Drilling Down into Exec Packages

20 August 2015

Have South African Executives lost touch with their workforce? Have they divorced themselves from the socio economic challenges that workers face daily?

When you read of companies like Amplats awarding their 11 top execs multi million rand bonuses whilst the company makes a loss of over R1.5 billion under the atmosphere of massive workforce discontent, one has to wonder what went wrong.

The excuse for this excess is that a Business has to pay international market related salaries to keep top Executives. But, I ask you, why does anyone want to keep an exec who is responsible for massive losses and cannot deal with their own staff effectively? And is a bonus of Multi millions appropriate if you are considering retrenching, downsizing or laying off people? It stinks!

Exec bonuses should be performance related. Wages should be fair at the top as well as at the bottom of the ladder.

It’s easy operating a business from a boardroom. The balance sheet has no pulse, no family and is devoid of the scars and wrinkles of a proper days work. It is equally easy for an exec, at the stroke of a pen, to reduce the budget for “Human Capital” without a second thought. It’s a paper entry justified by a curve on a chart or the result of “drilling-down” at some overstuffed “brainstorming”. Of course the decision to “cut-heads” is often justified based on data, the need to satisfy shareholders and to ensure the self-interested ones making this decision get their Multi-million Rand bonus.

But, what about the worker? There are people in our industry working on minimum wage of R14.50 per hour. Take into account that transport to work can cost as much as half a daily wage. How does a person survive on about R80 per day? How do you feed a family? Educate your kids? Put a roof over your head? Let alone effectively serve a guest and smile at the same time. And, to think that an adjustment to a formula on an Excel spread sheet can unbalance even this meagre living?

So many companies claim to be “investors in people” and advertise this ad nauseum . But if one uncovers the truth behind the spin it’s sometimes a whole different world.

It seems staff are only engaged in conversation when there is a wage negotiation or a dispute. Shouldn’t it be compulsory for senior management, Execs and Board members to go “back to the floor” regularly? For “The suits” to consult and ask questions of the lowest paid workers. Not wait for a consultative committee but actually talk to the team. Ask opinions on how to improve things, how to cut costs, how a task can be done better, how we can give our guests great service. After all who makes the business money? The waiter, The Chef, The salesperson, the barman, the receptionist. These people are as much the “stakeholders” as the board, the shareholders or the customer. But their opinion is often neglected when tough decisions need to be made.

It’s pretty good business strategy not to restrict dialogue with the workforce to bargaining units and wage negotiations and engage with our most valuable assets beyond this. There is intelligent life beyond the boardroom.

There are Execs in South Africa that have refused bonuses and taken pay cuts rather than downsize or retrench. There are those in the Hospitality Industry who truly invest in people, consult with them, nurture their skills and actually care and still make profit. Those that know that the money is not just made in the boardroom and appreciate that their comfortable lives are the result of the work of many hands that are not so fortunate.