How to Increase Productivity and Reduce Labor Unrest

Abstract By altering an organization's hierarchical structure and making its employees feel as if they are participating in management, a company can decrease labor strife, increase productivity, and reduce personnel turnover. The Author presents the employee involvement matrix which can aid a management team in implementing employee involvement programs that will be successful at different levels of sophistication. The matrix utilizes two continuums: the employee involvement continuum, which contains the various types of participation; and the learning continuum, which specifies the skills that are required in order to implement a given level of involvement.

Keywords Employee involvement, Staff turnover, Productivity, Participation

Many old-line companies have a hierarchical structure in which directives are issued from top to bottom. It is not unusual for such companies to experience periodic labor strife, which brings with it a concomitant reduction in productivity and revenue. Labor is what companies want to prevent, but it is an integral part of a hierarchical corporate culture.

My experience with numerous clients over the last two decades has shown me that by altering its hierarchical structure and making its employees feel as if they participating in management, a company can decrease labor strife, increase productivity, and reduce personnel turnover.

Prior to changing a corporate culture, supervisors -- who reflect the views of senior management -- must learn new modes of behavior. Invariably in an authoritarian hierarchy, supervisors are expected to achieve certain rigidly sanctioned goals. Their roles may consist of checking off the names of morning latecomers, keeping close tabs on daily production quotas, and inspiring workers by instilling fear and insecurity.

After participating in training program aimed at team building and increased employee involvement, however, supervisors can be transformed into team leaders who coach and mentor workers, giving them a sense of pride in their accomplishments, Where supervisors and workers once followed rigid formulae, now they can be encouraged to be flexible and creative, to use their own best judgment, and to pitch in and help colleagues. Management and employees work together which a common mission: to make the company a better place to work. The end result goes beyond increased productivity and profitability to produce enhancements of company products.

Such successes, however, cannot occur without first changing the corporate culture. Experience has taught us that a number of initiatives are essential for improving workforce morale:

  • Developing a written, one-year plan for improving workforce morale.
  • Creating flexible task forces to handle every workplace issue.
  • Evaluating employee opinions on new ideas, tactics, and strategies.
  • Defining the existing corporate culture, through the use of contemporary surveys, so that the views of employees mesh with the company's financial goals.
  • Deciding how much to budget for training so this initiative can be an integral part of all future budgets.
  • Establishing a system for evaluating the success of both existing and future proactive endeavors.

Instilling enterprise-wide change

Three factors must be in place if the enterprise-wide change initiative is to succeed: a methodology for successful communications, an understanding of the various employee involvement activities, and senior management's commitment to cultural change.

A methodology for successful communication is essential if a corporate culture is to become flexible and open to change. A sophisticated method of workforce communication can help change the corporate culture and maintain those changes over time. Without back-and-forth flow of communications, a clearly defined corporate identity and purpose will become blurred, resulting in ambiguous expectations. It is essential that all workers feel they understand where their company I headed and how it plans to get there. There is a direct an axiomatic link between good communication and significant increases in productivity.

All businesses, regardless of size, have two distinct cultures: a management culture and an employee culture. For the most part, companies tend to operate under management's agenda, unaware of the employees' agenda.

Communications should serve to unite these cultures. The unification of divergent agendas is the key to any successful, long-term human resources strategy. Thus, communication is critical in any effort to achieve productivity gains while enhancing morale, which usually run on parallel tracks.

To create a truly effective change initiative, communication strategies must be blended with employee involvement initiatives. The employee involvement matrix can aid a management team in understanding employee needs and goals. (See Exhibit 1.) The matrix helps company leaders focus on what they must do to implement employee involvement programs that will be successful at different levels of sophistication. The matrix takes in to account organizational conditions, management commitments, and workforce skills; and it provides a guideline for the realistic and appropriate degree of employee involvement.

The basic concept underlying the matrix is that increased levels of employee involvement cannot be accomplished unless adequate employee and management sills exist. Increasing employee involvement can be attained as company-wide training levels and organizational conditions improve and become more sophisticated.

The matrix (See Exhibit 1.) utilizes two continuums to project an appropriate level of employee involvement for a particular company. The horizontal continuum, labeled "Employee involvement," contains the various types of programs. The first program, cooperative goal setting, is the least complicated and requires the least "cultural commitment" on the part of the company. The continuum progresses to program No. 10, which is employee ownership and control.

"[If real cultural change is to occur] there must be a genuine commitment by management to a meaningful level of employee involvement as part of its ongoing business strategy."

The vertical continuum on the matrix is the learning continuum. It specifies the type of knowledge and skills that will be required throughout the company in order to implement a desired level of employee involvement. The learning continuum has five general areas, ranging from interpersonal relations to business process.

To determine the reasonable level of employee involvement in a given company setting, management should begin at program No.1 on the employee involvement continuum and work upward.

