Employment Relations Research Series No.7

PARTNERSHIP AT WORK

Dr John Knell

Industrial Society48 Bryanston SquareLondon, W1H 7LN

Contents

Executive Summary 2

1 Scope and Objectives of the Research

Introduction 1Methodology 1Case Study Selection Criteria 1Generating the Sample 2Summary Characteristics 2The Structure of the Report 2

2 A Review of the Literature

Introduction 5i) Current Definitions of Partnership 5Developing a nuanced understanding of partnership 7WhatÕs so new about partnership? 8ii) Partnership at Work: A Necessary Historical Context 9The New Economy and the New Workplace: from Conflictual 9to Cooperative Orientations?The New Competition 10US Evidence 11The Rise of HRM 21The Institutional Context 13The New Economy and the New Workplace: Assessment 14iii) Tackling barriers to Partnership 14Conclusions 15

3 The Case Studies: Summary Analysis

Introduction 17i) Routes to Partnership 17ii) What is meant by partnership? Towards an understanding 18of the partnership conceptiii) Partnership Philosophy: Towards a Core Set of Values 19iv) Partnership in Practice: Workplace Organisation and Management 22v) What was done to develop a partnership approach and what were 26the problems encountered?vi) Partnership Outcomes 28Conclusions 30

4 The Individual Case Studies in Detail

1. Appor Ltd. 332. Borg Warner 363. Braintree District Council 414. Domnick Hunter Group Plc 455. Elementis Chromium 486. Herga Electric Ltd. 547. H.P. Bulmer Holdings Ltd. 598. Litton Interconnection Products 649. Leyland Trucks Ltd. 6810. Michaelides and Bednash Limited 7311.Natwest Retail Banking Services Ltd. 7512. Scott Bader 7813. Shelter 8314. St. Lukes Communications 8615.Trifast Plc 89

Bibliography 93

Executive Summary

Chapter One Ð Scope and Objectives of theResearch

This study examines what partnership at workactually means in practice. It is based on areview of the partnership literature, and a detailedexamination of the partnership policies andpractices of fifteen organisational case studies.

Chapter Two Ð A Review of the Literature

The review highlights the fact that the currentemphasis on partnership displays considerablecontinuity with long-standing and emergentdevelopments in work organisation and labourmanagement. New partnership approaches arenot, therefore, offering starkly original visionsof the employment relationship, nor indeedspecifying new methods to foster partnership inthe workplace.

However, the analysis identifies a rangeof economic, social, technological andinstitutional factors encouraging the adoption ofnew work organisation and labour managementpractices consistent with partnershipapproaches. For example, the accelerating paceof change in the structure of competition andmarkets is having a profound impact on thecharacter of employee relations. Increasinglycompetitive markets, rapid technologicaladvances, and shifts in consumer preferencesare seen as having transformed the competitiveenvironment and necessitated neworganisational responses, based on rapidproduct and process innovation. Various labelshave been used to describe the resultantworkplace innovations and productive systems,including Ôhigh-commitment enterprisesÕ. Thesuccess of these systems is seen as beingdependent on the development of high-trustrelations with the whole workforce. As aconsequence, these organisational responsesrequired by the new competitive environmentcan be seen as sympathetic to the developmentof partnership in the workplace.

These new forms of work organisation, andlabour management innovations, may offerenhanced opportunities for work to become morefulfilling, and therefore provide a firmer basisfor partnership and co-operation in the future.

Our review of the recent literature suggests thatthe real test of the partnership agenda will behow far the principles and practices advocatedby such approaches extend to all employees,irrespective of their seniority, skill level, orstatus within an organisation.

Chapter Three Ð The Case Studies:Summary Analysis

Similarity triumphing over differenceThere is a remarkable commonality of vision,value and purpose across the companies, and intheir substantive employee relations practices,though very few of the case study firms use theword ÔpartnershipÕ to describe their employeerelations approach.

Nonetheless, when the case study organisationswere presented with a check-list and descriptionof what partnership is taken to imply andcontain, all of them thought that it was anappropriate descriptive term to apply to theirpolices and practices.

Creating a shared understandingIn nearly all of the case studies, the basis ofpartnership has been for the organisation to open upa dialogue with their workforce about creating acommon vision and objectives, and about howeveryone can best work together to achieve it.

Sometimes the desire to have these types ofconversations, which in some cases proveddifficult at the beginning, was born from a deepdissatisfaction with existing relationshipswithin the workplace. In others it was promptedby the recognition that most aspects of theorganisationÕs operations could be improvedupon, and that the changes required could onlycome from engaging the whole organisation,honestly and authentically.

The speed and force with which suchunderstandings were generated, and themethods used, also differed according to theorganisationÕs circumstances. Where partnershipwas pursued with some urgency (e.g. LeylandTrucks, Borg Warner), partly as a result ofcrisis, the process was led by senior managers,and was initiated through direct communicationmethods (team briefings, mass meetings) withemployees. Leyland Trucks for example, heldsessions with groups of 40 employees lasting upto a day, in which they explored what thepartnership idea might mean.

i

Alternatively, where partnership was drivenmore by the measured adoption of thephilosophy, the process of developing sharedunderstanding was naturally less dramatic andmore gradual (e.g. Scott Bader, LittonInterconnection and St. Lukes), with a reducedemphasis on direct communication methods.

Creating such shared understandings does notof course mean the removal of disagreements.However, our case study organisations suggestthat the very process of forging agreements(and disagreements) in a climate of enhancedtrust, helps to enable everybody within theorganisation to adopt a problem-solvingorientation when tackling what appear at first tobe apparently intractable differences.

These orientations and practices stemmed fromthe recognition by our case study firms that fora partnership approach to be successful it isdependent on securing genuine employee buy-in to its policies and practices. Equally, ifpartnership is imposed on companies it isunlikely to work. Our evidence suggests thatwhilst a partnership approach is usuallyprompted by managers in the first instance, itfalters unless the organisation quickly achievessupport from all parties. The practicalimplication of this is that for partnership to feelauthentic to employees they have to be givenincreased voice, influence, discretion andresponsibility. It is clear from our study thatnearly all of the case studies are managing theirorganisations in this spirit.

Union / non-union establishment comparisonsAt the level of visible practices, differencesbetween the union and non-union case studyfirms were negligible in terms of the incidenceof workplace innovations and new managementpractices. However, given that all of our firms,including the SMEs, are good practiceorganisations, little significance can be readinto this finding.

More broadly, with regard to attitudes andbehaviours, if we examine union involvementwithin the case study firms, taken as a whole theunions have adopted a co-operative stancetowards new initiatives, and they have provedto be active participants in developing apartnership approach. An example of thisorientation is that the trade unions within theseorganisations have accepted that partnershipinvolves building a better relationship betweenall employees and the company, including on anindividual basis with each employee. As aconsequence a common characteristic of all the

unions in the case studies was their willinginvolvement in consultative mechanisms inwhich they did not have a monopoly ofrepresentation rights. This was true not only ofworks council type arrangements, but also moredirect consultation through working teams.Similarly, all of the unions had proved to beactive and enthusiastic participants in thedevelopment and negotiation of partnershipagreements.

Developing Partnership PracticesMany of our case studies organisations havefaced difficulties in implementing the newforms of work organisation associated withpartnership. For example, the difficultiesinvolved in moving an organisation fromtraditional command and control structures withlow levels of job discretion, to onecharacterised by a flatter hierarchy, self-autonomous teams, with employees beingoffered the chance of more meaningful controlof their jobs and working time. Many of theorganisations featured in the study confirm thatsuch a shift:

● can unsettle those employees who do notwant to take on new responsibilities, or feelthat their previous status and position havebeen undermined. The solution has been formany of the organisations to embark oncomplementary culture change and teamand relationship-building training activities;

● may quickly reveal shortcomings in theskills base of a workforce. The solution hasbeen to respond with significant investmentin training needs analysis and learningprogrammes;

● usually necessitates transformations in thecommunication processes within theorganisation, both vertically and laterally.Solutions adopted include more regularbriefings, off-site meetings, greatermanagement visibility, and the adoption ofnew communication channels (such as hotlinesand regular Ômeet the bossÕ opportunities).

Performance OutcomesAll of the case study firms featured in this studyassert that their adoption of a partnership-basedapproach has helped them achieve enhancedcompetitive performance. This endorsement ofthe business benefits of partnership is a strikingfinding. Some of the firms reported exceptionalperformance improvements. For example:

● Borg Warner has doubled the size of itsworkforce and increased its turnover by60% in the last 4 years;

ii

● Michaelides and Bednash have built an 85million pound business in four years, withturnover increasing 20% year on year;

● Trifast has doubled its turnover andworkforce, and trebled its profits over thelast five years;

● Litton Interconnection have generated a200% increase in profits over the last fiveyears;

● Domnick Hunter have increased profits by afactor of three on a doubled turnover.

None of the firms are working in sectors (i.e.Information and Communication Technologies)where the magnitude of such changes could beexplained by market growth rather thanorganisational improvements.

Employee Relationsand Work Organisation OutcomesThe partnership firms in our study display ahigh rate of innovation and have beensuccessful in introducing new forms of workorganisation and in managing the resultantchanges. The erosion of hierarchy, theredefinition of roles, increased task discretion,flexible working practices, and thedevelopment of semi-autonomous teams wereall widespread features of the case study firms.

The organisations display high levels ofcommitment to continuing the development ofpartnership. Certainly, the experience ofdeveloping partnership has not led any of theorganisations to question the value of such anapproach. Rather, the majority of the firmsindicated that they regard their partnershipactivities as very much work in progress, whichwill continue to evolve over time, and whichwill necessitate ongoing work and commitmentto ensure future success.

The employees in our study display highsupport for the principles and practices beingadopted by our case study firms. This wasconfirmed by our interviews with employeesand their representatives, and by thoseorganisations amongst our sample who havecarried out employee attitude surveys, whichreported high satisfaction scores. More broadly,all of the organisations reported low levels oflabour turnover and absenteeism amongst theirworkforces. Indeed, a number of the firms,notably Michaelides and Bednash and St Lukes,reported exceptionally low labour turnoverfigures when compared with the standard ratesof labour turnover in their industry.

New management practicesThe studyÕs findings suggest that theadoption of a partnership approach makes anorganisation more likely to pursue a broadrange of new labour management practicesand work organisation transformations, asexemplified by the impressive scope ofinnovation amongst our case study firms. It is ofcourse a matter for further empiricalinvestigation to confirm how strong thisassociation proves to be within otherpartnership organisations.

Perhaps even more significantly, our findingsshow that partnership companies are morelikely to make a concerted effort to operate suchmethods effectively, to engage in subtleprocesses of continuous improvement, and todeliver meaningful improvements in bottomline performance. In other words whilstpartnership may not be a prerequisite of newforms of work organisation, it does act as aÔvital enablerÕ, more readily ensuring that:

● adoption of ÔnewÕ management techniquesis more far-reaching, and they are firmlyembedded in the labour process;

● innovations of this kind lead to a genuinelyhigh commitment, high performanceworkplace.

Focused on future successA striking similarity across our case studysample was the extent to which all of theorganisations were focused on future success.In this respect, all of the companies couldarticulate a strong vision of their desired future,and how they were attempting to get there. Inother words, they want to operate at all timesÔbeyond the immediate business planÕ. Moreover,they took for granted that the rapid changewithin the business environment was now aconstant dynamic, and that they could not planfuture strategies on the basis of static structures.

Conclusions

This study augments the growing empiricalevidence that firms with partnership basedapproaches to employment relations achieveenhanced competitive performance. It thereforechallenges those who find it difficult toreconcile improved employee rights, voice,involvement and discretion with sustainedimprovements in economic performance. Thesefindings suggest some illuminating pathwaysfor UK industry as a whole.

iii

The basis of competitive advantage isincreasingly derived from the value containedwithin intellectual capital and its application.As a consequence, the dynamics of trust,innovation, commitment and connectivitywhich our study reveals are being activelypursued through partnership approaches, arelikely to become progressively more importantconsiderations for the way in which businessesare managed and organised, and the waybusiness itself is conducted.

Thus, the experience of our case studycompanies would suggest that partnershipapproaches are important, both for theenrichment of the work experience and forsimultaneously accelerating the pace ofworkplace innovation and improved enterpriseperformance. The new forms of workorganisation and labour management practicesprevalent within our case study firms suggestthat partnership approaches may prove to be avital component of UK enterpriseÕs adaptationto the demands of the new information age andincreasingly competitive world markets.

iv

OneSCOPE AND OBJECTIVESOF THE RESEARCH

Introduction

This study examines the conceptual andpractical foundations of partnership.Partnership organisations are increasinglyassociated with workplace innovationsdesigned to improve productivity and productquality, and meet the organisational demandsof the new information age. Nonetheless, thereis comparatively little evidence on the actualsubstance of partnership approaches at work.

In order to shed light on the components of apartnership approach, this study focused onthree key objectives:

1. to identify a number of businesses of allsizes, where a successful partnership approachto employment relations has been adopted;

2. to examine in detail the arrangements andprocesses involved; and,

3. to explore the outcomes achieved.

Reflecting these objectives, the study has beenexploratory in character, seeking to examinewhat partnership actually means in the contextof the workplace. Specific lines of enquiry havetherefore included:

● what leads companies to adopt a partnershipapproach? What are the catalysts anddrivers? And,

● having made a commitment to adoptinga partnership approach, how and in whatways do organisations make suchaspirations a reality?

Methodology

The first stage of the research involved a reviewof the partnership literature, in order to identifymore precisely the components of a partnershipapproach. The aim of the second stage was toprovide evidence about the processes andoutcomes of the partnership approach toemployee relations, across a range oforganisations. Given this focus, the research hasadopted a case study approach. In this context,the advantage of case studies is that they:

● allow us to explore the process dimensionsof building effective partnerships at work;

● identify causal factors shaping thedevelopment of partnership, which can onlybe revealed through detailed case studyresearch;

● trace the recent history of the organisationsselected and how attempts to generatepartnership have developed over time. Thiscontextual information is vital indetermining the rationale that may haveunderpinned any such initiatives; and

● allow for a detailed analysis of the ways inwhich the organisations are planning todevelop their partnership arrangements nowand in the future.

Within each case study firm interviews wereheld with directors, managers, trade union andemployee representatives, and employees,spread over two separate day-long site visits.

Case Study Selection CriteriaThe selection of the case studies wasdetermined by a set of explicit criteria, namely,to identify:

● organisations who were adoptinga partnership approach of some form;

● organisations who had not previouslyreceived any public attention regarding theirpartnership practices. In other words, thisstudy was concerned to identifyestablishments who have not been held upas examples of good practice in this respect,and who have become established membersof the Ôpartnership landscapeÕ; and,

● a range of organisations including thoseemploying less than 250 employees,unionised and non-union firms, and to bedrawn as far as possible from differentindustrial sectors.

