Show me your money? I’d prefer decent management

I watched a documentary last night about a London plumbing firm trying to sort out its range of salaries. (Show Me Your Money, available on 4oD until early August.)

In the programme, the Managing Director encourages all staff to reveal their salaries and then negotiate amongst themselves to arrive at a more equitable distribution.

I am a huge fan of transparent pay policies and think they should be widely adopted. If you can’t justify your salary to your colleagues, and can’t live with the knowledge of what your colleagues are being paid in relation to you, there’s something wrong with the pay distribution. We don’t do it at JKP, but I’m not the boss.

However, there were some things in the programme last night that made me think this particular example is problematic.

  1. The pay discrepancies in place were, in some cases, shocking, and to me showed an incredible failure of management to allow them to come about. This wasn’t addressed. If your salaries are secret, it’s the responsibility of the company to ensure they are equitable, and the MD had completely failed in this duty.
  2. There was a case of a new starter in the call centre on £3k more than his colleagues who had been there longer. All but one of his  colleagues were women. Coincidence? It didn’t look like one.
  3. The fact that the most lowly-paid person in the company was a woman working in the canteen came as no surprise. It did surprise me, though, that she was being paid less than the recommended London Living Wage. Again, a total failure of management. Even after the pay increment at the end of the process, I believe this woman was still earning less than the London Living Wage.
  4. There was no pay review process in place. Pay rises came about as a result of going to the MD, talking about your kids needing something, and the MD giving you a rise. This is not a policy, this is a free-for-all. And, what’s more, it wasn’t even a publicised free-for-all. A portion of the workforce had no idea this happened, so stayed on the same salary for years.

In short, this is no way to run a business and it’s a mistake to use them as an example of innovative business practice.

2 Replies to “Show me your money? I’d prefer decent management”

  1. Pay increases are undoubtedly a tricky thing to justify in the current climate and this novel approach sought to show that the company could be ‘fair’ in the way it distributes its’ salaries. What it failed to offer was any sort of incentive for lower paid staff to remain at the company in the long term. With a base salary for call centre workers and mechanics how can Pimlico Plumbers expect to maintain employee engagement in the future? Where’s the incentive for these staff members to strive to out perform their colleagues? Why should they put in 100% if they feel the person sat next to them coasts along from day to day… after all, they get paid the same anyway.

    http://staffmotivationmatters.co.uk/show-money-a-sure-fire-way-reduce-employee-engagement-organisation/

  2. I think this is where pay reviews come into play and, to take the concept further, the idea of 360 degree appraisals to feed into pay reviews. If I work harder than my colleague, and that’s acknowledged by management and my other colleagues, I should get more money at a pay review than my take-it-easy colleague. I add more value and this should be reflected in my pay. This pay differential can be made public. I didn’t get the impression Pimlico Plumbers had any intention of doing such a thing, though.

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