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The Grinch Speaks

Yesterday I posted a lead from a reader complaining about a holiday party that Freddie Mac hosted, the objetcion being it was inappropriately splashy (the reader used, and I repeated, the overwrought “decadent”) given that Freddie is losing quite a lot of money these days ($2 billion last quarter, almost certainly the same this quarter, no indication as to when there might be an end of the red ink).

Several readers dumped on me, in particular Tanta at Calculated Risk, for denying employees their fun given that some parties here and there aren’t going to make a dent in $2 billion and counting of losses.

Now upon reflection, I think there were better grounds for having a go at me, namely that I put up the post in haste, doing no more than checking if the source had his Freddie numbers right and providing links for same. I let his over the top indignation stand. He undermined his credibility by being overwrought, and I went along because I knew putting “decadent” in the headline would pull in more traffic.

And I don’t meant this as a jibe at Tanta; other readers echoed her views; she did the heavy lifting by being the most articulate. I have a great deal of respect for her, but to me, this shared response illustrates some deep seated cultural attitudes that I find odd. And by definition, that makes me the odd man out.

First, let me reveal a general prejudice: I think the prevailing form of holiday office party is a lousy idea and ought to be abolished. Now I am certain to get disapproving comments from the 15% of office workers who like them and 100% of the readers who work in the hotel or catering business and depend on them. I will discuss that there are some variants of holiday parties that are quite reasonable, but (at least from what I can tell) they are less common.

The prototypic office holiday party is:

For members of the company only

May or may not involve significant others

Occurs between Thanksgiving and Christmas

Occurs on a weeknight

These are objectionable features. People are pretty much required to show up at these events. At every firm I have worked for, people have regarded going at best with indifference and at worst with distaste. You are expected to act like you are having a good time, but you can’t drink too much or you might do something stupid and/or be hung over the next day. Now for companies with a frat house culture, there’s no problem, but I imagine few people work at places like that

One element that contributes considerably to the collective dread is the timing. A weeknight party is another event on an already overcrowded calendar. Between Thanksgiving and Christmas is a terrible time to have a party. Unless you are in a sleepy business and close your books early in December, most people (professional in particular) are busy on year-end deals, having to go to holiday events hosted by their clients, trying to collect outstanding fees. Even those who are fortunate enough not to have a heavier work load in December are busy on the personal front: holiday gifts, year-end tax planning, more interaction with family members, and for those who have kids, helping them buy presents for friends and going to their school holiday events.

I believe on balance including significant others makes matters worse (at least in the large party format). It puts a spoltight on single people and those getting/recently divorced if they can’t round up some arm candy. Many significant others find these events stressful and not worth the time, particularly if the have careers (the year-end time stress applies to them too).

Generally speaking support staff seem enjoy and appreciate these parities. It is a very good gesture to show that they are part of the team, not second class citizens, and get the same perk as the very top people. I think that’s the only reason to keep them.

Better types of parties:

Parties that include clients and friends of the company. For whatever reason, these events aren’t as claustrophobic and fraught as strictly internal parties. It’s also a nice gesture to throw a party for those who have helped make it a (hopefully) good year as a thank you. Staff also don’t seem to harbor the quiet resentment that lurks beneath the surface in internal parties; they understand that this is work, and because the party isn’t intended to give them a good time, their expectations are lower, and as a result they are often better able to enjoy themselves.

Small workgroup lunches. If you want to thank staff for their effort, do it on company time rather than cutting into employees’ personal time. A lavish lunch does nicely.

January party. Why be so rigid about time? One firm holds a Chinese New Year’s party rather than a holiday party. January is dead and dreary and the employees seem much more in the mood for fun then than in overstressed December.

Now to Freddie. Maybe because I’ve been employed by partnerships (I worked on Wall Street in the stone ages when they used clay tablets and abacuses) and have had primarily private firms as clients, I am used to dealing with people who see identify with corporate expenditures. They have a different attitude toward expenses, which doesn’t necessarily mean they are cheap. But they tend to be more consistent in how they spend when it’s their nickel versus the company nickel. Maybe I have an unrepresentative sample (although mine is pretty large) but I haven’t seen them engage in the behavior I seem among some employees at large companies, who will go to considerable lengths to avail themselves of corporate perks but won’t spend in their personal lives. Put it another way: they tend to be more value oriented in their expenditures. (Note the right cut may not be private versus. public, but small/medium versus large, In private companies, which also tend to be smaller, employees are more cognizant that their actions can affect the health of the business).

So one element of what I found objectionable about the Freddie event was that it was a party for adults and kids at the Ritz. That strike me as bizarre: a costly place better suited for corporate events for a family party?

