BT set to pay bonuses
Telecoms giant BT is set to pay thousands of its frontline staff a bumper bonus this year.
BT announced this week that it will pay staff a £400 bonus after it put a pay freeze into place earlier in the year, reports the Guardian.
Following talks with unions, BT's non-management staff will get £200 next month and a further £200 in December.
The move will effect around 55,000 of the company's staff who are currently paid an average of £24,000.
An email to staff yesterday outlined the move and chief executive of the company Ian Livingston praised management skills saying: "Judging from my in-box this morning that's gone down well."
The company praised team members who have played a major role in improving customer service.
It added that BT valued the constructive and pragmatic relationship it has with the Communication Workers Union and it will continue to work closely with them to deliver further operational efficiencies."
The news comes as the company announced that it is set to bring at least 2,000 call centre jobs in India back to Britain as it prepares to close about half its customer service operations on the sub-continent.
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Comments
Why not reduce the cost of calls and / or improve the service BT provides rather than paying bonuses?
Bet you wouldn't be saying that if you worked there! I don't have a problem for rewarding people for a job well done. The question is was the reward justified or was it only for doing the job they were paid to do?
Giving a reward for changing behaviours retrospectively is a good idea - it isn't a carrot, jusr recognition. Does it set a precedent/expectation though?
Seems very odd to be paying bonuses at the same time that they're making so many redundant.
I can't for a millisecond pretend to believe that all 55,000 staff have exceeded the expectations and requirements of their current job roles!
I would therefore deduce that many (the vast majority) of the 55,000 staff receiving a £400 bonus in 2 traunches are receiving this payment because they are employed by BT and no other criteria!
The bonus is on top of an average salary of £24k which, in customer service industries, is a reasonable to good salary, so the bonus is not required to make up their pay.
£22m paid out in bonuses, shareholders to please with dividends also - I can only assume there will be no cuts in the price of telephone calls or broadband this year.
'12 million customers to be hit in October as call costs go up 34% since January' Headline from Guardian on line today so it is not as good as no cuts in price!
Wait a moment - haven't BT been one of the forerunning companies to ask their employees to actually take a shorter working week? This seems like such a conflict to paying out bonuses.
BT 'loaned' staff out to other companies, ie they kept them on their books but other staff paid their wages. I wonder if those people still got a BT bonus?
Can't see how they would earn the bonus since they aren't contributing to the improvement on customer service - unless it is by not being there :-)
I thought that the people loaned out are from other divisions?
How can they possibly justify paying staff bonuses when they're having to increase the price of their services? Surely that's not ethical.
Performance related pay justifies corporate greed - if the frontline staff are getting a paltry £400 it will be interesting to look at what the senior people will get by comparison.
They didn't get a pay rise so paying bonuses is a lot cheaper since they don't accumulate ongoing costs or qualify for pension benefits.
If you followed your argument to its logical conclusion nobody would ever get a pay rise either because that always feeds into the consumer price unless there is at least an equal improvement in productivity or other cost savings.
Don't agree I'm afraid Ray, a pay rise can usually be linked with "cost of living" increases or the RPI increasing whereas a bonus is a one-off payment [u][b]usually[/b][/u] made as a result of exceptional performance commonly linked with the financial performance of the organisation (although I suspect the custodians of the English language are having to re-write the definition applied to such payments in lieu of the widespread gorging on profits some organisations have enjoyed).
We are currently experiencing or are close to deflation, therefore the cost of living is remaining stagnant or is reducing, hence a lot of organisations are holding back on pay rises. This is usually necessary to ensure ongoing economic stability. If people have too much money, then prices will spiral out of control and we cannot remain competative with other countries in terms of export trade.
Withholding wage increases also allows organisations to offer similar products or services at the same price as they previously did or develop new products or services to gain a competative edge. BT is doing neither as is apparent with their 34% cost increases.
If we follow bonus payments to their logical conclusion, we create a two teir society, the "haves" and the "have nots" because prices will increase in line with the availability of money through bonus payments and those who receive no bonus or increment in their pay will not be able to afford to keep up.
The government puts inflation up to slow down spending, people loose their homes and go bankrupt because they can't afford the borrowing they got in the better times and we return to the "boom and bust" of the early / mid 1990's, with inflation at around the 13% mark.
£400 is a fairly small sum of money and won't cause financial catastrophe (hopefully) however it is not in keeping with the current economic climate and is very insular in my opinion.
Hi Colin,
sorry for delayed response - didn't get notification that you had commented back. Think the site must be overworked by all the comments!
I agree that many pay rises are linked to the cost of living but this still requires either a rise in price or an improvemnt in efficiency to pay for it otherwise firms would go bankrupt. Many firms increase prices with no added benefit in service.
The reality of today's economic position is that it is cheaper for BT to pay staff a bonus than to give them a pay rise. Whether you believe that they deserve it or that it is not the right basis of remuneration due to the usual definition of bonus isn't actually relevant from BT's perspective. It is an expedient to keep staff happy and recognise the effort they put in. The response from the staff has clearly shown the positive impact it has had and goodwill that has generated. BT will need that from all of its staff in the coming months.
The amount of money, as you say, is not massive enough to have a significant impact in the financials. As a tactical ploy I don't think you can fault it.