Keeping to the Bare Minimum Wage

I spoke to an employer last week who was quick to tell me that they don’t pay more than the minimum wage.  If someone goes off sick then they only pay Statutory Sick Pay.  He was quick to justify this… “Like any small employer, every penny counts and we cannot afford to pay out anything more than the absolute minimum we can get away with”.  I came away from the conversation feeling very sorry for his employees – and with concerns about the sustainability and growth of his business.

The question is not whether an employer can afford to pay more than the absolute minimum, but whether they can afford not to.

 Keeping Low

Of course, there are obvious benefits of keeping the wage bill as low as possible.  It is the largest outgoing for most employers.  Rightly, they will do everything they can to control it and prevent it from spiralling uncontrollably.

You want to feel you have not wasted that money and have preserved it to spend on other things which will grow your business.

It is also true that pay is not a “motivator”.  You can pay a high salary without seeing reward in terms of performance by the employee on the receiving end.  But money (or perceived lack of it) is a de-motivator.  If an employee feels they are not getting a fair deal, they will have no incentive to go the extra mile for your business.

“Give and Ye Shall Receive”

It is a fact in life that you get back what you give out – if you project love and generosity, then that is what will come back to you.  If you “give” to your employees (in terms of money, and in terms of valuing their contribution in other ways) then they will repay you with loyalty, with support to you and your customers, with performance beyond your expectations.

If you stick to paying out the very minimum, then there is no incentive for your employees to work hard or to put in more than basic performance.  There is a saying I have heard many times in the work place:  “if you pay peanuts, you get monkeys”.

The danger  – if they are a high performer – is that they will “mark time” with you until a better opportunity comes along.  Even worse, if you have a poor performer, is the danger that they may stay with you as they cannot get another role. In that case, they will never be really happy at work and they will only ever perform at the level  at which you value them (ie. the minimum). They will become more and more disillusioned and their performance (already low) is likely to spiral downwards over time as they tick away the days until they can take their pension.

Spreading the Germs

If you only pay the minimum amount possible when someone is off sick, then they will hurry to come into work as soon as they can.  This sounds like a good thing and is the reason why some employers only pay Statutory Sick Pay.  But what if the person has something contagious (even a stinking cold) and comes into work because they need the money?  They pass their germs on to others they work with and, before you know it, the whole team is sick.

And what is the quality of the work someone produces when they are feeling below par?  There is a strong likelihood that their work will be slow and may be full of mistakes.  In the long run, this could cost more than paying them whilst they are off sick and not contributing at all.

Spreading the Love

Again, we come back to the value you put on your employees.  There is a reason why the wage bill is generally the highest bill you face each month.  If you get it right, it is because the people are the highest performing asset you have and will make your business grow and prosper.

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Nicely, Nicely, Thank You

There is a character in the show “Guys and Dolls” called Nicely Nicely Johnson. He always answered “nicely, nicely, thank you” when asked how he was.  He was always one of my favourite characters.  I loved his name when I was a kid, and I still do now.

“Nice” is a much underrated word.  I have often heard it used as an insult and I have been told countless times in life that I am too nice.  How can anyone be too nice?  I have always taken it as a compliment, even though it is usually meant as a put-down.

So what makes a “good” employer? 

Well, an employer that people want to work for is “nice” to their employees.  Is that such a crime?  Surely, being nice to people makes it a more pleasant world for everyone.

You may have to do many things as an employer which neither you, nor your staff, like doing.  If there is a downturn in business for some reason, then it may be necessary to lay people off or make them redundant.  If someone misbehaves or breaks the rules, then you will have to discipline them.  If someone cannot do the job for some reason, then you need to deal with it.  If someone is off sick a great deal, you may need to take action. In the worst extremes, that could mean someone loses their job.  None of these things is pleasant or “nice” to do.

So how can I be “nice” when I have to do these things?

 “It’s not what you do, it’s the way that you do it – and that’s what gets results”, as the song says.

When I was a little girl, I embroidered a present for my aunt.  Based on a Native American prayer, it included the line “never criticise a man until you have walked a mile in his moccasins”.  It is very easy for managers to get caught up in the everyday pressures of running a business or a team.  It can be difficult to see beyond the goal or the deadline or the budget.   But try imagining what the other person may be feeling or going through.  How would that make you feel?

Next time you have to deal with a difficult situation with an employee –  or with anyone else for that matter – try to “walk in their moccasins” for a few minutes.  Treat them how you would like to be treated in their situation.  It will change the way you handle the issue and make it more pleasant for everyone.

Oh – and the good thing about being “nice” is that it makes you feel better too.  You may find it takes some of the stress out of a difficult day.

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The Truth, The Whole Truth and Nothing But The Truth

The Art of Giving a Reference

When we change jobs, we are all keen to be given a good reference to give to our new employer.

On the other hand, many employers these days only give a basic reference which confirms that the person worked for them for a specific period and what the job title was.  This is only of limited use to a new employer as it gives no indication of how well or badly the employee performed in the role or how they got on with colleagues and/or customers.

As a result, there is a general belief that “references are not worth the paper they are written on”.  This is a real shame when a little care could really help the recruitment process along.

Why do we only give out basic information?

