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I cannot believe that a businessman would make such a bad move for his company. How could he know know the consequences that rewarding mediocrity like this would have to his operation?

Imagine you are an exempt (salaried) employee working for this company (or any medium sized company). You are a conscientious and competent employee who never bangs in sick. You show up every day and bust your hump, working extra hours and weekends when you feel you need to. (Remember that an "exempt" employee does not qualify for overtime.)

Your efforts help the company to be successful and you are rewarded for your efforts by increased salary and promotions. After a few years, you are earning $70,000, more than 90% of the other employees in the company. But you deserve it because you earned it.

Meanwhile, your success is envied by some of your less than stellar co-workers. These workers like to gripe and complain and have a "not my job" mentality. They only turn in the minimum performance necessary and never volunteer to go the extra mile. You will not see them in the office on weekends or after 5. Some of these employees actually resent you because you make them look bad by comparison. They call you a "brown noser" and other names behind your back. But you are okay with this because you are making $70K and these chumps are always going to be stuck in the $35-40K range.

But one morning you come to work and get the memo that your CEO has decided to raise everybody's salary to $70,000. The same salary you worked so hard to attain. Is the boss raising your salary to $105,000 to compensate? No. Maybe he threw you a 10% raise to take some of the sting out of it. If you are lucky.

So now you have to deal with your co-workers, who you have picked up the slack for all these years, walking by your cubicle with knowing smirks on their faces. They are now making pretty much the same money as you and they never had to work for it.

Does that make you feel like a sucker? Does that make you feel like going home at 5:00 on the button and not giving the company anything extra from that point on? Or more likely, it will cause you to update your resume and find employment with a company that truly values your exceptional skillset. Let your current boss deal with the mediocrity that remains behind.

This CEO is a real bonehead.

I work for a major university where I was in charge of a pretty large department. After a reorganization where they thought anyone could manage large departments I was put in charge of a smaller department that I could run blindfolded. I was told that I wasn't demoted, rather they "raised up all of the other managers to my level." Seeing that working hard, doing extra work, volunteering for task forces, etc., was getting me nowhere, I did the bare minimum work required for well over a year. Slowly, but surely problems began to emerge, things fell through the cracks, there was no follow up, and so on. Now two years later I'm back in the same position I had as it dawned on them that someone needs to manage things effectively!