The ‘old world’ of pay and benefits systems has led us to a place that does not seem very comfortable. There is still consistent underpayment of women.
Massive equal pay claims are expected to imperil sections of the public sector and lead to cuts in services. Bonus schemes have rewarded individuals who bankrupted their company (and, in some cases, the country). An industry of job evaluation has been established as a defensive necessity for employers, but many employees still feel a burning sense of unfairness about their pay.
What are we trying to achieve? The legal context is perilously limited as a starting place, as it is simply concerned with eliminating oppressively small wages (with National Minimum Wage), and manifest discrimination on the ‘equality’ grounds. But there is little legal imperative to “fair” pay, once the hurdle of unlawfully discriminatory differentials is overcome.
It may be lawful to single out workers who do not have the benefit of specific legal protections, but it will tend to undermine feelings of fairness. For example, those who never take ‘sickies’ are functionally working harder than those who do. They may argue they are being ‘discriminated against’ if they are salaried, since they work more hours for the same pay.
They may have no legal redress, but is your organisation paying the price some other way? Workers can use subterfuge to restore a sense of ‘equity’ if they feel they are being unfairly treated, but this is never to the employer’s benefit. Minimum and hourly wage structures tend to reward work by the hour, but perhaps the reality of the new world of work is to be found in piecework rates. This may be a useful approach for some jobs, but for many it is not easy to measure the “piece”.
You could argue that if I am twice as productive, I should I get twice the hourly rate. But if the organisation has not established a clear expression of “value” in the jobs, and a way of measuring outputs, then what constitutes ‘productive’ will not be clear and reward structures will be adrift. Bonus schemes come in a wonderful variety of shapes and sizes, but what is a bit startling is the number that seem to reward undesirable behaviour or outcomes.
Some schemes focus on individual achievement, and although some competition between members of a workgroup can help to get everyone to up their game, sometimes the outcome is corrosive not productive. And so many bonus schemes appear to result in women being paid substantially less. There is no reason why we should not arrive at individual bonus schemes that are gender neutral and encourage the type of performance the business needs, but many fail to do that. Structuring short term and long term reward systems is becoming trickier.
Pension funding is becoming ever more difficult, so are employees going to need two jobs to earn enough to fund daily life and save for a pension? Existing working time maxima apply on a ‘per job’ basis (except for the under 18s), so two jobs may be a way for some workers to earn enough. But this raises questions about the long term health implications for the workers, and quality implications for the organisation’s customers. The European law-making process seems determined to regulate and control and reduce variation, in the interests of protecting workers from exploitation. At what point, though, is a worker being protected not from exploitation, but from work itself?
It is hard work building an employer brand. Like any reputation it takes years to build and moments to damage.
Talking to individuals who are being made redundant by some well known organisations it is staggering to see how they are being treated in personal terms. Whilst it is never nice to be dismissed, or to be told you are not wanted anymore, some of the thoughtless cruelties, lack of information or clarity begin to beggar belief.These individuals – often highly successful – remember the treatment they have been subject to and years later will be talking about it.
‘Good’ redundancy exercises don’t cost any more to implement than poor ones. They don’t take any longer (though sometimes the thinking time is longer). They are characterised by clear communication, clear processes, and consideration for individuals affected (whether going or staying).
If you are restructuring to survive this recession and grow; consider how your methods will affect your ability to grow when you get to that point. If your workforce don’t trust you and don’t believe what you say they will leave as soon as a better opportunity presents itself. The real problem is not that HR or even senior managers don’t know this, but when we are in an ‘emergency’ a lot of this gets left to one side. The real winners are organisations who know what is important and what is urgent and plan to incorporate both. That means not only looking at what you do (and how much it costs) but at how you do it, how you communicate it and the messages this gives. This is not about legal compliance, or compromise agreements or headcounts, budgets and ratios, it is about letting your entire workforce know what your people values really are.
“What you do speaks so loudly, I can’t hear what you say”……………
The minimum wage is due to increase by £0.07 to £5.80 from 1st October. But more importantly for some businesses in the service industry is the plan to omit “that is not paid through the payroll” from the legislation.
For businesses in the service industry, this small edit to the law will have a more significant impact in two months time than the 7 pence increase, as the National Minimum Wage Regulations will have these words deleted, making it illegal to use tips to make-up the minimum wage.
While due to come into force on 1st October, the information is in no way easy to find. It is available on the Dept for Business, Innovation & Skills’ website, but tucked away in consultations – Government’s decisions on the treatment of tips & gratuities for the minimum wage, although it doesn’t get a mention on the Pay & NMW page, and the associated Business Link’s page only refers to current law, with no reference to these changes.
Small businesses that currently make use of tips to supplement the wages paid to staff need to ensure they’re ready for these changes, and with it being only two months, planning budgets should be well under way now.
The actual line of legislation that will come into force on 1st October, a draft of which is available from the Office of Public Sector Information simply states: ‘In regulation 31(1)(e) of the Principal Regulations (reductions from payments to be taken into account) omit “that is not paid through the payroll”.’ Simple, but very significant for a lot of businesses.
Businesses have until 30 September to respond to a government consultation seeking their views on proposed laws to stop age discrimination in the provision of services, such as group holidays and special deals for particular age groups. The proposal is that providers of goods, services and facilities in both the private and public sectors should not be allowed to discriminate against adults aged 18 and over unless it can be objectively justified – that is it can be justified because it is a proportionate means of achieving a legitimate business aim. The main areas to be covered are:
The consultation closes on 30 September 2009. Download the consultation document on the Equalities Office website.
Ask an underperforming employee and many will say, setting targets, giving me warnings is bullying me. Ask their manager and they will say they are frustrated by the lack of performance .
They will tell you an employment law requirement such as warnings make their life difficult and impose unnecessary procedural burdens. Ask a high performing employee and they will say the setting of targets and giving of feedback is welcome and helps them improve their performance.
Employers have often failed to confront performance problems, or ‘square pegs in round holes’ and used transfers and ‘promotions’ to move employees out of critical performance areas. Until quite recently it was common to hear “he’s been here twenty years and he’s never been any good” as a long saga of under-performance and under management unfolded. Now underperforming staff are more likely to be ‘performance managed’ out of the business.
The practise of setting objectives, then warnings, then dismissal (if objectives are not met), can look like a fair and objective process. But, poor practise and a few rogue players are giving performance management a bad name, that in some organisations announcing that an individual needs to go on a performance improvement programme is tantamount to handing them their notice!
The setting of impossible goals (by over stating the goals or under resourcing what is needed to achieve it) is one of the behaviours identified as bullying. Not only will unrealistic goals undermine the fairness of any dismissal but they may also trigger claims of bullying. If these claims are linked to any issue of discrimination this can turn into a very expensive 'efficiency exercise'. Managers need to take care that their performance management and supervision is based on what can be achieved and offers adequate training, resourcing and support.
The HSE has warned businesses to be on their guard against buying unnecessary and over-expensive new health and safety posters following recent changes in health and safety law requirements. The HSE has issued new versions of the health and safety law poster and pocket card that must be displayed in workplaces or given to workers. Businesses have until 5 April 2014 to replace existing poster and cards. It is asking businesses to tell the HSE if they are approached by unscrupulous commercial suppliers of posters and cards, who tell them that their posters/cards must be replaced now and/or offering overpriced copies.