Best practice: Employee relations

first_imgBest practice: Employee relationsOn 7 Aug 2001 in Personnel Today Previous Article Next Article Related posts:No related photos. Comments are closed. Personnel Today’s monthly series reveals how managers dealwith business problems and enhance performance. In this issue, Andrew Walker,HR manager at East of Scotland Water, explains how working with staff andunions to deliver business strategy can help a company through times of change,driving the business forward with the support of all employeesIn 1996, East of Scotland Water was born out of the merging of the water anddrainage departments of five local authorities. These authorities were diversein almost every way, with different ways of working, different cultures anddifferent terms and conditions. There were 97 different pay structures, peopleworking different hours, paid different rates for doing the same job and withdifferent holiday, bonus and sick pay arrangements. But the newly formed company had a clear goal – universal franchise, onecompany, and one working culture. There was a strategic decision to be made – take the highest levels ofbenefits from each employer or start with a blank sheet and design a package thatwas right for the new organisation. ESW opted for the latter and started theplanning process from scratch. Negative feedback The key objective was to involve employees as much as possible in drivingthe new company forward. A series of project teams were established soemployees could develop an approach to job evaluation, salary levels, terms andconditions, overtime, hours of work, bonus schemes and communications. The company set a very challenging schedule for this development processlasting 18 months, with a ballot of all employees at the end of this time tosee if they agreed with the new company strategy. Despite the company’s bestefforts, the feedback from the employee ballot was a 2-1 rejection. At that time, and continuing today, the company recognised four unions – theAEEU, Unison, GMB and TGWU. Although the company had tried to involve them asmuch as possible, the effect of this 18-month discussion period was that theunions had felt increasingly marginalised. Part of the problem was that certain unions’ rules would not allow them toact on behalf of non-union members. While the unions were keen to be involved, they didn’t feel they couldparticipate fully in the proceedings. The regular meetings of the joint counciland divisional forums were perceived by many as toothless and not particularlyrepresentative, and did not have the weight of the unions behind them. Most important of all was the view from employees that, when discussingterms and conditions, they wanted the confidence of union involvement to ensurethey really were getting a fair deal. A way had to be found of achieving universal franchise, but without themarginalisation of the unions and to address the still- dominant culture ofcommand and control linked to a tradition of collective bargaining of any andall changes. Facilitating change ESW thought it was managing change well by involving everyone in thedecision process, but something had gone wrong. With an important lessonlearnt, the HR team realised that greater involvement from the unions wascrucial to instil employee confidence in the decision-making process. The solution to this problem was found with the introduction of an externalfacilitator. ESW chose an academic from Strathclyde University who had a goodreputation and who all parties trusted to be neutral and unbiased. ProfessorJohn Gennard facilitated a series of meetings between the HR team and theunions. Gennard’s intervention involved several months of straightforward talking.The group discussed many matters over this time, drilling down to find the realissues that underpin ESW’s business strategy. It was during this period that the principles for ESW’s future strategy werelaid down. Eleven principles were agreed, including: – Employment security – Free exchange of information – Joint problem solving – Training and development of all employees The main objective, agreed by all, was to avoid disruption to customerservice at all cost. After thorough consultation, union members and the HR teamdelivered a joint presentation to the ESW board, outlining their proposals.This was a breakthrough at ESW, as it was the first time the unions andmanagement had stood before the board as a unified group, with a commonpurpose. With the board’s approval, ESW began turning principles into tangibleactions. This meant a completely new way of managing change. Strategic companydecisions would now be debated by an Enterprise Council – rather than regionaldivisions – and newly formed Employee Business Groups. These groups woulddiscuss company policy from their specific business angle, and the EnterpriseCouncil would consider company strategy. Within this structure, there were guaranteed seats for the trade unions,with elected places for non-union members and shop stewards. Straight talking Last summer ESW took 150 shop stewards, employees, managers and unionrepresentatives away for two-and-a-half day sessions facilitated by the GMBManagement College. The purpose was to build a consensus about the way the newsystem would work. Participants were given techniques for joint problem solving, theopportunity to try things out, and also to build trust among the potentialdecision-making group. Elections took place after these sessions and the new business groups andEnterprise Council were up and running by the end of last year. After the mistakes of the past, the frustrating setbacks and a lot ofstraight talking, the real business of moving the company forward could beginin earnest. Induction days started off the process for the newly electeddecision-makers, who soon realised the full implications of having a say overcompany policy. It’s all very well mulling over the nice things about companylife, but before long, difficult decisions have to be tackled. The induction days looked at how the group might deal with situations suchas the rationalisation of staff. Union officials, shop stewards, managers and employee representatives werenow making choices that had previously been made by managers behind closeddoors. The group used the induction days to work through such problems in detail,finding the best way to manage tricky situations and setting out criteria foragreeing the best solution. This was when the groups fully realised that theywere in charge of important decisions. For the first time, management was notpresenting set views, it was asking for them – sharing both the problem and thesolution. The