HR must congratulate BA directors’ pay cuts

Solidarity among employees was very much in the air in the immediate
aftermath of last month’s terrorist attack on the World Trade Center. However,
cynics were waiting to see whether sentiment would translate into action as
companies were forced to cut costs drastically in response to the economic
fall-out of the attack.

It seems that the board at BA, at least, have decided that they should take
their share of the massive reduction in payroll that the company has announced.
Last week chief executive Rod Eddington said board directors had agreed to take
a 15 per cent pay cut and 600 managers below board level have been asked to
accept a 10 per cent cut. We should gloss over the fact that Eddington’s
remaining salary and those of his boardroom colleagues will hardly be a
pittance, and applaud this unusual move.

It is worth remembering that the phrase "fat cat" gained currency
at a time when board members, especially the leaders of privatised utilities,
were awarding themselves large bonuses while simultaneously sacking legions of
staff. Since then the press and trade unions have labelled business leaders fat
cats whenever they have won big pay rises for poor performance.

The BA move may not be much comfort for the 7,000 staff who face redundancy,
but at least it shows that those at the top are taking a share of the pain.

HR people should congratulate the BA board for making this gesture. For too
long top executives have been immune from the performance-related pay that is
the norm for the rank and file in today’s organisations. This state of affairs
has long undermined the efforts of HR managers to link pay to performance in
their company’s culture. Other companies making mass redundancies should look
at BA as a bold example to follow.

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