1. Introduction
The need to pay proper attention to employee voice is an issue of growing importance, according to a new CIPD-sponsored survey. Adrienne Margolis visits a whisky distiller where the views of the workforce are expressed through the firm's innovative trade union partnership, while Mike Emmott (see below) sums up the research findings
13 Sep 2001
The management of change is too important to be left to management alone. So says Harry Donaldson, the senior union official representing GMB members at Glasgow-based whisky distiller John Dewar & Sons. And the company's director of HR, Paul Mosson, doesn't contradict him.
In fact, the two agree on most business issues. They share ideas, management books and even strategic decision-making. Between them, they have redesigned the firm's industrial relations strategy from scratch, following the Bacardi group's acquisition of the Dewar's brand from United Distillers two years ago. The new owner invested £8 million in plant and technology in Glasgow's east end, opening a bottling factory for William Lawson Distillers the small company it already owned and for Dewar's.
2. Changing Times
The impetus for change came from the senior management team and Mosson himself, a former United Distillers HR professional who had left the industry and joined Bacardi to return and overhaul HR at Dewar's.
My mission was to help in the creation of a new business and to get it up and running, he explains. There were two ways to do this: the traditional model of bringing people in and throwing them at it, or questioning what kind of culture we wanted.
Mosson chose a new formula, which he describes as a deliberate cultural vehicle for openness, honesty, commitment and responsibility. His approach culminated in the Living Agreement Working Together (see panel below). The deal was drawn up with the GMB to create a framework for employee relations that emphasises and recognises the value of people within the business.
The two parties believe that the deal goes beyond most of today's partnership agreements. It breaks new ground in areas such as staff consultation and the commitment to skills development on the employer's side, and it introduces greater flexibility in work patterns and wage demands on the union side.
3. Joining the workforce together
Mosson says his starting point was the need to change the mindset of workers in relation to their skills and also the attitude of the employer. You get the environment you deserve, he says. I am a great believer in transactional analysis [which predicts that people will live up or down to others' expectations of them]. Relationships in the workplace should be adult to adult. Also, we see unions as a force for checks and balances, and as a provider of resources.
When Mosson joined Dewar's, he hit it off immediately with Donaldson, the GMB's national secretary for the food and drink sector, who was also willing to try a new approach. We had a new intake of employees who were prepared to take on new roles and new skills, Donaldson says. There are 198 people in the workforce, and the Living Agreement covers everybody, he explains. We both understood the reality that, as industry changes and the customer profile changes, there is a need to create something that can change with it. A traditional union approach would have led to a less flexible agreement.
Employees have the same terms and conditions, whether they are union members or not. Everyone is salaried. There is no collective bargaining in the traditional sense, but everyone's salary is raised by at least the retail price index every year, Mosson says. There has also been a bonus of 5 per cent to 7 per cent each year. It has removed the annual bun fight and shown everyone that they are equally valued.
The bonus is calculated on the basis of a combination of individual or team, departmental and company performance. From the employees' point of view, it means that we are real stakeholders, Donaldson says. Individual, team and company performance are linked, and this helps to drive business performance and adds a new dimension to raising earnings.
4. Dewar's as a Totality
Workers for the new John Dewar & Sons came from four different sources. Some transferred from United Distillers under TUPE arrangements. Others were existing workers at William Lawson. There were recruits from elsewhere in the industry and completely new staff with no experience of the sector. Some workers were already unionised, others were not.
The question was how to co-ordinate all this, Mosson recalls. The first and most important thing was that having people from different backgrounds was dynamite. There was a chance that one of the cultures could dominate, so we deliberately questioned the culture, communications and training and development in order to put together a new blueprint. The Living Agreement is part of that.
But there was one problem: most of those workers who were union members belonged either to the T&G or the GMB, which were both recognised. But, as part of its process of change, the company wanted a single-union agreement.
Mosson admits that simplifying what he calls the employment relations dialogue was tough. After approaches from both unions, he opted to derecognise the T&G. It was not easy, he admits, but the reality of it was that we looked at Dewar's as a totality, and most union members were represented by the GMB.
The move angered the T&G, which complained to the Scottish TUC. The union's regional organiser for the sector, Dave Stark, accuses the GMB of making a sweetheart deal behind his members' backs an allegation that the GMB denies. Stark says that the T&G currently has slightly more members than the GMB at the firm, and he is still trying to persuade the management to re-recognise it. But Mosson feels that the GMB has taken a more progressive view.
I think its approach enables trade unionism to be palatable to a smaller company, he says.
5. Allowing the business to grow
The GMB was acting in a new role, Donaldson says. I am not here to sell one union. I was open and honest, and respected the fact that people were members of other unions. I said that the decision to sign up or not was theirs alone.
