Sunday, 6 November 2011

Executive Pay: The Subject Which Must Not Be Named

It’s the week of the annual CIPD conference, where the great and the good of the HR world get together to “learn from best practice examples from leading organisations ... pick up practical tools that you can implement right away in your organisation... and hear the most current thinking from high quality speakers who have been there before.”

And with split second timing, one of the most high profile members of the profession makes a public attack on the excesses of executive pay, saying that “top pay has been found to bear little or no relation to company performance”

He goes on to say that, “Perhaps it would help to make directors and CEOs more accountable to their employees. Perhaps there should be employee representatives on company boards.”

Great to hear a prominent member of the HR profession to be making a public statement on such issues, isn’t it?

The only problem is, that this comment doesn’t come from any member of the HR profession. It comes from John Sentamu, the Archbishop of York.

Let’s look at what the Archbishop says in a bit more detail:

The news that Chief Executives (CEOs) of the FTSE 100 companies last year received average pay increases of almost 50 percent adds urgency to our cause. Typically these CEOs receive 300 times as much as the least well paid British employees in their companies. If they have a responsibility to their staff, it is hard to imagine a more powerful way of telling some people that they are of little value than to pay them one-third of one percent of your own salary. Top pay has been found to bear little or no relation to company performance, but even if it did, isn’t the performance of a company dependent on the work and wellbeing of all its staff?

Do you have to be a senior cleric in the Church of England to realise that paying some employees one-third of one percent of the salary of the CEO of an organisation is blatantly unfair and unjust? I think not.

But is this an issue that the HR profession seems to be happy to tackle?

Judging from the timetable for this year’s CIPD Conference it would appear that the subject of executive remuneration is the HR equivalent of Lord Voldemort: The Subject Which Must Not Be Named.

If you’re interested in Talent Management, Delivering Organisational Effectiveness or Building a Culture of Engagement and Leadership, the conference will have you feeling like a kid in a sweet shop. But if you’re looking for some open and frank discussion about the issue that has got the rest of the population gossiping, you are searching in vain.

OK, as an HR professional with a degree in Theology, I’ve probably got more in common with what Archbishop Sentamu is saying than many of my colleagues. But the question I’d like to ask is this:

If as HR professionals we’re not addressing this issue, who else is?

Come on, HR people! How about responding to this challenge of the Archbishop of York:

Our society will work best when we recognise that as human beings we are all, fundamentally of equal worth and members of one society.

Let us do it. Let us do it now.

Your comments are, as ever, most welcome

1 comment:

  1. So this is where my personal moral compass and my role description could potentially meet in a perpetual Mexican stand off.

    Whilst my job evaluation training makes me see the world in hay points (and we all know what points mean……..), the moral me knows that whoever you are, wherever you come from, no-one is better than anyone else.

    But then, those two standpoints aren’t mutually exclusive are they? Not everyone has the same knowledge, skills and experience, not everyone has the same desires for life. Yes we’re all flesh and blood but some of us are Gryffindor, some of us will always be Slytherin.

    Of course everyone should have access to the same opportunities to grow and develop. And of course we know they don’t. But it’s hardly fair to lie that at the door of HR. When, in truth, the HR profession spend much of their time trying to ensure, from recruitment through to leaving an organisation, that everyone is treated fairly, viewed as equal. We have such things as diversity managers for goodness sake!

    But, and here’s the down side of wearing many hats - it’s typically the HR professional that has a role to play in devising remuneration packages that allow an organisation to attract and retain the right people, to ensure the profitability and growth of their employer and that includes the packages for those at the top. So it’s hardly surprising then that they don’t spend their annual family party having sessions entitled ‘One organisation, one pay band’ or ‘I know you pay my wages but I think you get paid too much.’

    So, with my remuneration hat on I say hurray to know how points and salary surveys. But switching hats I say strip me naked and I’m the same as you (well almost)!