Productivity deal!
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need watching
r ways of monitoring information may elpful to both sides; and external changes :A business at short notice by John Darker AMBIM
PRODUCTIVITY agreements in one form or another have penetrated into most sectors of road haulage, and to maintenance operations in passenger transport. They were given an initial impetus by the new pay and hours "deals" arranged by the petroleum and chemical companies from 1966 onwards. Reports by the National Board for Prices and Incomes supported the trend to tie wages to measured output.
Little has been published by individual companies on the effects of their productivity arrangements. Schemes launched several years ago have been affected by the many pay rises since granted and by changes in circumstances -more densely trafficked urban areas, faster vehicles with possibly greater carrying capacity, new types of mechanical hand ling aids, etc. Some bonus carrying may have been consolidated into standard wage or salary scales.
Before the national economic crisis had reached boiling point, prominent road transport operators voiced the need for a new look at productivity schemes, understanding that heavy pay claims were on the way and that higher wages not backed by extra output could only prove disastrously inflationary.
Bogus agreements
It is generally accepted that some of the productivity deals in the late Sixties were largely ineffective, even bogus. Employers were under pressure to grant higher wages and any sort of spatch-cocked 'deal could be painted in glowing colours.
Today, employers -and the Government — are much more cautious. While there has never been a time when efficient working was more called for, trade unions are not exactly clamouring for the higher productivity that will release still more labour to the dole queues.
Quite apart from this aspect it is accepted that a soundly based productivity scheme needs to be well thought out. A hastily contrived
scheme may do more harm than good, if only because of its effects on pay differentials, not least between operative and clerical grades. (BRS white collar grades greatly resent the erosion of their -differentials" as drivers' wages escalate.) A productivity agreement was defined by the old Prices and Incomes Board as an agreement -in which workers agree to make a change or a number of changes, in working practice, that will lead in itself — leaving out any compensating pay increase — to more economical working; and in return the employer agrees to a higher level of pay or other benefits".
Guidelines
A recent leaflet of the British Institute of Management very usefully sets out some guidelines on productivity bargaining and stresses that such an agreement can be a blessing or a curse. "An ill-conceived, badly negotiated and poorly controlled agreement almost certainly result in a lowering of efficiency and a raising of costs, a disillusioned trade union negotiating team and a cynical though more prosperous work force." Success depends on: O Whether it was appropriate to the circumstances; O Whether it was adequately negotiated; O Whether it was fully implemented and controlled.
How do you decide as to the appropriateness of a new deal? '
The BI141 poses 15 commonsense questions which may be summarized. There is no point in increasing output if you can't sell the product! If you seek to lower unit costs, say in transport or warehousing, take care that the higher labour cost that is likely to be involved will be sufficiently offset by the savings from your increased efficiency.
Can you quantify the savings you seek and are these sufficient to allow a real inducement in higher pay? Can the new working practices be
adequately specified? Has enough information on wl decide that a productivity de: best approach? Might not r ing, new working patterns, ne or vehicles or better use a space resolve the problem?
There are many issues an possible solutions in a gene' ductivity agreement. Specific in one area could suggest normal "trading" bargain w more appropriate.
Can the sort of agreement y in mind be monitored, ie ( regularly and fairly easily to r all concerned that it is achiei objectives? Is there amongst r ment and workers a willinE accept the changes involve( Suspicion and intolerance, any real change difficult possible? In the road haula text, will ingrained habits ( and thinking frustrate chang What will be the effect on of employment and on custon tions? Will the pressures on b of negotiators permit ti question: "How can we find t tions to these, our agreed pro as opposed to: -How can / ge want to resolve nqy difficultil
Is there sufficient trust an will between the negotiators 1 them to work together to res. jointly agreed problem? Co consequential demands likel made by the same or other gi employees nullify the desiral this sort of agreement? (Whil staffs and maintenance gra getting more and more re: drivers' pay increases).
