Thursday, April 1, 2004
Pensions tax regime simpler, but Budget did nothing to boost savings
While disappointed that there are no measures in the Budget to boost pensions savings, either through employer or personal contributions, the Chartered Institute of Personnel and Development has welcomed the radical decision to replace eight separate pensions tax schemes with a single lifetime allowance.
Charles Cotton, Pensions Adviser at the CIPD, said:
“The Chancellor’s radical decision to shift from eight pensions tax schemes to a single lifetime allowance is welcome, as is the sensible decision to lift the cap on the new allowance from the existing £1.4million to £1.5 million in 2006 and £1.8 million in 2010. The single lifetime limit was originally scheduled to come into force in 2005. This delay should not encourage employers and the Inland Revenue to take their eye off the ball.
“We are disappointed that there is nothing in the Budget to encourage employers to contribute to the pension schemes of their employees or to encourage employees to save for their old age.”
above: The CIPD welcomed the decision to replace eight separate pensions tax schemes with a single lifetime allowance.
‘Staff do not trust the top table,’ says HR
The ongoing debate about the low level of trust between employees and the top table in UK organisations appears to be doing little to improve relations with the vast majority of HR professionals believing that their staff do not trust senior managers.
New figures from a HR Gateway poll of 270 respondents suggest that a huge 80% feel that employees do not believe what ‘top management’ tells them about the future plans and direction of their firm.
Only 15% thought that staff trusted the top table, a figure the Institute of Directors (IoD) labelled as ‘disappointing’. However, many of their members are trying to improve matters, it said.
‘There is an appetite out there for change and things are improving. But it is a matter of good middle management. People in this position need to be ensuring that communication is taking place and staff are fully informed,’ said the IoD.
However, chief executive of the Institute for Leadership and Management (ILM), Gary Ince, feels that communication is failing at all levels and believes it is a product of the continual change many firms find themselves in:
‘Mistrust is a sign of a lack of leadership at all levels and is indicative of the major change many firms are experiencing. Marconi is a good example of this. It divested its traditional business only to have to realign itself shortly afterwards. A huge amount of change for staff.
‘Leaders need to ensure that any changes are communicated early and that staff know why the change is necessary. They also need to ensure that the message has spread and if anything goes wrong they need to ensure they are honest and communicate why it went wrong,’ he said.
One recent survey suggested that professionals in the communications industry give directors a ‘D’ for effort when it comes to communicating corporate messages, with only 10% feeling the top table had the skills to relay key messages.
Also, a MORI poll last year suggested that senior managers and directors come top of the list of highly mistrusted mediums of communication. One in five employees said they are actively not to be trusted — a rise of four per cent since 1994.
Ensure that your firm does not make some of the same mistakes.
British workers oppose moves to end UK working time opt-out
A clear majority of those who work more than 48 hours a week do so largely as a result of their own choice rather than employer compulsion according to research by people management experts, the Chartered Institute of Personnel and Development. Senior managers and professionals, who are those most likely to be able to make informed choices about their hours, are most likely to work beyond the 48-hour limit.
The survey of over 750 long hours workers, Calling Time on Working Time?, also finds scant evidence of any employer abuse of the opt-out clause. Over three quarters of staff sign the clause as a result of their own choice rather than any employer pressure. And only a minority actually sign the clause at the same time as signing their employment contracts — a key concern identified in the Commission’s consultation document which closes today, 31st March.
Commenting on the findings, Gerwyn Davies, the report’s author comments, “Our survey shows that long hours workers are opposed to the removal of the opt-out and in particular any moves to restrict their freedom to choose to work long hours. The issue of long hours working is complex, deep-seated and ingrained in the culture of organisations and cannot be addressed by a uniform ban. The negative effects of long hours working are evident from the report, but these are best solved by employer measures such as flexible working arrangements rather than a blanket ban on long hours working.”
“Related CIPD research demonstrates that giving employees a high level of choice and involvement over how and how long they work and introducing a wider variety of more flexible working options can realise substantial gains in levels of employee commitment and corporate productivity. Yet in this study fewer than half of employees felt that they had access to flexible working options.”
Davies concludes, “The Working Time Regulations have had only a limited impact and removing the opt-out would not help significantly.
Only six per cent of those who have reduced their working hours during the past five years have done so as a result of the working time regulations.
“And while UK workers welcome the intervention of their employers to reduce their working hours, they are less receptive to the involvement of the EU. The interests of both workers and organisations in promoting a better work-life balance are therefore better served by the wider use of flexible working arrangements.”
Global leader in testing says 25% of management and staff are “living a lie”
More than 25% of UK company staff and management are deceiving themselves when it comes to self-analysis of their skills and attitudes, with around a further 20% completely oblivious to their weaknesses.
