Will employees turn on Tata Steel? #employees #reward #benefits #engagement #pay #jobs #career

With politics, we’ve all seen it before: Tony Blair promises not to increase tuition fees, but does anyway, and Labour voters abandoned him. Lib Dem’s pledge they will never increase tuition fees, but when in bed with the Tories, renege. Now they play second fiddle to UKIP. Getting into trouble for saying one thing and doing another is as old as the world….

Today’s @guardian article on Tata Steel’s potential change to employee pension reminds us of two things: One, if allowed to go ahead, the flood gates will open. Who will be next? BHS? Two: What’s to stop Tata or other companies reneging on other agreed benefits (or pay, for that matter?) No one knows where this could end, and although the proposed pension re-structuring would be better than the Pension Protection Fund option, it’s still not good enough. Tata Steel, the government and the unions MUST work together to find a third, workable, employee friendly solutions to the Tata crisis. 

To understand the potential scale of this “what-were-we-thinking” type of school boy error, read the following statement and choose one response that most closely reflects your feelings. 

Person A promises you (either in writing or verbally) to pay you to carry out a service for them. You carry out said services, but person A then advises they will pay you only a fraction of the monies originally agreed. How does this make you feel?

A) Extremely happy - you know you did a good job, you’re happy with your standard of work and that’s the most important thing.

B) You are happy with your standard of work, but slightly irritated that person A has changed their mind about how much pay you will receive. 

C) Angry that person A has lied to you and refuse to carry out any further services or duties on their behalf.

If you answered C, you fall into a category with 99.9% of other people who would be livid that an agreement that you had with another party had been well and truly broken. True, in Tata Steel’s case we’re talking about pension, not direct pay, but that doesn’t make an iota of difference. Their employees will experience exactly the same sentiments. 

Of course, the person paid for their services (the employee, in Tata’s case) is worse off in the short term. But employee productivity comes, in part, from employee engagement. Employee engagement comes from a robust psychological contract (the belief that each party will honour their word) between employer and employee. And that psychological contract is based upon trust, so when you stick a pin into the balloon of trust, you can expect everything else to go POP! Including discretionary effort (AKA our willingness to get in early, not take lunch and work late to get our jobs done).

Tata Steel is playing with fire - and when you play you with fire, you get your fingers burned.