ANALYSIS: THIS WEEK’S BIG QUESTION - Can you defend pay that is not linked to productivity?

Reports suggest ministers are keen to shame firms which don’t link pay rises to performance.

Reports suggest ministers are keen to shame firms which don’t link

pay rises to performance.

STEPHEN HUMPHREYS, Royal London Insurance

’You can defend pay if it’s linked to results. That need not be

productivity, it can be customer satisfaction or other improvements

That said, when pay becomes a tabloid news story it’s a no-win

situation. Anything over pounds 100,000 is going to sound like a large

amount of money to the average punter. The utilities particularly have

suffered from stories about pay that can be very damaging in terms of


MILES WEBBER, Manufac turing, Science and Finance Union

’There’s absolutely no justification for anyone, least of all public

relations practitioners, in defending outrageous telephone-figure pay

rises. The Chancellor is right to call for greater accountability in UK

boardrooms as the gap between the bosses at the top and those who really

create increased productivity, the shop floor workers, widens.’

NICK CHALONER, Abbey National

’You can’t defend pay that’s not linked to productivity and it would be

hard to find a PR solution for that. Big pay awards not linked to

performance will just get people focusing on the fact that a company is

not delivering the goods. If there’s another perceived fat cat pay award

at a FTSE-100 company, I think the Government may well take steps such

as introducing legislation that would require shareholders to vote on

salary increases.’


’Everyone’s salary is dictated by the market directly or indirectly.

Although the issue of big pay rises is an emotive one, the market has no

emotion. If a car company wants to employ and retain the best designers

it must pay the market rate. If a football club wants the best players,

or a company wants the best CEO and senior management then the same

principle applies. But high pay for those who are not performing is

rarely sustainable.

There are those who say that politicians’ pay should be based on

performance, but I couldn’t possibly comment.’

JOHN DRUMMOND, United Utilities

’Here’s what I can’t defend - I can’t defend pay that isn’t earned.

Here’s what I can defend. Payment for expertise, payment for

responsibility, payment for performance.’

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