How will your proposed ment affect the situation z parties to it the next time rou there any forces operatinl which you have no control could affect the agreement IN expiry date? Does present ( ment legislation permit the agreement envisaged?
Can you adequately negf productivity agreement?
A successful agreement only if the full implications iegotiating process and its 1 outcome are fully accepted !rstood for better and worse, or level. Can the negotiators :ir supporters with them? Or a chance that discord will ielf in the final stages of on? Apart from genuine or fears as to the con:s of a productivity agreenegotiations may be ,ed by rivalry between differe unions and/or managenips.
I and negotiate
ver the size of company it to have facilities and pro;eared to the rigorous conand negotiation process. lion negotiating teams are ever more professional and .rs, on either side, must have sort of information availnyone feeds in to the talks on which is distrusted by le steps must be taken to it or give it credibility.
must be agreement by both the overall problems and the overall objectives for e hub of the productivity .g process. Failing this af objectives, each side will to solve its own problems negotiations will take the "trading" rather than -solving".
nal points are important: ust be mutually agreed criteria (eg cost, acceptwings) against which pro.1 be assessed; if there is any to the capacity of the rs on both sides to underough discussions called for quate training should he beforehand.
.e productivity bargain he oetnented and controlled? St of productivity deals on I yield no lasting benefits to le if labour relations are when the scheme is imple mented. If the agreement is complex, or radical in the changes it requires, it may be necessary to arrange a phased implementation, in which case the pay element is also likely to be phased. It cannot be stressed too often that those involved in the change must know, and accept, what is required of them. It goes without saying that those who are responsible for managing the change must know how to introduce it though -it must be admitted — there is no substitute for experience. The management of change in industry and transport is a skilled art not to be learnt wholly from reading or lectures.
Bad old ways
One of the most difficult risks to assess is the probability that old restrictive practices (on both sides) may re-emerge, or that new ones may be created. It may be possible to set out in the agreement the steps that can be taken to meet this eventuality.
The final agreement should be specific where specific action is required. The trade union side must accept that it also has a responsibility for the operation of the agreement, both in the spirit and the letter. This is unlikely to mean that the trade union is involved in the executive management of the scheme but it does mean that reasonable steps by management to implement the scheme in accordance with the agreed principles will be backed by shop stewards and district officers.
It is desirable that the substantive agreement should contain a clause calling for a regular joint review of its working. It may be necessary to devise a new monitoring system (eg new starts of information, new methods of recording, new means of gaining the information, etc). And — to cater for the many external changes that afflict businesses at short notice — negotiators should ask themselves if the agreement can be re-negotiated should the situation change radically?
Let us try to sum up the pros and cons of productivity bargaining for both sides.
Management may welcome the chance of a "clean slate" in working relationships, practices and agreements. A productivity deal could reduce excessive overtime and eliminate time-wasting and restrictive practices. It may relax rigid demarcation lines, increase flexibility in the use of labour and lead to the introduction of more rational pay structures.
Alternatively, the efforts expended may yield savings far below the level anticipated. The cost of consequential claims by grades of staff not benefitting from the deal must not be forgotten. Perhaps the major long-term disadvantage is that the scope for further negotiation diminishes, so future benefits may be dearly bought.
Fringe benefits
Employees may benefit from increased — and perhaps more stable pay, and fewer working hours. Fringe benefits may be better and some schemes not only offer greater job satisfaction derived from widening the job, but also a better career structure. Certainly, training opportunities should improve.
Some workers may lose pay or have to undertake shiftworking. Relative status and wage differentials may be disturbed — and this is unsettling to the staff affected.
A union negotiating a productivity deal is made to seem More significant to its members and labout relations may be sweeter. Rut, with greater flexibility in working arrangements, some jobs may disappear. Union negotiators risk being accused of collusion withl management. Union officials and lay members may suspect that it would be more profitable to sell restrictive practices piecemeal, rather than in a package. The shared decisionmaking puts an onus on the union to help management implement the scheme.
The negotiators on both sides face a heavy burden.