Company Car Policy

[Paul Martin]

Our current company car policy is based heavily on our grading structure - those on higher grades have a higher car allowance / car cash allowance. The result is a very status driven benefit and something that we are keen to reduce. Is it possible to remove the link between the level of car benefit and grade? Does anyone have experience of making this transistion, and if so what were the learnings?

[Adam Nuckley]

Hi Paul,

Unsurprisingly changes to status awarded cars/car allowances is an emotive subject and the most important point is to have a clear communication programme about the change that is being made, WHY it is being made, and exactly what the new system is.

I worked for a company that made this change. They allocated allowances on the basis of status, but without a clear basis on who got them and how much they received. When we introduced a new internal grading structure we linked an updated car policy to this, with only 3 different values of car allowance.

Some employees were upset as they saw this as a demotion, i.e. reducing their car allowance, but we could explain how we set the level and that their peers were all receiving the same amount. This allowed us to defuse their complaints, though we did compensate any employees who had their car allowance reduced with an increase to their base pay. This was a one-off hit that meant we could introduce a logical, future-proofed system for the future.

I hope this helps, and if you want to discuss this further, feel free to get in touch.

Adam Nuckley
Innecto Reward Consulting