When a large-ish company declares bankruptcy or multiple retrenchments, the news reports often include a quote from a union representative about wanting to ensure that employees receive their entitlements.
This means the employees should be paid any salary and allowances owed to them, and they should have access to fully paid-up superannuation accounts. These payments are a normal part of the contract between an employer and an employee.
The trouble with entitlements is that they don’t inspire loyalty to the organisation or dedication to doing brilliant work. You do a fair day’s work and you’re entitled to expect a fair day’s pay. If the pay’s not there, you’ll take your talent elsewhere.
Retaining great staff requires extra effort by the employer. To attract the best, some organisations offer incentives like bonuses and access to training or travel; others provide facilities like a gym or childcare. These options cost money, and in a challenging economic climate it’s tempting to cut back on such non-core expenses.
Like many others, my employer is wrestling with reduced income and leaner operating budgets. It’s quite possible we’ll have to reduce spending on some employee benefits in the next few years.
However, there’s one benefit that’s likely to stay for many years and I reckon it provides a good model for other employers.
Edward Stevens, merchant and late of Malvern, Victoria, was a member of our Council (equivalent to the board of directors). He bequeathed half of his estate to my employer. The money formed the basis of a trust fund which now earns income via investments.
Once some capital works had been completed, if there was any money left over from the bequest Stevens wanted it “to augment the wages or salaries of the staff of the University beginning with the lowest paid employees.”
These days the Edward Stevens Trust provides financial help to staff or their dependents in ’special need’ circumstances such as:
- lengthy absence from work due to illness, after paid leave has run out
- needing to maintain superannuation contributions during extended sick leave
- support for dependents following the death of a staff member
- other situations, at the discretion of the head of Human Resources
The trust fund is not enormous by today’s standards; its total capital seems to be roughly equivalent to the salary of a senior manager. The trust is pooled with our various other trust funds and savings, so the cost of investing the fund and managing the income is relatively low.
How do you measure the return on this kind of investment?
Most of our staff will never need to ask for help from the Edward Stevens Trust. Whether we use it or not, just knowing that there’s help available turns a sense of entitlement into a sense of privilege. I could find work at a higher salary elsewhere — but I’d rather work for an organisation that genuinely cares about its employees’ welfare.
Tags: remuneration, Edward Stevens, entitlements, human resources, loyalty, performance indicators
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