacity. Management kept a paternalistic relationship with employees – they practiced a participative management style by involving them in management processes. The advantages of a participative management structure are: People tend to be more cooperative and enthusiastic when they have some involvement in the planning Better decisions are usually more common when different experiences and points of view are raised Employee development is maximised The disadvantages are: Consultation takes time and many decisions are too minor to warrant that sort of time commitment or a decision has to be made quickly and there is no time for commitment No benefit is likely for new or untrained employees The best managers use participative techniques whenever they can, especially when the decision affects the employees – but they choose their opportunities carefully In 1995 Herman Miller was a $1billion company, but sale were only $800million in 1989 so the growth was very slow – profits slid from $40m in the 80s to $4.5m in 1995. In 1992 it recorded a net loss of $3.5m – its first loss

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