Given that the organisations were selectedbecause they were adopting a partnershipapproach, the sample was not a random onedesigned to represent organisations ingeneral. Nonetheless, the intention was toinclude a range of firms diverse enough to offerilluminating points of comparison. Someorganisations not featured in the study werevisited, interviewed and subsequently rejectedon the basis that they were not displaying a clearcommitment to partnership. Others we wouldhave liked to cover were unwilling to take part.

1

The difficulty of gaining access was made moredifficult by the fact that all of the participatingcompanies had to agree to be identified in thepublic reporting of the results. Given theseconstraints, the study has proved successful ingenerating a sample displaying significantheterogeneity.

Generating the short-list of companiesA number of different sources were utilisedto generate an original short-list of 35organisations. These sources included:

● the Industrial SocietyÕs membership● the DTIÕs Best Practice Directorate● the Involvement and Participation AssociationÕs

networks● the TUC, and prominent trade unionists

Summary CharacteristicsThe sample is made up of fifteen organisations,with the following general characteristics:

● 7 non-union firms● 8 unionised firms● 5 SMEs● Mixture of sectors

- 2 advertising firms- 2 chemicals- 1 public sector and 1 voluntary sector- 1 food and 1 financial services- Remaining 7 spread across manufacturing

and engineering sectors

The Structure of the Report

The rest of the report is organised as follows:Chapter Two reviews the recent partnershipliterature and examines the conceptual andpractical foundations of partnership. ChapterThree presents a summary analysis of the casestudy findings and assesses the implications ofthe study for the future development ofpartnership approaches. Chapter Four providesa full account of the partnership activities ofeach of the individual case study organisations.

2

3

The Case Study Organisations

Table One below summarises the key characteristics of the fifteen case study organisations.

Table One: The Case Study Organisations

Organisation Sector / main activity Number of Forms of EmployeeEmployees Representation

Michaelides Advertising 19 Non-unionand Bednash

Appor Ltd Other Manufacturing 39 Non-union (Plastics)

St Lukes Advertising / 97 Non-union Communications Communications

Litton Interconnection Electronic Engineering 125 Non-union

Herga Electric Manufacturing 160 Non-union (electronic components)

Borg Warner Automotive Components 310 Single UnionAutomotive Recognition(AEEU)

Elementis Chromium Chemicals 400 Multi-Union Recognition(chromium chemicals) (T & G and AEEU)

Shelter Voluntary Organisation 456 Single Union Recognition

(T&G)Scott Bader Chemicals 650 Non-union

(resins & polymers)

Leyland Trucks Ltd Motor Vehicle Manufacturing 804 Single Union Recognition(AEEU)

Trifast PLC Manufacturing 827 Non-union(industrial fastenings)

Domnick Hunter Engineering (filtration products) 1,000 Single Union RecognitionGroup (AEEU)

Braintree District Local Government 1,200 Multi-Union RecognitionCouncil (GMB, T & G, & AEEU)

HP Bulmer Holdings Cider manufacture 1,250 Single Union Recognition(T & G)

Natwest Retail Retail Banking Services 35,000 Multi-Union RecognitionBanking Services (BIFU, NWSA & UNIFI)

TwoA REVIEW OF THE LITERATURE

ÔModern and successful companies draw theirsuccess from the existence and development ofpartnership at work. Those who have learnt tocherish and foster the creativity of their wholeworkforce have found a resource of innovationand inventiveness that drives their companiesforward as well as enriching their lives.Õ (Tony Blair, Fairness at Work. Page 3)

ÔThe challenge for unions and employers is tobuild on the best of best practice. Developingworkplace partnerships based on mutualityand independent worker voice should alsobe a central objective of public policy.Õ(John Monks, IPA Magazine, April 1998)

ÔPartnership is a matter of principle Ð it isthe right thing to do Ð but equally....itprovides pay-offs in terms of higher employeecommitment, better employment relationsand superior company performance.Õ(Guest and Peccei, 1998.15)

Ô[Partnership] is vital because companies aremore dependent than ever on a complex webof mutually beneficial partnership Ð with advisers,uppliers, customers, shareholders, and, ofcourse, with employees.Õ (Melville Ross,1998.4)

Introduction

These statements show that the notion ofpartnership at work has achieved pre-eminencein current debates about how best to generateenterprise success and social renewal.Partnership organisations are associated withworkplace innovations designed to improveproductivity and product quality, and withmeeting the organisational demands of thegrowing information economy. However,partnership is being evoked so frequently that itis a concept in danger of losing its power toexplain and exhort.

This brief review aims to explore theconceptual and practical foundations ofpartnership. In so doing it will identify moreprecisely the components of a partnershipapproach; the material conditions that arefostering the development of such approaches;and the barriers that need to be overcome if theemerging aspirations for partnership are to

come to fruition within the UK.The review is organised as follows: i) examinescurrent definitions of partnership, and outlinesthe role of this study in deepening ourunderstanding of partnership approaches;ii) provides the historical context to thepartnership debate, in order to establish what isnew about current partnership approaches, andwhy partnership has come to occupy sucha prominent position in strategies for workplaceand enterprise renewal; iii) outlines the barriersconfronting the successful adoption ofa partnership approach.

i) Current Definitions of Partnership

Partnership is not a term that carries with it anyprecise theoretical or practical connotation. It isthis very fact that has perhaps made the word soattractive. Who could possibly be againstpartnership?

But this strength is also a weakness, in thatit can lead to confusion over what it is meant toimply, and therefore for many employers andemployees the idea of partnership may seemvague and difficult to put into practice. Theseproblems stem partly from the fact that mostrecent definitions of partnership have tended tofocus more on the cultural values andaspirations that are seen to underpinpartnership, rather than on precise empiricaldefinitions of partnership approaches andoutcomes. In this vein, numerous literatureshave talked of the need to foster long-termrelationships of trust and mutuality between allof the different stakeholders within theenterprise (TomorrowÕs Company, (1996);Pearson, 1995). The stakeholder approach inparticular emphasises the importance of theacknowledgement of, and accommodationbetween, the different legitimate interests heldby the stakeholders of an organisation. This hasled commentators to draw a clear link betweenthe emergence of partnership approaches, andthe more general debates around business ethicsand stakeholding. The consequence of all this,as Ackers and Payne note, is that Ôwhile businessis united...over the contribution of partnershipwith employees to good human resourcemanagement, it is divided over what this meansfor industrial relations practice.Õ (1998.541).

The most recent and comprehensive attempt toovercome these confusions has been Guest andPecceiÕs recent report for the Involvement andParticipation Association (IPA), entitled ÔThePartnership CompanyÕ (1998).

5

Guest and PecceiÕs study is the culmination of asubstantial programme of work that has beencarried out by the IPA. In their 1992 reportÔTowards Industrial PartnershipÕ, the IPAidentified the basis on which new workplacerelationships could be built, which included thefollowing:

● joint commitment to success● building trust● recognising the legitimate role of all the

partners● addressing the issues of security

and flexibility ● sharing success ● informing and consulting staff ● employee voice and representation

These foundations of partnership havebeen reaffirmed by a number of similarcommentaries, such as the Irish governmentÕsPartnership 2000 document (1996) andthe TUCÕs ÔPartners for ProgressÕ (1996).

Guest and Peccei examine how far these broadvalue-based commitments are being translatedinto specific principles and practices withincompanies adopting a partnership approach.The definition of partnership developed byGuest and Peccei has three components: a set ofvalues or principles; a set of practices; and apromise of benefits (cf. 1988.16) Let usexamine each of these components in turn.

The principles of partnership are defined as theÔvalues underlying partnership which prescribeappropriate forms of behaviour and practice inorganisationsÕ (ibid.). Guest and Peccei specifyfour main general principles, namely:

● good treatment of employees now and inthe future

● empowerment: creating the opportunityfor employee contribution

● employee rights and benefits● employee responsibilities

These principles underline the importance ofmutuality, and the reciprocal rights andresponsibilities of employer and employees, indistinguishing a partnership approach. Theysuggest that management and employeecommitment to the development of partnershipsprings directly from these value-basedprinciples. Once an organisation has adoptedthem, they then have significant choice anddiscretion over how they configure theiroperational and employee relations policies toachieve greater partnership.

In this regard, the second componenthighlighted by Guest and Peccei are thepractices Ôwhich organisations pursuingpartnership might be expected to have in placeÕ(ibid.). In other words, the work organisationand labour management policies and practicesmost closely associated with the effectivedevelopment of a partnership approach. On thebasis of the companies in their study, Guest andPeccei identified the following eight maingroups of practices (cf. 1998.24):

● direct participation by employees indecisions about their own work

● direct participation by employees indecisions about personal employment issues

● participation by employee representativesin decisions about employment issues

● participation by employee representatives indecisions about broader organisationalpolicy issues

● flexible job design and focus on quality● performance management● employee share ownership● communication, harmonisation and

employment security

Therefore, an organisation wishing to pursue apartnership approach has a comprehensivemenu of employee relations options to choosefrom. This list of practices confirms theimportance of involvement, participation,employee voice and discretion, shared reward,and new forms of human resource management(HRM) practice in the substantive character ofpartnership approaches. The list also underlinesthe force of our earlier arguments that thepartnership concept overlaps with a number ofother related ideas, such as stakeholding,mutuality, and particular aspects of HRM.Guest and Peccei suggest that one way todifferentiate between these overlappingconcepts is to focus on how far the differentinterests of the partners are recognised. As theynote ÔArguably these are recognised by thoseadvocating stakeholding, mutuality andparticipation; in contrast much of theenthusiasm for employee involvement andhuman resource management seems to be basedon a unity of interest.Õ (1998.15) This has ledsome commentators to categorise HRM as aunitarist approach.

How far the unitarist underpinnings of HRMare compatible with the pluralistic orientationsof partnership is a matter of ongoing debate (cf.Taylor and Ramsay, 1998). The development ofnew employee voice mechanisms (e.g. workscouncils) and the development of ÔintegrativeÕ

6

rather than ÔdistributiveÕ collective bargainingstrategies by trade unions, are seen by some asviable, important, and complementarycomponents of these new approaches to workorganisation (cf. Birecee et al, 1997).

It is certainly the case that UK trade unions arenow broadly supportive of the HRM practiceslisted above, and John Monks has been explicitin stating that HRM is not an anti-union agenda(cf. Taylor and Ramsay, 1998). In this context,the strong support of UK unions to socialpartnership reflects their acceptance that unionsshould be adopting a more positive andproactive stance towards new managementpractices, rather than a reactive one. It alsounderlines that the value-based commitmentsand principles underlying partnership aregaining widespread support.

The final dimension of Guest and PecceiÕsdefinition of partnership concerns the outcomesof partnership. They identify three key areas(1998.32) in which the outcomes of apartnership approach are likely to provebeneficial, namely:

● employee attitudes and behaviour (in termsof contribution and commitment)

● employment relations (measured by labourturnover, retention, absence and conflict)

● organisational performance (the businessbenefits of partnership being reflected inimprovements in productivity, quality,innovation, sales and profits)

It is difficult to attribute direct causality to theinfluence of partnership on these organisationaloutcomes. As Guest and Peccei note, Ôit is moreprobable that [partnership practices] have anindirect impact through their influence onemployee attitudes and behaviour (and indeedthat of management) which in turn has animpact on internal performance, reflected inproductivity, quality and innovation and this inturn has an impact on the organisationÕs salesand profitability.Õ (1998.16)

Developing a Nuanced Understanding ofPartnershipWhat does Guest and PecceiÕs definition revealabout the form and substance of partnership?

Firstly, the aims of partnership are seen tooperate in the interests of all parties offeringminimum standards of employment, jobsatisfaction, and enhanced / shared reward forthe employee and a committed, productive andadaptable workforce for the employer. These

aspirations do not deny the existence ofdifferent and conflicting interests, but ratherseek their accommodation through a firmcommitment to mutuality and the generation ofshared goals and understandings.

Secondly, at the level of the individualworkplace, partnership refers to the co-operation between employer and workforce,which may take place through a formalstructure or informally. In other words, the keypartnership practices identified by Guest andPeccei highlight both individualistic andrepresentative dimensions, and are seen asbeing equally applicable in union and non-union environments. Partnership, therefore, canbe achieved through union recognition whereemployees so wish, but can also be achievedthrough non-union routes such as consultativebodies or even, especially in small firms, directcommunication between the employer andindividual workers.

Finally, partnership should be thought of as anintergrated package, implying the successfulimplemetation of certain underlying principlesand complementary practices, with successmeasured through improvements in employeerelations and enhanced enterprise performance.

Nonetheless, Guest and PecceiÕs definitionleaves a number of issues relevant topartnership research unresolved. The broadnessof the partnership concept, its overlap withrelated ideas such as stakeholding and HRM,and the difficulties of assigning causal influencedirectly to partnership in producing certainoutcomes, makes it difficult to specify thecharacter of a partnership approach withprecision.

These ambiguities, regarding the empiricalsubstance of a partnership approach, mirror thedebates that have plagued the development ofthe HRM concept concerning what shouldconstitute a robust empirical proof of theexistence of HRM approaches. Those debateswill not be rehearsed in any detail here, but abrief comparison with them is instructive in sofar as some of the key dimensions are the same.For example, the HRM literature has been quickto note that the existence of a particular menu ofHRM techniques within an organisation shouldnot be taken to mean that the organisation ispursuing an integrated and strategic HRMpolicy (cf. Legge, 1989).

7

Perhaps in this sense, as with the HRM concept,partnership is better thought of as offering amap to guide practice, rather than representinga prescriptive model or theory (cf. Noon,1992.30). In other words, there is unlikely to beone definitive expression of a partnershipapproach, or a clear-cut empirical benchmark,rather emerging similarities between commonpolicies and practices. The exploratory,inductive ambitions of this study are in tunewith such a position, in so far as our case studywork is seeking to examine in some detail theemerging character of partnership practices inorder to assess the extent to which they displaymeaningful convergence and coherence.

Notwithstanding these complexities, readers ofthis study will understandably be seekinganswers to the following vital question, namely,ÔHow far are any improvements in a firmÕsenterprise performance attributable to theadoption of a partnership approach, as opposedto their implementation of other leading edgetechniques and practices?Õ The importance ofthis question lies in the fact that sceptics ofpartnership would no doubt argue that leadingedge companies can secure significantperformance improvements irrespective ofwhether they have adopted a partnershipapproach or not.

Two interpretational considerations need to beaddressed in answering these questions. Firstly,at a fundamental level, if we are witnessing aslow and gradual change towards a partnership-based approach, it may be too early to assess thedurability and exact character of this change. AsMarks et al have commented Ôagreements onpartnership in principle need to be evaluated inthe light of practice.Õ (1998.218)

Secondly, answering these questions dependson the production of empirical evidence for usein evaluation, including baseline andbenchmarking measures. The definitions ofpartnership, reviewed above, involve bothvalue-based commitments and complementarysets of HRM practices. There are many issues,which are of common concern across industrialsectors of groups of businesses. The adoption ofsimilar approaches or practices in response tothese common concerns, regardless of whetheror not the business is pursuing a partnershipapproach, makes any empirical study difficult.Facing similar competitive pressures, manyorganisations are for example adopting flatterorganisational hierarchies, policies to ensuremore rapid and flexible responses, and

recognising the need to tap into theaccumulated intelligence and innovation oftheir employees. It therefore follows that beinga partnership company is not a prerequisite foradopting these new forms of work organisation.

