This means that, with a general election looming, politicians of every party will be preparing themselves for a beating as the pundits enter into the process of dissecting their policy proposals.
That dissection will undoubtedly revolve around two issues: how much will their proposals cost; and how will they find the money to pay for them?
I don't think we need a deep and detailed analysis to tell us that, in the current economic climate, the cash is going to come from two main sources: cost-cutting in public services; and taxation.
When it comes to cost-cutting, my experience is that the devil is in the detail. What's being cut? By how much? What are the implications? What are the alternatives? Because I'm not a political pundit, I'll reserve any comment on these issues until after the election.
As an HR practitioner, however, I feel wholly entitled to throw in my two-penneth worth on the issue of taxation, because taxation is, in effect, the flip-side of the coin we think of as compensation and benefits. And, in recent months, politicians have taken every opportunity to tell us what they think about the reward policies of our financial institutions.
So it's my sincere hope that they're planning to apply the principles they've been advocating to the banks when they come to develop their own taxation policies. I'd like to think they now have the core principle firmly embedded in their psyche - that an effective taxation policy (like an effective reward policy) should aim to reinforce behaviours that deliver long-term, sustainable outcomes.
This is, however, easier said than done. In November 2008 I commented in this column that the best compensation and benefits specialists are engaged in an on-going struggle to avoid what I called the law of unintended consequences. It is a law that Neal Blackshire, head of reward at McDonald's, defined at the time as: "When you incentivise one set of desirable behaviours you may unintentionally also encourage further behaviours that have consequences for the organisation - consequences that may not always be positive." As the column described, there is a two-part solution to mitigating the impact of this law. First, reward and taxation frameworks each need to be capable of being easily fine-tuned to ensure the behaviours they encourage are only those that will deliver long-term, sustainable prosperity. Second, policymakers need to have a profound understanding of the way in which human behaviour impacts economic performance - otherwise, how will they know what inappropriate behaviours look like?
The banking crisis is an eloquent testimony to what can happen when the law of unintended consequences goes unchecked; when HR professionals are either disconnected or deliberately distanced from the outcomes of their policies; and when the voice of HR either isn't heard - or isn't raised in the first place.
The collapse of the global financial system saw too many high-profile HR professionals denying they had anything to do with their organisations' rewarding themselves into oblivion. So, in the months ahead we need to ensure the rest of the HR profession is supporting our politicians in making tough decisions needed to fill the hole that's been left in the economy.
It's said that people who complain about paying taxes fall into two groups: men and women. But if HR can play its part in ensuring that taxes are levied in a way that has the best possible chance of delivering a secure future for us all, maybe we'll all complain a little less.
- David Fairhurst is senior vice-president/chief people officer, McDonald's Restaurants Northern Europe
