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People Matter June 2015

Understanding auto-enrolment

Auto-enrolment is one of the biggest issues facing SME employers today. Although founded with noble intentions, the scheme will give employers headaches. But reaching for the pills won’t help. You need information to help decide whether to tackle auto-enrolment yourself or make the problem go away through outsourcing.

Auto-enrolment is a compulsory workplace pension. It’s the employer’s responsibility to implement it. You have a looming deadline – known as a Staging Date – by which you must have the scheme set up. Most employees not paying into a pension must be enrolled, and others given the option to enroll. There are significant penalties for failure to comply, with further stages and deadlines to come. Fear not, though! You can outsource the administration, which can reduce the risk to you and save on internal resources. For more information speak to the HR Dept urgently.

Beating Bonus Bingo

For years it’s been bankers’ bonuses that have caused controversy: for their sheer size, as well as being awarded during times of poor performance. Such has been the concern that they have even been targeted by specific taxes. A survey carried out earlier this year reveals the scale of the issue in other sectors of the economy. It seems fair to say it is pervasive in UK PLC.

The survey (conducted by the Chartered Management Institute) found that one third of all under-performing managers were awarded a bonus. And not small ones either! The average bonus for an under-performing director was £45,000, whilst for senior managers who were not cutting the mustard it was nearly £9,000. When bonuses become divorced from performance, they become little more than lottery wins: Bonus Bingo.

Aside from the immediate financial cost of the bonus, this can be irreparably damaging to a business. A culture of laziness, expectation, and lack of courage can set in which could drag even the bright stars down to the lowest common denominator and stifle innovation.

It is speculated that reasons for the phenomenon could include: It being easier to hand someone money than face an awkward conversation with them. Managers being rewarded for past glories. And inadequate levels of basic pay which are expected to be topped up with sizeable bonuses. Does any of this sound familiar in your organisation? Or do you recognise any warning signs?

What are possible countermeasures to Bonus Bingo? Many of these factors are born out of underlying system failure, rather than last-minute shortcomings in a bonus appraisal meeting. Have a clear reward system in place. Agree SMART (Specific, Measurable, Attainable, Relevant, and Time-based) objectives with managers, which are clearly linked to rewards. And regularly review basic salary to ensure that it’s at a market rate, reducing any feeling that it should be topped up through bonuses.

If you need help putting proper bonus and reward systems in place call your local HR Dept. They can help you identify the problems and put them right.

Mobile phones: How clear is your policy wording?

Using a mobile behind the wheel can land you in trouble with the police. The practice is now often prohibited in company HR policies too. Two recent cases at the employment tribunal highlighted the importance of ensuring your policies are clearly worded. The first involved a bus driver who had only used his phone to set an alarm while stationary, before driving off as he put the phone away. His employer’s policy explicitly forbade the presence of mobile phones in the cabin and the tribunal found his dismissal fair. But in the second case, an accountant was dismissed for driving into the company car park whilst on his phone. However the tribunal found this company’s policy wording unclear, and after criticizing the company for ignoring mitigating circumstances, ruled the dismissal unfair. A strong incentive then for having clearly and precisely worded HR policies. For help, call the HR Dept today.

College strikes victory in the courts

News from the courts and employers in the education sector can breathe a sigh of relief. Strikes among teachers have not been uncommon in recent years, and this court case revolved around how much pay should be withheld from striking teachers.

The case was Hartley Vs King Edward VI College at the Court of Appeal. The three teachers who brought the case claimed that too much pay had been withheld from them. The College had based its calculations on a notional five-day week, 52 weeks a year, which led to a daily deduction of 1/260th of annual pay. The teachers’ case revolved around precise wording in their contract and section 2 of the Apportionment Act 1870. They claimed that the significantly smaller amount of 1/360th of annual pay should be withheld, based upon the principle that pay is accrued equally throughout the year.

The court rejected the appeal so the greater amount of 1/260th of salary remained withheld. However, there was a hint that law in the area may need updating to better reflect modern working practice.

The case could have had far broader ramifications than adjustments to three pay packets. It is estimated that had the judgment gone the other way, it would have cost the education sector £300,000 for every strike day. If you employ people in the education sector, or indeed any other sector, and are concerned about the HR ramifications of industrial action, pick up the phone to your local HR Dept. They can help you manage before, during and after a strike to minimise disruption.

Summer travails of a line manager

While summer is a time of travels as people escape on holiday, for managers it also dishes up particular travails.

Holidays – you may be keenly anticipating your own, but managing staff holiday-bookings? Less so. Remember, you aren’t normally obliged to sanction holidays at requested times. When bookings clash you can prioritise, but be fair and consistent. And if unauthorised time off is taken, conduct a proper investigation before assuming the worst.

Comfort – Consider a summer dress code, but balance comfort against appearances in customer-facing roles, and stick to Health and Safety guidelines. Keep temperatures reasonable through fans, windows and air-conditioning.

Work-experience – Many businesses accommodate summer work-experience schoolchildren. If this is on your radar, ensure you are clued up on relevant regulations and remember you have a duty of care.

Summer safety

With the sun threatening to grace us with its presence in the coming month or two, let’s reflect on measures you can take to keep employees safe this summer. First, you have responsibilities to provide adequate shading and water to outside workers (some suggest sunblock too). But aside from these obligations, it makes sense to brief the wider workforce on summer safety. Simple precautions like staying hydrated, using fans, covering up on lunch breaks and applying sunscreen can all contribute to healthy employees and reduced absence. So everyone keeps the workplace productive and has fun in the sun.

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