Fancy working for less pay? No. Fancy not working at all? Suddenly the pay-cut option seems relatively attractive. It is the choice employers are increasingly asking their staff to make, but is it fair to ask the victims to decide their own fate?
British Airways (BA) has an even more brutal option. It has asked its employees if they fancy working for nothing at all. And in case that decision is too easy the airline has offered the twist of a choice of doing unpaid work or taking unpaid leave. Which hurts the ego most?
At the Axa healthcare company the choice is between job cuts or cuts in rewards such as free fruit and switching off the air-conditioning.
Such decisions require a degree a gamesmanship by staff: do the insecure vote for a collective cut in pay or perks to retain their own job while those who feel their positions are safe reject the cuts in conditions and wave goodbye to their colleagues?
Either way it delegates decision-taking to a level of staff not used to making such serious choices.
Workers can accept being told they will suffer but it is surely unfair to ask them to choose to accept pain. Are not managers paid to make such management decisions?
At least BA chief executive Willie Walsh is leading by example, working July for free. But as his minions point out, the £61,000 he is forfeiting far exceeds their annual pay. However, giving staff the stark choice of job cuts or pay cuts is a shock tactic that brings home the severity of the company’s problems.
And at loss-making BA it seems to be working: ground staff have agreed new working practices and pilots have accepted lower pay and longer hours in return for an equity stake in their company. Giving them £13m of shares in exchange for an annual £26m saving on pay looks like a bargain for the employer.
In a free market, pay would fall when the pool of available labour rises; but while we expect rates to rise when unemployment is low, we have difficulty accepting the formula works in the other direction.
At best companies might recruit new staff at lower wages -– often in a far away country -– but existing employees’ remuneration does not fall. However, with negative price inflation and rising redundancies, downwardly mobile pay is now on the agenda.
But the dilemma remains: should we ask workers to vote for their own pay cut or should we act like managers and impose it on them?
For those companies that are poor at workforce democracy and staff involvement in key decisions, their employees’ own suffering is an odd place to start empowering them.
(Pic: Kevin Hutchinson cc2.0)