This implies that it is difficult for this study toresolve how far partnership leads directly to theadoption of certain practices over others, andcontributes directly to bottom line performance.However, our analysis can determine whetheror not the adoption of a partnership approachmakes an organisation more likely to pursuesuch new forms of work organisation.Additionally, once an organisation has made thedecision to introduce new methods, does theadoption of a partnership approach have anyimpact on the extent to which any new labourmanagement techniques are fully implementedand embedded into their labour processes andoperations? These are vital points of focus forthis study, which stem directly from thestrengths and weaknesses of partnershipdefinitions.

WhatÕs So New About Partnership?Our review has revealed that the developmentof current partnership approaches has not beendependent on the creation of new concepts andinsights. The key principles and practicesidentified by Guest and Peccei have long beenfeatures of the employment relationship in theUK, if not the substance of widespread practice.Indeed, experienced observers of UK employeerelations could argue that the current emphasison partnership therefore represents nothingnew. Equally however, recent advocates of apartnership approach would suggest that we arewitnessing a profound, if slow and incremental,shift towards a partnership approach. Forexample, Ackers and Payne reviewing theunionsÕ changing attitude to social partnershiptalk of a move from Ôreactive conflict-resolution to Ôactive and intimate partnershiprelationship re-focused on consensuscreation......The basis of this consensus is thestakeholder economy and firm.Õ (1998.536)

In order to determine the value of thesecontrasting arguments we need to placerenewed emphasis on the importance andefficacy of partnership approaches in ahistorical context, in order to assess just how farcurrent approaches represent a continuation oflong established traditions and practices. Such afocus will also facilitate an analysis of how farthere are discernible developments within theeconomy, and in the character of work

8

organisation, which are driving the adoption ofpartnership approaches in a more decisive anddynamic way than previously.

ii) Partnership at Work: A NecessaryHistorical Context

ÔWork is a co-operative activity even when itseems to resemble nothing more than a bloodybattlefield.Õ (Anthony, 1977.64)

ÔUntil the late 1970s, [large companies]..mettheir workersÕ ÒInstrumentalÓ work orientationwith a motivational Òcash nexusÓ. Anyone whotalked about employee ÒloyaltyÓ and Òallpulling together for the good of the firmÓ wasregarded as a nostalgic crank who did notunderstand modern industry. Today....such attitudesare pass�.Õ (Ackers and Black, 1991.30)

A potential obstacle to the adoption ofpartnership approaches is cynicism on both sides ofindustry. The basis of this cynicism is thatpartnership constitutes nothing new, and that thecurrent preoccupation with partnership approachesis misplaced, insofar as it merely re-labelslong-standing practices at the level of the enterprise.

Such a view has some substance. Thedevelopment of industrial relations theory andpractice has long been concerned with how therange of interest groups and stakeholders withinthe workplace can best be accommodated oneto another. As Anthony emphasised, work is acollaborative activity, and as such employersand employees find themselves in a position ofmutual dependency. It has therefore long beenrecognised that it is possible to generate greatergains through partnership than would otherwisebe the case. The current use of the wordpartnership merely describes this long heldaspiration. On this reading, the issue is lesswhether examples of partnership exist withinorganisations, but rather whether moresystematic, structured, and coherent strategiesfor fostering partnership are emerging.

However, the very fact that the use of the term,ÔpartnershipÕ, has become so prominent doessignify a genuine change. Little or no use of theword partnership in the context of workplacerelations can be found in the seminal industrialrelations texts, nor in the more recent HumanResource Management (HRM) literature. It isonly in very recent times that partnership hascome to be used to describe an integrated packageof values and practices at enterprise level.Prior to this development, the long established

analogues for partnership in the specialistliterature have been involvement andparticipation. Indeed, the lineage of currentpartnership approaches can be traced to long-standing debates within industrial relationsconcerning involvement and participation. AsSchuller notes, Ôthere are a whole cluster ofterms- employee participation, joint decision-making, employee involvement, industrialdemocracy Ð which suggest a degree ofemployee influence at work.Õ (1985.3) Someclearly imply a more radical redistribution ofpower than others, and their respective currencyvaries according to the political and culturalcontext. (cf. ibid.)

During the 1960s, 70s and 80s, debates aboutindustrial democracy, financial participation,and employee involvement systems focused onwhat the parameters of such developmentsshould be, in terms of the appropriateboundaries of prerogative, reward, influence,and discretion. At that time, such considerationsfrequently divided managers, trade unions andemployees, and they remain highly contentiousissues. Generating a shared understandingwithin an organisation about how suchboundaries are to be drawn and defined, lies atthe heart of all effective attempts at partnership.The question is whether developments in theorganisation of work are making the definitionof such boundaries less problematic.

The discussion which follows examines thesedevelopments in traditional industrial relationstheory and practice, which have more recentlyculminated in new competition theories and therise of HRM.

The New Economy and the New Workplace:from Conflictual to Cooperative Orientations?

ÔThe fundamentals have shifted from amanipulation of things to the processing of dataand managing relationships. The new...approach is far more team-centred andemphasises information and feedback loops.Union-management co-operation can be abetter way to handle the scope, complexity, andeffect of technological changes.Õ (Cohen-Rosenthal, 1987.12)

Whilst commentators disagree on the precisenature of current change, it is becoming morecommonplace to argue that in the face ofintensified competition, we are witnessing ashift Ôaway from adversarial approachestowards the generation of commitmentÕ at work(Edwards, 1992.361). In a similar vein,

9

Beaumont has noted that Ôthere is no shortageof views to the effect that both British andUS collective-bargaining practices havetraditionally been Ôtoo adversarialÕ in natureÕ(1991.232).1

This has led to suggestions that benefits couldbe derived from fostering a moreproblem-solving and consensus drivenapproach to the conduct of employee relations.For example, the Commission on the Future ofWorker-Management Relations, set up bythe Clinton administration in 1993, wasexplicitly asked to consider means to encourageemployee participation and labour-managementco-operation (see Kochan and Weinstein,1994.497)

What factors have been at play in producingsuch shifts in emphasis and approach? Is itpossible to identify broader economic, social,technological and institutional forcescontributing to a slow shift from a conflictual toa more co-operative (participative) aspiration inthe field of industrial relations? Do thesedevelopments mean that the barriers toachieving genuine partnership are any lessformidable, or rather that a range of factors hasmade the commitment to such an aspirationacross all parties, more robust and durable?

The New CompetitionThe accelerating pace of change in the structureof competition and markets is having aprofound impact on the character of employeerelations. Increasingly competitive markets,rapid technological advances, and shifts inconsumer preferences are seen as havingtransformed the competitive environment andnecessitated new organisational responses,based on rapid product and process innovation.Various labels have been used to describe theresultant workplace innovations, includinghigh-commitment enterprises and flexiblespecialisation. As Birecree et al note, withinthese productive systems Ôemploymentrelations are non-hierarchical and overtly co-operative; [and] inter-firm links are relationalrather than hands-offÕ (Birecree et al, 1997.8).The success of these systems is seen as beingdependent on the development of high-trustrelations with the whole workforce (cf. ibid.).As a consequence, these organisationalresponses required by the new competitiveenvironment can be seen as sympathetic to thedevelopment of partnership in the workplace.

Space precludes a detailed review of thisliterature2 but it is useful to highlight the moreimportant developments encouraging theadoption of new forms of work organisationwhich are consistent with new partnershipapproaches.

Current debates about the ÔnewÕ competitionhave their origins in socio-technical approachesassociated with the work of the TavistockInstitute and the Quality of Working Life(QWL) movement. This research traditionstressed the importance of job enlargement,rotation, and autonomous work groups inimproving both productivity and the quality ofworking life. These innovations took as theirstarting point the insight that organisations arenot merely technical systems, but also socialones, which can be managed more effectively ifthe interdependence between tasks and socialrelations is recognised. Walton, for example,argued that such methods were designed toÔbuild an Òinternally consistent work cultureÓ,to increase the workersÕ skills, theÒidentification with the product;Ó, and topromote their sense of dignity and self worth.Õ(Walton (1977.1) quoted in Warner (1984.82)

Reviewing the spread of such experiments inthe 1960s and 1970s, in both the UK andEurope, Warner suggests that their introductionaccelerated as it came to be realised that rigid,hierarchical organisations did not lendthemselves to more flexible ways of workingand overlapping task and role responsibilities(1984.86). As he notes, the differences betweenthe old forms of work organisation and the newcentre around a shift from:

● fragmented to whole tasks● repetitive to varied jobs● defined to overlapping authority● given to adaptive technology● tall to flat organisations● centralised to decentralised reporting

(1984.86)

The important corollary is that thesedevelopments are seen as having created newdemands for a more adaptable, multi-skilledworkforce. Advances in skill formation havethus come to be seen as a prerequisite forcompetitive improvements, facilitating thedevelopment and adoption of new technologiesand production methods central to theproduction of higher value added goods andservices. With the acquisition of Ôbroad andhighÕ skills (Streeck (1989) (1991)), so theargument runs, workers become more ÔflexibleÕ

10

in production, and firms are able to respondmore effectively to changing market demandsand uncertainty.

The prescriptive HRM literature and theassociated accent on total quality management(TQM), have played an important role inpopularising such a perspective. As Hill notesin a review of TQM, organisations are seen ashaving reorganised in order to compete underthe new market conditions. As a consequence,they now require:

Ôemployees with multiple competencies, whowill work diligently and thoughtfully withoutclose supervision, use their knowledge andexperience to find more efficient and effectiveways of doing things, and are committed to theobjectives of the firm. ...Participative companycultures that incorporate high-trust and non-adversarial relationships are seen as the mostappropriate to motivate people to work in theseways.Õ (Hill, (1991.397/98)

These comments effectively describe therationale underpinning current partnershipapproaches, and the benefits that are meant toaccrue from them.

In a similar vein, the debate that took placeconcerning the rise and fall of quality circles isalso quite instructive with regard to theemerging partnership agenda. Accounts ofquality circles in the early eighties sought tocontrast the basis of Japanese and Westernmanagement philosophies. Bradley and Hill forexample use DoreÕs notion of ÔwelfarecorporatismÕ to describe the Japanese philosophy,Ôwhich promotes high-trust relations betweenmanagers and labour, and, in turn, fosters alabour relations system which operates on theassumption that interests are shared and co-operation is easily achieved.Õ (1983.293)

In contrast, the dominant form of employmentrelationship in British and American companiesis depicted as Ôa market-based one based on thecash nexus, which has also promoted anadversarial competition of interests betweenmanagers and other employeesÕ (ibid.).

Bradley and Hill argue that the adoption ofquality circles by some UK enterprises was adirect attempt to promote greater employeecommitment and counteract the negativeimplications of a low-trust style of management(ibid.). These arguments serve to emphasisethat the current stress on partnership, and onhighly participative and high commitment

styles of management can be regarded as aÔslow train comingÕ, which has now finallyarrived within the UK.

It is illuminating to examine the reasons whysuch quality circle initiatives were seen to fail inthe eighties. Bradley and Hill suggest that mostmanagers in the UK never genuinely embracedthe operating principles underpinning qualitycircles. They note that Ômiddle managers sawworkers as the passive implements ofmanagerial directivesÕ and that in their hands,quality circles did not Ôprovide an area ofautonomous decision making which allowsmembers both to formulate and to implementÒneed-satisfyingÓ work-related decisions.Õ(1987.77) Almost identical arguments are nowbeing deployed to distinguish what is new aboutmore recent fully fledged partnershipapproaches (cf. Partnership 2000 (1996)).

US EvidenceSimilar processes of innovation in employeeparticipation and work redesign can bediscerned within the US. OstermanÕs (1994)study, based on a nationally representativesurvey of establishments, examined the level ofinnovation in individual practices such as TQM,problem-solving groups, self-managed teams,and job rotation. He found that 64 per cent ofthe establishments reported that at least half oftheir core employees were covered by one ormore of these workplace innovations. On thebasis of these results, Osterman estimated thatapproximately one third of American workplacesare significant adopters of innovative practices.He also found that Ôestablishments that believethat they have a responsibility for employeewelfare are more likely to adopt innovativework practices.Õ (1994.183) 3

According to Osterman, a new conventionalwisdom with respect to work organisation hasemerged on both sides of the Atlantic. ÔThisview holds that gains in productivity depend onadopting new models of work organisation,models that entail internal labour marketinnovations such as broad job definitions andthe use of teams, employee problem-solvinggroups, and quality circles.Õ (1994.173) Suchdevelopments have been variously labelled,Ôtransformed systems, high commitmentorganisation, and high performance workorganisation.Õ (ibid)

These developments can be seen ascomplementary to the development ofpartnership approaches. The pace oforganisational change and continuous

11

improvement implied by intensifiedcompetition has led many commentators toargue that the emergence of such highcommitment organisations will only beaccomplished if more dialogue takes placebetween the social partners, both within theworkplace, and outside. For example, Kochanand Weinstein suggest that there is a need todetermine how far the traditional dichotomybetween management and labour is compatiblewith the requirements of high-value-addedproduction systems. (cf. 1994.500)

As they note:

ÔThere is already considerable evidence that thediversity of the work-force, the changingorganisation of work and authority relations,and the blurring of organisational boundaries allincrease the complexity and fluidity of interestsand make it hard to organise them into twointernal cohesive and conflicting groups. This isnot to suggest that conflict is not an endemicaspect of the employment relationship, butrather that there may be a new role for firm-level institutions to channel this conflict.Õ(1994.500)

On this reading, the role of trade unions in theworkplace is likely to undergo a subtle change,with more emphasis being placed on theirrepresentative role, and their ability to harnessworkforce co-operation in the pursuit of mutualgains. Such orientations are seen as a departurefrom more traditional and adversarialconceptions of their role within collectivebargaining processes.

This view of the role of the unions within socialpartnership has found strong support in the UK,particularly from the TUC. As Taylor andRamsay note, it would now appear that Ôthepriority for trade unions is to be part of theÒsolutionÓ by creating Òa new IndustrialRelationsÓ which abandons the Òeasy habit oftaking an oppositional stanceÓÕ. (1998.116).Thus, a concern of this study is to generate newinformation on alternative forms of workplaceparticipation and representation ranging fromemployee involvement to works councils, orsimilar institutions that introduce employeevoice. What lessons for both employers andtrade unions are contained within suchinnovations?

