The morality of furlough

Using emotion to build positive reward practices
The morality of furlough

This week, Government announced an extension to the Coronavirus Job Retention Scheme (furlough scheme) until end October. But some companies have already come under fierce criticism for using it. 

The furlough scheme gives employers access to government support to help pay employees and avoid redundancies. Over 7.5 million people (a quarter of the workforce) are now covered by the scheme, at a cost of £14bn a month.

However, ‘tycoons’ such as  Sir Philip Green (Arcadia Group), John Hargreaves (Matalan) and Umar Kamani (Pretty Little Thing), have fallen foul of the press for using the scheme whilst maintaining a lavish personal lifestyle.   

Others, such as Victoria Beckham and a number of Premier League Football clubs have given in to this pressure and backtracked from the scheme.

We’re not surprised this is sparking emotion. There’s a huge economic burden to be shared as a result of the pandemic and it somehow needs to be picked up by wealthy individuals, cash rich businesses and the humble taxpayer.

But let’s be clear. These companies have all been adversely affected by the pandemic and are entitled to seek government support to protect jobs and keep on a strong financial footing.

I agree that government grants being handed to wealthy individual and cash rich businesses is unpleasant.  But shaming them for doing so is akin to shouting in the face of an overweight person as they eat a lunchtime salad.   

It’s not fair, and it’s missing the bigger and hugely significant issue that needs addressing.

It’s not fair because the scheme is open to all eligible businesses.  No criteria has been set for applications to the furlough scheme on the basis of the:

  1. relative impact of the pandemic on that businesses
  2. wealth of the individuals, families and institutions that own the business
  3. turnover, profit and cash reserves
  4. executive pay and bonuses 

It’s therefore unreasonable to expect all companies to apply a set of moral judgements and decline funding from the public purse on these bases.

This doesn’t mean that I think the situation is right. It’s hideously wrong. I just feel there is a much bigger and significant issue to address here. It’s an issue that has led us to a perfect storm of the vastly rich owning and managing business and organisations where workers earn less than they need to live on.  

At the heart of all this is the simple concept of where the money from business goes.  This is where we need to apply more morals.  Often, too much has gone to executives and shareholders, and too little to workers. Profits have flowed out of companies in the good times, and little has been reserved for a rainy day.

This pandemic is providing us with an opportunity to change this. 

Take a look at the work of Duncan Brown who, along with an expert group, is seeking to help us do this. Whether it’s a different approach to executive pay decisions, more employee profit-sharing, or taking steps to ensure we can afford better pay for key workers, we all have a role to play.     

So, let’s all stop ‘furlough hounding’ and think hard about how to create a more positive future for our reward practices. 

 

At Verditer we make performance and reward more effective. 

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Image: courtesy of jingdianmeinv1