Publicly traded companies are skimping on research and development, training and hiring to meet earnings expectations every quarter, said Robert Pozen, a senior lecturer at Harvard Business School.
In a survey by the National Bureau of Economic Research of 401 senior financial executives, 80% said they were willing to forgo spending on research and development to meet their quarterly projections; they also delayed the start of company investments with promising gains in the long term.
The practice isn’t just bad for employees, it’s bad for the companies and the economy as a whole, Pozen said in a blog on Harvard Business Review.
Any manager who shoots the lights out in one year is highly likely to underperform in the next few years. The truly talented manager does better than average on a consistent basis, and builds an impressive record over several years.
(Image via bobpozen.com)
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