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Learn from legal expert, Harrison Barnes
Don’t just take it from us
By Harrison Barnes, CEO and Founder - BCG Attorney Search
The importance of works-pay as part of the total costs for an employee
The works-pay component of employee costs considers workplace and work-related resources necessary for an employee to do his/her job. Accordingly, a company or a workplace would be resource-rich or resource-poor to an employee. Even with the same salary, an employee would have both reduced income and reduced satisfaction in a company with a low works-pay component.
Works-pay – the personal and workplace components
Works-pay is the component related with tangible supplies and equipment like computers and special software, in contrast to things like growth opportunities or career enhancement prospects. The works-pay component of employee costs is strictly job-related and not career-related, though there may be overlapping areas. Learning to use a tool and gathering experience – obviously affects career through gathered work experience, but the expense of providing the tool is still job-related-costs and not employee career-related.
Works-pay is generally divided into two components: personal works-pay and workplace works-pay. Personal works-pay includes costs of things over which an employee or individual worker has day-to-day possession and control, while workplace works-pay would include the costs of workplace settings and environment. Portable tools like pens, uniforms, laptops etcetera and personal works-pay, while fixed computers, cubicles, desks etcetera would be considered under workplace works-pay.
The issues with works-pay components
With both types of works-pay related employee costs, all issues boil down to - how much is “actually needed?”
The problem is that when components of works-pay are shifted to the shoulders of employees, they often see it as a cost to be minimized in use, and overstated on questions of reimbursement. Even if they do not do so, the employer mindset would often visualize it in that manner and presume that an employee is overstating costs and spending less than necessary. This gives rise to workplace issues, conflicts, and in general, an unwholesome workplace.
Companies that try to bear almost all works-pay related costs provide a basis for workplace or organizational commitment and worker readiness, while at the same time doing away with a great number of issues that could have led to workplace conflicts. At the same time, providing a resource-rich environment means extra resources spent over inventory maintenance and checks and making sure that wastage or under-usage of resources remains minimal.
The problems with personal works-pay
While it is extremely necessary to utilize an employee fully from day one itself, the personal works pay component is something that employers tend to drag their feet over, as in today's market and workplace competition, the prospect of a new employee remaining long enough to make personal works-pay viable and worthwhile remains questionable.
On the other hand, readily availability of personal works-pay components, greatly help in employee retention, makes an employee feel safe, and helps in employer branding. It generates in the mind of an employee a feeling that the employer has readily accepted him or her and leads to normative commitment or a sense of obligation that helps in both productivity and employee retention.
Personal works-pay components range from business cards, corporate credit cards to pens and routine closet items. They include supplying tools ranging from cell phones to software to personal outfitting, protective gear etcetera, most of which would have to be discarded if the employee leaves the workplace, and necessary to be supplied so the employee develops a continuance commitment to the workplace.
The principal issues about the personal works-pay component revolve around what is essential and what is not, investment versus costs, and issues of equal allotment of resources.
While in an ideal world, equal allotment of resources is just and fair, in a not-so-ideal world, employees vary according to their commitment and productivity levels. It makes sense to provide more productive employees with enhanced tools, but distribute allotment of essential resources on an equal basis.
So, this moves us into the next area where issues might develop with the personal works-pay component. At what point are we going to take an employee's personal preferences into account? While providing every employee with the same basic model of a working phone may be equitable and sufficient, an employee may be used to better products than the company supplies for its employees. At this point, a company is in a dangerous point of being regarded as not up-to-date, and this is a point that needs to be understood, weighed, and bridged. While it may not make sense to provide every employee with the latest iPhone, it may not also make sense to provide employees with phones that lack basic facilities like caller identification systems, that today's individuals take for granted.
Since, personal works-pay components become mostly useless when the employee leaves the company, the issue also arises to solve at which point should ownership of some items be handed over to the employee and in what manner.
It is extremely difficult to suggest solutions straightaway to personal works-pay issues, except that it should always start with a clear inventory, crystal-clear ideas of resources being allotted and allotment rationale, periodic reviews of return on investment and use of personal works-pay components in employee commitment and retention strategies. The solutions differ from one workplace to another, but the issues broadly remain the same.
John E. Tropman, The Compensation Solution: How to Develop an Employee-Driven Rewards System (San Francisco: Jossey-Bass, 2001)