The rise of HRMWe have already noted the overlappingterritories between new models of partnershipand theories of HRM. Both emphasise the

importance of the shared objectives ofemployers and employees, and the contributionthat greater employee involvement andparticipation can make to workforcecommitment and enterprise performance. (cf.Taylor and Ramsay, 1998.117)

The conceptual underpinnings of HRM weredeveloped in the early 1980s by academics inAmerica (Fombrun et al (1984), Beer at al(1984). The economic context against whichHRM emerged in the United States wascharacterised by increasing internationalcompetition, in particular Japanese competition.The perceived failure of American firms torespond effectively to Japanese competition,was seen as creating a crisis in Americanmanagement (cf. Hendry and Pettigrew(1990.18). HRM was seen as a response to thisimpasse, and explicitly a response to thefailings of traditional personnel managementtechniques. HRM claimed to offer a morerobust conceptualistion of how businessstrategy considerations should inform employeerelations policy.

The key features of the new HRM, such as teamworking, continuous improvement, problem-solving initiatives, task and job enrichment, anddirect communication innovations, are nowregarded as essential elements of partnershipapproaches. For some, training anddevelopment have been presented (Keep, 1989)as the litmus test of the applicability of HRMmodels to the circumstances of the UK.Latterly, employablity considerations havecome to be regarded as a vital component ofsuccessful partnership approaches (CBI, 1998).

These points serve to illustrate that partnershipis a term which has only comparatively recentlybeen used to describe an integrated model oflabour management policies and practices.However, they also help to explain why thepartnership model has attracted such high levelsof support in a comparatively short period oftime. The current prevalence of partnershipwithin debates about organisationaltransformation can be taken to mean that theneed for such policies to succeed is now takenmore seriously, and that a broader consensusexists on the necessity of certain workplaceinnovations and cultural shifts.

Nonetheless, the durability and sustainability ofpartnership approaches is currently being testedin these new innovations and initiatives. Howfar they prove durable, and do bring bottom linebenefits, will influence the credibility of the

12

partnership agenda. The brief history of HRM islittered with examples of high failure rates inthe application of employee involvementprogrammes (Ramsay, 1991), quality circles(Hill 1991) and TQM initiatives. Unlesspartnership approaches offer substantiveimprovements in work organisation and labourmanagement systems, the term will becomediscredited as another rhetorical deviceattractive in form but weak in substance.

In this regard however, there are grounds foroptimism. On the positive side for example,what has strengthened since Hill conducted hisearlier research on quality circles, is thetransformation of organisational hierarchy, withthe continued growth of flatter hierarchies, jobenlargement, and more devolved responsibility.These developments provide a more favourableenvironment for embedding partnershipapproaches, as they imply that firms can nolonger pay lip service to the need to makeparticipation work at all levels.

As Hill was writing as early as 1991, it is usefulto return to his forward-looking arguments.He notes that:

ÔDe-layering management promotes somedecentralisation of decision-making and anenlargement of jobs that affects roles at andnear the bottom of companies. Rapid responseputs a new premium on internal flexibility andbetter horizontal co-ordination, which gives anadditional impetus to wider roles at eachhierarchical level as people collaborate acrossthe organisation rather than push upwards,shifting from mechanistic towards more organicways of working.Õ (1991.566)

The force of these arguments has grown strong.This is particularly the case given the growth inthe numbers of higher skilled workers withinthe labour force. As researchers have beenquick to note:

ÔA higher skill-profile in enterprises, especiallythe high-tech ones, will increase the de factopower of employees vis-a-vis day to dayoperations. Being on the receiving end of workis not considered to be a desirable status for themore educated personnel.Õ (IndustrialDemocracy in Europe (IDE), InternationalResearch Group, 1993.27)

More participative managerial approaches areseen as the solution to these sorts of workorganisation problems.

These considerations are seen as becoming evermore important, given the rapidity of changeimplied by the transition from an industrial toan information economy. As Scase has recentlyargued, traditional forms of work organisationare becoming redundant, as organisations embracethe notion that their key asset is intellectualcapital, and the basis of competitive success thenurturing of creativity and innovation(cf. 1998.68). For Scase, such shifts willnecessitate the development of a culture of hightrust between employers and employees, and aworkplace designed to foster closer workingrelationships between colleagues and teams (ibid.).

To a degree, these developments are alreadyvisible in the blurring of task and occupationalboundaries, which has also been an importantdriver working to encourage partnership at thelevel of the workplace. As Kochan andWeinstein note:

ÔAdvances in information technologies have ledto the elimination of many low skilled white-collar jobs. In their place have emerged new jobdesigns that involve more service and salesactivities and often incorporate some functionsthat have traditionally been the domain ofprofessional and managerial workers. ...Theexpanded responsibilities of these new jobdesigns lend themselves to the utilisation ofTQM techniques in which workers in co-ordination with their supervisors formulate theirown job descriptions.Õ (1994.489)

These developments pose difficult challenges toenterprise managers, in that they aresimultaneously a challenge to hierarchy, and tothe skills of managers to devolve responsibilityand discretion, and manage the new distributionof power and control over decision-making.They have made dialogue, and partnership in avery pragmatic sense, vitally important inhelping to secure the performance improvementswhich can result from such innovations.

The Institutional ContextPartnership at work is also being underpinnedby a range of institutional arrangements whichhave recently emerged in the UK, such as workscouncils and other new forms of consultation.Space precludes an examination of how farsuch voluntary and regulatory mechanisms areproving an important catalyst in generatingrobust methods of employee representation andin turn new forms of workplace partnership.However, in spirit at least, they are clearlyconsistent with greater employee involvementand participation within the workplace4.

13

The New Economy and the New Workplace:AssessmentThis brief review of the historical developmentof new competition theories and HRM, hasunderlined that the current emphasis onpartnership displays considerable continuitywith long-standing and emergent developmentsin work organisation and labour management.New partnership models are not offering starklyoriginal conceptualisations of the employmentrelationship, or indeed specifying new methodsto foster partnership in the workplace.

However, our review has also highlighted that arange of economic, social, technological andinstitutional factors are encouraging theadoption of new work organisation and labourmanagement approaches which are consistentwith partnership models5. Moreover, it is thestrength of these imperatives, and thecrystalisation of a robust consensus about howorganisations can best respond to them, that haselevated partnership to the forefront of debatesabout enterprise and economic renewal.

These arguments notwithstanding, not all of theimperatives driving the evolution of contemporarydevelopments in employment and work organisationare conducive to the attainment of partnership.It is possible to identify significant impedimentsto partnership aspirations, to which we now turn.

iii) Tackling the Barriers to partnership

Organisations are made up of a diverse range ofstakeholders. It therefore follows that theestablishment of mutual gains and commonunderstandings is unlikely to be astraightforward process. For example, within asingle organisation, different groups of workersmay have distinct sets of interests, which may,or may not, be reconciled within an overallpartnership approach. Whilst such groups mayform ad hoc alliances in order to further theirinterests, social partnership implies a moreunifying, durable, and sustainable set ofunderstandings and arrangements.

This suggests that one important barrier topartnership, and a focus for our enquiries, is thecomplexity of stakeholding relationships thatunderpin partnership. It may be more difficultto generate commitment from certain stakeholdersthan others. For example, Sisson has suggestedin the context of direct participation policies,that the main obstacle to their more widespreadtake-up is Ôthe reluctance of management inmany organisations to shift from traditionalforms of work organisationÕ (1996.30).

In addition to the complexity of stakeholderrelationships within organisations, our reviewunderlines that developing a genuine partnershipapproach, particularly if it accompanies broaderorganisational change, such as the flattening ofhierarchies, the growth of group work, anddevolved responsibility, can have far-reachingimplications for an organisation. As aconsequence, partnership can challengeexisting power structures within an enterprise,perceptions of job security within theworkforce, and stretch the competencies ofmanagers and workers. For example, ifpartnership implies a switch from commandand control structures, managers are likely toneed training in coaching, mentoring, andfacilitation skills, which are likely to increase inimportance as a result of these changes6. Thisraises the general issue of how far the skillsrequired to foster partnership at work arewidely distributed across UK workplaces. ThePartnership Fund announced in the EmploymentRelations Bill, and its funding provision of fivemillion pounds, is therefore a welcomeinitiative aimed at tackling this specific issue.

More broadly, the high trust relationships at theheart of partnership approaches are dependenton a decision by all parties to co-operate fully.Such decisions necessitate Ôgiving a hostage tofortune because the benefits of co-operation areunlikely to accrue immediatelyÕ (Birecree et al,1997.16) The realities of recent labour marketand workforce restructuring imply that for someworkers the decision to wholeheartedly co-operatewill represent a sizeable leap in faith. Particularlypertinent here is the decline of internal labourmarkets within organisations. Detailedassessments of labour market restructuring inthe UK (cf. Nolan and Walsh, (1995) highlighta number of inter-linked developments, namely:

● the decline of internal labour markets● the growth of outsourcing● the fragmentation and casualisation of

employment● the growth of a less secure ÔperipheralÕ

workforce

These developments have not been confined to theUK alone. For example, Kochan and Weinsteinargue on the basis of US experience that:

Ôin transformed human resource managementsystems, the introduction of new jobs withexpanded responsibility has contributed to thebreakdown of non-professional white-collarinternal labour markets.Õ (1994.495)

14

15

Taken as a whole, these developments haveresulted in reduced possibilities for progression,and increased insecurity for particular groups ofworkers. As a consequence, the forging ofpartnership arrangements with these progressivelymore disadvantaged and peripheral sectionsof the workforce may prove problematic. Thereality of their employment and job experiencesis likely to make them sceptical about the likelylongevity of any partnership arrangement theyenter into. Moreover,they recognise thepotential fragility of any such agreements in thecase of economic downturn.

This is a vitally important issue, in that manypartnership initiatives are built on the premiseof delivering long-term returns and improvementsfor the individuals and establishmentsconcerned. As Kochan and Weinstien note:

Ôin firms where there is no formal job security,employees will have a disincentive to co-operate in efforts to restructure work in waysthat may increase productivity andsubsequently lead to firm-wide employmentreductions.Õ (1994.496)

At a time when employers are reluctant to giveany ground over their prerogative to makedecisions based on business need, thecontradictions for a partnership agenda needlittle emphasis.

More broadly, the intensified competitiveconditions in which organisations now operatecan frequently compromise the employmentsecurity and relationship-building componentsof a partnership approach. Downturns inbusiness confidence and deterioration inenterprise performance can exert pressures onpartnership arrangements within organisations.Thus, in a very real sense, the most enduringtest of a set of partnership relationships is howeffectively those relationships can survive awave of redundancies, and how far the attitudesand practices forged through developingpartnership extend to the management andconduct of such decisions.

However, building such robust long-termrelationships in the face of the pressure tosecure short-term profitability can be difficult.This is particularly the case for publicly listedcompanies, who have to satisfy City andshareholder interests, a set of stakeholderswhose interests are regularly prioritised overthose of employee stakeholders7.

Conclusions

This brief review has underlined that the currentemphasis on partnership displays considerablecontinuity with long-standing and emergentdevelopments in work organisation and labourmanagement, and that new partnership modelsare not offering starkly original visions of theemployment relationship. However, our analysishas also revealed that the package of employeerelations practices being adopted by partnershiporganisations, and the specific ways in whichthey are being combined and implemented, issuggestive of a break with the past.

In this vein, our account has highlighted the factthat a range of economic, social, technologicaland institutional factors are encouraging theadoption of new work organisation and labourmanagement approaches which offer enhancedopportunities for work to become morefulfilling, and therefore provide a firmer basisfor partnership and co-operation. Morover, theresearch evidence suggests that theorganisations operating such partnershipapproaches are securing real benefits, both forthe business and their employees.

Reflecting this, the objectives of currentpartnership approaches, and the languageemployed, have a strong aspirationalcomponent, particularly when married withoptimistic accounts of the future of work andemployment in a knowledge-driven economy.Against that context, the real test of thepartnership agenda will be how far theprinciples and practices advocated by suchapproaches extend to all employees,irrespective of their seniority, skill level, orstatus within an organisation. For many workerswithin the UK economy, the reality of theirpresent working experiences bears little, if any,resemblance to visions of high commitment,high skill, and high discretion enterprises. Thechallenge is to spread such emerging forms ofwork organisation and partnership more widely.

With those thoughts in mind, let us nowexamine our case study findings.

16

End Notes

1 (cf. Provis, (1996.475) for a review of these arguments).

2 For excellent treatments see Appelbaum and Batt (1994),Birecree, Konzelmann and Wilkinson (1997), and Kochanand Osterman (1994). The conceptual status of newcompetition approaches has been the subject of livelydebate, withsome authors questioning the empirical andtheoretical coherence of the new competition thesis(cf. Lovering (1990) anf Nolan OÕDonnell (1991).

3 This would seem to lend support to the view thatpartnership approaches are unlikely to be successful unlessa strong commitment to the values of partnership existswithin an organisation.

4 For a useful review of potential developments see Hyman(1997).

5 This is not to suggest that these new Ôhigh performanceÕsystems are already widespread in the UK, or for thatmatter in America. However, such systems are visiblein leading edge companies, and provide inights which aresuggestive with regard to the future development of theemployment relationship (cf. Birecee et al (1997.10)).

6 In this context, Sisson notes that mentoring, and coachingare vital to the success of direct participation policies, andsuggest that training in inter-personal skills is the key tothese new tasks and competencies (1996.10). An insightreflected in the GovernmentÕs declared intention within therecent Employment Rights Bill to set up a partnership fundto encourage the acquisition of partnership building skillsby managers and employees.

7 I would like to thank Frank Wilkinson for focusing myattention on this issue.

17

ThreeTHE CASE STUDIES SUMMARYANALYSIS

Introduction

This section provides a summary analysis of thecase study findings. A full account of eachindividual case study organisation is reported inSection Four of the report.

The overall objective of this study was togenerate some exploratory impressions on whatpartnership actually means in practice, and thecase studies provide a rich vein of material inthis respect. Accordingly, our discussion isorganised around a number of relatedpartnership themes as follows:

i) Routes to Partnership Ð assesses the extentto which there were any generic driversencouraging the adoption of a partnershipapproach

ii) What is Meant by Partnership? Towards anunderstanding of the Partnership Concept

iii) Partnership Philosophy: Towards A CoreSet of Values

iv) Partnership in Practice: WorkplaceOrganisation and Management Ð exploresthe essential dimensions of partnershippractices in the workplace

v) What was done to develop a partnershipapproach and what were the problemsencountered?

vi) Partnership Outcomes Ð reviews thesubstantive performance outcomes securedby our case studies, both in terms of bottomline indicators and the character ofworkplace organisation and innovation

The concluding section discusses the extent towhich our evidence confirms the emergence ofa coherent partnership agenda within oursample of case study firms, and the implicationsof our analysis for the performance of UKenterprises and the economy more generally.

Interpreting the findingsAs with most case study based research, muchof the richness of our findings reveals itself inthe detail, and it is sometimes a hazardousprocess to endeavour to generalise andextrapolate from a small case study sample.Equally however, given the heterogeneity of oursample, any striking similarities between thecase studies in terms of their overall

philosophies, touchstone views, and approachesto organising work will be of particular interestand significance.

