UK: OVERTIME PAY BOWS OUT - BUT THERE COULD STILL BE VALID REASONS FOR RECORDING OVERTIME.

UK: OVERTIME PAY BOWS OUT - BUT THERE COULD STILL BE VALID REASONS FOR RECORDING OVERTIME. - The number of companies paying for overtime working continues to decline year by year. Even among so called blue-collar workers, overtime has largely given way t

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Last Updated: 31 Aug 2010

The number of companies paying for overtime working continues to decline year by year. Even among so called blue-collar workers, overtime has largely given way to more imaginative reward systems such as 'annual hours', and decades have passed since most companies paid overtime to their managerial staff. For white-collar staff in general, schemes that reward outputs rather than inputs have become the norm. It looks as if white collar overtime may soon be a thing of the past.

Marks & Spencer is of course renowned for its employment practices, but overtime for middle-ranking employees certainly isn't one of them. 'There have been occasions where we've had people work above and beyond the call of duty,' says compensation executive Andrew Moore. 'In those cases we would make a one-off bonus payment.' Or take an industrial employer almost at random. The computer group ICL has not paid overtime to managers for many years. 'Even professional and technical people are being paid less overtime and higher basic pay,' says Clive Wright, director of remuneration and benefits. 'It's more about getting the job done than the hours worked.' Statistics tell the same story. Many businesses use a cut-off point, or salary bar, to determine eligibility for overtime, and according to pay research organisation The Reward Group, the median salary bar climbed from £15,000 to £18,000 between 1992 and 1996.

People still eligible for overtime don't always get it - or even claim it. PowerGen, for example, is one company that still, in theory, pays overtime to quite high levels. Individual management contracts begin at around the £40,000 a year level, and all 3,000 other personnel are covered by one agreement which recognises the principle of single status. 'While the agreement does contain provision for overtime to be paid, more effective working practices have significantly reduced the need for overtime,' says personnel director John Hart. 'The focus is on meeting the demands of the job. This, coupled with the relative attractiveness of the overall remuneration package, means there is now much less of a tendency to account for every single additional hour worked.'

Nevertheless, there are influences at work that could help to preserve the concept of overtime. In order to pay overtime it's necessary to record time, thus producing data that might be used for a variety of management purposes. 'It is in a company's interests to monitor time for health reasons, if nothing else,' says consultant Peter Jauhal of Hay Management Consultants.

Further, as the Institute of Management's head of external policy Deborah Allday suggests, the EU Working Time Directive could serve to concentrate attention on this aspect of the subject. Although the Directive does not apply to managers 'the 48 hour working week will focus the issue', she says.

Wright of ICL agrees with this assessment of the situation. 'It is causing us to consider if we should get everyone to record their hours, not just to meet the Directive but as a general way of monitoring the hours people are working.' Stress levels are generally on the increase, according to Wright. 'Time recording will help the company's chief medical officer keep an eye on things.'

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