The disparity and perceived unfairness of directors receiving large salaries and bonus payments compared to other workers is a continuing rumble in the press.
There is a risk that the anger generated by reports of multi-million pound chief executive pay deals and a new round of bankers bonuses in a couple of months’ time could spill over into the workplace.
A recent report by the Organisation for Economic Co-operation and Development (OECD), said that income inequality among working-age people had risen faster in Britain than in any other rich nation since the mid-1970s. Business secretary, Vince Cable, announced new rules in June to force publicly listed companies to give shareholders three-yearly votes on executive pay and bonuses in an effort to contain the tide.
But it’s not just about six figure salaries for the C-suite, on Channel 4 this summer the ‘Show Me Your Money’ documentary discovered that there are also pay discrepancies between employees doing the same or similar jobs, which once revealed led to emotional responses from anger and shock to guilt and resentment.
HR directors may find themselves caught up in the backlash against high salaries, especially as the UK economy remains firmly in recession and many employees will not have had a pay increase for a number of years and some will have taken a cut. HR personnel may need to defend their company’s position with regard to directors’ salaries and also need to diffuse anger over pay inequality within their departments.
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