It's short-sighted because employees are humans, which perform much better when healthy and excited to work. Stingy/hostile employers have high turnover and employees who treat work as a zero or negative sum game.

A good example of this is the This American Life story on NUMMI: https://www.thisamericanlife.org/561/nummi-2015

Toyota took one of GM's worst plants and turned it into one of its best by treating workers with respect. Hearing the workers talk about the transformation stunned me.

Employers are also human, and prone to the fallible traps of responsibility that befall many people managers and executives, including but not limited too:

* not trusting your team to do their work and by extension questioning whether they are working "hard enough" (or dreaming of ways to extract more blood from stones)

* some flavor of impostor syndrome, needing to prove your value by making sweeping changes to the team process even if inheriting a successful team

* not having either the back bone or clout to question status quo, including demoralizing cultural habits such as stack ranking

There is a reason the majority of employers (including managers) are generally bad and the good ones are few and far between - it's human nature.

I'm reminded of Microsoft Japan piloting a 4 day work week and announcing in 2019 that the trial ended up increasing productivity by 40%. They ended up not making the change permanent. One small company in New Zealand - Perpetual Guardian - did the same trial in 2018 and saw the same effect, they made it permanent.

Most companies operate like Microsoft.

Are you suggesting basically every retail chain in America is using a fundamentally broken compensation system?

Yes, because basically every retail chain a) can dump a lot of externalities on society at large, b) is or wants to be publicly traded and evaluated on very short-term metrics, and c) is run by believers in the managerialist ideology that dominates American business culture.

Broken systems product broken systems.