A key theme that emerging for many reward managers if that of fairness. After years of large City bonuses, eye popping executive pay and an ever-widening gap between the earning power of footballers, fund managers and top TV stars versus the ordinary person in the street, we are now seeing a backlash. Witness the outrage when Goldman Sachs reported it was on track to earn large profits which could lead to boom-time level bonuses for many staff. What was accepted with a bit of eye rolling a few years ago, is now scorned with the organisation having to ward of the bad publicity.
So quite a few employers are making a point of being seen to be fair in their pay policies ®– with many high profile names announcing just how much pay their top execs are giving up in the recession. The aim is not just to appease shareholders (although this is pretty key given the number of ‘red top’ warnings the likes of the ABI have issued to shareholders in recent months when executive pay schemes are felt to be inappropriately greedy), it is also to show internally that it is not only ordinary staff lower who are feeling the pain in their pay packet, the top bosses are bleeding too.
Perhaps the biggest area of benefits unfairness that is creeping steadily up the agenda of public awareness is that of the vast different in pension promises for public sector staff versus those who work in the private sector.
Once the average tax payer begins to grasp just how much public sector pensions will cost each of one of us, compared to just how little so many private sector employees will have in their pension pot in retirement, things will really kick off. Some predicted that this summer would be one of riots over pay and pensions. I think it will take a little longer than that; there is anger out there but it is being dampened by fear of redundancies.
The disquiet doesn’t just stop there. The equal pay issue reared its head again in June with the publication of the Equality Bill. One of its most eye catching measures to tackle gender pay discrimination was the requirement for large employers to report their gender pay gap by 2013. With so many benefits pegged to salary levels, it is not just cash pay that where men tend to win out, they also tend to win on the benefits front.