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Time to put benefits back on the fringe

Time to put benefits back on the fringe Editor's comment The 'right' ingredients but a stale mix Latest figures issued by the Tim e to put Engineering Employers' Federation offer a stern rebuttal to those who still believe in the fallacy that high unem­ ployment and a depression of earnings can ginger up manufacturing perfor­ mance, albeit brutally. In fact, viewed collectively the benefits back statistics make a nonsense of several economic shibboleths. Productivity, so the unions would have us believe, is dependent more on the efficiency and sophistication of the machines than the men who on th e fringe operate them. Not so in the engineering sector where investment levels are roughly for the following reasons: ONE of the demands made by the back to where they were in 1972, striking power workers — tariff con­ while output per head over the same It favours service industries and cessions on electricity used by their period has shown a modest rise after a thus hinders the shift of labour into families — caused a public outcry and "productive" employment. British pronounced dip at the beginning of was forcefully resisted by their em­ Rail can offer its employees free train ployers, the Electricity Council. rides and it costs them nothing. What The EEF attributes the improve­ But the claim is not that outrageous, does a machine tool maker have to ment this year to higher deliveries and for it has to be acknowledged that offer — a cut-price horizontal borer? stable employment, but notes that concessions, perks, fringe benefits — productivity over the last seven years It inhibits job mobility, for com­ call them what you will — are an has risen by only 20 per cent — very parisons between one employer and entrenched part of the reward system. low by international standards. another are increasingly clouded by If one is to be unwaveringly consis­ the relative merits of hidden benefits. To describe employment as stable tent, by denying the power workers is almost an understatement. In a It militates against the small em­ their cut-price electricity, one should batch of graphs where the only ployer — another source of supposed also seek to end cut-price food for consistent feature is inconsistency, Government concern at the present supermarket staff, cut-rate mortgages the employment line is almost as time — who can't call on the fringe for bank staff and free travel for rail straight as a ruler — and one, benefit resources of the big companies. and underground workers. furthermore, which is well down in It restricts an employee's credit In the cause of fairness, the curbs the manufacturing league table. rating. Bank managers, finance com­ should not stop there for it's reason­ Meanwhile, increases in earnings panies and building societies are only able to suggest that the higher up the — which the EEF notes are still in interested in the cake — not the jobs ladder, the juicier the perks. excess of competitors—ar e neverthe­ trimmings when considering a per­ Sorry, motivational aids. less shrinking until the UK line is at sonal loan or mortgage application. It would be naive to think that those the point of merging with those for Similarly, individuals need to remind on the receiving end of these non-cash Japan, the US and West Germany. themselves that pension benefits reflect benefits would willingly forego them A weak currency aids export com­ cash earnings — not incentive vouchers. if offered a compensatory rise in take- petitiveness is another myth as far as home pay. While the effect is now mercifully the engineering sector is concerned. As with a reduction in the working different, the principle of non-cash While exports by volume have remained week — which results in more pay at reward is not dissimilar to those bad almost static since mid-74, imports overtime rates — such a move would old days when men were paid in showed an alarming rise from the bring a double bonus: the pay rise and company tokens which had to be beginning of 1976 to the middle of this the re-emergence of "allowances" spent at the company store. year. after a token period of dormancy. But Fringe benefits need to be shunted So nearly all the supposed ingre­ it is realistic to argue that the weight back into their proper context: Rewards dients for recovery — low sector against real earnings improvements, over and above the pay cheque and employment against a high level of by way of existing tax structure and not as a part substitute. That can only national unemployment, a decline in efforts to hold down incomes, actively be achieved by a change in the tax wage rises, a rise in productivity and a encourages fringe benefits. This im­ system which presently indulges in its drop in materials prices — have balance is against the interests both of own concessions concerning perks, to produced a mix which is far from individuals and the British economy the detriment of net earnings. rejuvenating. 4 INDUSTRIAL MANAGEMENT http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Industrial Management Emerald Publishing

