Notes on the Front

Imagine you own or manage an enterprise and someone approaches you with a proposal to increase productivity by 20% – at very little investment cost. You’d at least give them a hearing. And you might be surprised that it has nothing to do with ‘slash and burn’ organisation (cut wages, taxes, suppliers’ costs, payroll numbers, toilet breaks, etc.).

The National Centre for Partnership and Performance researches just such proposals. And it’s unbelievably simple: take the principles that work at a societal level and apply them to the commercial enterprise; namely, increase participation.

Participation used to be the buzzword – part of a cacophony of nice sounding phrases like consultation, partnership, sharing, involvement. Many employers used the appearance of participation to manipulate changes in workplace practices resulting in more working hours, outsourcing, deferral of pay rises, etc. And many employees saw through it. But that needn’t be the case.

The Centre has surveyed hundreds of companies in a number of countries, relying on a plethora of case studies. Depending on the specific programmes and degrees of implementation these are the outcomes.

• Greater levels of trust between management and employees
• Higher productivity, quality and innovation Increase sales and profits translating into higher wages and remuneration
• Improved labour retention (and thus a reduction in recruitment and training costs)
• Lower levels of absenteeism and workplace conflict

In other words a more competitive, high-performance, value-added enterprise. This is win-win-win – for employees, management and society.

Of course, this is nothing new. Studies into workplace participation have consistently shown the benefits. On this point the jury came in long ago, even if employers and managers are still out somewhere else.

But the Centre has come up with a particularly intriguing piece of research:  Achieving High Performance.  They start with base-line enterprise where there is no enterprise participation or unionised workforce. The management of this enterprise could be labeled ‘traditional’ (a nicer term than backwards): no profit-sharing, Team Quality Management, benchmarking, regular employee meetings, use of IT, etc.

The research sets up three different scenarios to compare with this ‘base-line’ to assess the impact on productivity:

Scenario 1: Employees are unionised but there is no employee participation – in other words, still a ‘traditional’ management style. Productivity decreases by 15%.

Scenario 2: Employees are still non-union but there is a high degree of enterprise participation – something that occurs in a few multi-nationals. Productivity increases by 11%.

Scenario 3: Employees are unionised and there is a high degree of enterprise participation. Productivity increases by 20%.

We are forever getting treated to union-bashing by apologists for a backward management culture. Yet business research doesn’t bear this out. Yes, in the first scenario where there are unions but no enterprise participation, productivity declines. There is obviously greater chance of conflict, lack of trust, absenteeism, high staff turnover, etc. But are the unionised employees to blame? Apparently not because in Scenario 3, enterprises that have both union representation and enterprise participation outstrip everyone in productivity by a mile – even in apparently ‘enlightened’ workplaces that have the same participation structures but no unions.

Like people, employers come in all shapes and sizes from the very good to the very ungood. But one could be forgiven for thinking that there is a sizeable body out there who seem to believe that waging war on their employees is somehow ‘best practice’. There’s Ryanair and Gama. There’s Gate Gourmet’s employee profiling (bashing their workforce at Heathrow airport last year obviously gave them a taste for more). Or there’s the following case (Sunday Tribune 26/11/06), one of many that ends up before Rights Commissioners and the Labour Court.

A trainee manager in Lidl supermarkets frequently worked 12-16 shifts, seven days a week. As a consequence he suffered chest pains and dizzy spells. Once when he left work at 2:30 am he had to return four hours later and was reprimanded for being 10 minutes late. It all seemed to come to a head when the store management actively interfered in his private life, harassing both him and his girlfriend, who worked at the same store, for having a relationship (they were told they could lose their jobs if they were seen together outside the store and working hours). The Labour Court awarded him €42,500 in compensation – not nearly enough in my book.

Can anyone really argue that this no-brain, troglodyte managerial style will result in world-class enterprises, competing effectively in our export or home markets? Not only is it destructive of workplace performance, it is expensive and time-wasting (don’t senior managers have better things to do in Lidl?).

It would be nice to think this is a one-off but have a meander through the case summaries on the Labour Court website – and they are only the tip of the ice-berg; most employees just leave their workplace or don’t even know they have rights to be respected – and one suspects its more prevalent than we can fear.

Legislation can go part of the way in defending employees’ rights. Certainly being members of a trade union can help. But if we are to create high-road companies there must be a change in the enterprise culture itself, transforming backward-looking companies and employers into agencies that create wealth and efficiency.

It really is a no-brainer. If we want a more productive, competitive enterprise base we will have to do two things: introduce greater participation and do everything possible to get employees involved in a trade union.

Are there enough out there in management-land listening?