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Johannesburg - Employees will no longer accept the payment of large salary packages and bonuses to executives while their financial incentives remain unaltered, Deloitte Human Capital said on Thursday.
"During the recession, while employees faced retrenchment, salary freezes and bonus cuts, news of executives receiving large compensation packages and financial incentives was met with wide-scale disapproval," Deloitte human capital director David Conradie said in a statement.
Executives should now show employees that they genuinely empathised with them, he said.
"For instance, in response to its 36% drop in net income, Absa announced that its directors and executives would receive 35% of their incentive pay in cash whilst the rest would be deferred over three years.
"Maria Ramos, Absa group's chief executive also announced in February that she has agreed to defer her total bonus over three years."
Conradie said this showed employees that executives genuinely empathised with them and were committed to the organisation's success.
"The furore over the paying out of bonuses and large salaries is symptomatic of a broader management problem where companies are not transparent with staff about the true state of their financial affairs," he said.
Conradie said top employers involved employees in discussions about the company's financial performance, regardless of prevailing market conditions, and engaged them on how each employee could contribute to the bottom-line.
"As the economic recovery continues, those organisations that successfully manage growing workforce expectations concerning pay and simultaneously exercise prudence and transparency in terms of executive bonus and incentive payouts will have a substantial head-start on their competitors."
Conradie said that in contrast, those which failed would be unable to take advantage of the recovery and may well find themselves on the defensive as general staff discontent escalated and their key talent walked out the door.
- Sapa