Mosson and Donaldson met the staff, and outlined their plan for a new way of working, which had personal growth and development at its core. Mosson sees the Living Agreement as enabling the development of the whole person someone who is intellectually versatile and wants to move forward in an ethical, fair business, he says.
The nice thing for me was their response, Donaldson recalls. When we asked the workforce whether they would prefer the future or the past, a sense of excitement came from individuals who had not felt stretched or valued before.
People wanted to have union representation, he stresses, but were also clear that they didn't want to go back to the old style of trade unionism. They were not too concerned about which union represented them, but they did want to create something new.
Unions are not in a position to say they know best what people want from work, Donaldson says. For me, this issue was about creating the environment to allow the growth of the business, and of its people.
6. Living Agreement
Under the Living Agreement, the union carved out a different role. As a new consultancy, we were working on the basis of resourcing, coaching and mentoring, and providing education and training Donaldson explains. We also wanted to improve core skills such as numeracy and literacy.
Bacardi has invested in a well-equipped training centre at the new bottling plant, while Mosson and Donaldson devised training plans together. Mosson says that the agreement, drafted jointly by him and Donaldson and signed in October 1999, has produced positive results. Absence rates have been reduced to virtually zero, there is low staff turnover and the performance of the business has improved.
Employers and unions often hide behind collective agreements, he says. But we have an environment in which people are open and honest.
Both men admit that for the agreement to work there must be a high level of trust. My colleagues in HR were surprised when the deal was announced, and it was a quantum leap for trade unions too, Mosson says.
On the union's part, we need to deliver what members want, Donaldson says. There is a new bargaining agenda. People want their jobs to be interesting and enjoyable, and they want portable, marketable skills. They also want to be treated as adults.
Donaldson acknowledges that the GMB, like other unions, used to focus on pay, but when people are asked about their priorities at work, pay is low on the agenda. The industrial landscape has changed and we need to be smarter in our approach. We need to add value to the business and not simply expect people to pay union subscriptions and get nothing in return. As a collective, we want to create an environment where individuals have a choice, without undermining our role.
We recognise that this is the start and we still have much work to do but we believe it's a good start.
7. HR's express purpose
Are employers really listening to their staff? And how can HR contribute? Mike Emmott, CIPD adviser on employee relations, examines the results of the latest CIPD-sponsored study into employee voice
Companies are increasingly rating the views of their employees as a critical business issue and managers are adopting mechanisms for listening to what their staff have to say not because they are forced to, but because it seems essential if they are to meet business objectives.
This is one of the key messages to emerge from a recent series of in-depth interviews with senior HR and line managers in 18 organisations, mostly in the private sector. The research, conducted by a team led by Mick Marchington of Umist, was commissioned by the CIPD. It builds on a survey that he conducted a decade ago into what he then called involvement but now calls employee voice.
One finding that is perhaps surprising this time round is that collective forms of employee voice have gained a new lease of life. This is despite the fact that managers are now less inclined to see unions as the main channel of communication, and that far fewer now view employee voice in terms of collective representation. Most interviewees saw the phrase as an alternative to words such as consultation, communication and say. They clearly understood voice as implying some form of two-way dialogue enabling staff to influence what happened at work. One HR manager suggested that his firm's approach was designed in such a way that all employees can represent their views to management, rather than being just the other way round.
8. Co-operation throughout the company
This shift in thinking from collective structures to dialogue involving employees is significant. When managers talk about partnership, they are likely to be thinking about trying to engage employees' hearts and minds. But nearly all respondents reported that they used some form of joint consultation. This was not mainly because the workforce insisted on it, but because managers believed it could add value to the business.
Under the influence of partnership, consultation with unions seems to have become more meaningful in some firms and to start earlier in the decision-making process. On the other hand, several employers had introduced effective non-union forms of partnership, either alongside union representation or instead of it.
The message for unions is that, if they are prepared to engage in partnership, they may be able to get more involved in the business, with the potential to offer extra benefits to their members. But it would seem that a crucial basis for this form of employment relations is a firm belief in a co-operative, rather than adversarial, approach.
9. Communication
But mechanisms for listening to employees range far wider than collective representation. Direct, two-way communications are an important approach in all of the organisations in the study and can take many different forms. For instance, the managing director of a transport firm held a meeting every few months on a Sunday morning in a local pub, to which all drivers were invited (and most attended). A housing association had a staff magazine compiled by employees rather than managers that occasionally took sideswipes at management. Other mechanisms adopted included employee attitude surveys, suggestion schemes and project teams.
