Posted by Justine Woolf on 20 January 2015
Who’s holding the organisational moral compass?
Corporate Governance | HR Reward | Reward Consultancy | Business Ethics | HR Ethics
In an age where many of the tech companies in Silicon Valley espouse their great benefits such as 'bring your pet to work' or skateboard parks and, recently, the episode with egg freezing, whose responsibility is it to ensure that there is a moral compass guiding benefit packages or incentives offered to staff?
Whilst companies like Netflix have offered unlimited annual leave for a while, the recent Virgin announcement that staff have the opportunity to take unlimited annual leave has raised some eyebrows in certain circles. Although many of us will cynically put this down to yet another of Sir Richard’s undisputedly successful PR stunts, some people are concerned that it’s stunt that will come back to haunt Virgin with people abusing the offer.
In reality, however, it’s more likely that, in trusted organisations, conscientious employees would actually continue to not even take what they would normally be entitled to never mind abuse the system through taking excess leave.
In my view the real concern should be who is responsible for ensuring they actually take enough time off to recharge? Is it up to the employer to provide guidance or a minimum number of days to be taken? Of course, that partly goes against the idea of the implied trust that goes with a policy of this type. Should HR still monitor things to see who takes what in terms of number of days? I think that in this case, yes actually.
Although not the moral police, it is the responsibility of HR and line management to ensure the welfare of their staff. Whilst no limit suggests there is no maximum, the reality is that most employee struggle to take their statutory allowance of leave as it is.
Company values
My experience working in and with many organisations is that the company values usually act as that moral compass for the type of benefits or incentives that they offer. So, for example, in a public sector organisation that was government subsidised, it was seen as appropriate to incentivise sales with a cash prize not unlike sales roles in many other organisations, but it would never have been for a significant amount of money.
That was partly, of course, because they couldn't fund it but there was also an implied duty of care in terms of wanting to incentivise without creating jealousy or calls of unfairness from other parts of the business and partly because it was not appropriate given their ownership status. The newspaper headlines would have certainly made interesting reading!
Should organisations like those in financial services who offer significant bonus payouts be responsible for the fact they give such large payments? Well yes, they ultimately decide on what is an appropriate amount to spend based on market forces, performance, ability to fund, messages they want to send to their staff and so on. Should the same organisation have a moral duty to ensure the money is spent wisely? In my opinion, no.
Who decides what wise spending is? Would you like to be told how to spend your lottery winnings? Is it up to Camelot to give you guidance? Well yes, there is a moral duty to ensure people are informed and make the best decisions according to their circumstances but, ultimately, it's the individual's responsibility to manage their money. The same issue came up recently with the Government announcement on pensions and the fact you could blow the whole lot on holidays if you so choose or, according to the pensions minister, a Lamborghini! When does a moral code go from adult to child conversation to an adult to adult one?
Trust
Talking of fast Italian cars, one company we worked with offers the opportunity to have a Lamborghini for a day as a prize for meeting sales targets. But, is that a dangerous option and should it be encouraged? It could well be perceived as an inherently risky benefit for an employer to offer - what if the employee had an accident?
Well yes, in some respects offering the opportunity to drive a very fast car does have its risks but this is also where that trust word comes back into play. In some ‘relevant’ organisations and, as part of a global sales incentive programme, it is regarded as a very strong motivator that also dovetails with the organisation’s brand values concerned with ‘going for it’ and pushing hard to succeed.
Ultimately the benefits, pay or bonuses offered are organisation-specific decisions made on the basis of judgement on risk appetite, leadership views, levels of employee trust, alignment to core values, perception of staff and stakeholders and, of course, ability to fund. My experience is that there is generally an inherent moral code about what an employer would or would not offer its staff. It just looks different depending on the type of organisation they are and the level of conversations they have.