With that in mind, let us firstly considerwhether it was possible to discern similar routesto partnership amongst the case study firms.

i) Routes to Partnership

It is axiomatic that organisations may displaydifferent motivations and cite different reasonsfor adopting a partnership approach. The studyaimed to explore these dynamics in some detail.

In none of the case studies however, were thepartnership approaches started directly byemployee activity or union initiative. Rather,partnership was prompted and led by specificsenior staff or management teams.

Perhaps unsurprisingly, given the diversity ofthe case studies, there is no single genericcatalyst or driver encouraging the adoption of apartnership approach. Nonetheless, it ispossible to identify four clear clusters of factorsdriving the adoption of partnership amongst ourcase study firms:

As a route out of an adversarial industrialrelations climateA number of the case studies described theirroute to partnership as an attempt to break outof a cycle of ÔpoorÕ industrial relations,characterised by low trust and adversarial,Ôthem and usÕ attitudes. All of the organisationsfitting this categorisation can be characterisedas Ôbrownfield siteÕ establishments, with a longtradition of unionisation, and formalisedcollective bargaining and representativestructures. These include Leyland Trucks, BorgWarner, HP Bulmers, and ElementisChromium. Of these organisations, only one,Borg Warner, described their adoption of apartnership approach as a direct reaction to acrisis situation, both in terms of the competitiveposition of the company, and the character ofindustrial relations within the company.

Within these cases, there was then variation inthe extent to which the move towardspartnership had been driven forward by themanagement team within the company, or byjoint relationship-building initiatives.Nonetheless, all of these case study firms havesought to develop partnership by building amore positive relationship with their recognisedtrade unions using existing methods ofconsultation and negotiation. Amongst our case

18

study firms the partnership-building initiativeswere not driven by a desire to isolate or avoidthe unions concerned. Equally, the trade unionswithin these organisations recognised thatpartnership was about building a betterrelationship between all employees and thecompany, both on an individual basis with eachemployee, and more broadly between the unionand the company.

The maturation of traditional ÔpaternalisticÕemployee relations practices (particularlyamongst the SMEs)This route to partnership was common to all ofthe long established SMEs featured in ourstudy, and also to larger unionised firms such asDomnick Hunter and Scott Bader. The firmsfalling within this category present theiradoption of a partnership-driven approach as adevelopment of existing practices andphilosophies, rather than a step change ordeparture from established employee relationstraditions. In other words, key partnershipvalues, such as trust, openness and mutuality,which have long been a feature of the operatingphilosophy of these companies, haveover time evolved into a comprehensive setof partnership commitments.

Realisation that to introduce new systems ofwork organisation successfully required apartnership approachThis is the factor that comes closest to being acommon driver across all of the case studyorganisations. In a number of cases theorganisations were explicit that they realisedfrom the outset that in order to embark upon thedegree of transformation in working practicesand work organisation that they envisaged, theywould have to recast the overall character oftheir employee relations practices. Partnershipwas seen as vital in securing theunderstanding and support of their employeesto new management practices andorganisational innovations.

In some cases this realisation was reachedsimultaneously, or prior, to the decision beingtaken to embark upon the change programmeconcerned (e.g. Elementis Chromium, H.P.Bulmers, Appor Ltd, Litton InterconnectionProducts and Leyland Trucks). In others, theexperience of actually trying to manage newinnovations within the workplace led to anactive reassessment of the character ofemployee relations within the organisation, andthe need to build a partnership-driven approach(e.g, Trifast plc, Shelter, Braintree District Council).

Recent start-up firms and partnershipTwo of the SMEs within our case study sample,both of whom were set up within the last fouryears, have adopted a partnership-basedapproach since their inception, driven by acoherent values-based operating philosophy. Inone of the firms, Michaelides and Bednash, thatphilosophy has been pioneered by a visionaryowner manager. In the other, St LukeÕsCommunications, the company was founded asa result of an employee buy-out, which leddirectly to the adoption of a stakeholder-drivenapproach to managing and running the company.

ii) What is meant by partnership? Towardsan understanding of the partnership concept

As we discussed in Chapter Two, establisheddefinitions of partnership include both ÔsoftÕ(values and aspirations) and ÔhardÕ (industrialrelations practices) dimensions, and a focus onthe outcomes of a partnership approach. In thisanalysis section we will consider each of thesethree dimensions of partnership in turn,beginning with the ÔsoftÕ values-based nature ofpartnership. Two points of focus are particularlyrelevant here. Firstly, was the term partnershipwidely used by the case study organisations?Secondly, were the organisations in our studycommitted to an identifiably similar set ofvalues and principles underpinning theirapproach to the employment relationship.

The partnership conceptNot many of the organisations in the casestudies use the word ÔpartnershipÕ to directlydescribe their employment relations. Some usethe term to describe a ÔmatureÕ relationship,such as a long-standing agreement with theirunion(s) (e.g. Elementis Chromium), whilstothers described the relationship they weretrying to achieve as rather more ÔstakeholdingÕthan ÔpartnershipÕ (e.g. Braintree DistrictCouncil, St LukeÕs Communications).

Nonetheless, when the case study organisationswere presented with a check-list and descriptionof what partnership is taken to imply andcontain, all of them thought that it was anappropriate descriptive term to apply to theirpolicies and practices.

Thus despite the widespread usage of thepartnership concept, the case studyorganisations are in fact employing a variedvocabulary to describe their employee relationsphilosophy, and most make reference to anumber of different key words underpinningtheir approach, as opposed to identifying oneover arching descriptive concept. For example:

19

● Litton Interconnection describes the totalrelationship Ð which includes customers andsuppliers, etc. Ð as one of ÔsynergyÕ

● Michaelides and Bednash describe theiremployee relations philosophy as beingbased on ÔcollaborationÕ

● even where unions are strong, bothmanagement and the unions agree thatthe concept involves a strong elementof involving the individual employeein ÔpartnershipÕ (Braintree DC andLeyland Trucks)

● some use ÔpartnershipÕ to describe theirrelationship in the supply / demand chain Ði.e. with customers and suppliers (e.g. St LukeÕsCommunications, Litton Interconnection).

iii) Partnership Philosophy: Towards A CoreSet of Values

Whilst there was less than unanimity withregard to the meaning and use of the termpartnership, the organisations in our studyproved to be committed to a remarkably similarset of values and principles underpinning theirapproach to the employment relationship. Ouranalysis suggests that the partnership valuescommon to our case study organisations wereas follows:

● trust and honesty● mutuality● creating a common vision● open management● reaching agreement without coercion● employee voice● a stress on ÔinvolvementÕ, ÔownershipÕ

and ÔresponsibilityÕ● employment security, sometimes qualified● a new Ôemployability dealÕ● fair reward● an emphasis on quality

Let us examine each of these values-basedcomponents of partnership in turn.

Trust and honestyA vitally important part of partnership is theconcept of trust, with the majority of the casestudy firms using the word ÔtrustÕ to describewhat they are aiming for in the partnershiprelationship. The aspiration to achieve higherlevels of trust was not a vague commitment, butrather was seen by the case study organisationsconcerned as a key driver shaping the designand implementation of new processes, systemsand behaviours within the workplace.

MutualityOur evidence strongly supports researchfindings (IPA, 1998) which have identified theimportance to partnership of a set of reciprocalcommitments and obligations between thepartnership company concerned and theiremployees. A commitment to mutualitystrongly informed the framework of values andprinciples shaping the conduct of employeerelations within our case studies. As such,elements of mutuality are contained within allof the other values-based commitments outlinedbelow, in particular employee voice,employment security and fair/shared reward.

For many of the companies, at the heart ofmutuality was establishing as honestly aspossible what the company could realisticallyexpect from the individual employee, and whatthe individual employee had the right to expectin return from the company. In this respect, thecase study organisations sought to clearlyestablish the future direction of the business, thedegree of employment security that they wererealistically prepared to guarantee, and thetraining and development opportunities thatthey could provide. In return, the organisationssought to receive from their employeescommitments to: the objectives of thebusiness, flexible ways of working andlearning; and certain minimum standardsgoverning how employees should treat eachother in the workplace.

In other words, notions of mutually beneficialÔrightsÕ and ÔresponsibilitiesÕ informed themutuality agenda within the case study companies.

Creating a common visionIn our earlier discussion of how organisationsgo about creating a partnership approach, wefocused on their attempts to create a sharedunderstanding. A key component of suchattempts is the formulation and communicationof a common vision for the enterprise. Withinour case studies, this vision incorporates bothbusiness objectives, and broader labourmanagement aspirations in terms ofthe rules and principles guiding how membersof a particular workforce should aspire totreat each other.

Thus, the trust, honesty and mutualitycomponents of partnership already mentionedare frequently formalised into a Ôworking setÕ ofvalues which are seen to guide the workingpractices and activities of individual employeesand the workplace as a whole. These Ôrule setsÕare accorded significant importance within the

20

organisations, impacting directly on the waywork is organised and carried out, rather thanrepresenting laudable commitments onlyadhered to when business conditions permit.Whilst all of the case studies displayed thesecharacteristics, these rule sets were givenformal expression in Appor Ltd, Scott Bader,Litton Interconnection, Trifast, Leyland Trucksand Elementis Chromium.

This is an interesting finding in relation toresearch which has argued that common visionsand goals make up the Ôcorporate glueÕ (Ferner,1994) that holds together the diverse strands ofan organisation. However, such visions havetended to focus on broad macro aspirations, asopposed to the sometimes quite detailed values-driven commitments that feature amongst ourcase study firms. All of which suggests that agenuine commitment to values-drivenapproaches is a distinctive feature ofÔpartnershipÕ organisations.

Open managementAlthough lip service is frequently paid to theimportance of Ôopen managementÕ in fosteringhigh commitment enterprises, feworganisations would pass a robust test of theirpractices in this respect. However, our researchfindings would suggest partnershiporganisations attempt to minimise theÔexclusiveÕ nature of management.

At its most simple level within our case studiesthis can be taken to mean a commitment toopenness and transparency. A vital element ofthis ÔopennessÕ concerns the financialperformance of the company. Many of theorganisations stressed the importance of sharingthis information with the whole workforce,including long term forecasts (cf. BorgWarner). More profoundly, it signals a clearbreak from the Ôofficers and other ranksÕapproach to managing organisations, with ourcase study organisations displaying a strongstress on the devolvement of responsibility anddiscretion across all sections of the workforce.There may still be clear ÔaccountabilitiesÕ, andsome ÔhierarchyÕ, but partnership organisationstend to be those where, for example, teammembers will display a broad range ofÔseniorityÕ, but seniority criteria will notdetermine the choice of the team leader (e.g.Trifast).

Reaching agreement without coercionThis involves productive approaches tonegotiation and consultation, informed by theabsence of a Ôtake it or leave itÕ approach, aprinciple applying equally to union and non-

union environments. For example, nearly all thepartnership organisations observed in the casestudies have a policy of ÔagreeingÕ goals andtargets and agreeing on employee developmentrather than merely setting or decreeing theseissues. With regard to Ôpartnership behavioursÕ,the unions involved in these case studies arestrong supporters of the need to develop Ôwin /winÕ negotiating strategies, and in some casesthe organisations have engaged in specificpartnership training in order to facilitate suchchanged behaviours (cf. Elementis Chromium).

Assessed overall, it is not the case that theorganisations have engaged specifically inÔpartnership trainingÕ. They have howeverinvested in training offering strong cultural andwork organisation support to the developmentof partnership. For example, amongst some ofthe organisations there is a strong emphasis ontraining managers in their team leadership roles(e.g. Domnick Hunter) and in developing newforms of Ôhands offÕ supervision (e.g. BorgWarner). More broadly, there is evidence thatemployee representatives have more access tomanagement training courses and workshops(e.g. in Bulmers and Elementis Chromium) thanhas previously been the case.

Similarly, reflecting the emphasis placed onteam working as part of a partnership approach,many of the case study firms have madesignificant training investments in teambuilding skills. Trifast, for example, madespecific investments in teambuilding andteamwork training, utilising off-site andoutward bound facilities.

Employee voiceThis is one of the IPAÕs identified partnershipcharacteristics, with employee voicemanifesting itself either indirectly, through theinvolvement of individuals in quality and otherinitiatives, and/or directly through employeerepresentatives in formal consultativestructures. The emphasis placed on the vital roleof effective employee voice mechanisms wasone of the strongest findings across all of thefirms included in this study. The firmsdisplayed a strong commitment to thedevelopment of effective communicationmethods, with a stress on the importance ofbottom-up information flows and realcommitment on both sides.

In the unionised firms within our study, therewas no evidence that the firms were attemptingto develop voice mechanisms which by-passedor undermined established systems

21

of consultation and negotiation. Interestingly,most of the organisations without trade unionsindicated that whilst they would not necessarilywelcome compulsory work councils legislation,they would not be concerned or unduly troubledby any such legislative intervention.

The firms in our sample would therefore appearto be operating with a multifacetedunderstanding of the importance of effectiveemployee voice mechanisms within theworkplace. As a starting point they take forgranted the importance of regular and effectivecommunication processes, and of providing theopportunity to employees to have their voiceheard, not just by their immediate teamleader or supervisor, but also by seniormanagement (e.g. NatWestÕs innovativecommunication hotline).

More broadly however, the commitment of thecase study organisations to generating effectiveemployee voice mechanisms extends beyondthe benefits of good communications, into therealm of unlocking the insights, creativity, andintellectual capital of their employees (cf. BorgWarnerÕs formal commitments within theirpartnership agreement). The case studyevidence confirms that if employees feelgenuinely listened to and heard when theycontribute within the workplace, not only willthey feel more valued, but they will be morelikely to continually bring forward ideas andsuggestions which lead to the continuousimprovement of the organisation. Thus, a keyorganising principle of a partnership organisationis to find ways in which those many voices canbe harnessed for the overall good.

Another dimension of employee voice, is thatmany of the organisations emphasised theimportance of on-going communication.In other words, the importance of dealingwith problems and issues as they arise,informally, through talking, rather thanretreating into formalised discussions andforums with senior managers.

A stress on involvement, ownership andresponsibilityThe case study organisations recognise that fora partnership approach to be successful it isdependent on securing genuine employee buy-in to its policies and practices. Equally, ifpartnership is imposed on companies it isunlikely to work. Many of our case study firmsadopted an explicit stakeholder approach tosecure employee buy-in, using a range ofbottom-up communication methods, supported

by the introduction of employee shareownership (St Lukes, H.P. Bulmer Holdings) orprofit-sharing (Elementis Chromium) schemes.

Our evidence suggests that whilst a partnershipapproach is usually prompted by managers inthe first instance, it falters unless theorganisation quickly achieves support from allparties. The practical implication of this is thatfor partnership to feel authentic to employeesthey have to be given increased voice,influence, discretion and responsibility.It is clear from our study that nearly all of thecase studies are managing their organisationsin this spirit.

