Jackie Orme has remained defiant that she will keep her bonus this year despite the HR community calling on the boss of the Chartered Institute of Personnel and Development (CIPD) to give it back.
Personnel Today exclusively revealed last month that the CIPD handed Orme a bonus linked to performance targets, believed to be worth 20% of her estimated £300,000-per-year salary, while other staff endured a freeze on such rewards.
The news sent shockwaves through the HR industry, with pressure mounting on the CIPD boss to hand back the money.
A Personnel Today poll revealed 92% of people said she should not have been awarded a bonus this year. More than 200 readers responded.
But Orme declined to be interviewed and would not discuss her bonus, pointing only to an official statement which said the reward was “good practice”.
Critics of bonus decision
Sandy Begbie, Aegon UK HR director, told Personnel Today: “For me this is all about leadership and the need for executives in all firms to lead by example. This is a straightforward issue – the bonus should be handed back.
“If leaders are to be respected during these difficult times then leading by example is critical. Employees will be prepared to accept some tough decisions if the impact is being applied equally. It would appear this is not the case.”
Another HR director for a large multinational firm, who wished to remain anonymous, said: “It’s a bad decision on [Orme’s] part. She should not have taken it. It was a stupid move… this is not the year to do it.”
One disgruntled CIPD employee said: “She should either hand back the money and say thanks but no thanks; offer all staff some bonus from her own personal bonus as she could not have achieved her target without them; or accept the money but put it back into the business.”
The CIPD axed 41 jobs earlier this year as the recession hit. It also banned discretionary bonuses for all employees because the organisation did not meet its financial targets and froze base pay for the majority of staff, including Orme.
Cary Cooper, professor of organisation psychology at Lancaster University, said: “In general, I think if senior people have taken a bonus, no matter what sector they’re in, at a time when other people are losing jobs, or people’s salaries have been frozen, or costs are going to be cut dramatically, they should give it back. Just give it back, it’s not worth it.”
In a previous statement, Vicky Wright, CIPD president and chair of the CIPD’s remuneration committee, said: “Jackie’s remuneration package contains a significant element that is linked to stretching short- and long-term performance targets. This is quite deliberate, and reflects good practice in executive remuneration.”
According to its 2007-08 annual report, the CIPD boosted its income by more than 10% to reach £39.4m.
An anonymous staff member this week claimed that training budgets had been slashed. “Many of us have been refused or taken off training we were booked on,” the employee said.
But the CIPD vehemently denied the accusation. Lisa Sarjeant, CIPD HR director, said: “We will not be cutting training budgets per head, which we view as critical to the success of our employees’ development and our organisation as a whole.
“Our commitment to staff development remains unchanged. It is important for us to prioritise training spend carefully to meet the needs of the business but we have not withdrawn staff from planned training. In fact, we have just launched a new in-house mentoring scheme, which is open to all employees.”