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What Is a Peanut Butter Approach?

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  • Written By: Tricia Ellis-Christensen
  • Edited By: O. Wallace
  • Last Modified Date: 23 September 2016
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The term peanut butter approach reflects the idea that a company will apply the same tactics to all aspects of a business. For instance, a business might need to cut 10% of its workforce. Under this concept, the workforce would be reduced evenly among different departments. Managers would be just as likely to be laid off as regular employees, and any department, productive or not, would lose 10% of its workers.

If a person makes a peanut butter sandwich, he or she may be meticulous about making sure the bread is spread evenly with peanut butter. After all, it's more enjoyable to eat the sandwich if there is peanut butter in each bite. This idea has been applied to business, and the idea of spreading something evenly across all areas has taken on the name the "peanut butter approach."

There are some inherent problems in the peanut butter approach when the same tactics are applied to all parts of a business. The company that simply reduces 10% of its workforce without considering that certain departments may need more workers because of greater productivity may be making a mistake. Instead of spreading layoffs evenly through a company, business experts often advocate evaluating individual needs of each department. This would be the opposite of the peanut butter approach.

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Another way that the peanut butter approach is mentioned in business is when companies give raises. Instead of determining raises on a merit-based system, some companies give the same raise percentage to all employees. This can have unfortunate consequences because it may reward employees who may not merit raises and at the same time 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 toward employees who merit them, and that spreading raises evenly can be detrimental to a company.

Of course, this approach isn't always a negative thing. Sometimes a business applies it because it just makes sense and is fair to do so. It can be a mistake in especially large businesses, however, to think that the same approach will always work for all departments and aspects of a business. Instead of this approach, really understanding the needs, productivity, and capacities of each department is perhaps more beneficial.

Similarly, people may discuss this approach when talking about governmental programs, particularly those offering tax breaks. Some argue that people and businesses aren't served when taxation remains the same for all, such as a flat tax would be. Particularly when it comes to things like tax breaks for businesses, some believe that government tax breaks ought to have a more specific focus on businesses operating in difficult circumstances or those businesses that are accomplishing something that will benefit citizens.

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anon226881
Post 4

Interesting article. Thanks!

TheGraham
Post 3

I wonder if it's better to do a peanut butter approach in banking like savings accounts, or not? Depositing the same amount in savings as you do into checking means you save half of your paycheck...of course, you also have half the amount of money to work with in the meantime.

aishia
Post 2

I've never heard of the peanut butter approach before. Sounds like something that's good for things in which equality is important, like voting campaigns. Things that are competitive, like workplaces that encourage good work to get promoted and fire you if you slack, are an unfair place to do peanut butter type tactics.

Hawthorne
Post 1

There's also such thing as a one-sided peanut butter approach, and that's when you apply it to tips given to workers in restaurants. I know of a place that requires tips be added to one pool that is evenly divided among workers at the end of the work day -- peanut butter approach, right? On that side. If a worker doesn't get a tip at all, or gets one smaller than the restaurant considers the standard, this is subtracted from their paycheck rather than the tip pool! I think that not letting the individuals keep the tips they earned with their exceptional service defeats the entire purpose of tips, and that this is one setting where the peanut butter approach isn't appropriate.

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