Tie CEO pay to staff mental health, says Jeff Kennett

Former Victorian premier Jeff Kennett has called for performance bonuses of chief executives to be partially tied to the mental wellbeing of their employees under a radical proposal to be put to the Business Council of Australia today.

The Beyondblue chairman also wants senior executives to submit to an independent mental health assessment by a psychologist each year.

Mr Kennett will address chief executive officers and senior ­executives at a forum today in Melbourne that has been organ­ised by the BCA to discuss the role that business leaders can play in shaping mentally healthy workplaces.

Mr Kennett told The Australian that a solution would be to make the mental health of employees one of the annual key performance indicators of ­private-sector executives and government department heads.

“What I would like to see in every head of department of a ­bureaucracy, in every CEO’s performance, and every direct ­report’s KPIs, is a KPI about the mental health, the wellbeing, of their workforce, of those that ­report to them,’’ he said.

“When you talk about pay performance, when you talk about bonuses, particularly, I want to see a KPI in place that ­addresses this, because that will focus their mind more than anything else.

“If some of these people think this is all sort of rubbish and over the top, well, tie their bonus to it, tie their salary to it. Let them understand that this is a major contributor to the effectiveness of their administration.”

Companies regularly survey staff about their attitudes to work. Mr Kennett said employers would need to get advice about how his proposal could be applied to their business: “You will recognise in most organisations whether you have got a mentally healthy workplace or not, whether people enjoy coming to work.’’

Mr Kennett said he wanted “transformation from talk into action” to address mental health in the workplace. “Talk is cheap,” he said. “The BCA is a big organisation, with big company members. They have got to do more than talk.’’

Australian Chamber of Commerce and Industry chief executive James Pearson said yesterday that many employers had KPIs based on work health and safety outcomes and recognised that mental health was important. He said it was up to individual boards to determine the KPIs of executives but he believed mental health should be part of a broad strategy to address health and safety.

BCA chief executive Jennifer Westacott said she was looking forward to Mr Kennett’s presentation today.

“We need to take these things very seriously because these things at a kind of bottom line result in unplanned absenteeism, they cost businesses money,’’ she said. “They’re not just feel-good things. These are real economic things. That’s why the Business Council is interested and passionate about this.”

She said many performance arrangements applied to executives currently “do have a sense of staff retention, a sense of the wellbeing of the organisation”. “But I’m certainly open to sitting down with him, and I know companies will be, and saying, ‘how do we improve our effort here and what are some of the incentives we would need to have?’,” she said.

Mr Kennett said senior executives should have their mental health independently assessed by a psychologist annually. “I have had a number of organisations in the last two years, three years, where a CEO, a CFO, a COO has hit the wall, and the ramifications on the small leadership group is obviously quite profound, not to mention the impact on the business,” he said.

“In most cases, at a senior level, it’s the pressures of work, the expectations; it can be the workload affecting relationships at home. In some cases, it has been elevation to the senior ranks, access to more money, then leveraging that money to commit themselves to houses, properties, a lifestyle that they can’t really afford but it’s about appearance.’’

Mr Kennett said bad mental health cost the economy about $11 billion a year but workers’ compensation was only a small part of that. He said bigger factors were absenteeism and “presenteeism, where people turn up to work performing below their norm”.

He said employers were increasingly recognising the damage that mental health can cause to the morale of their employees, “particularly when it sadly involves suicide”.

Deloitte chief executive Cindy Hook, who will address the BCA forum today, said the company was finalising a workplace wellbeing index that employers will be able to use to help them assess whether wellness policies were working.

In conjunction with Beyondblue, Deloitte partners have undertaken mental health awareness training, which is now being made available to directors and managers.

“Increasingly you are hearing CEOs talk about this — whether it’s just mental health or wellness more broadly, I really think the trend is increasing,” she said.

“For me, this does have a very strong business purpose. This is about driving performance and I believe strongly that if the 6000 individuals within Deloitte are well and are strong in the broader sense, they are going to perform at their best, personally and professionally, and that’s going to drive organisational performance.”

Lend Lease chief executive Steve McCann, whom Mr Kennett describes as his “poster boy” for driving programs to improve workplace wellbeing, said his company had 750 accredited mental health first-aid officers. “Creating a culture where mental health is as important as physical health is a fundamental part of our commitment to a mentally healthy workplace,’’ he said.

[Source:-The Australllian]