Roll Over Beethoven

Government Minister Lord Freud got himself in hot water last week when a recording of a Conference Fringe meeting was revealed where he stated that some disabled people were not worth the minimum wage, and suggested that employers could pay them £2 per hour with a state benefit being used to top this up. While most criticised him, there were some who sought to defend his comments, with this Daily Mail article being a particular example. In summary, it makes two points; firstly that the author’s father, who was blind, accepted he should be paid less because he required support to carry out his work – despite the fact that he was a highly rated newspaper columnist; and secondly that “the market” would inevitably value some jobs (by implication those done by people with disabilities) below the current level of the minimum wage.

Taking the second point first, it is quite possible that, if we simply allowed the market to determine wages, some jobs might be paid less than the current minimum wage rate of £6.50 per hour. If Lord Freud and his supporters want to make the case for abolishing the minimum wage, then that’s a perfectly acceptable position to argue (though none of the mainstream political parties seem to support it) – but it does seem to me that dressing up this argument as some form of altruistic help for the disabled is at best disingenous.

What worries me though about the first point though is that it demonstrates how out of touch politicians and media “commentators” are with the modern world of work. Firstly they seem completely unaware of the Access to Work Scheme, which provides  support for those with disabilities in work. To take the example of the blind Mr Utley, these days he wouldn’t require his employers to provide him with a paid secretary to read the newspapers to him, since a) most modern software includes a “read aloud” feature (as well as other accessibility options) b) if he did need special equipment it would be paid for and c) even if he did require a full time support worker his employer would get assistance with the costs. Without making a political point, it seems as a taxpayer that the government spending £500-£1000 providing an employer with special equipment to support an employee with a disability to work  is a more cost-effective solution than subsidising the disabled employee through the benefits system. Even in the case of  severe disability, where the individual requires a full time support worker, the current system (though not perfect) seems a better option.

Secondly,  they assume that a disability means an inability to do anything. No-one (even his political opponents) seriously suggests that David Blunkett was less effective than any other Home Secretary because he was blind. Indeed, rather than paying him less, if Mr Utley Snr really was the “leading Tory thinker of his generation” you’d expect the Telegraph to be paying him top dollar (it’s that thing called the market again) rather than ripping him off. Just imagine how Beethoven would have managed under Lord Freud and his supporters. “I’m sorry Ludwig, I know this symphony is genius but as you’re deaf, we’re only going to give you a third of what we paid Schubert for his inferior composition”.

Are our workplaces designed to fail?

I’m a big fan of economist Tim Harford, and recently read his book “The Logic of Life”.  In one chapter he deals with an economic idea which offers an explanation of the reasons both for high executive pay and office politics – Tournament Theory.

The argument – supported by some statistical evidence – runs like this. Modern workplaces reward relative performance, not absolute performance. Good performers are defined, not by specific targets, but by being better than other performers. So work becomes a series of endless tournaments between ostensible colleagues – if one wins, another loses. And with victory comes reward.

Now just like in the current World Cup, victory can be obtained in various ways.  You can go all out to achieve success, putting in lots of discretionary effort – the equivalent of playing free-flowing, attacking football. But there are equally successful strategies that will win you the match without necessarily benefiting your employer. You can be risk averse, blocking anything new and sticking to the tried and trusted, stifling your more innovative opponent – the work equivalent of “parking the bus“. Or you can go out of your way to discredit, disrupt and stab your colleague in the back – the equivalent of trying to kick your opponent off the park. Your tactics are determined by doing not what is best for the organisation but what will work for you –  and just like the group stages of the World Cup will be decided not just by who your current opponent is but also what your other  colleagues are up to.

In this model, the prize for getting to the next level  has to be sufficient to make it worth competing at all. So if you earn £20000 pa, the prospect of a promotion to a salary of £25000 is a big jump. At £70000, an increase to £75000 will have far less effect but an increase to £90000 may well incentivise you. Chief Exec salaries of say £500000 aren’t designed to reward the individual in the role, but to act as an incentive to Directors below them who may be earning a “mere” £300000.

Of course, it’s easy to spot problems with this theory from an HR perspective. For example, it makes no allowance for intrinsic motivation, despite increasing scientific support for this playing a major part in the way individuals behave in the workplace.

But what the theory does do is to explain why many of our HR initiatives fail. If our organisation structure and pay and benefits system is set up to reward relative performance, it will inevitably encourage people to behave in the way that tournament theory predicts. No amount of family friendly policies, team building exercises, empowerment or innovative recruitment strategies will change this if we have designed systems that work against what we are trying to achieve. So while OD and “compensation & benefits” are seen as the less ‘sexy’ end of HR, maybe they are the ones we should be paying more attention to if we really want to change the world of work.


Dads Army & Crisis Management

Originally published February 2011, at a time when everyone was seizing on the latest economic statistics as evidence that we were all “doomed”

It’s often helpful, in a difficult situation, to see how people have handled such crises before.  For example, the different ways in which the members of the Walmington on Sea Home Guard reacted to the constant threat of invasion in WW2 is strikingly similar to how many are behaving in the economic climate today.  See if you can identify yourself or colleagues in the list below:

Capt Mainwaring – in charge because of his status rather than his competence, he uses bluster and nice sounding phrases to disguise that he has no idea how to deal with the situation.
Sgt Wilson – the calm voice of experience, refuses to get flustered as he knows that things have been this bad before and will resolve themselves again.  He always takes the considered view, which often pulls Mainwaring out of trouble.
Cpl Jones – panics at the slightest thing and over-reacts to the mildest bit of bad news. Unless controlled, his attitude infects the rest, creating mayhem and negativity.
Pte Fraser – the voice of despair, who enjoys seeing how bad things can get and is secretly hoping they will get worse.
Pte Walker – spots the opportunity to make money in everything. Sometimes his scams backfire but often they come to the aid of the platoon as well as his own pocket.
Pte Pike – never experienced anything like this before, really not sure how to deal with it except that it all looks very bad indeed and his Mum wouldn’t like it.

Looking around, it seems to me that at the moment we have a lot of Frasers (especially in the media) and Joneses, and perhaps not enough Wilsons and Walkers.  While many under 35s, who have never experienced any kind of negative economic conditions before, are cast in the role of Pikes, slightly bewildered and looking for reassurance.  As for Mainwarings – are there any you could suggest?

Wayne Rooney and Marxism

This post was originally published in October 2010, and was a tongue in cheek response to footballer Wayne Rooney’s attempts to negotiate a new contract with Manchester United.

News of Wayne Rooney’s new deal with Manchester United – a reported £160-200000 per week – caused a mixture of amusement at the very public negotiations, followed by tabloid anger that someone should be earning so much at a time of great economic uncertainty.
While I doubt Wayne has read much Karl Marx, it struck me that he is behaving exactly as Marx suggested a member of the “proletariat” would do:
•    He is attempting to sell his labour for the highest price possible, knowing that whatever he gets for it his employer will still get more (if he scores the winning goal in the Champions League, will all the profit Man Utd make go back to him?) – the concept of “surplus value”
•    He is “alienated” from his team mates (not just because he criticised them!) as his football skills have just been reduced to a commodity to be traded on the market. His apparent gain will be at the expense of other players who cannot sell their skill at such a high value.
•    He recognises that no-one is interested in him as a person, but for his ability to do a job to a particularly high standard and for his subsequent value as an image – what Marx termed “commodity fetishism”.
So there you have it – Wayne is an exploited, alienated member of the proletariat, just like the rest of us (and Karl Marx is quite a useful left-winger by all accounts).