Marks & Spencer plans to slash the redundancy benefits for its 60,000 staff by up to 25 per cent in a move that has infuriated employees and triggered fears of a middle management cull.
In an internal memo seen by The Times, the high street retailer is proposing to reduce the maximum payout that employees can receive in relation to their length of service from 70 weeks to 52 weeks.
Anyone aged over 41 would receive only three weeks’ pay for each year they had worked at M&S if made redundant, compared with 3.75 weeks’ pay at present. M&S wants to introduce the new conditions by September 1.
Employee representatives have warned the M&S board that the proposed changes had caused “an unprecedented level of feedback, concern and anger”.
In a letter sent to management last week they added: “There is zero confidence that we will not be entering another round of redundancies, and a strong suspicion that this is one of the reasons behind the proposal.”
The last two paras say it all really. I can't see how this is going to do M&S any good in the long run for a number of reasons.
1. It's obviously going to worry a lot of M&S staff. Worried people don't always work the hardest or the most effectively.
2. This cut applies to all staff. That means that if M&S does cut jobs even those lucky enough to survive will have a gripe. One of the reasons that companies tend to lay people off rather than reduce wages is that in the former case disgruntled victims are outside the organisation, whereas in the latter they remain within it, only with added knackered morale. M&S seems to be willing to annoy staff it wants to keep.
3. Taking away something people already have is always going to nark them off because of the endowment effect.