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Over 1,000 Irish-based staff at the UK-owned Marks & Spencer retail group agreed a new performance-related pay system in April 1998. The company's competitors may need to match the scheme to attract workers from the shrinking pool of potential employees in Ireland's booming economy.
A performance-related pay agreement was finalised in April 1998 between Marks & Spencer (M&S) and the Mandate trade union, which represents the majority of "front-line" staff in the retail chain, and SIPTU, which represents catering, security and warehouse employees. M&S operates in a non-union environment in the UK, its home country, but not in Ireland, where it has some 1,000 employees.
The new pay agreement involves a top performance rate of IEP 7.20 per hour for "exceptional performers" with the majority of employees set to earn a new basic "experienced" rate of IEP 6.00 an hour after just 12 months' service. A new trainee rate of IEP 4.39 per hour is pitched at the same level as the national statutory minimum wage (IEP 4.40) proposed by the National Minimum Wage Commission in April 1998 (IE9804246F).
Each member of staff will be subject to a new annual "performance development review", the outcome of which will decide the employee's final annual "score" and the precise performance-based increase. The performance reward is based on a three-tier points system which will raise the basic "experienced" hourly rate as follows: IEP 6.60 (26 points); IEP 7.02 (40 points); or the top rate of IEP 7.20 (53 points)
M&S's main competitors, such as Dunnes, Tesco, Roches and Superquinn, are examining their rates of pay in light of the M&S deal and the proposed national minimum wage.
In April 1998, the National Minimum Wage Commission broadly targeted the expiry date of Ireland's current economic and social pact, Partnership 2000 (IE9702103F) - that is, 1 April 2000 - as the approximate starting date for implementation of a minimum wage. That target date may now be brought forward, however, following a commitment recently made by Taoiseach (Prime Minister), Bertie Ahern at the annual conference of Ireland's largest public sector trade union, IMPACT. Mr Ahern told IMPACT delegates in Limerick on 20 May that the Government was not convinced by employer arguments against the proposed national minimum wage: "I want to assure the trade union movement regarding the delivery of the minimum wage, we are going to do it and do it speedily."
Staff retention is a growing issue in Ireland. Supermarkets and retail outlets like M&S are now in competition with multinational electronic firms, which are hiring thousands of young people for general assembly work. The M&S agreement will mean a top rate of almost IEP 15,000 a year, one of the more attractive packages available in an industry which has traditionally relied on a young, transient workforce.