The peanut butter approach is when a company applies the same tactics to all aspects of the business, such as evenly cutting 10% of the workforce across all departments. This approach can have drawbacks and may not be suitable for all departments or aspects of a company. Business experts suggest assessing each department’s individual needs instead. The same approach is also applied to government programs, such as tax breaks, which some argue should focus more on businesses operating under challenging circumstances or benefiting citizens.
The term peanut butter approach reflects the idea that a company will apply the same tactics to all aspects of a business. For example, a company may need to cut 10% of its workforce. Under this concept, the workforce would be reduced evenly across different departments. Managers would be just as likely to be fired as regular employees, and any department, productive or not, would lose 10% of its employees.
If a person makes a peanut butter sandwich, they can be meticulous about ensuring that the bread is evenly distributed with the peanut butter. After all, it’s more fun to eat the sandwich if there’s peanut butter in every bite. This idea has been applied to businesses and the idea of spreading something uniform in all areas has come to be known as the “peanut butter approach”.
There are some inherent problems with approaching peanut butter when the same tactics are applied to all parts of a business. The company that simply cuts its workforce by 10% without considering that some departments may need more workers due to increased productivity may be making a mistake. Instead of spreading layoffs evenly across a company, business experts often advocate assessing each department’s individual needs. This would be the opposite of the peanut butter approach.
Another way the peanut butter approach is mentioned in business is when companies scale up. Instead of determining raises on a merit-based system, some companies give the same percentage raise to all employees. This can have unfavorable consequences because it can reward employees who may not deserve raises and at the same time it may not encourage employees who have worked very hard to stay with a company. Some business experts suggest that at least a portion of raises should be directed to deserving employees, and that spreading raises evenly can be detrimental to a company.
Of course, this approach isn’t always bad. Sometimes a company applies it because it makes sense and is right to do so. It can be a mistake especially in large companies, however, to think that the same approach will always work for all departments and aspects of a company. Instead of this approach, really understanding the needs, productivity and capabilities of each department is perhaps more beneficial.
Similarly, people may discuss this approach when discussing government programs, especially those that offer tax breaks. Some argue that people and businesses are not served when taxation remains the same for everyone, as a flat tax would be. Especially when it comes to tax breaks for businesses, some feel that government tax breaks need to focus more on businesses that are operating under challenging circumstances or those that are accomplishing something that will benefit citizens.
Protect your devices with Threat Protection by NordVPN
