By Alan Measures, Moog
It was a busy Easter weekend for me. Out of the blue, I received an email from Ban-Ki moon. It turns out the UN was running a lottery that used email addresses - no ticket purchase was necessary - and I HAD WON! A cool $10.5m. I just need to forward some financial details.
I can tell you it takes a lot of time to work out how to spend this kind of cash. By Easter Monday I'd narrowed it down to creating my own saloon car racing team, buying a delightful looking barn conversion (with its own recording studio) just outside Esher and getting Led Zeppelin back together for one more show, with me alternating between guitar and drums (my gig, my rules).
My wife argues that discretion is the better part of valour and suggested all may not be as it seems. I put this down to me choosing Led Zep over S Club 7 but I checked the IP address that the email had come from. Not New York as the email claimed but Turkey. And from a Yahoo email account. Hmmmm.
Turning down free money seems to go against the grain. I suppose it boils down trust. Doubt destroys trust, and the absence of trust can apply a very aggressive discount to any sum. There my not be any such thing as a free lunch, and as it turns out, no such thing as a free lottery win either.
Given my plans for an early retirement look to be on hold, I pondered examples from my working life where I'd seen people turn down free money. At a recent review of our DC pension plan it became evident that around 40 staff had chosen not to join. And this despite the fact the company contributions would be made whether the employee contributed or not. Free money - of a sort. The reasons they were waiving the company's contributions so far remain anecdotal - apathy, a lack of awareness and a measure of cynicism. The stories of people who had lost sizable parts of their pension pot in the 2008 crash linger on much longer than any subsequent pension communication and countering such cynicism isn't easy.
Happily, many of you will not be old enough to remember the government backed "profit related pay" (PRP) arrangements that were introduced in 1987. They were set up to emphasise how company profits could increase wages, and by 1991 allowed for tax relief on the lower of £4,000 or 20% of pay. Given this was money being handed back by the taxman, you'd have thought that everyone would have been delighted. But not quite.
Staff had to vote in favour of the plan - they had to agree to the tax free element portion of their pay being at risk. If the company failed to make a profit then they could be up to 20% of pay out of pocket. However the scheme rules made it easy to set the profit payment thresholds so low that payment was a virtual certainty. It just required 80% of staff to agree to the change. (When the legislation was being drafted the honourable member for Sedgefield, Tony Blair tried - and failed - to get this down to 50%. My employer at the time was one of many that adopted the arrangements with enthusiasm and I was instructed to get out "there" and brief staff so that we got 100% endorsement from staff.
I can't recall what our final vote percentage was. Over the required 80%. Not the 100% that had been expected. What is etched forever in my mind however is the briefing session I ran where I was less than 3 slides in to my pitch only to hear someone at the back say "It's a con". I carried on, sure that my canny mix of clip art and frequent reference to the phrase "tax free" would win the day. A slide further on I heard "You must think I'm daft". By now I sensed my slides were no longer the focus of the room. Time to address my heckler direct. "It's free money" I smiled. "No such thing" came the reply. "I've been working here 15 years and I've never seen this company give away a penny to staff". This was greeted with some nods and one or two words of support. I fell back on a deftly illustrated slide which showed Jim, a line operator who was grinning inanely at the 6.7% saving he would make by agreeing to put £2,000 of his annual salary of £10,000 into the plan. "We'll never see a penny" was the retort. And worryingly from a different voice. "But it's from the taxman" I replied. "They're all crooks too" was all I got back. I decided to gallop to the end of the session and seek refuge in the free (yes, free....) coffee and biscuits. Attempts to win my opponents back over a Nescafe and jammy dodger fared no better - in the end it boiled down to him saying "I know you are trying to have me over. I don't know how, but I know that's what you are doing". He used a different word for "have". An American colleague describes this mindset as the BOHICA syndrome - not a district in Manhattan but an acronym - Bend Over Here It Comes Again.
The CIPD Autumn 2013 Employee Outlook report showed that barely one third of employees trusted the leaders in their business. It's a sobering thought. The bottom line here is that whatever the amount involved, the true value of what is offered hinges on trust. And actions speak louder than words - as Hemingway said “the best way to find out if you can trust somebody is to trust them.”
Read the latest research Cultivating trustworthy leaders
Attend the Reward Conference, 14-15 May 2014
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