For example, our case study firms appear toassume the necessity and benefits of flexibleworking, multi-disciplinary teams, and the useof ad hoc cross-functional teams. Some of theorganisations emphasised the importance ofdeveloping non-hierarchical teams, in whichthe chair role is by design not usually played bythe most senior persons on the team (e.g.Trifast). The Head of Human Resources atTrifast indicated that one of the implications ofthese sorts of developments is that jobdescriptions are becoming less and lessimportant in structuring work and tasks. Shecommented that ÔThe way weÕre moving, wemany not have job descriptions much longer Ðmore Ôrole descriptionsÕ.Õ

An important corollary of these aspirations, isthe need to generate a Ôblame-freeÕ culture.Whilst this term is often greeted withscepticism, it is increasingly recognised that asemployees stretch themselves beyond theirestablished responsibilities they are likely tomake some errors, particularly at the outset. Inthis sense, our case study evidence wouldsuggest that partnership organisations appearbetter than many companies at letting peoplemake mistakes as they step beyond their usualjob roles.

Employment security, sometimes qualifiedMany of the case study organisations placedconsiderable stress on the importance ofemployment security guarantees in developingthe trust and mutuality foundations of anevolving partnership approach (cf. NatWest).Whilst not all of the case study firms felt able togive guarantees, the commitment to regardredundancy as a last resort, and to pursue allother options available, was a strong feature ofall the case studies.

22

A new Ôemployability dealÕThis values-based commitment links directly toour earlier discussion of mutuality. Theattempts by our case study firms to establishmutual obligations necessitated theirtransparent acknowledgement of the newrealities of the employment contract. Whilst60% of the case studies had a no compulsoryredundancies policy or employment securityguarantees, these commitments were in themain heavily qualified. However, incompensation, many of the case studyorganisations formally recognised theirresponsibility to enhance the employability ofeach individual employee.

In other words, the Ôrights and responsibilitiesÕ(a phrase actually used by Braintree DistrictCouncil) of employer and employee wereexplicitly discussed and set out in the context ofincreased competition and greater uncertainty.Thus one aspect of the employment contractwithin partnership organisations is qualifiedemployment security guarantees being linked toenhanced employability commitments onbehalf of the employer.

Reflecting this, there was a clear emphasiswithin the case study firms encouraging self-development, in terms of supporting employeesat all levels who wish to improve theirqualifications and education. In some cases(e.g. Borg Warner and Trifast) the organisationhas Ð for financial reasons Ð put a limit on theamount of support available for developmentand specifiy that is must be related to work (ÕwewouldnÕt subsidise our staff to do basketmaking coursesÕ). In other cases, whilst theorganisation states that education and trainingmust be relevant to work, they are in practiceflexible in deciding what is relevant (e.g.NatWest giving help to towards professionalqualifications (ACA, CIS) which are not tooclosely related to banking.

In terms of broader leading edge practice, anumber of the organisations also placedsignificant emphasis on the responsibility ofindividual employees to learn, and to share theirown learning as part of the employabilityculture within the firm.

Fair rewardThe final values-based component ofpartnership was the commitment to fair reward.Our case study organisations took this to meantwo distinct things. Firstly, fair reward in thesense of a ÔcompetitiveÕ total salary andbenefits package. Arriving at accepted notions

of competitive involved a consideration of theoverall employment deal offered, including thepossibilities for flexible working, andcontinuous learning. For example, Shelter,which finds it difficult to be fully competitiveon the basis of salary levels given the high skillsbase of its workforce, and their earningpotential in equivalent private sectoremployment, is committed to improving theiroverall employment and benefits package tocompensate. They have therefore developednew policies on flexible working hours, homeworking and sabbaticals.

Secondly, around half of the case studyorganisations had a firm commitment toprofit/gain sharing and employee shareownership schemes. The principle that allemployees should share in the financialsuccess of the company was regarded as animportant vehicle to increase employeeÕscommitment to the long-term success ofthe company, redefining employees asstakeholders and partners.

An emphasis on qualityNearly all of the organisations placedconsiderable emphasis on the importance ofcontinuous improvement programmes,including Kaisen. In this regard, there has beenan identifiable Japanese influence, particularlyin manufacturing industry. Many of them haveachieved numerous externally recognisedstandards. Most, but not all, have IIP and/orISO 9000 (or equivalent) and many otherawards from local and national organisations.Many place a strong emphasis on theenvironment, and some have achieved MAS (or equivalent).

iv) Partnership in Practice: WorkplaceOrganisation and Management

This section of our analysis will examine theÔhardÕ (industrial relations practices)dimension of partnership approaches, byexploring in some detail the character ofworkplace practices adopted by the casestudy organisations, and the similarities anddifferences between them. Given theheterogeneity of our sample, a clearconvergence of the practices adoptedamongst our case study firms would be aninteresting finding.

High performance work organisationsIn terms of the broader context, the employeerelations practices that are associated withpartnership in our case study companies, are

23

consistent with the emerging conventionalwisdom about work organisation and the neweconomy. Osterman (1994), amongst manyothers, has argued that gains in productivitydepend on organisations adopting internallabour market innovations such as broadjob definitions, the use of teams, employeeproblem-solving groups, and quality circles.Such developments have been variouslylabelled, Ôtransformed systems, highcommitment organisation, and high performancework organisationÕ (Osterman, 1994.173).

Our case study firms fit this characterisationvery well, with the majority adopting nearly allof the innovations listed above. We canillustrate these observations if we compare thepractices of our case study firms against thepreliminary findings generated by the latestWorkplace Employee Relations Survey(WERS) (Cully et al, 1998). This is the mosteffective way in which the peculiarities anddistinctive features of our sampleÕs labourmanagement practices can be illuminated.

Measuring up to WERS: a partnership effectat work?In drawing comparisons between our case studyfirms and the WERS findings, it needs to beremembered that the organisations in our studywere not drawn from a random sample designedto represent organisations in general. Rather,they were chosen because of their commitmentto partnership. As such, we would expect thesefirms to have more of the relevant labourmanagement innovations in place than arandom sample of firms. Nonetheless,comparisons are illuminating in order toexplore the extent to which our case study firmsout-perform the WERS sample.

The preliminary WERS findings releasedtowards the end of last year, listed sixteenfrequently discussed ÔnewÕ managementpractices and employee involvement schemes,and provided data on the proportion ofworkplaces currently operating them. Thisrange of practices provides a comprehensiveframework within which to examine thepartnership practices of our case study firms.

Table Two summarises the WERS findings, andcontrasts the proportion of WERS workplacesoperating the listed practices with theproportion of our case study firms. What thiscomparison clearly reveals is that our casestudy firms consistently outperform the WERSsample, and by some considerable margin in all

but two of the new management practices forwhich comparable data is available. Forexample, only a fifth of WERS workplacesemployed eight or more of the practices listed inTable Two. In contrast 11 out of fifteen casestudies (or 73%) employed eight or more ofthese practices, and 100% of the case studyfirms employed seven or more of these newmanagement practices.

These figures suggest that our case studiesare outperforming the WERS sample bysome considerable margin in relation tolabour management and work organisationinnovations. This is a particularly noteworthyoutcome for the SMEs within our sample,as such high levels of innovation aremore frequently associated with large,sophisticated firms.

As the authors of the preliminary WERSfindings note, the aggregate outcomes for theWERS sample, reported in Table Two, disguiseconsiderable variations in their application,which are related to factors such as sector,employment size and the type of unionpresence. However, given that the case studyfirms in our study are similarly segmented by sector, size, and union presence, the veryhigh incidence of some of these newmanagement practices in the case study firms isparticularly interesting.

To what extent does such evidence suggest thata significant Ôpartnership effectÕ is at workacross the case studies, allowing for the fact thatthe sample organisations were specificallyidentified as good practice companies? Tofurther explore this question, let us examinewhat our case study evidence tells us about theways in which partnership companies areimplementing these new management practices.

Sets of partnership practicesIn terms of partnership practices, and the extentto which these come in identifiable sets, themost robust set of partnership practicesinvolved:

● formally designated teams ● team briefing ● performance appraisal of non-managerial

employees ● problem-solving groups

24

Thirteen out of the fifteen case studies (87%)employed all four of these practices. If weextend this list of practices to include profitsharing or employee share ownership schemes,8 out of the fifteen case studies (53%) employedthis larger set of practices. Additionally, withone or two exceptions, all of the case studyfirms had a commitment to open and transparentcommunications, and have developedformalised learning programmes and strategies.

Thus, whilst there were slight variations in thecharacter of partnership practices, the casestudy organisations do appear to have adopted arecognisably common ÔsetÕ of core practices.

However, our study is unable to accuratelydetermine the causal influence of a partnershipcommitment and philosophy in encouragingtake-up of these practices, as opposed to thecausal effect of the operational necessities ofbeing a competitive business. Obviously both

are at play in determining a convergence aroundthe particular policies and practices beingemployed by our case study organisations.

Broadening our analysis somewhat, an importantquestion to explore is how far our empiricalevidence offers support for the notion thatpartnership organisations are more likelyto fully implement the new ways of workingassociated with the introduction ofnew management practices and formsof work organisation.

Partnership and the full implementation of newways of workingThe strongest evidence in support of apartnership effect operating across our casestudies concerns the extent to which particularpractices have been fully implemented withinan organisation. Our findings illustrate that theÔnewÕ forms of management practice andemployee involvement schemes explored in our

ÔNEWÕ MANAGEMENT PRACTICES % of WERS % of case Workplaces study firms

No. %

Most Employees work in formally designated teams 65 14 93

Workplace operates a system of team briefing for groups of employees 61 14 93

Most non-managerial employees have performance formally appraised 56 14 93

Staff attitude survey conducted in the last 5 years 45 5 33

Problem-solving groups (e.g. quality circles) 42 14 93

ÔSingle statusÕ between managers and non-managerial employees 41 10 67

Regular meetings of entire workforce 37 9 60

Profit-sharing scheme operated for non-managerial employees 30 8 53

Workplace operates a just-in-time system of inventory control 29 2 13

Workplace level joint consultative committee 28 6 40

Most supervisors trained in employee relations skills 27 6 40

Attitudinal test used before making appointments 22 *

Employee share ownership scheme for non-managerial employees 15 7 47

Guaranteed job security of no compulsory redundancies policy 14 9 60

Most employees receive minimum of 5 days training a year 12 *

Individual performance-related pay scheme for non-managerial employees 11 3 20

Table Two. New Management Practices in the Case Study Firms and in British Workplaces,according to the Workplace Employee Telations Survey 9WERS) 1998

*We did not ask the firms to quantify the amount of training undertaken, either in terms of % of turnover or days oftraining per employee, and did not explore whether they had epmloyed an attitudinal test prior to appointments.

25

case study analysis are much more stronglyembedded in our case study firms than they arein the vast majority of the WERS workplaces.

For example, 65% of WERS workplacesreported that employees work in formallydesignated teams. However, only 5% of WERSworkplaces reported that team members had towork together, were given responsibility forspecific products or services, jointly decidedhow work was to be done, and appointed theirown team leaders, all of which are seen as keycomponents of autonomous team working.

It is on this dimension that the most markeddifference between our case study firms and theWERS sample is revealed. Our case studiesscored the following scores on thosedimensions:

● team members had to work together: 80%of the case studies

● were given responsibility for specificproducts or services: 80% of the case studies

● jointly decided how work was to be done:60% of the case studies

● appointed their own team leaders: 20%of the case studies

Thus in aggregate terms, 60% of the case studyfirms meet the first three criteria of autonomousteam working listed above, with 20% meetingall four aspects of the criteria.

Similar findings emerge if we take the issue offunctional flexibility, another key indicator ofworkplace innovation, which refers to theability to move workers from one task toanother. WERS asked managers to estimate theproportion of employees in the occupation withthe most employees at the workplace who wereformally trained to be able to do jobs other thantheir own. In more than half of all workplacesthis form of flexibility is either non-existent ornegligible. But, in around a quarter ofworkplaces, most employees in the largestoccupational groups are trained to be adaptable(cf. 1998.9). In stark contrast, this degree offunctional flexibility is prevalent in nearly all ofthe case studies (13 out of the 15, or 87%). Assuch our case study firms would appear to beleading proponents of functional flexibility.

These examples would seem to confirm thatpartnership organisations are more likely tofully implement new management practices,and fully embrace the changes implied by themin terms of new ways of working, and theoperating culture of the organisation.

There would appear to be a significantpartnership effect at work across our case studyfirms, leading to markedly increased rates ofinnovation in work organisation and labourmanagement policies.

Union/non-union establishment comparisonsWhat then of the differences between the unionand non-union firms within our sample? Firstly,at the level of visible practices, there were onlynegligible differences between the union andnon-union case study firms in terms of theincidence of workplace innovations and newmanagement practices. However, given that allof our firms, including the SMEs, are goodpractice organisations, little significance can beread into this finding.

More broadly, with regard to attitudes andbehaviours, if we examine union involvementwithin the case study firms, taken as a whole theunions have adopted a co-operative and positivestance towards new initiatives, and they haveproved to be active participants in developing apartnership approach. An example of this is thatthe trade unions within these organisations haveaccepted that partnership involves building abetter relationship between all employees andthe company, through both existing collectiverepresentation, and on an individual basis witheach employee. As a consequence a commoncharacteristic of all the unions in the casestudies was their willing involvement inconsultative mechanisms in which they did nothave a monopoly of representation rights. Thiswas true not only of works council typearrangements, but also more direct consultationthrough working teams. The unions concernedhad usually secured some guarantee that anysuch direct consultation about how to do the jobbetter, improve customer service etc., in no wayundermined the position and role of the union.Similarly, all of the unions had proved to beactive and enthusiastic participants in thedevelopment and negotiation of partnershipagreements, of which more below.

The non-union firms in the group of casestudies were all asked about their attitudetowards unions, and what they would do if morethan half their employees wanted a recognisedunion in the workplace. They all appearedgenuinely relaxed about such an eventuality,indicating that unions held no fear for theirorganisations, and that they were alreadymanaging in an open and participative way.

26

v) What was done to develop a partnershipapproach and what were the problemsencountered

Having made a commitment to adopt apartnership-based approach to their employeerelations, our analysis reveals that the casestudy organisations in our sample have pursueda number of identifiable Ôfirst stepsÕ. Thesehave in the main involved the generation of newunderstandings between manager and managed,and a recasting of the ways in which employeesrelate one to another and to the business.

Creating a shared understandingIn nearly all of the case studies, the basis ofpartnership has been for the organisation toopen up a dialogue with their workforce aboutcreating a common vision and objectives, andabout how everyone can best work together toachieve it.

Sometimes the desire to have these types ofconversations, which in some cases proveddifficult at the beginning, was born from a deepdissatisfaction with existing relationshipswithin the workplace. In others it was promptedby the recognition that most aspects of theorganisationÕs operations could be improvedupon, and that the changes required could onlycome from engaging the whole organisation,honestly and authentically.

