R Srinivasan

Reinventing the meaning of work

R Srinivasan | Updated on July 23, 2020 Published on July 22, 2020

On the payroll Amid such uncertainty , keeping your job is considered a reward   -  Getty Images/iStockphoto

The Covid-19 pandemic has changed what employment and rewards mean

The other day, a friend was complaining bitterly about becoming a ‘Covid victim’. No, he had not caught the dreaded disease. What he had was a terrible toothache — the kind which sends a high-voltage current directly into your brain and drives all other thoughts out of it — and was unable to do anything about it. His dentist was only doing video consulting, but was not doing any procedures. And as anybody who has attempted to defer a root canal operation knows, antibiotics and analgesic gels can at best postpone the inevitable, not avert it. My friend claimed that he, along with the thousands of others suffering from non-Covid ailments but unable to secure treatment for them, were also victims of the virus.

In the world of work and employment, there has been a similar, high profile ‘Covid victim’, one whose passing in ordinary times would have caused consternation and turmoil and have, arguably, brought operations in most corporates to a standstill: I am referring to the annual “appraisal” cycle, to which — despite the valiant efforts of HR departments the world over — rewards and recognition of employees are also inextricably linked.

Is employment enough?

With most employers still struggling to even reopen business — just look at the fate of malls, multiplexes, hotels, restaurants and the like — leave alone get back to “business as usual”, there has been, with very few exceptions that I know of, no attempt made to even go through the motions of a full-fledged appraisal of their employees’ performance; leave alone doling out promotions, hikes and bonuses.

In ordinary — read pre-Covid — times, even a single employer of reasonable size skipping appraisals and rewards for a year would have made headline news. If that company had been a listed corporation, this would certainly have qualified as material information which would have been required to be disclosed to the exchanges. But now, with practically the entire gamut of organised business — leave alone the unorganised and informal sectors — going through such turmoil, such information is not considered material or impacting enough on stock prices to be disclosed!

In fact, though no employer will say this on record, many see simply keeping staff on the rolls — even if steep pay-cuts have already been imposed — as reward enough in these uncertain times. Given the uncertainty over the timeline for bringing the virus under some semblance of control, and the knock-on effects of the already severe fallout of the serial lockdowns and economic shutdowns imposed, most employers appear to think that offering their employees the notional comfort of being “employed” should be enough.

That is certainly the thinking behind sending employees on compulsory “leave without pay and benefits” for fixed to indeterminate periods. You have no work, you will not be getting paid, but you are technically not fired. The board of directors of Air India, our hugely loss-making flag carrier, have taken this to perhaps an extreme limit, by sending many employees off on such leave without pay for periods which may be extended up to five years!

This basically stands the meaning of what you and I have considered to be employment on its head. What is the meaning of being without pay for five years but still being legally “employed” by an organisation? And what does it mean for employers? What about their statutory obligations, like insurance, provident fund, gratuity, healthcare and so on?

I am sure many of these questions will be tested legally in the courts in the near future. Government-owned companies like Air India have a peculiar — and largely self-created — set of problems when it comes to the nature of employment they offer, but even private sector employers are facing similar challenges. What kind of connect does an organisation have with an employee on “furlough” (the useful Americanism for sending someone off on forced leave without pay); and vice versa, what ‘rights’ does an employee on furlough continue to enjoy with the employer?

If simply keeping someone employed, or continuing to pay them when business is disrupted, is seen as reward enough, then what is the future nature of compensation going to be like? And if the “new normal”, as many are predicting, will be a permanent resetting of growth on a lower trajectory, does this spell an end to performance-linked compensation as we know it? And what will be the fate of ‘talent’ in the workplace of the future, if there is going to be a permanent demand-supply mismatch between work and workforce availability?

Performance tracking

There are some indications available. A study by Mercer suggests that future rewards strategies will be skills-based, rather than the conventional performance-based ones which in turn rely on productivity metrics. Another study by Korn Ferry has suggested that “predictability of pay” will be an increasingly important factor going forward, which means that employees will place a greater premium on a higher fixed base pay, rather than highly variable and potentially sky high ‘performance-linked’ incentives.

In fact, CEOs, who almost inevitably tend to have rewards packages which are heavily ‘performance-linked’, are likely to be the most impacted by these changes. Start-ups, which rely on concepts like sweat equity and stock options to attract and retain talent, may have to look at an entirely different structure to their cash burn going forward.

The point is that everyone — employers, employees, trade unions and the government — will have to revisit many notions previously unquestioned. Take our tax structure for instance, which is heavily weighted towards the organised sector employer (and employee) in terms of concessions and benefits. The taxman will have to revisit many of these. In the ‘work from home’ new normal, for instance, should the employer still get to write off communication costs and claim depreciation benefits on such infrastructure investments, or should they be passed on to the technically salaried employee working from home and personally investing in the necessary infrastructure?

Or take how we measure performance itself. Should managing to limit a drop in sales to only 50 per cent in the post-pandemic environment be considered a better achievement than achieving 110 per cent of target in a pre-Covid economy growing at 10 per cent? With work from home disrupting the concept of ‘work time’ and ‘personal time’, what happens to the concept of overtime?

Clearly, even if the rest of our lives return to the previous “normal” in the future, when eating out, travelling or partying with friends will no longer be considered a life-threatening activity, what we understand to be the terms “work” and “employment” will have changed for ever.

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Published on July 22, 2020
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