It pays to keep a close eye on your reward schemes

Citation

Pitt, M. (2008), "It pays to keep a close eye on your reward schemes", Human Resource Management International Digest, Vol. 16 No. 4. https://doi.org/10.1108/hrmid.2008.04416dab.001

It pays to keep a close eye on your reward schemes

Article Type: Employment law outlook From: Human Resource Management International Digest, Volume 16, Issue 4.

A client who was working away from home checked into an hotel one evening and left his dirty laundry outside his room in the bag provided. He had failed to notice that he was too late to use the service, which guaranteed next-morning delivery of the clean laundry.

Later that evening, a housekeeper noticed the laundry still outside the door. She took it home, washed it and returned it to my client’s room the next morning. She won the hotel chain’s “employee of the month” prize for her trouble. Her citation reads: “Quality is … never having to say that the laundry is shut.”

More and more companies are rewarding employees for their loyalty or outstanding performance, as businesses recognize the key role that such schemes can play in motivating the workforce and improving staff retention and morale. But rewarding employees is not always as straightforward as it may at first appear.

Take the case of Legoland Windsor Park Ltd. The company provided a Lego model to each employee who reached three years’ service. Employees receiving the award, with the exception of those working in the human-resources department, were depicted in a way that related to their job. A catering employee, for example, was shown with a pizza in one hand and a cup in the other, while a reservations employee was represented with a telephone. But the model given to one employee, who had a permanently withered arm, depicted him with his arm in a sling.

A tribunal accepted Legoland’s explanation that there was no appropriate work-related method of depicting the employee, who was a team leader with a roving role. It decided there had been no discrimination. But the Employment Appeal Tribunal disagreed. It decided that the employee could have been depicted carrying a team leader’s radio and that the only explanation for representing him with his arm in a sling was his disability. The reward therefore fell foul of the Disability Discrimination Act 1995.

Firms seeking to combat high levels of employee absence by providing incentives for people to turn up for work may also find that all is not as straightforward as it may initially appear.

First, some employees may feel that they are being penalized for taking time off sick. Dealing with absenteeism should never be about denying employees’ right to stay away from work when they are genuinely too ill to attend.

Secondly, employers risk discriminating on the grounds of disability, sex or even religion, if they give rewards for full attendance without making allowances for legitimate reasons why employees may need to take time off.

For reasons such as these, any attendance bonus scheme needs to be carefully written. It must take into account time that employees may need to take off work for reasons related to a disability. It must also take account of employees’ statutory rights to time off because of, for example, maternity, adoption, parental and paternity leave, and time off for dependants. Factors such as jury service and time off for public duties must also be taken into consideration. And an employee given a sabbatical for religious reasons should not subsequently find that he or she fails to qualify for an attendance bonus.

I advise employers to treat non-attendance as a disciplinary issue, rather than face the risks of claims through rewarding staff for turning up for work. Equally, employers should deal with each case of absence independently, and be sure not to penalize those who have genuine reasons for not coming to work.

A third reason to be cautious about company reward schemes arises from legislation aimed at outlawing age discrimination.

It is possible that the recent law will enable younger employees to claim that long-service awards are privileges they are unjustly denied because they are not old enough to have earned them. Other benefits for long-serving employees, including extra holiday entitlement or free medical insurance, could similarly be challenged.

In my view, it boils down to this. Length of service does goes hand in hand with experience, but only up to the point where people become fully effective in their jobs. Then it becomes irrelevant. And employees obviously arrive at this point more quickly if they are doing unskilled and semi-skilled work than if they are performing more complicated tasks.

Exactly how this works out in practice will, though, have to be decided by the courts. In the meantime, it pays to keep a close eye on your reward schemes.

Mike PittEmployment-law partner at UK solicitors Pearson Hinchliffe. He can be contacted by e-mail at michael.pitt@pearson-hinchlif.co.uk