In the last issue we started to look in detail at some of the corporate responsibility issues which affect the HR function. In this article we consider the issues of corporate responsibility in relation to pay, non-discrimination, training, appraisals and how to promote good responsible business practices by suppliers.

Pay is a very thorny issue and anyone who says that the pay in their company is 100% fair is wrong. In our assessment work it is always one of the most contentious issues we deal with. We firstly try to assess whether pay setting is clear. It is astonishing the number of times we find employees of all grades and ability completely bewildered about their pay.

We regularly see examples where elements of pay (a bonus, pension or overtime scheme) is foggy for employees and a source of perceived unfairness. In our assessment work we encourage employers to check with employees to make sure that pay is at least clear and to make an effort to simplify and explain pay structures to employees.

We also look at whether pay is fair relative to the cost of living in a country. Again this is a source of enormous contention. We start from a philosophical viewpoint that companies should pay only enough to attract the employees they need, but for the lowest paid employees, it is very important that the employer considers whether a reasonable living wage is being paid.

We therefore investigate whether, at a minimum, the employer bothers to benchmark wages for the industry and against the local cost of living. One of the clearest problems we see in this area is the outsourcing of the lowest paid work. Contract cleaners often work in appalling conditions for example, but the contractor does not feel any need to encourage these sub-contractors to deploy ‘corporately responsible’ practices themselves.

Pay also raises the issue of time off from work, flexible working and work/life balance . In our assessment work with the GoodCorporation Standard we have taken the brave decision to duck these issues! We do look at them in terms of non-discrimination and where they are perceived to be unfairly set-up or applied.

However, we do not look at them in terms of 40 days holiday good, 15 days holiday bad. Our logic is that these issues are areas of fair competition between employers and it is impossible for us working in many different countries and sectors to try to make common rules apply to all.

Making sure that pay and terms do not discriminate unfairly between employees is essential to corporate responsibility. However, the issues of non-discrimination can be very sensitive depending on the context. For example companies have tied themselves in knots when trying to report on the number of ethnic minorities they employ.

What is reasonable in Cheltenham is probably not in Bradford just as what is fair in the UK makes no sense in Nigeria. We therefore try to focus on the perception of employees about how they are treated in reality. We also do our own reality check of the mix of the employee base against the local population.

One of the intriguing issues is how different the debate is across the EU. For large companies with operations in Germany, Spain, France, Belgium and the UK they will find five different sets of assumptions about non-discrimination, even though each of those societies starts off with a similar set of overall pronouncements about non-discrimination.

Not surprisingly local knowledge is also essential. As I found out to my cost, it is no good sending a Dutch speaker to the Flemish speaking parts of Belgium to assess these types of issues. Our poor Dutch speaker was not warmly welcomed, but at least it was not personal, because no-one was welcome at this particular site if they were not Flemish.

The rash of recent cases alleging sex-discrimination is also delicate to handle. We find that when assessing fairness, sex-discrimination is surprisingly common as an issue with many women perceiving that their roles as mothers’ means that their treatment in the workplace is bound to be different. In many instances we find that women expect this to be the case and argue that their different treatment is reasonable and fair given their relatively shorter time at work for example.

As assessors we stick closely to the principle that people must be treated on the basis of merit and nothing else. But it is complex. We were asked why we did not use the concept of ‘equal pay for equal work’ in our assessments.

We found that phrase intuitively attractive and straight-forward, but as soon as our assessed companies pointed out some of the pitfalls we started to have doubts. They pointed to differential pay for sub-contractors and consultants, to differential pay based on length of service and/or experience for example. These issues continue to challenge us.

The discrimination issues take us onto bullying and harassment in the workplace. We see these as important issues in the corporate responsibility debate. We find that companies often with good cultures can still hide pockets of very poor employee relations with abusive relationships present.

Our approach works well to discover these types of issues. We find that employees taken aside for an hour talking to a trusted third party will often reveal what is really going on inside the company. Obviously in such cases our first duty is to protect the employee’s anonymity and we are careful about how such cases are presented back to management.

We see it as an essential part of corporate responsibility to foster a working environment in which all employees are treated with respect and in which bullying and harassment are not tolerated. But we recognise that problems get hidden because it is often very difficult for the employees involved to make effective representations with confidence to change the situation they are in.

We also look at the issues of fair training and fair appraisals of employees. Again these areas are highly contentious but an important aspect of corporate responsibility. We make a strong point of saying that training can often be on-the-job and informal, but should be formally considered. We also encourage appraisals regardless of the job or length of tenure, even if it is a short chat.

Employees mostly moan to us about perceived unfairness of training. Often training is regarded as a perk rather than as a productivity issue. But employers could do better at being clear about how employees are being trained, however informal that might be, and make sure that employees discuss their training needs so that training is agreed.

Appraisals also cause much grief! We find that employees perceive appraisals to be unfair both when they are linked to decisions on pay and when they are consciously unlinked. Our fairest employers are those that make appraisals obligatory for all, but employee driven in terms of effort and content. This stops employees from forming the perception that the appraisal is a forced one-way communication. On balance we also find appraisals linked to future pay are more real and useful to employees.

We also look at issues such as child labour, forced labour, bonded labour and the like. But fortunately these issues won’t bother most of the UK readers of this article. But supply-chain issues are extremely important and they are not just about children working for a distant supplier in Bangladesh four steps removed from the UK company.

From the example of contract cleaners and security personnel it is clear that suppliers to bigger companies can operate very poor working conditions.

We often find suppliers failing to produce any terms and conditions for employees, contracting labour illegally, paying below the minimum wage and allowing bullying and abuse to exist within the workplace.

In these cases we encourage the employers to actively screen their suppliers.

We provide a straight-forward pack which can be given to suppliers and subcontractors during a tender process. It encourages the supplier to put in place responsible working practices. Our best employers have made compliance with the checklist in this pack, a scored part of the tender process. These kinds of management processes go some way to changing the way things are done, which is the most important thing.

Leo Martin is director and founder of GoodCorporation, the corporate responsibility standard and is the principal character in the BBC’s series, Good Company, Bad Company.

Other articles in this series

• Doing ‘good’ with HR




• The pope, the EU and the Election




• Breaking down ‘woolly’ notions




• What’s all the fuss about?




• Does it really pay to be good?