If employees are already involved at given level -- cooperative goal setting or an employee idea system -- and wish to do more such as convene focused task forces, the group process and problem-solving skills shown in the next section of the learning continuum would have to be in place before that new activity could be attempted.

The basic premise of the matrix is that successful implementation of employee involvement at any level must be preceded by requisite workforce skills and managerial commitment.

The final factor in the success of the cultural change process is commitment by management. Simply instituting training on the skills in the learning continuum will not be sufficient. There must be a genuine commitment by management to a meaningful level of employee involvement as part of its ongoing business strategy. A constant re-evaluation of the level of cultural commitment by management is essential to moving further along the employee involvement continuum.

Employee involvement continuum

  • The employee involvement continuum progresses through ten steps of increased involvement.
  • Cooperative goal setting -- the joint establishment of goals b each individual and his or her supervisor after mutual discussion. Goals are set and reviewed on a work-cycle basic.
  • Employee idea system -- a managed and funded program, which provides formalized feedback and includes a reward system. The program results must be highly visible for maximum success.
  • Focused task forces -- the convening of a group to work on a specific issue of set of issues and to recommend alternative solutions within a given time period.
  • Problem-solving teams -- work-unit teams that spend a specified amount of time each week trying to solve identified work-related problems.
  • Cross-functional groups -- problem-solving at interdepartment level with representation from various group functions within the work environment.
  • Union management committees -- can be considered if the employees are represented by a labor union. Joint union-management involvement will help to maximize union participation in all phases of employee involvement.
  • Process improvement groups -- selected groups to solve macro-level problems and improve key enterprise processes, such as product development, quality control, marketing, and distribution.
  • Self-managed work teams -- unsupervised teams of individuals working together for the purpose of improving skills, rotating jobs, and making work-related decisions that affect the total team.
  • Entrepreneurship -- creating opportunities for employee to implement innovative ideas, including designating a special team to pursue an idea, accepting the risks, and appointing a champion to execute the idea within the organization.
  • Employee ownership and control -- employee ownership of all or part of an organization or subsidiary within that organization. Increasing degrees of ownership can improve a business's profitability.

The Learning Continuum

The Learning Continuum denotes the skills and processes necessary for each level of employee involvement.

A. Interpersonal relations involves five skills:

  • Team building -- creating and sustaining high-performance oriented teams.
  • Effective meetings -- conducting purposeful and productive meeting and methods of meeting planning, leadership, participation, and follow-up.
  • Leadership styles -- understanding and practicing leadership styles and straits and the factors that make certain styles more effective.
  • Motivation theory -- knowledge of what motivates individual human behavior, e.g. personality, needs, expectations, dependency/maturity theories.
  • Communications skills -- understanding and practicing effective, two-way communication, e.g. listening, writing, speaking, and giving and receiving feedback.

B. Group process involves four skills

  • Presentation skills -- techniques for preparing and giving a persuasive and effective presentation.
  • Data gathering/organization -- methods of collecting data such as surveying and interviewing, and methods of organizing and presenting information.
  • Group problem solving -- utilizing group problem-solving techniques as compared to the individual-solving process.
  • Group leadership -- analyzing how people behave in groups, what constitutes a group, and the roles of a group's leaders and participants.

C. Employee relations consists of four types of learning:

  • Stakeholder analysis -- analyzing the goals, motives, and behaviors of all internal and external stakeholders of a given enterprise and determining how to maximize mutual benefits.
  • Conflict resolution -- understanding, mediating, and resolving conflicts between groups.
  • Negotiation -- methods and strategies for achieving win-win results in negotiations and avoiding the zero-sum game.
  • Collaboration -- comparison of cooperative versus competitive strategies and their relative impact on goal achievement.

D. Organization analysis includes three processes:

  • Work and job design -- coordination of the interrelationship of jobs, workflow, and other factors in orders to improve quality, productivity, and employee commitment.
  • Organization structure -- design of organization structures to meet current and future economic and technological demands.
  • Systems/process analysis -- identifying and solving problems utilizing macro-level processes, which promotes the attainment of key business objectives.

E. Business process contains four skills:

  • Risk analysis -- pinpointing and quantifying risks in given enterprise and determining acceptable risk levels and trade-offs.
  • Life-cycle analysis -- identifying the critical steps in the development of strategies, plans, markets, products, and technologies to ensure their ultimate success.
  • Cost/benefit analysis -- methods and techniques for determining cost factors and projecting real and probable benefits in implementing new business ventures and technologies.
  • Business systems -- analyzing the goals, inputs, processing requirements, outputs, constraints, and feedback mechanisms in a business operation in order to maximize. Efficiency and effectiveness.

We have seen the implementation of this broad initiative effectively change the corporate culture of many companies, unifying the agendas of management and employees, Sustained through the proactive implementation of flexible communications programs, the resulting corporate cultures have achieved a significant increase in productivity, very low levels of personnel turnover, and an absence of labor unrest.

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