retail news in context, analysis with attitude

The Financial Times writes about how most of Unilever's some 158,000 employees "are remunerated in the same way that people in big companies have been paid for decades. They get a fixed salary; a pension and other benefits and a bonus that depends on how well they perform each year. Its 14,000 senior managers and executives can also take part in a scheme that can more than double their bonus if they invest it in Unilever shares."

But go figure. That's changing, all because Unilever was willing to pose - and then answer - a question:

"What would happen if people lower down the pay ladder had a chance to take part in the executive share scheme? And what would those people do if they were also allowed to convert more of their fixed pay and benefits into a bonus or, conversely, turn more of their bonus into fixed pay?

"Peter Newhouse, Unilever’s global head of reward, was keen to find out, which is where the experiment came in. Mr Newhouse has long thought the traditional package of a fixed salary and one-size-fits-all benefits is 'archaic.' He thinks it would be better for both workers and businesses to tailor pay according to people’s needs."

And so, some 200 employees at a variety of levels were "told they could join the executive share scheme and then, if they chose, shift the balance of their pay to take more or less of it as a bonus. Here’s what happened: 20 per cent decided to put their entire bonus into the executive scheme and 20 per cent chose to shift the balance of their fixed and variable pay. But there were some revealing differences."

Higher salaried people shifted more of their annual pay into bonuses; 90 percent of lower paid staff chose higher fixed pay.
KC's View:
The point is this - that companies can become employers of choice, keeping valued employees and attracting new ones, if they look to develop more personalized approaches to pay and benefits.

It is just another way in which companies can and perhaps should challenge the status quo.