Duncan Brown: Are status perks still relevant?

Why do some organisations retain status benefits for executives?

Yerdaw understands status. He’s only eight and has no money. But my self-appointed, homeless guide to beautiful Lalibela, Ethiopia, insisted on showing me to the best restaurant in the best hotel in town. ‘How do you know it’s the best?’ I asked. ‘The manager has a big, big car’ he said.

Back in the UK, we have long been obsessed with social status, defined by sociologists as the prestige attached to a person’s position in society. When I started my career as an employee relations trainee at Vauxhall’s Luton plant, an admittedly not very prestigious post, there were separate toilets, apartheid-style, for hourly-paid workers and managers.

This was somewhat confusing, because we graduates were taken on as hourly-paid to avoid a staff headcount freeze. And, after I graduated from Cambridge University, I think my parents were hoping for something better.

Today, social divisions are subtler and more complex, but just as evident. Some 160,000 of us took part in the Great British class survey that was published last month. Beyond the traditional upper-, middle- and lower-class divisions, it claimed to identify seven social classes, ranging from the wealthy elite at the top, with the big, big cars, down to the poorest, the precariat at the bottom.

Two types of status

Sociologists talk about two types of status: you can earn it through your achievements, known as achieved status, or you can be placed by your inherited position or on the basis of your power over others, which is called ascribed status.

All self-respecting HR managers will claim that their organisation’s rewards are entirely performance and achievement-based. How else can they justify the widening pay differentials they have presided over in recent years as senior pay levels have escalated?

Yet, despite the flatter grading structures, the performance bonus schemes and flexible benefits plans that Aon Hewitt’s surveys show are now commonplace, if I took Yerdaw into any of our major quoted companies, he would have no problem in identifying the ascribed ‘chiefs’ as he calls them, without needing to consult their appraisal forms.

The big, big offices as well as cars, the expensive clothes and deferential staff are all giveaways, even without him seeing the enhanced pension benefits and perks that can see a failed banking exec earn a £700,000 annual pension.

So just why do we retain executive perks and benefits in many organisations? Why haven’t they gone, along with discriminatory pay structures and other outdated remnants of a bygone age? And why, despite our supposed talent-management policies, is it getting harder for someone who is bright and keen, like Yerdaw, to progress to the top levels of our organisations and society?

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I am sponsoring Yerdaw now. Just £60 a month buys him accommodation, food, clothing and his school books. That’s real talent management for you.

Follow Duncan Brown on twitter.com: @duncanbHR