Recent ‘controversial’ public discussion regarding the ‘pay package’ reportedly under consideration for the apparently impending new Executive Chairman of GuySuCo brings into focus the customary and I daresay widely established principle and practice of performance-related compensation. Given the nodal and critical role of GuySuCo in the local context, I wish to add my little experience and professional insight to the discussion.
One cannot deny the need and wisdom for pay to at least keep pace with contextual changes in the market, and movements in inflation, cost-of-living, productivity and profitability. While ability-to-pay is obviously a sine qua non, it is conceivable that a company might consciously decide to ‘temporarily’ pay key executives above its means in order to attract the ‘better-of-the-best’ with a view to providing the quick and effective injection the lagging company might need to save it from drowning and, more importantly, turn around its fortunes. In this context any such ‘exceptional’ executive(s) must stand out and be publicly acknowledged as being head and shoulders above those not given preferred treatment.
Furthermore, pay architecture (providing for motivation and relativities, increases, decreases or status quo, etc) can reflect much about an organisation’s policies and approaches towards its human resources, and therefore be instrumental in attracting, retaining, motivating and developing employees with the sought-after competencies and attitudes while discouraging the unwanted.
Therefore attention must also be given to the complementary need for differentiated and performance-related pay increases (PRP) for the rank and file. It has been the norm in expanding, thriving organizations and companies overseas and at least one case with which I am familiar locally. Incentivizing higher levels of performance and productivity has become crucial in our competitive world.
Trade unions typically baulk at differentiated and performance-related pay increases (PRP) for reasons obviously best known to themselves, but which I believe is largely based on their underlying, historical ‘socialist’ origins favouring egalitarian approaches and equality of membership. Also, I think most of us are more at ease with the ‘charade’ of ‘treating everyone alike’ than making waves with pay being reflective of individual performance, although we recognize that some employees merely ‘come to work’ while others actually work, some harder, more effectively and productively than others. The escalating pace of globalization demands that we do not overlook shifting trends in human resource management.