Tha’s the finding of Life Orientations Ltd (LIFO), the UK arm of the 30 years-established global testing organisation, a year after its UK launch.
The findings of LIFO, following 1,100 tests and assessments in 2003 and 2004, indicate a huge underlying presence of managers and employees who are not just deceiving themselves — they’re also deceiving their employers and colleagues.
“There are highly influential people in UK businesses who are being self-deceptive because they are unaware of their failings, or simply living a lie and avoiding situations in which they’ll be challenged or tested because they know themselves so well,” said LIFO UK Managing Director Bridget Biggar.
“There are large numbers of managers in the UK who can’t manage, can’t listen and can’t control, get too involved and can’t delegate, get their priorities wrong, confuse colleagues and lose sight of their longer-term objectives.
“In many cases the situation has arisen because their seniors have accepted CV’s or ‘by-the-book’ interview responses at face value, failed to drive through a structured testing and assessment process and caused weaknesses to be built in to their management and passed on to staff.
“The managers themselves all too often know their weaknesses but refuse or fail to recognise them: the tragedy is that these weaknesses can actually be used as a strength — admitting a shortcoming and doing something about it gives you advantage over others who don’t or won’t concede a failing for reasons of insecurity or pride.
“If you know there’s a gap in your business’ capabilities, then you know you need to fill it, and the skills and capability to do so usually lie with other people working in the business.
“By testing and assessing the management and staff, then you’ll know what you need to do to fill the gap, strengthen the structure and then either drive forward or defend, successfully, depending upon your business objective or requirement.”
Whereas the vast majority of psychometric testing programmes identify traits, skills, shortfalls or strengths amongst the workforce, the success of LIFO has been built on providing an ongoing development path once the strengths or weaknesses of an organisation’s key people have been identified.
LIFO has tested and assessed a vast range of people in the past year. Surveys have illustrated that people with massive ability often have no commitment or drive, whereas there are average-intellect staff who put in massive efforts to improve themselves and their colleagues.
Individuals who are focussed on detail can be a liability if their support structure doesn’t make up for their focus.
“A successful individual is the product of a complex cocktail of self-awareness and capability, personality — and the culture and influence of those people working with him or her,” said Bridget Biggar.
“The most public illustration is perhaps in sport: a player may struggle in one team and excel in another. For instance, Eric Cantona failed to live up to his promise at Leeds United, but shone for Manchester United.
“We can do nothing to change our base DNA - which could be psychopath or procrastinator - but we can do a good deal to assess and recognise capabilities, and identify and drive different behaviour strategies. LIFO sits on top of the personality and shows what can be achieved by changing someone's behaviour.”
Proposals to shed 40,000 civil service jobs — Government should learn ‘downsizing’ lessons of the past
Reform of the civil service, including substantial job cuts, is deliverable, but the Government must learn the lessons from best practice in the private sector, according to the Chartered Institute of Personnel and Development, the professional body for all those involved in the management and development of people.
Dr John Philpott, Chief Economist at the Chartered Institute of Personnel and Development, offered the following thoughts:
“Downsizing was often too rapid, and not strategic enough. Companies lost the people who were easiest to get rid of, then often discovered they’d lost the wrong people, either because they were good enough to be mobile, or older, but at the same time some of the most experienced people in the organisation. By contrast, CIPD research into organisational change suggests continuous change, based on genuine consultation, delivers greater efficiency savings and genuine performance improvements.”
“The ‘psychological contract’ between employer and employee also needs to be considered. When undergoing major change it is important to win hearts and minds in order to ensure that the remaining workforce is supportive and motivated. In the public sector, where the pace of change is traditionally slower than in the private sector, this will need particular attention.”
Bash the bureaucrat, laud the front-line
“No-one wants to keep unnecessary administrative roles. But the ‘bureaucrat bad / front-line good’ approach is too simplistic. There is a need for some administrative roles, in order to allow the front-line to operate effectively. Indeed, some new investment in certain “administrative” change management expertise may be necessary to manage the scale and type of reform desired. The Chancellor, in his response to the Lyons and Gershon reviews, has talked about considerable investment in IT to allow objectives to be achieved. Investment in the human resources needed to deliver effective change should also be prioritised if the Chancellor’s objectives are to be delivered.
“The talk is of people losing ‘bureaucratic’ jobs being transferred to the front-line. Once again, this is too simplistic. Many of the people in question may not have the basic skills or personal aptitudes necessary. In practice, there may be many redundancies, and new people may still have to be trained up for the new roles. This could end up costing a lot more than expected.”
People and performance
“There is a trade-off between cost-savings and performance. Too much change, too fast, could undermine the Government’s core objectives and delivery agenda. The big lesson from past private sector experience is that the “people” element in processes of change is what really matters. If the Government fails to get this right, things could go badly wrong.”
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