Don't Compromise!

British Airway’s CEO Willie Walsh’s call for staff to work for nothing certainly raises some interesting questions. For many commentators – including Polly Toynbee, Ed Davey, Ken Clarke and Ester Ranzen on the BBC’s Questiontime (watch the programme on iPlayer until 25/6/2009) – the first of these is something to the effect of “Who the **** does Willie Walsh think he is?”. The trigger for the moral indignation behind the question is understandable but – regardless of where the knee is aimed – is a knee-jerk any more helpful than any other variety? (That said, Management Today didn’t appear to be lining up to shake Mr Walsh’s hand either.)

If the old adage is right, everybody really does have their price (presumably making airlines an older profession that we might have first realized). Given that the voluntary sector is not the predominant social or economic model, it seems reasonable to assume that – whatever our motivation for being at work – price is part of the equation. In a market-based economy, prices are what make the market go round, no?

Market-based economies are also a full-scale working version of another adage: you get what you pay for. And given that the private sector workplace is very much part of the market, the adage applies to payroll and customers alike. BA’s operational model has essentially struggled to cope with the rise of low-cost, frill-free airlines: its higher cost model has left it looking expensive. Coupled with fuel cost rises and the well-publicised fiascos around Terminal 5 at Heathrow, the company is in crisis. While sensible pruning activity has been applied (eg stop flying routes that will never be profitable), there is still a long line of wolves at the check-in desk.

While much of what can be cut has been, the concept of “disposability” appears to remain a tricky one for Walsh and his colleagues. As some commentators have pointed out, a CEO foregoing 1/12th of £735,000 is probably not going to feel as pinched as many employees giving up a month’s pay: being a trolley dolly is only a high-flying career in one sense.

Of course, what we earn and how we choose – as far as we are free to – to live our lives are complex decisions that demand (despite the title of this blog) that we compromise. Seth Godin, marketing guru, wrestled with this conundrum on his blog recently:

It’s interesting to consider where we choose to compromise. I know people with $50,000,000 in the bank who still don’t believe that they have enough, who still grind away at a job they don’t like trying to earn another penny. I also know fundraisers for non-profits (ones that they believe in) who aren’t willing to swallow hard and make a difficult fundraising pitch or promote a new approach to raising money that might feel risky.”

The income that we are each even theoretically able to sacrifice for the greater good is known as disposable income – and as overall income declines, the percentage of it that’s disposable declines more rapidly. Gas, electricity, milk and tea bags cost much the same for everyone, and even the lowest paid have to eat and keep warm. Compromise is what it’s called when you can afford it: otherwise it’s something more like surrender. No one else appears to have drawn the comparison yet, but Mr Walsh is in danger of becoming the Marie Antoinette of the airwaves: even at duty free prices, “let them eat cake” is still an insulting suggestion.

And salary is also a fundamental part of the reward and recognition process that underpins motivation, development and working behaviour. It’s a fairly straightforward equation: in return for doing x and achieving y, we will give you n. Where n=0 – and is being set at 0 for the short-term while the veiled threat is of redundancy as an alternative outcome if sacrifices aren’t made – then the same “reward” could be achieving by staying in bed. (One of the points about working is also that it is supposed to provide an incentive for people as an alternative to claiming benefits. Expecting to retain the effort while removing the reward is to re-write the relationship in more than just contractual ways.)

To work effectively, reward mechanisms should relate to workplace performance: better work or a better contribution means a greater reward. Quite apart from querying whose leadership has delivered the company to its current landing strip (though this surely should be asked at some level), this begs questions about how behaviour will henceworth be rewarded henceforth at BA – will those who can afford to sacrifice some salary be preferred (in whatever way) to those whose performance or contribution may be greater but whose capacity to effectively financially support their employer is smaller? Equally, if you’re not going to get rewarded anyway, where is the incentive to do well and what is the penalty for failing to do so? We all get what we pay for, whether we’re buying flights or behaviour.

Salary is also an expression of value: what we are paid should equate to our employer’s judgement of our worth – either crudely in terms of our contribution to the bottom-line or more sophisticatedly to include an evaluation of our individual value as human capital. There are two reflection exercises for BA’s management there:

a) where does responsibility for the handling of Terminal 5 and the evolution of the airline’s operational model lie,
and

b) if human capital is important to BA – and despite automated check-ins and the like, its staff are still an airline’s main public interface – is sending an implicit message of sharp or total devaluation a wise move in an industry where the staff already have a very good idea exactly where the exits are?

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