new system presents another challenge for group members. Not only dothey have to make decisions, but they must also justify them to the people theyrepresent. They have to explain why they came to the chosen solution, howevercontroversial that might be. Reality bites The induction workshop scenarios have already become a reality. For example,the Water Industry Commissioner has set ESW very stringent savings targets thatthe company has to make in its operating expenditure. In the past, ESWmanagement would get together and privately discuss the cuts and savings thatneeded to be made to balance the books. Now there is ongoing dialogue with theEnterprise Council and each of the business groups to come up with solutions. Crucially, there are no secrets. The groups know the size of the savingsthat need to be made, and are working on the solution together. With the involvement of the union representatives, management and employees,ESW has introduced a voluntary severance scheme. The groups are also discussing the implications of letting people go. Thismeans changing working practices to manage the impact of reducing staff incertain business areas. In these tough times, it is a real challenge for the groupmembers to get support from the people they represent. If there is a positive side to making savings at ESW, it is that decisionsand solutions have been made in the open, with the involvement of as manypeople as possible. This means that employees and unions know exactly what thecompany is facing, and have influence over the outcome. Employees know that themanagement team is doing everything it can to reduce job losses. The groups have also been looking at other costs the company incurs, seeingif they can make savings elsewhere. This should reduce the number of job lossesand also demonstrate to employees the importance of trying to findcost-effective suppliers, reducing wastage and taking positive steps to makesavings in all areas of business. This process has also shown that there is not necessarily a link betweencost savings and jobs. If there are other ways to save money, the company willfind them. Further education ESW has spent the past six months demonstrating to all involved that thingsreally have changed for the better. The company has engaged people in thebusiness groups because they are prepared to take the responsibility.Participants know it is good for their career development. They are getting alot of information about the business and about the strategy, where the companyis going and are starting to realise that they can have a real impact on itsfuture. However, there is still a large proportion of people that ESW needs toeducate. Starting in September, ESW is taking everybody off the job to leadthem through a process to help them understand the business strategy, how thisrelates to customer management and how money flows through the business. Inthis way, the company hopes to have all employees armed with a full understandingof what it is trying to achieve. There are plenty of other developments to keep the Enterprise Council andbusiness groups busy. Next April, ESW is moving towards a merger, becoming oneScottish Water Authority. This move towards a larger, more diverse organisationwill present many new challenges that ESW employees must address and preparefor now. The training and development programmes for representatives have also beenmapped out by the groups. One of the first parts of this programme is financialawareness training, which involves taking employees off the job for a couple ofdays so that they can understand the budgets and finances that they are havingto make decisions about. Not only does this help them with the decision-making,but also helps them report back their decisions to the people they represent. In the past, employees have been able to criticise decisions, as they had noinfluence over them. When they have an understanding of the financial process,there is less room for criticism, just good, sound ideas. Sharing in the future A good example of how the financial training has paid off is with paydetermination. The traditional way to settle this would be by collectivebargaining. The company would put its offer to the unions, which would returnlooking for something higher, and eventually they would meet in the middle. Now, all parties share the same information, understand the budgets and thebusiness context, so a collective decision is made about where the money shouldbest be allocated and where that money might come from. Another training focus is IT. At ESW, about 1,000 out of 1,700 employeeshave access to computers on their desks, but others, such as those working onnetwork repairs, do not have that luxury. ESW has installed kiosks in theplaces where employees congregate so those without desk access to the Internetcan keep up to date with team briefings, company news and – in the future –their personnel records. These are exciting times at ESW. The company is moving through a greatperiod of change, which needs to be managed well to drive the business into thefuture. But with the support of employees, unions, management and the board, changeis not feared at ESW, it is a challenge, but not a threat. The building blocksare in place to ensure that company strategy and policy will never be decidedbehind closed doors, and that every person at ESW is fully represented as thecompany moves into a new era. On getting your staff involved in decisions– It is crucial to get commitment from the top. This needs to be more thanjust verbal support – it must be visible and consistent – Don’t assume everything’s going OK. Progress can be achieved quickly, butcontinual feedback from those involved manages expectations and helps find waysof improvement – Recognise that it is different on a course from being on the shop floor.Ten or 20 like-minded people will agree on a great idea, but they have to goback to the shop floor and explain their decision to people who haven’t been onthe course. The representatives need continual support to ensure that theydon’t feel pressured into agreeing to ideas their colleagues will hateThe best professional network you will ever join. The Best Practice Club is a professional knowledge network, pooling theideas and advice gleaned from a diverse and global membership which spansmanufacturing and service industries as well as the public and private sectors.Through a combination of education and shared experience, members are able toidentify and adopt best business practices. – For a full information pack, contact 0800 435399 or visit www.bpclub.comlast_img


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