Productivity – Who Benefits?

Senior politicians constantly talk, or possibly lecture, about the UK’s productivity and its relative low position in the pecking order compared to other ‘developed’ nations. We need to produce more per person or else we won’t be globally competitive. Senior management teams want greater productivity, more output without more resources. For the two-dimensional manager that means working harder. Perhaps more and sustainable progress would be made by being thoughtful and creative. Perhaps more and sustainable progress would be made by replacing or, better still, improving the managers and their outlook.

For many years, I led management teams in pay negotiations with the Trade Unions. Whilst this was always an interesting process, it was ultimately also a frustrating one. The inevitable outcome was universal dissatisfaction, equal pain but, and this was the fundamental, no strikes or lost production; an acceptable result to everyone, apparently.

Allow me to make a few observations regarding process before addressing the core discussion point;

  • Local trade union representatives make themselves hostages to fortune. In an effort to consult the membership, they create impossible expectations. On one occasion, once all of the elements of the ‘claim’ were added up, it would have increased the wage bill by 25%, for a company already making a loss.
  • The representatives, after coming to an agreement, were unsure if the members would accept the deal. My question was, ‘Why have we bothered having the negotiations?’ Only by threatening to go to the workforce directly did the Works Convenors react positively.
  • The management, especially the Finance Director, was loathed to pay any increase and, indeed, saw people as a cost to be reduced as quickly as possible.
  • In reality, there was no negotiation as neither team were experienced in it as a process. It was confrontation, with incremental movement. After I made the first ‘offer’, the immediate reaction was to ask if it was the company’s final position. It was clear all previous discussions had been aggravations. I wasn’t only negotiating but also teaching people how to negotiate. In fairness to the Shop Stewards, it was evident every year the management had begun by telling them to accept the offer or the business would close; threats can only work on small number of occasions, then they become worthless.
  • A useful tool in any negotiation is the adjournment. It gives everyone time to think and be dispassionate. In the example referred to above, we had 54 adjournments! It might be a record, and we did come to a deal.
  • Trade Unions have the potential to be a force for good, but the representatives need to be professional and competent, not just nice people prepared to be visible.

In a different situation, the management were concerned about the number of employees being observed leaving work early. There wasn’t the discipline of clocking out, and the people had achieved their production targets. The first thing this demonstrated was poor management because the quotas were set wrongly. The company needed to be more productive and there was up to an extra hour per person available. If this could have been fully accessed it would have equated to 50 extra people’s output. Clearly significant and worth pursuing.

So, we implemented physical clocking out, with which the Trade Unions were unable to realistically argue. On day one, nobody was seen sneaking out early. The Managing Director and I went into one of the production areas fifteen minutes before the end of the shift. All of the workers were queuing by the clock, bags packed, coats on and doing nothing, just standing waiting, not even talking amongst themselves. We had gained nothing and lost a lot of goodwill. I asked the senior steward to explain it. ‘Simple’, he said. ‘The lads can only win one thing, time. Even though it doesn’t look as if they are doing anything with the time, at least they have won it’.

In truth, I have never, to the best of my recollections, been in a management discussion which contemplated anything other than taking 100% of any improvement. So, the guys (it was nearly all men) could have found about an hour’s productivity each and we gained nothing. Could we have agreed even a 75:25 split, in which they worked fully until 15 minutes before agreed finish time and then they could go home if targets were met?

We were part of a bigger group and all terms and conditions had to be common in all divisions. It is worth reviewing McGregor’s Theory X (and Y) to understand this suppressive attitude. Nobody benefitted because there was no improvement to productivity.

The first time I attended a programme which today we would call Lean Operations was in 1988. It went under the banner of Total Quality Management and many of the principles are valid today. The initiative was created as a positive reaction to the threat of Japanese manufacturers. British industry had to make massive improvements to quality levels and productivity. The macro-benefit of this was the survival of the industry and many of the jobs. Implicit in this last sentence is there were job losses and many of them.

The rate of change in the workplace is even greater today, as Artificial Intelligence (AI), robotics and globalisation (competition) impact. Nothing can stand still, innovation is startling and improved productivity is a given, just to survive. Management may well argue that maintaining employment is enough of a gift to the employees.

Is this just and fair?

A final truism; rarely in a re-structuring of an organisation do senior managers become the victims. Unless carefully overseen, middle managers will hide until the storm passes. The real victims will all come from the lower ranks, although there will be managers who feel sorry for themselves as they had to pass on bad news!

Again, is this fair? Is it really what the business needs? Who will the managers manage? Who was supposed to be managing the managers?

All of the answers come through a great culture, highly motivated teams, clear purpose and inspirational leadership. So, that’s easy then!!

Kacper Zaremba

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  1. Great article! I recognise many of the things you describe from other employers I know outside manufacturing. Unfortunately, as you indicate, self-preservation becomes the priority for nearly all concerned at every level, especially where employees expect to see out their career there, but this plays out very differently depending on your position in the organisation.