Spun off from the Gillard thread.
Background: Although I have spent my entire working life at the same manufacturing facility, the ownership of the plant has changed several times, and so too have management regimes. Both are not necessarily related! I am a skilled ‘dual’ tradesman. We moved from wages to salary in 1996, and back to wages in 2009. Salary failed because of the changing expectations of management, pure and simple.
Pre-1996, there were a core of old-thinkers who rorted overtime. You know the story; do bugger all during the day and work overtime to catch up, sometimes to the detriment of production. For some reason there was an inability or a lack of will to manage the situation over the years, but when the opening of a major expansion to the plant coincided with a new EBA, it was seen as an opportunity by the company to treat that expansion as ‘virtual Greenfield’ and create a new wages structure for the workers not only there, but also over the entire site. This new salary included rolling all the petty allowances into the hourly rate (tool allowance, leave loading etc) to create an ‘all-purpose’ rate, then adding an amount equal to the average overtime worked across the site to the total. Superannuation remained over and above the gross amount. The advantage to the company was that it created a culture of ‘hurry up and do the work’ which then decreased downtime because there was no advantage to be made by working overtime – we were already getting paid for it. It worked a treat because efficiency, production and profit increased significantly. The advantage to the worker was the feeling that he was getting paid something to do nothing, and more leisure time. The company was happy to pay what appeared to be a significantly higher base salary compared to wages because they correctly surmised that if the worker is at home, then that meant that the plant is running and does not require anyone fixing something and holding up production. Win/win. For me, I was no better or worse off. From that I guessed that I had always worked an average amount of overtime!
It was only a few years until it began to go pear shaped. A change of management regime occurred, and the new bosses couldn’t work out why the workers were getting paid so well but not working overtime to earn it. Their interpretation of the EBA meant that they couldn’t see the value-for-money argument. The next EBA in 2000 included a minimum amount of overtime that had to be worked.
The next EBA, from different managers again, saw us compelled to work even more overtime.
The next EBA saw us put onto a call-in roster, and even more compulsory overtime.
The next EBA saw us selling our soul if we wanted to remain on salary. We were threatened with returning to a wages system if we didn’t agree. We asked for an example of figures, a deal was struck, and we couldn’t be happier. Yes, when I don’t work overtime I get paid less than what I did under a salary, and the current managers have actually clamped down on overtime as well – the culture has changed.
Sorry for the ramble. I don’t like the concept of a salary for the reason that it dilutes earnings if the expectations imposed on the worker become unrealistic. I know the total value of the salary package must be considered, but so must certainty and quality of life.