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The nine-to-five working day might never have been common for those in road transport but even the same set hours each week could soon become a thing of the past as more companies are recognising the benefits of annualised hours. But are they progress or exploitation? John Kelly examines the issues.
The concept is blindingly obvious. Why should people work eight hours a day, five days a week, when the demand for their services fluctuates within day, week, month and season? The result tends to be that people are paid when there is no work for them and they are paid overtime when the workload peaks. The annualised hours payment system attempts to equate the supply of labour with the demand for it in an equitable manner.
A fundamental part of introducing annualised hours is to measure the operating hours required by the business, based on its anticipated demand levels, Given that total figure, the number of employees required to provide those man hours can be calculated. For a full time employee, the calculation would be something like this:
• Analysing the Demand
It is important to emphasize that the successful introduction of annualised hours is crucially dependent on the accuracy of the analysis of the operating data. Thus if people really have been standing around waiting for goods to arrive at the despatch bay or for a vehicle to be serviced, then the analysis should try to eliminate such waste from the total amount of time really required. The essence of the analysis is to identify: Li the total number of hours Ill seasonal patterns of demand C the size of unpredictable variations From the analysis it should be possible to develop a roster of work required on a regular basis.
There will be times when use can be made of reserve hours. These are hours that are not included in the roster but may be called upon by management to meet fluctuations in demand or shortage of labour. Some rosters will try to minimise the unpredictability of reserve hours by specifying shifts in which an employee is liable to be called in to work
reserve hours. The whole objective must be to achieve the desired flexibility while minimising the unpredictability for the employee.
For example, in P & 0 Distribution's agreement there are clauses such as:
7 All drivers to complete work as presented and be prepared to work to maximum permitted hours when required
E All drivers and warehousemen to be allocated to their normal work, but can be allocated to alternative warehouse or driving duties as required where they have been trained and have the necessary skills to complete the work El All HGV drivers to operate any vehicle from a car to maximum size vehicle as required when qualified to do so.
With regard to the structure of pay. it is apparent that the loss of overtime payments will probably have to be balanced bv an increased basic package. This will permit the payment of a stable salary, which can be attractive to some employees, as well as helping to break down the "them and us" attitude shown by phrases such as "salaried" and "non-salaried". The system should also provide employees with more leisure time.
Strict rules must be drawn up to reconcile paid hours against worked hours and decide at what intervals excess hours generate additional payments. As deficit hours may be written off at some interval, it is important to ensure that no employee is consistently being paid for work not done.
There are a number of issues which must be carefully thought through and planned for, in order to avoid any employee resentment or abuse of the system. These include: L Holidays: These will normally be rostered, hut sonic schemes will allow swapping with a colleague.
E. Sickness and other absence from work: 11 employees are rostered for varying hours per clay, problems can arise with the hourly credit for time off. One scheme just says that whatever the actual shift length, a full day will be taken as 7 hours and a half day as 15 hours.
A large number of companies have now adopted an annualised hours payment scheme and most of the details of problems have been addressed and solutions found which are acceptable to management and their employees.
As so often is the case in personnel matters, attention to detail and a strong sense of fairness is required to introduce a successful scheme.
It might be thought that trade unions would resist changes like annualised hours. But in the most successful cases they have been involved from the start and have been constructive in promoting change and in defending the legitimate interests of their members. They appreciate that improved productivity and changed working practices are essential if competition is to be defeated.
Terry Savage of USDAW said at a recent conference: "We do realise that flexible working and annualised hours can be attractive to working people. Providing it is properly agreed and mutually convenient between an employee and an employer, the union has always said that part-time working for example can be an entirely acceptable arrangement. More than that, it can even be a necessary and preferred option for working people themselves according to their own personal and family circumstances."
A Challenge for Management
A manager can no longer buy his way out of trouble by offering overtime. Through discussion he has to manage and plan the resources required to meet fluctuating workloads. He will have to be vigilant to control sickness levels on nights or holidays planned when night-shifts are rostered. In other words the manager is required to manage and some managers may be found lacking in this respect.
However, the benefits are significant. Colin Murphy. general manager of network distribution at P&O Distribution, says: "Benefits included a significant reduction in the incidence of drivers running out of hours, and nights out, an improvement in the use of warehouse resources." He also found that old prejudices between warehouse, drivers and management were reduced and there was a move towards a "one team" attitude. There has been a sign:ficant improvement in industrial relatic■ns and customer service.
Annualised hours is not a simple route to easy cost savings. If it's not properly controlled and planned it can be an expensive option. What it does achieve is giving manager:, the opportunity to plan resources more effectively.