Employers are frightened of horror stories of legislation.  “We might get sued if we say something nasty” and so they feel obliged to say as little as possible and to keep it very bland.  Additionally, many do not trust their managers to give references as they might inadvertently say something which may cause a problem for the Company.

Yet references should be a really powerful tool in the recruitment process. They should tell an employer whether the person is qualified to do the job and what experience they have; they should tell about any performance issues, or triumphs; they should tell of any misconduct or grievance; they should give an idea of the attendance record and any patterns of absence;  they should tell about the relationships and whether the person is a good fit for the new role and the team they will be working with.

How  can you write a “safe” reference, which also helps the new employer?

  1. References must be truthful and factual.  The manager or colleagues may have an opinion – good or bad – about the individual, but this should not be included, unless it is based on fact which can be backed up with evidence. So an opinion that “he was always late, never arrived in work at the right time” would need to be backed up with a record of occasions of lateness, plus evidence of a conversation (or even formal action) with the individual pointing out their lateness and exploring the reasons for it and giving targets for improvement.   Equally, if your opinion is that “she is the best sales person we have ever employed” then you should really be able to back that up with evidence of meeting high sales targets, or great customer feedback.  You don’t have to share any evidence with the new employer, but it must exist so you could produce it if anybody questioned the truth of your reference
  2. Contrary to popular belief, references can include “bad” things – but again, they must be backed up by evidence. So if the person  has a day off sick every other Monday, then it is fine to say so, as long as the attendance records exist which back this up.  It would also be helpful if you could show that you have taken this up with the individual and made them aware it is not acceptable and have agreed a way forward to improve things.
  3. There should be no surprises. You cannot say that the person was not very good at dealing with customers, unless you have had a conversation (or even a formal meeting) with the individual and told them about this problem and a record has been kept, with a copy given to the employee.  If dealing with customers is a critical part of their job, you would again need to show an agreed improvement plan.
  4. The employee may well get to see the reference. It is not unusual for a potential or new employer to show the reference they have received to the individual or even to ask their opinion of what has been said.  Indeed, I suggest this is a good idea for an employer to do.
  5. If you follow all these rules the individual will not be able to show it is not fair.  You might find it helpful to share a copy of the reference with them so they can see what has been said.  They may ask you to change it, but you don’t have to do that.  At least they will have seen you have been honest and they can take the opportunity to consider how to address any negatives with the new employer.
  6. These rules apply to verbal references as well as written ones. Employers sometimes feel they can get round the “difficult” issues by making  a quick ‘phone call to the previous employer, rather than getting a written reference.  This is risky as the person on the receiving end of the reference may well write notes or write the conversation down and it becomes as much of a liability as a written reference would have been.  In any event, is is unfair on the individual to say something which they are not able to be party to or to answer.
  7. Some employers get round the problem by allowing managers to give “personal character references” but not official work sanctioned references. This is also risky as the receiving manager is likely to think it is an “official” reference and to treat it as such, so the risks are still there.  It is better for the employer to produce the reference centrally, with input from the individual’s line manager – or to spend a small amount of time in training managers to write proper references (or show them this video!).

In a nutshell

Please produce and send meaningful references, following the above guidelines.  It will be helpful for the employee, helpful for the new employer – and you may be grateful for the same courtesy when you are next recruiting. It could help save an expensive mistake.

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Increasing Productivity – Not My Problem

It is well reported in the press that the UK has productivity problems.  Productivity levels have not increased since before the financial crisis in 2008.

Small  and medium-sized enterprises (SMEs) make up 90% or more of the private sector and most are aware that there is a productivity problem in UK.  They always believe the problem lies  with “other employers” and none can see that it may start in their own business.  There are many and varied reasons why productivity is low in UK, but some of it is because owners/managers of small businesses don’t recognise that they need support from HR.

They all talk about business challenges, not people challenges.  A quick search on Google for the most common business challenges reveals: recruiting and retention; technological changes; Governance and legislation; Trust; financial management.  All of these challenges can be helped by good HR support.  Other challenges include Brexit; the General Data Protection Regulations (GDPR); gender reporting.

What help can HR provide?

If you have read earlier articles we have published, you will already know some of the areas where HR intervention can help your business to grow and increase productivity – particularly in retaining staff and so reducing staff turnover and recruitment costs.

I have been talking to a variety of different employers in the last few weeks, as part of my search for feedback on the support that JMA HR could provide to them.

The response I hear quite often is that the business (whatever it is) “is too small to need HR support” or “never has any HR problems”.  This is nearly always followed up by a story about a tribunal case they have had to defend, or some particular people-related issues which they have dealt with themselves “without needing to pay for HR”.  They have quite often paid for legal advice and representation though.  Of course, this has not factored in their time or lack of experience in these issues.  It may seem cheaper to “do it yourself” but is it going to be quick, effective, a good use of your time, or to prevent further issues?

Where HR help is needed

Several employers had taken legal advice but not been prepared to pay for HR support.  This is interesting as the legal advice is generally about “cure” and HR support is generally about “prevention”.  There is, of course, an overlap, but my question to employers is whether it is better to spend at your own pace, and at a level you can control, on HR support?  Alternatively you risk getting it wrong.   You may well then have to  spend  on legal advice and support when it becomes urgent and at a level over which you have no control.

If you keep reading our articles, you will get support (at no cost) on a variety of issues which you may face from time to time.

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