"No Fault Dismissal": A Licence For Poor Leadership & Management?

‘Dead hand of fear’
It is anticipated that the most controversial concept contained in the formal submission, created by the Adrian Beecroft, recommending that "no fault dismissal" should apply to micro companies employing fewer than ten staff – will quietly be killed off. Apart from Vince Cable’s warning to ministers that the proposal would leave the 'dead hand of fear' hanging over employees, reports seem to indicate that the evidence so far shows little support among British businesses for the proposal.



Flexibility = Prosperity
David Cameron is right when he suggests that it is in everybody’s interest (apart from a tiny minority of skivers) that our labour market is more flexible, even more so if we want to create prosperity and increase our share of world trade. A flexible workforce will create greater job security because our products and services will be more competitive meaning more sales and in turn greater prosperity.

You’re fired!
A flexible labour market though, is not and should not be a licence for lousy or weak management to behave like monsters and treat their workforce as flotsam by enabling them to dismiss employees without “fault’. Good, decent and skilled managers should treat their staff as they would treat their customers. No fault dismissal is a disgraceful proposition and would only appeal to companies and individuals not worth working for, the ‘hire and fire brigade’ of get rich quickies but long-term losers. Managers should treat their employees with dignity and treat them, as they themselves would expect to be treated.

People don’t leave jobs they leave people
I help and train managers to be leaders. In my experience very few have ever been trained in basic people management skills, a result of our willingness to reward diligent and loyal work with endless promotions to positions an individual is often not prepared for. Projection into roles you are not ready or trained for has a negative ripple effect; the promoted employee becomes stressed, their productivity and efficacy begins to drop, whilst their subordinates become secondary, undirected, demotivated and ultimately dissatisfied with their job. This simply is why people don’t leave jobs, they leave people.

Let’s not get distracted
I would agree therefore with Terry Scuoler, the EEF chief executive that the focus really should be on positive labour reform and not allow the fatuous ‘no fault dismissal’ notion to distract the urgent needs of UK business and manufacturing. I embrace for example, the recommendation to try and streamline the employment tribunal system, which really is a time and money consuming disaster for British commerce and so weighted in favour of the crooked rogue and dishonest employee. The five-point plan in the Beecroft report has some great benefits for all the working population and amazingly this includes managers who generally work a darn site harder than the so-called workers.

Rest In Peace ‘No Fault Dismissal’…

The Customer is doing us a favour...

Much of what I talk about and what we teach at Denny Training, is to ensure that at all times, the customer is at the forefront of every decision we make.

Mahatma Gandhi said, ‘A customer is the most important visitor on our premises; he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so’.
Surely then, in times of economic downturn and recession, it is vital that we remain in tune with this philosophy by being at one with our customers needs as well as being in touch with their ‘mood’. We, as providers of a service must understand enough and be sensitive to the challenges faced by our consumers. We hear a great deal about the impact of the failing economy on businesses, but how often do we as business owners take a step back to think about how it is affecting individual customers? I am not talking about other corporations. I am referring to the every day hard working individuals charged with the responsibility of keeping a roof over their head and food on the table; the ongoing need to provide for their families. The pensioner who has suffered a loss in savings and faces the fear of outliving their financial capacity. The young person who has never had a job since leaving school, is laden with debt and has little if any prospect of securing one in the short term. These are the people we need to be ‘connected’ too, not literally, but metaphorically. It is surely in all our best interests, that we allow our customers to act as a barometer in our decision making process, whether that be the products and services we provide, the price points for our goods or the amounts of money we pay our top executives.

It is in this context and against this principle that I felt compelled to comment on what I believe will become a trend in the coming months and years if we do not step back and test the temperature.
 
On April 27, 2012 despite openly stating they had had ‘an unacceptable year’, Bob Diamond, Chief Executive of Barclays PLC was perfectly content to receive a £17.7 million pound paycheck in a year when Shareholders received £700m in dividends while the banks’ staff received £1.2bn in bonuses. It is no surprise then that 31.5% of the shareholders voted against the remuneration packages. Whilst this was not enough to prevent the payments being made to the executives, it did send a loud message of dissatisfaction.

On May 3, 2012, Aviva, the insurance giant took a kicking from its Shareholders, 54% of whom decided that the remuneration packages for its executives, including now departed Chief Executive Andrew Moss, were way out of proportion given the performance of the company. Whilst the amounts were perhaps mere pocket change by comparison to the banks’ bonuses, what we are seeing is a trend towards excessive reward for poor performance in a climate where the division between rich and poor throughout the world is becoming chasm like.

I am not naive, I acknowledge and believe that there must be fair and appropriate remuneration for workers and executives alike. Good work and performance must be recognized and rewarded, but such rewards must be aligned to ‘reality’ and sensitive to current economic conditions and public perception.

My challenge with these obscene pay awards is two fold;
Firstly, how can anyone be worth those kinds of sums?

Secondly, we can only assume that the ‘fat cats’ who recommend and approve these grotesque amounts, are so far removed from ‘real life’ as to make them the least appropriate or prudent people to be handling our money, our insurance or indeed any sensitive and volatile aspect of our lives.

Ask yourself this:
Did the people involved in agreeing these reckless pay awards consider me, the customer, the shareholder at any point in their decision making process?

Is the trust we invested in these companies valued?
The answer must be a resounding ‘NO’!
The Barclays website states, ‘As a responsible global citizen, Barclays is committed to ensuring the sustainability of the communities in which the business operates, and strives for sustainable relationships with customers and clients worldwide’
I am at a loss to understand how £1.2bn worth of staff bonuses, including one single award of £17.7m to the Chief Executive, in the current global economic climate could ever be described as ‘responsible’ or an act that would ensure a sustainable relationship with customers.
Speaking of irony, in 2009 Aviva won the Market Research Society Award in the Financial Services category, for its approach to generating insight, putting customer needs at the heart of the business. What changed?

What is clear, is that despite their rhetoric, these institutions were so far removed from the needs and expectations of their customers, so out of touch with the mood of their stakeholders that they made decisions which will forever haunt their careers and tarnish their brands reputation. ‘U’ turns on financial packages and resignations resulting from the embarrassment of shareholder revolts, have all followed the events of April and early May and simply endorse the customer response to these executive pay awards.
In order to differentiate and really mean what we say about customer care, we must take to heart and really comprehend the last couple of lines of the earlier quote, ‘He (the customer) is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so’.

 View more blogs