The second is that I would feel uncomfortable participating in an event like that if my employer were hemorrhaging money. I guess I have a character defect, but I’d be reverse engineering the party’s costs and wondering what percentage of someone’s salary it represented.

Freddie has 5400 employees. If they spend $100 per employee on holiday parties on average, that’s over half a million dollars. That’s the cost of four or maybe five employees for a year, which is about as far out as most public companies seem to focus these days. I’d rather have no party, or a smaller party, and save some jobs.

But of course, a private company would think like that, trying to hit a target cost reduction number, but that concept is a fiction in a public company. They will announce headcount cuts to please the Street. That’s what sells. And the symbolism in public companies is terrible. The big guys almost never take pay cuts, the pain comes out of the rank and file. But still, it feels wrong to me to be holding costly parties when heads are soon to roll, particularly if one turned out to be mine.

Third (and now I will sound like a hopeless Grinch) I object to the seemingly unending escalation of holiday and other consumption in this country (although indications are that ugly financial reality is forcing people to rein things in a bit). I am simply stunned at, for example, how many presents kids get today and how quickly most of them will be forgotten. The statistics keep being manipulated, um, revised, but no matter how you cut it, America has had a close to zero or negative savings rate for some time. The “oh we must have a party” is part of that mentality. Why should we party if there is no profit? Why should we spend to the limit of our means (or beyond) because the malls are full of stuff?

Now I have some experience in living at the edge of my means, and at least in my case, there was more than a bit of retail therapy involved, I was stressed, I was working extremely hard, and buying that gadget/suit/coat/pen/wallet gave me a lift. For maybe the fifteen minutes I spent making up my mind and a day or two afterwards. And having seen this operate on various levels (at least in Manhattan, which I’ll concede is a weird microcosm), you have deferral/reward (“I deserve a present for myself”) and status competitiveness. They are both insidious.

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11 comments

  1. Anonymous

    I find things like a publicly-traded company Goldman Sachs (tkr GS), which has a $19-Billion bonus pool, to be a little more out of line than holiday parties in this case.

    Let’s face it. The BS line about shareholder value really means CEO-bonuses today.

    -A-

  2. Chris

    Yves,
    Amen to that, brother. I’m glad you came back to this topic. Signals are important; this party sends some confused ones.

    Tanta is hopelessly bright. Oftentimes, she writes in a tone that isn’t usually employed in polite society. I was surprised that she wasn’t more courteous on someone else’s blog.

  3. Anonymous

    Thank you for articulating your reasons. They sound spot on to me. I suspect most of us do not choose our workmates as personal friends and the office party is actually a potemkin village that presents a fake image of comraderie. The expenses should show up under the “marketing and propaganda” heading. And it’s soooo unimaginative. How about giving the participants a vote? This is all about corporate mucky mucks needing self-validation via traditional means. And they keep a list of all the good toadies who attend.

  4. Anonymous

    Sadly, in my experience office parties are much more likely to be excruciatingly boring rather than decadent. Maybe I work for the wrong companies.

  5. don

    This may come as a surprise, but a lot of people don’t attend Christmas parties, don’t work for businesses that hold Christmas parties, and don’t live in big cities where large companies that sponsor Christmas office parties more than not likely reside.

    As for me, I don’t recall ever attending an Christmas office party, and a lot of people, likely tens of millions of US citizens, don’t partake in the prevailing consumerism, in part perhaps by necessity, in part by choice. And since I think it safe to say that office Christmas parties reflect said consumerism, could it be that those worked up over whether the posting was fair or not, work out of a set of biases that limit their perspective . . . because their lifestyle doesn’t leave much room for anything else?

    I’m reminded of President Bush’s comment after 9/11 that nothing will ever be the same, so show your patriotism by going shopping. What rang for me at the time was how this reflects the superego injunction to enjoy, the means by which our society enforces discipline and conformity.

    Some refuse to go along, and thus the criticism of the post on Freddie seems to me to be a lot about nothing.

  6. David Siegel

    Sorry to hear about the unhappiness of life in big-money Manhattan. Here in Austin TX, where I work for a public interest outfit, we are marking the holidays by all going out for pizza one afternoon. Should be fun.

  7. Steven

    My take on this is simple – it looked bad. Expense aside, anything else aside, this is a horrible thing for public relations. If NOTHING else can be said of it, it’s simply bad tactics.

    Now it sounds excessive anyway, but all things aside . ..