The speed and force with which suchunderstandings were generated, and themethods used, also differed according to theorganisationÕs circumstances. Wherepartnership was pursued with some urgency(e.g. Leyland Trucks, Borg Warner), partly as aresult of crisis, then the process was led bysenior managers, and was initiated throughdirect communication methods (team briefings,mass meetings) with employees. LeylandTrucks for example, held sessions with groupsof 40 employees lasting up to a day, in whichthey explored what the partnership idea mightmean. As their Managing Director commented,Ôthe first thing to do was to talk people to death.Õ

Similarly, one of the union representatives atBorg Warner commented, Ôthat in all fairnessto the company, they took a long time speakingto people in groups, and in mass meetings,encouraging, training, and taking the fearout of people.Õ

These sorts of efforts were then reinforced byongoing attempts to work on the Ôhearts andmindsÕ of the workforce, with Elementis

Chromium for example, holding a number ofpartnership awareness days, which were led byboth management and trade unionrepresentatives.Alternatively, where partnership was drivenmore by the measured adoption of thephilosophy, the process of developing sharedunderstanding was naturally less dramatic andmore gradual (e.g. Scott Bader, LittonInterconnection and St, Lukes), with a reducedemphasis on direct communication methods.

Creating such shared understandings does notof course mean the removal of disagreements.However, our case study organisations suggestthat the very process of forging agreements(and disagreements) in a climate of enhancedtrust, helps to enable everybody within theorganisation to adopt a problem-solvingorientation when tackling what appear at firstto be apparently intractable differences.

The objective of developing mutually heldunderstandings across the whole workforce,may appear an extremely aspirational one tothose with a less than optimistic view ofemployee relations within UK firms.Nonetheless, many of our case study firms werekeen to stress that partnership, if it is to meansomething tangible, is about changing the waypeople work, and the way people treat eachother in the workplace. Admittedly, none of theorganisations featured in this report would saythat they have fully achieved their aspirations inthese respects. But vitally, they all displayed acommitment to the desirability, and in theirviews necessity, of such ambitions, and a beliefthat they can be made a reality.

Clear leadershipNearly all of the case studies conveyed theimportance of a clear lead and commitmentcoming from the top of the organisation. Thisfinding is not surprising, but the force of theendorsement for this view is interesting. Thecase studies provide compelling evidence thatin the first instance, only senior managers cancreate the culture and ÔspaceÕ for honesty andtrust to develop and flourish within anorganisation. However, having set the context, asenior management team must endeavour toquickly secure genuine employee buy-in to theresultant changes in the workplace.

Indeed, the managers interviewed displayed asophisticated understanding that theiremployees will quickly discern whether suchaspirations remain more Ôrhetoric than realityÕ,and that having committed an organisation to a

27

more trust-based culture the penalties of failureare severe. Correspondingly, they placed significantemphasis on the need not only for senior staffwithin partnership organisations to listen, butmore importantly the requirement for them tochange their behaviours if necessary. HergaElectric for example, stressed the importance ofmanagers within the organisation seeking honestand meaningful feedback on their leadershipstyle, and on the need for the organisation togive every employee the chance to lead.

The importance of languageIn securing the changes already outlined above,a number of the case study organisations,notably H.P. Bulmers and Herga, emphasisedthe importance of altering the language thatorganisations use to talk about themselves andtheir labour management policies and practices.This desire to transform organisationallanguage stemmed from recognition thatlanguage has an important part to play inreinforcing positive attitudes and practices, asopposed to perpetuating negative ones. Forexample, Herga has stopped using the wordÔmanagerÕ, as they believe that the notion of amanager ÔmanagingÕ, goes against the spirit ofempowered teams. Additionally, some of theshifts in language were motivated by the needto acknowledge changed realities, with H.P.Bulmers for example talking about the need forthe organisation to move from Ôpaternalism toperformanceÕ, and from notions of a Ôjob forlifeÕ to the idea of ÔemployabilityÕ.

Acknowledging doubts and insecuritiesFor many of the organisations in our study, theadoption of a partnership approach haspresented them with a formidable set ofchallenges and obstacles. For some of theiremployees the changed relationships andatmosphere engendered by partnership hasproved very difficult to adjust to. As aconsequence a number of the firms stressed theimportance of acknowledging the doubts andinsecurities of their workforce as they haveattempted to change practices and behaviours.This aspiration is strongly reflected in some ofthe key partnership values, such as mutuality,which were discussed earlier.

The role of partnership agreements anddefinition exercisesOur findings do not give strong support to theidea that partnership agreements are essential tosuccessful partnership, as only two of our casestudies had formal partnership agreements,namely Elementis Chromium and Borg Warner(both unionised organisations) with NatWestcurrently considering whether to adopt one.

However, this absence of formal negotiatedagreements should not be taken to imply thatthe principles of such agreements, namely theneed to establish formal understandings and definedworking practices, are not informing the pursuitof partnership within our case study firms. Indeed,a large number of the case study organisationsdisplayed a commitment to formalising ordocumenting their partnership approach.

For example:

● two firms had publicly documentedpartnership philosophies and practices(e.g. Herga and Appor)

● Scott Bader and Bulmers already had long-standing written agreements covering theiremployee relations philosophy and practice

● three of the firms (Leyland, Litton andTrifast) had undertaken a comprehensivedefinition exercise in order to give formalexpression to their partnership approaches

● the remaining firms (e.g. Michaelides andBednash, St LukeÕs Communications,Domnick Hunter Group, Braintree DistrictCouncil and Shelter) all had formal missionstatements or strategy documents whichoutline employee relations approachesor philosophies consistent withpartnership approaches

These findings suggest that whilst partnershipagreements are not to the fore in our case studyfirms, the majority of the organisations havemade explicit attempts to formalise thecomponents of a partnership approach into aÔworking setÕ of values and workplacepractices. An issue we highlighted in our earlierdiscussion of the importance of creating ashared understanding.

Attaining partnership: problems encounteredIt has become a truism to state, supported by thefindings of this study, that achieving partnershipat work is often difficult, requires high levels ofcommitment from all concerned, and can take asignificant length of time to achieve. Our casestudy evidence provides some illuminatinginsights into the problems that companies canencounter in adopting a partnership approach.

Our discussion of these issues is split into twoparts. The first section examines the fundamentalbarriers hindering the development of apartnership approach. The second section willexamine some of the practical difficulties thatour partnership case studies have experiencedin developing a complementary set ofpartnership practices.

28

Starting partnership: first order barriers andsolutionsThe barriers encountered to a greater and lesserextent by our case study companies havepredominantly been concerned with creatingsupport for the values and general approachunderpinning partnership, and transforminglanguage and behaviours within the workplace.In this respect, our inquiry has focused directlyon the importance of generating a sharedunderstanding of what partnership means,and securing high levels of supportfor the approach.

Unsurprisingly, the route that individual casestudies firms have taken to partnership hasaffected the severity of the barriers that theyhave faced in these respects, and it is thereforeimportant to note that not all of the companiesin our study have experienced barriers in thesense of profound difficulties and obstacles.The two new start-up companies (Michaelidesand Bednash and St Lukes) in our sample begantheir operations from day one with a clearblueprint and philosophy which has proved tobe a strong and effective driver of subsequentdevelopments. St Lukes were clear that theywere attempting to break away from traditionaladvertising industry hierarchies and job roles.Similarly, with regard to the SMEs within ourstudy, the adoption of a partnership approachhas evolved from their established employeerelations approach, and thus, becausepartnership has not represented some stepchange break from the past, their organisationshave been able to assimilate the new emphasiscomparatively easily.

In contrast, organisations adopting apartnership approach as a response to crisis, andin order to break out of an adversarial cycle ofindustrial relations, have faced more tangiblehurdles in developing partnership. Theprincipal barriers took the form of resistancefrom the Ôold guardÕ and its representativesamongst both managers and employeerepresentatives. With regard to managers theirresistance was partly due to their loss ofÔpowerÕ, which some attributed directly topartnership approaches, but also because of theway in which their jobs were changing as aresult of the new forms of work organisation wehave discussed. Many acknowledged that as aresult, they would need to be developed to takeon some of the new roles demanded of them,such as the greater stress on motivating,mentoring and advising. Herga Electricformally acknowledged in their definition ofpartnership that leadership in a partnership

organisation is more challenging than in a moretraditional hierarchical organisation, Ôwhereyou tell people what you want them to hear andkeep the rest secret.Õ

Developing Partnership PracticesIt is also worth highlighting the obstaclesassociated with the technical and practicaldifficulties of implementing the new forms ofwork organisation associated with partnershipin our case studies. Given the broad range oftechniques and practices prevalent within thesefirms, many of the organisations have facedsimilar difficulties in implementing new formsof work organisation, which have alreadyreceived significant attention in the industrialrelations literature. For example, the difficultiesinvolved in moving an organisation fromtraditional command and control structures withlow levels of job discretion, to one characterisedby a flatter hierarchy, self-autonomous teams,with employees being offered the chance ofmore meaningful control of their jobs andworking time. Many of the organisationsfeatured in the study confirm that such a shift:

● can unsettle those employees who do notwant to take on new responsibilities, or feelthat their previous status and position havebeen undermined. The solution has been formany of the organisations to embark oncomplementary culture change and teamand relationship-building training activities;

● may quickly reveal shortcomings in theskills base of a workforce. The solution hasbeen to respond with significant investmentin training needs analysis and learningprogrammes; and,

● usually necessitates transformations in thecommunication processes within theorganisation, both vertically and laterally.Solutions adopted include more regularbriefings, off-site meetings, greatermanagement visibility, and the adoption ofnew communication channels (such as hotlinesand regular Ômeet the bossÕ opportunities).

vi) Partnership Outcomes

Our consideration of outcomes is split into fourparts:

● What are the substantive performanceoutcomes secured by these firms?

● What are the employee relations / workorganisations outcomes secured by theseorganisations?

● More intangibly, how do these work placeslook and feel?

29

● Are the firms focused on future success?Let us turn firstly to the substantiveperformance outcomes.

Performance outcomesThe fifteen case studies featured in this studyvary greatly with regard to size, sector andbusiness circumstances. As a consequencegenerating an aggregated sense of performanceoutcomes is not easy, and each organisation hastheir own sense of what constitutes substantialperformance improvement. For example, someof the firms are very new, for whom establishinga market presence is the key performanceoutcome, whilst for others their adoptions of apartnership approach was born out of crisis andfor whom Ôsteadying the shipÕ constitutes success.

Notwithstanding these differences, all of thecase study firms featured in this study assertthat their adoption of a partnership-basedapproach has helped them achieve enhancedcompetitive performance. This resoundingendorsement of the business benefits ofpartnership is a striking finding.

Whilst not all of the organisations have beenprepared to provide substantive indicators(labour productivity, profitability and turnover)to back up this claim, the ten organisationsproviding such data have generated clearevidence substantiating clear performanceimprovements, with some reporting exceptionalimprovements. For example:

● Borg Warner: Doubled size of workforce:60% increase in turnover in last 4 years

● Michaelides and Bednash: have built an 85million pound business in four years,with turnover increasing 20% year on year

● Trifast: Doubled turnover and workforce,and trebled profits over last five years

● Litton Interconnection have secured a 200%increase in profits over the last five years

● Domnick Hunter have increased profits bya factor of three on a doubled turnover

None of the firms are working in sectors (i.e.Information and Communication Technologies)where the magnitude of such changes could beexplained by market growth rather thanorganisational improvements.

Employee Relations and Work OrganisationOutcomesWe have already discussed in some detail thecharacter of employee relations policiesadopted by our case study firms. Three broadoutcomes are worth highlighting.

Firstly, the partnership firms in our studydisplay a high rate of innovation and have beensuccessful in introducing new forms of workorganisation and managing the resultant changes.

Secondly, the organisations display high levelsof commitment to continuing the developmentof partnership. Certainly, the experience ofdeveloping partnership has not led any of theorganisations to question the value of such anapproach. Rather, the majority of the firmsindicated that they regard their partnershipactivities as very much work in progress, whichwill continue to evolve over time, and whichwill necessitate ongoing work and commitmentto ensure future success.

Thirdly, employees display high support for theprinciples and practices being adopted by ourcase study firms. This was confirmed by ourinterviews with employees and theirrepresentatives, and by those organisationsamongst our sample who have carried outemployee attitude surveys, which reported highsatisfaction scores. More broadly, all of theorganisations reported low levels of labourturnover and absenteeism amongst theirworkforces. Indeed, a number of the firms,notably Michaelides and Bednash and St Lukes,reported exceptionally low labour turnoverfigures when compared with the standard ratesof labour turnover in their industry.

Tangible High Commitment Workplaces Concerning the question of how did theseworkplaces look and feel, our study can onlyrely on qualitative data in answering. In the bestof the case study firms, individual employees atall levels displayed strong commitments to theorganisation and its objectives and values, totheir co-workers, and to the possibilities theirjob offered them in terms of developingthemselves now and in the future.

Our analysis cannot put significant weightbehind such comments, as the demands of thestudy did not allow the research team to spendan extended period of time in the organisations,or to conduct independent employee attitudeand commitment assessments. Further researchis required to ascertain just how tangible theÔcommitment dividendÕ is within partnershipcompanies as compared to non-partnershipcompanies. Nonetheless, our study would atleast suggest that the best partnershipcompanies are securing a form of ÔcommitmentdividendÕ which is evident in both theirsubstantive performance outcomes, and thesatisfaction ratings of their employees.

30

Focused on future successA striking similarity across our case studysample was the extent to which all of theorganisations were focused on future success.In this respect, all of the companies couldarticulate a strong vision of their desired future,and how they were attempting to get there. Inother words, they want to operate at all timesÔbeyond the immediate business planÕ. Moreover,they took for granted that the rapid changewithin the business environment was now aconstant dynamic, and that they could not planfuture strategies on the basis of static structures.

Conclusions

Similarity triumphing over differenceThis study has revealed that for a number ofgood practice firms there is a growingconsensus about the benefits of a partnershipapproach, and convergence towards a set oflabour management practices which allow suchaspirations to be practically achieved.

Indeed, whilst very few of the case study firmsuse the word ÔpartnershipÕ to describe theiremployee relations approach, there is aremarkable commonality of vision, value andpurpose across the companies, and in theirsubstantive employee relations practices. As wenoted at the outset of this analysis section, thisis a significant finding given the heterogeneityof our sample group. The particular value of thecase study approach employed has been toreveal in some detail the values and processesdriving the adoption of partnership-based,stakeholder-driven employee relationsapproaches.

Our case study firms report impressiveperformance improvements as a result ofadopting a partnership approach. However, ourstudy is unable to resolve the question of howmuch of their performance improvement isdirectly attributable to the adoption of apartnership approach, as opposed to theutilisation of leading-edge work organisationsand labour management techniques.