Time to put benefits back on the fringe

Industrial Management , Volume 77 (12): 1 – Dec 1, 1977

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0007-6929
DOI
10.1108/eb056810
Publisher site
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Abstract

Editor's comment The 'right' ingredients but a stale mix Latest figures issued by the Tim e to put Engineering Employers' Federation offer a stern rebuttal to those who still believe in the fallacy that high unem­ ployment and a depression of earnings can ginger up manufacturing perfor­ mance, albeit brutally. In fact, viewed collectively the benefits back statistics make a nonsense of several economic shibboleths. Productivity, so the unions would have us believe, is dependent more on the efficiency and sophistication of the machines than the men who on th e fringe operate them. Not so in the engineering sector where investment levels are roughly for the following reasons: ONE of the demands made by the back to where they were in 1972, striking power workers — tariff con­ while output per head over the same It favours service industries and cessions on electricity used by their period has shown a modest rise after a thus hinders the shift of labour into families — caused a public outcry and "productive" employment. British pronounced dip at the beginning of was forcefully resisted by their em­ Rail can offer its employees free train ployers, the Electricity Council. rides and it costs them nothing. What The EEF attributes the improve­ But the claim is not that outrageous, does a machine tool maker have to ment this year to higher deliveries and for it has to be acknowledged that offer — a cut-price horizontal borer? stable employment, but notes that concessions, perks, fringe benefits — productivity over the last seven years It inhibits job mobility, for com­ call them what you will — are an has risen by only 20 per cent — very parisons between one employer and entrenched part of the reward system. low by international standards. another are increasingly clouded by If one is to be unwaveringly consis­ the relative merits of hidden benefits. To describe employment as stable tent, by denying the power workers is almost an understatement. In a It militates against the small em­ their cut-price electricity, one should batch of graphs where the only ployer — another source of supposed also seek to end cut-price food for consistent feature is inconsistency, Government concern at the present supermarket staff, cut-rate mortgages the employment line is almost as time — who can't call on the fringe for bank staff and free travel for rail straight as a ruler — and one, benefit resources of the big companies. and underground workers. furthermore, which is well down in It restricts an employee's credit In the cause of fairness, the curbs the manufacturing league table. rating. Bank managers, finance com­ should not stop there for it's reason­ Meanwhile, increases in earnings panies and building societies are only able to suggest that the higher up the — which the EEF notes are still in interested in the cake — not the jobs ladder, the juicier the perks. excess of competitors—ar e neverthe­ trimmings when considering a per­ Sorry, motivational aids. less shrinking until the UK line is at sonal loan or mortgage application. It would be naive to think that those the point of merging with those for Similarly, individuals need to remind on the receiving end of these non-cash Japan, the US and West Germany. themselves that pension benefits reflect benefits would willingly forego them A weak currency aids export com­ cash earnings — not incentive vouchers. if offered a compensatory rise in take- petitiveness is another myth as far as home pay. While the effect is now mercifully the engineering sector is concerned. As with a reduction in the working different, the principle of non-cash While exports by volume have remained week — which results in more pay at reward is not dissimilar to those bad almost static since mid-74, imports overtime rates — such a move would old days when men were paid in showed an alarming rise from the bring a double bonus: the pay rise and company tokens which had to be beginning of 1976 to the middle of this the re-emergence of "allowances" spent at the company store. year. after a token period of dormancy. But Fringe benefits need to be shunted So nearly all the supposed ingre­ it is realistic to argue that the weight back into their proper context: Rewards dients for recovery — low sector against real earnings improvements, over and above the pay cheque and employment against a high level of by way of existing tax structure and not as a part substitute. That can only national unemployment, a decline in efforts to hold down incomes, actively be achieved by a change in the tax wage rises, a rise in productivity and a encourages fringe benefits. This im­ system which presently indulges in its drop in materials prices — have balance is against the interests both of own concessions concerning perks, to produced a mix which is far from individuals and the British economy the detriment of net earnings. rejuvenating. 4 INDUSTRIAL MANAGEMENT

Journal

Industrial ManagementEmerald Publishing

Published: Dec 1, 1977

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