  8. Tanta

    Yves, you have my permission (that’s a joke, Chris) to be as Grinchy as you like. I have complete respect for a principled position on that overconsumption orgy known as the the holidays. Personally I hate office parties. Always have. So what? I hated the Fourth of July Office Picnic and wouldn’t play on the softball team, either. And nothing’s cheaper than hot dogs and softball at a public park.

    But your original post presented your informant’s view of this, as you noted, and it really seemed to me that what had your informant all bothered was the idea that “the taxpayers” might be involved in this. It struck me that the appropriate comparison wasn’t Goldman, but, say, public schoolteachers (“We pay their salaries and they want a party?”). Surely you’ve encountered the politics of that before?

    This is the part that I think gets rather to the heart of the matter for me: “Generally speaking support staff seem enjoy and appreciate these parities. It is a very good gesture to show that they are part of the team, not second class citizens, and get the same perk as the very top people. I think that’s the only reason to keep them.”

    First of all, the mortgage business (probably unlike Wall Street investment banks) is mostly “support staff.” We’re like Santa; we have a lot of elves. (All those little people handling all those loan files, reconciling all those remittances, running all those reports.) However, I will say I’ve been to a few of these affairs to which the executive class showed up only too clearly and ostentatiously to show “appreciation for the little people.” The “little people” mostly waited, with their usual patience, for these oh so kind execs to scoot out early so everyone could start having fun. One does not prove to the support staff that they are first-class citizens by letting them know that you wouldn’t be doing anything as tacky or time-wasting or expensive as throwing a holiday party if it weren’t for the fact that the support staff goes in for that kind of thing.

    Second, that’s precisely how the original comment struck me: those people at Freddie Mac should be considered “second class citizens” because of the potential taxpayer bailout.

    Third, I’m sure we agree that the support staff, by and large, would rather have a raise and better benefits and the shot at promotion than any number of parties. If we make them choose, that is. I suspect most people would like both. Bread and Roses, if I may date myself a little.

    So of course you’re right: overspending and competitiveness are both insidious.

    I also think that certain kinds of class-bias and moralizing about the servant-class (as in “public servant”) not being put on an austerity budget are also insidious.

    Finally, whether I like it or not, there are people whose current job is waiter at the Ritz-Carlton, or caterer, or lollipop-maker, or shuttle-bus driver from Freddie Mac’s HQ to the Ritz (I’m quite sure they had this party in McLean because, well, they are headquartered in McLean. It’s an expensive place to live, and a lot of their employees commute from cheaper areas.) At least Freddie was spending its money in its local community. I don’t know either how long places like McLean can keep up being a “service economy,” but that’s what they are.

  9. Anonymous

    Random thoughts from someone who makes low wages in a cheap, corporate-controlled industry: newspapers.

    Years ago they used to give a holiday party at the country club, with a big buffet, a couple of free drinks, and even a live country rock band. The retirees were invited too. Everyone would get up and dance, even the elders, and we’d feast, get a little buzzed and have a good time.

    It was all terribly lavish compared to our wages and lifestyles, and before the 1980s were over it was cut down, cut back and eventually cut out, part of a general expense-tightening that just kept getting tighter over the years.

    We did miss it. It was a nice little extravagance that seemed to say, We know you work hard and long for low pay, and we appreciate it.

    That evolved into, You work hard and long for low pay, and you should be glad you even have a job, so shut up.

    That does make a difference.

    P.S. I agree with the guy who says he’s more offended by the astronomical salaries that so many of these people get. I do not believe they are so unique or indispensable that their companies need to pay them that much. (none of them is Alex Rodriguez or Kobe Bryant.) I think it’s just looting the stockholders’ money. If I pay you $1 million, as your boss I ought to make $5 million. So my boss should make $25 million, and his boss…

  10. NC Jim

    Two other (related) approaches to holiday office functions that I have seen work are:

    1) A manager opens his/her home to direct reports (or maybe two levels depending on numbers) and their SO’s for an evening social. There is something personal and intimate about being invited to someones home who has taken the time/effort/expense to decorate and prepare food.

    2) A manager takes his reports out to lunch on a Friday from ,say, 1:00 to 3:00 and picks up the tab. The understanding is that employees are not expected to return to work afterwards. These events always allowed peers to share in the holiday spirit and the boss to show appreciation by paying out of his own pocket – these lunches were not company sponsored in my experience.

    In other words keep it simple and personal.

  11. Anonymous

    Office parties in Ireland are a different thing altogether it seems. I used to work for a very straight laced Japanese owned IT company and our x-mas parties were mad. The company put everyone up in a posh hotel out of town, served up a nice meal, and kept the booze flowing all night. Sobriety was nowhere to be found, and all misconduct forgiven once back to work. This is not unusual in Ireland, in fact it’s the norm.

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