A comparison with practice in the early 1990s shows some important changes. These include a clear trend to replace bolt-on techniques such as quality circles with more comprehensive approaches. Organisations today are more likely to use departmental teams to help in problem-solving and to see this as a central part of their employees' jobs. New media such as intranets and e-mail have complemented other mechanisms, particularly in organisations where staff have routine access to computers. There are also cases where employees have the chief executive's e-mail or phone number so they can make direct contact. One-way, downward communication is now much less common.
10. Modern voice mechanisms
The introduction of modern voice mechanisms can affect a broad set of business issues. In two-thirds of the organisations studied, managers reported some improvement in employee attitudes as a result. A school headteacher told the researchers that a development planning day involving all staff had been instrumental in changing the ethos of the school. The potential for employee voice to contribute directly to securing extra business was mentioned several times, particularly in smaller organisations.
Further research will be needed on the nature of the links between employee voice and performance, but managers certainly believe there are positive effects. As one respondent said: We are spending plenty of money on [staff] engagement at the moment, because we believe this adds value. It can be seen in terms of performance and the way the business sparkles the way that people answer letters and deal with customers over the telephone, their feelings of ownership and pride.
11. HR Issues
So what are the key messages for the HR profession? First, HR managers are shown to have significant influence as internal consultants and hidden persuaders. Senior line managers make decisions about which voice strategies to adopt for instance, whether or not to recognise a trade union but there is a major opportunity for HR to influence those decisions and implement them effectively.
Second, it is not easy to get employee involvement right. Obstacles include a reluctance among employees to take part, a lack of management skills to implement programmes and uncertainty from middle management. But these are all issues that HR can help to tackle.
Third, employment regulations seem to have led several of the companies in the study to consider new and creative voice options. Legal provisions for union recognition and electing employee representatives were welcomed by companies that found them useful for improving communications and involving staff. This will not be true of other organisations, many of which are concerned that statutory intervention on information and consultation might reduce their options or interfere with effective current arrangements. But if HR managers are proactive they can help their firms to get the most from the legal framework.
Lastly, employee voice needs to be integrated with wider organisational and HR strategies. Decisions about it are generally made at the highest level, affecting management style and culture. Commercial and market pressures, union strategies and employee expectations are also important influences, but HR managers have a key role in implementing voice strategies effectively.
The research underlines again the scope for HR managers who are willing to respond to the challenge to become, in the language of Professor Dave Ulrich, genuine business partners.
The research report Management Choice and Employee Voice, by Mick Marchington, Adrian Wilkinson, Peter Ackers and Tony Dundon, will be published next month by the CIPD (01752 202301) price £15 (£50 to non-members).
12. Lesley James
This survey confirms what I have known for a long time,' says Lesley James, CIPD vice-president, employee relations. Employees are becoming ever more demanding about being heard, and there are many ways to establish effective communications. There is also an overwhelming need to set up the right mechanisms to encourage employees to drive improvements. This is preferable to a minimalist reaction to the next legal demand, which improves neither motivation nor effectiveness.
Employee voice offers a buffet of opportunities to listen and respond to the views of the differing constituencies that make up any organisation. The key is to try out the various mechanisms on offer and measure their effects. This should lead managers to demand more investment in successful methods and to dump those that don't improve performance and merely represent half-hearted attempts to listen.
It is no accident that great companies know that, when asked, their people always have something to say. Brave HR practitioners know that it's always worth listening and they can prove it.
13. The Living Agreement explained
The partnership deal was drawn up jointly by Dewar's and the GMB in order to underpin our joint commitment to the culture of working together, which emphasises and recognises the value of people within the business, according to the agreement document.
In a climate where organisations need to respond ever more quickly to the needs of their marketplace and their customers, speed, flexibility, quality and cost are of paramount consideration, it adds. Both parties recognise the pivotal role of learning and knowledge, applied to an enlightened, flexible and responsible workforce.
There is joint acceptance of commitment to success, commitment to employment security through employability, and commitment to transparency the sharing of hard, unvarnished information and open discussion regarding future plans. There is also recognition of legitimate interests, meaning that there may be occasions when the interests of both sides differ. The partnership will embody trust and respect, which will aid the resolution of any such differences.
It is called the Living Agreement because it has no fixed timescale and can alter to reflect changing priorities. The company and the union have agreed to meet at least twice a year to monitor the agreement. So far, neither side has pressed for changes.
14. Further information
Paul Mosson, Harry Donaldson and Mick Marchington will speak at the Employee voice: new dimensions in employee involvement seminar on Wednesday 24 October at the CIPD's national conference, 24-26 October. For more details, call 020 8263 3434 or visit www.cipd.co.uk/nationalconference