Nonetheless, what our study does clearly revealis that the adoption of a partnership approachmakes an organisation more likely to pursue abroad range of new labour managementpractices and work organisationtransformations, as exemplified by theimpressive scope of innovation amongst ourcase study firms. It is of course a matter forfurther empirical investigation to confirm howstrong this association proves to be within other

partnership organisations. Perhaps even more significantly, our findingsshow that partnership companies are morelikely to operate such methods concertedly andeffectively, to engage in subtle processes ofcontinuous improvement, and to delivermeaningful improvements in bottom lineperformance. In other words whilst partnershipmay not be a prerequisite of new forms of workorganisation, it does act as a Ôvital enablerÕ,more readily ensuring that:

● adoption of ÔnewÕ management techniquesis more far-reaching, and they are firmlyembedded in the labour process

● innovations of this kind lead to a genuinelyhigh commitment, high performanceworkplace.

This point was vividly illustrated in our earliercomparison of the case study findings againstthose emerging from the last WERS study.

Combining workplace partnership and highperformanceOur case studies also illustrate that someorganisations do fervently believe that workshould be based on the principles of dignity,trust and social justice, and have developedcomprehensive values-based frameworks tosupport such aspirations.

It is of course the case that the character of theorganisations featured in this study definesthem as a minority group within UK firms takenas whole. Nonetheless the growing empiricalevidence, augmented by this study, thatpartnership-based, stakeholder firms achieveenhanced competitive performance, challengesthose who find it difficult to reconcile improvedemployee rights, voice, involvement anddiscretion with sustained improvements ineconomic performance. As such, our findingssuggest some illuminating pathways for UKindustry as a whole.

It would seem that managers have nothing tofear from partnership, except improved bottom-line performance, more motivated and self-engaged employees, and an accelerated need forthem to embark on their own programmes oflifelong learning!

31

Partnership and the new economy: in tune withthe information age?Whilst disagreements remain over the pace ofchange in the character of our economic andsocial relations, few informed commentatorsdoubt that we are witnessing a shift in theconduct of economic activity. The basis ofcompetitive advantage is increasingly derivedfrom the value contained within intellectualcapital and its application. As a consequence,the dynamics of trust, innovation, commitmentand connectivity which our study reveals arebeing actively pursued through partnershipapproaches, are likely to become progressivelymore important considerations for the way inwhich businesses are managed and organised,and the way business itself is conducted.

Indeed, the experience of our case studycompanies would suggest that partnershipapproaches are important not just for what theyfoster for those in work, namely greater socialjustice and an enriched work experience, butalso for what they enable, specifically enhancedrates of innovation and improved enterpriseperformance. The new forms of workorganisation and labour management practicesprevalent within our case study firms suggestthat partnership philosophies may prove to be avital component of UK enterpriseÕs adaptationto the demands of the new information age.

It is to be hoped that this report will help topromote further research and debate about thebenefits of the partnership approach, aroundboth the potential for enhanced businessperformance in the organisations concerned andthe enrichment of the experience of work foremployees of organisations adopting thepartnership approach.

33

FourTHE INDIVIDUAL CASE STUDIESIN DETAIL

1. APPOR LTD

Sector: Other manufacturing (plastics)Products/Services: Machinery for dispensingsoaps and gelsNo of employees: 39Non-union

Introduction

Appor is a vivid example of what an SME canachieve when it adopts a partnership approach.Moreover, it clearly shows that developing apartnership approach is not beyond the reach ofsmall firms, in that it does not necessitate theresources of a large human resourcesdepartment to implement. Rather, in this case, itis driven by a tangible commitment to acoherent set of values and the notion thatpartnership seems to be about the ÔserviceÕemployees are willing to render one another.

Company Background

Appor is an autonomous subsidiary of SBS, afamily-owned holding company withinternational interests in plastic moulding andother industries. Appor specialises in soapdispensers, such as those provided by DEB,another group company who represent 70% ofApporÕs business.

The General Manager of Appor reports to theGroup Chairman who is based in Canada andwho visits the company once a month.

Partnership Philosophy

The company began a change process in 1990,started by the then Managing Director, MartinWilliamson (one of the family of owners) whointroduced a programme known as ÔTSSÕ (TeamSpirit Strategy). The move towards apartnership-based approach had four keystrands:

1 The CEO communicated a clear visionof where the company was heading and howit could be achieved

2 The Team Spirit Strategy (TSS 90)3 IIP4 The NVQ Training Plan

In the General ManagerÕs words, Ôthe ManagingDirector made us all one team, albeitwith smaller teams within the main team.At same time we looked at the internalcustomer concept.Õ

The early changes resulted in a 50% reductionin the size of the workforce. Appor suggeststhat many of those who left were those whodidnÕt want to change Ð especially those whocouldnÕt cope with the transition fromÔsupervisorÕ to Coach. Prior to TTS, Appor hada Senior Management Team of eight people,which had been reduced to two.

The change process took place with fullconsultation throughout the company, both inlarge meetings and through Coaches. As part ofthe team building process, every employee wasinvited to attend an Outward Bound type coursein the Derbyshire hills.

Appor does not actively use the wordÔpartnershipÕ to describe their employeerelations policies and practices, though theirstaff handbook is called ÔThe WorkingPartnership HandbookÕ (see extract). Rather, thecompany has some of its own terminology:teams are led by ÔCoachesÕ and employees arereferred to in the Handbook as ÔApporiansÕ.

Partnership Practices

CommunicationThe communication systems within Appor werecompletely revamped as a result of the TSSproject, which introduced:

● more communication about the business,letting people know how the company wasperforming and Ôhow whatever we didaffected the bottom lineÕ

● internal Key StatisticsÕ so that everydepartment could measure its performanceagainst target

● regular ÔGood News DaysÕ Ð sometimesheld off-site Ð so that staff couldcommunicate business information. Thesedays had proper business agendas, withdepartments and problem-solving teamsmaking presentations on their achievements(every employee is encouraged to be able tomake a presentation Ð anyone making one isawarded a rosette, and several presentationsattract a small present). There are now fourÔGood NewsÕ days a year.

34

The general communication operating principleis that there is, as much as possible, an opendoor policy. The structure is simple:

1 The General Manager2 Five Coaches3 Team members

There is no HR/Personnel specialist, and theCoaches take day to day responsibility fordealing with issues as they arise.

Appor does not recognise a trade union, butthey stressed this was not for ideologicalreasons. The company simply believes that theyhave fostered a genuine partnership with theirworkforce, and the General Manager indicatedthat she would not be concerned if she foundherself required to deal with collectiverepresentation in any form.

Attitude surveys take place annually; each yeara questionnaire is sent to all staff Ð this yearthere were only three non-responses.

One of the employees interviewed commentedthat ÔCommunications are open. You can tellanyone anything here, and everyone is asked togive presentations and play their part.Õ

Performance Management / AppraisalCompetence-based appraisals are carried outtwice a year under the CAAP (CompetenceAssessment and Action Programme), designedto help everyone contribute fully towards themission and to benefit everyoneÕs selfdevelopment in three main areas: jobdescription; competence assessment; trainingplanning. Some 24 general competencies arelaid down in addition to specific jobcompetencies Ð with different levels specifiedfor different jobs.

The procedure is as follows:

● each individual self-assesses themselvesagainst the attainment of competencies

● two days later, the Coach assessesthe individual

● two further days later, the two get togetherand discuss the assessments.

● an Action Plan is then drawn up for the nextsix months.

Appor is currently looking at 360 degreeappraisal. The General Manager thinks that thiswill work well, because ÔweÕve always tried toaccept constructive criticism hereÕ. We alwayssay to people, ÔDonÕt take it personally if

something you do is criticised. ItÕs likeIIP. WeÕd developed this culture withTSS 90 anyway.Õ

None of the employees interviewed couldremember when an issue of under-performancehad gone to a formal procedure. As oneof the team leaders commented Ôthe quietword works wonders.Õ

Employee DevelopmentThe annual training budget is worked out as apercentage of the profit achieved and shared outequally per capita, so that everyone has theopportunity to undergo training. Training isclosely related to the achievement of NVQs(eight people have NVQ4 in Management) andthe way people have developed into the rolesthey play in the company.

Appor is firmly committed to enhancing theemployability of all their staff, with thecompany operating on the basis that nobody istoo old to be developed. Financial support,including day release, is given for trainingbeyond the immediate needs of the job. ÔWepay for it allÕ. For example, the GeneralManagerÕs Open University Diploma wascompletely funded by the company.

Reflecting this commitment, Appor has anexcellent record in achieving quality standardsin the employee development sphere. WhileTSS was being developed the organisation wasapproached by the local TEC with a view toachieving Investors in People (IIP); thecompany were the first organisation to achieveit nationally, and have re-achieved it twicesince. Appor has now made the deliberatepolicy decision of taking the option of a 12-15review of IIP, because of the continuingimportance of measuring performance againstbest practice. In this context the GeneralManager noted that, ÔA lot of people are againstquality systems because of the "restraints". Butit depends on your approach. If you use themproperly the systems are definitely a good toolfor the business. ItÕs not just a question ofhaving the flag to fly outside.Õ The company arealso accredited to ISO 9001 and EMAS (Theenvironmental standard).

Team working: A ÔHands OnÕ CultureThere are two distinct activities in Appor:moulding and assembly. Each day, people swapjobs between disciplines in order to increasetheir learning. In addition the concept of theÔworking team leaderÕ is well entrenched inAppor, who regard themselves as working

35

coaches. As the General Manager commented,ÔI still like to do hands-on now and again. Forexample IÕll help process the invoices Ð it keepsme in touch. You might think that makes for anexpensive invoice processor, but it is worthwhile in terms of staff relations. I am alsowilling to operate a machine, though IÕm notvery good at it!Õ

There are regular monthly team meetings basedon a simple structure of team briefings held bycoaches with their teams after they in turn havebeen to the management meeting with theGeneral Manager. The team meetings coverpeopleÕs feedback as well as givinginformation.

Flexible Working with Increased ResponsibilityAppor try to organise production in order toallow employees to have considerable controlover their own work. For example, products areassembled by cellular rather than productionline methods, with each employee responsiblefor the assembly of a whole component.ÔEmployees actually place themselves at thebenches. Coaches act as guides and trainers,and indicate priorities; otherwise people have aconsiderable say in what they do.Õ

As the General Manager suggested, ÔWhereverpossible, people make their own decisions andchoose their own jobs. When we moved frombench to cellular assembly, we consultedeveryone about bench design, and how the workwould be carried out.

Employees cannot, however, choose theirstarting and finishing times. Customer needsand teamwork dictate that people are there forspecified shifts.

However, the company is willing to pay for timeoff for up to one hour for unavoidable doctor ordentist appointments during working hours.ÔAnd if people need a half day off and noholiday is left, we can be flexible, and they canmake the time up laterÕ.

Financial Participation: ÔSharing in SuccessÕAppor operates a profit share scheme, based onthe principle of continuous improvement. Toachieve the share, everyone has to do betterthan the previous best benchmark performanceachieved (e.g. this yearÕs figures would have tobe better than the peak figures achievedtwo yearsÕ ago, because there was adrop in profit last year).

Continuous ImprovementEmployees are encouraged to seek out andsuggest improvements in the way the work isdone. One of the competencies is ÔCreativityand InnovationÕ. It is made up of eight levels Ðthe minimum of which is defined as Ôsuggestsnew ideas when asked directlyÕ and which leadsto ÔComes up with new ideas leading to newapproaches being taken within departmentÕ(level 5). The highest level (level 8) is ÔUsesexternal sources of information in order tocome up with new ideas about products andapproaches leading to consistent innovationwithin the companyÕ.

Employment SecurityWhilst there is no formal commitment toemployment security, Appor has made a firmdeclaration that employees will not be laid offor made redundant except as a last resort. Forexample, currently the night shift has beenstopped. These people have not been laidoff, but are working on days. As partof this commitment, vacancies are alwaysadvertised internally.

Other Partnership Practices

There are no written job descriptions, butpeopleÕs skills are made use of as much aspossible, and levels of competence are laiddown for jobs. As mentioned above, ÔWe havesome strange mixes hereÕ with people doing arange of jobs requiring different competencies.

Quality problems are handled by problem-solving teams which are created and disbandedas required. There is no ÔQuality DepartmentÕ.

Holiday entitlements are harmonised, the onlydifferential being based on length of service.There is a common pension scheme for all,same eating arrangements, and an equalopportunities policy which embraces age aswell as race/sex/disability.

Outcomes

The key measurable outcome has been a 200per cent increase in profits, despite reducedsales. In the General ManagerÕs words, ÔWe didso many things beyond IIP, ISO and bettertraining. I canÕt put my finger on one singlething, except the partnership practices. Forexample Ð flexibility, quality, two-waycommunications: all these things havedefinitely improvedÕ.

36

More generally, Appor believe that a sense ofemployment security has developed. Staffturnover is very low. There may be a potentialproblem of an ageing workforce Ð the majorityof employees are over 40. The companyrecruits very rarely (`We keep peopleÕ).Attendance is good.

Other organisational outcomes include:

● productivity up● quality up● service innovation up● high levels of customer satisfaction,

48 hour delivery time to main customer● profit margins increased

The interviewees stressed that the essentialtrigger for these improvements was theestablishment of TSS 90.

The Future

Appor placed considerable stress on the dangerof complacency. They see themselves asengaged in a continuous process of refocusing,reviewing and seeing what can be done better.Their next major project is to introduce 360degree appraisal throughout the organisation.

2. BORG WARNER

Sector: EngineeringProducts/Services: Automotive ComponentsNo of employees: 310Unionised: recognised union: AEEU

Introduction

Borg WarnerÕs experience is an excellentexample of a partnership approach beingborn out of crisis, and an attempt to break acycle of adversarial and low trust relationshipsat work. The case study also emphasises that ittakes real commitment to keep partnershipalive, particularly during periods of adversetrading conditions.

Company Background

The company is part of Borg WarnerAutomotive Inc (BWA), US-owned with itsheadquarters in Chicago. The corporationemploys about 10,000 people worldwide,supplying automotive components and systemsfor cars: eg, four wheel drive transfer cases andcomponents for off-road vehicles such as RangeRover, and synchroniser rings and systems formanual transmission production in Europe andthe USA.

The company opened in Margam in 1969 withthe objective of specialising in automatic

THE WORKING PARTNERSHIP HANDBOOK

This is the only live document within which Appor uses the word ÔpartnershipÕ. It is in effect thestaff handbook, setting out the terms and conditions and the basic rules. It is similar to any staffhandbook, but some of the following statements very effectively convey the culture and philosophyof the organisation.

ÔThis booklet summarises some of the specific rules, regulations and legal requirements relatedto working at Appor. However, much more important than that is our expectation that you willwant to work as part of the Appor team and help us all achieve our stated goals. This meansbeing committed to:

¥ safety at all times¥ quality in everything you do¥ making yourself aware of your customersÕ needs and striving to supply them¥ continuous improvement of you, your department and Appor¥ flexibility in your job and outlook¥ solving problems¥ wanting Appor to be the best¥ caring about our community and environment

ÔIf you are committed to these ideals, you wonÕt need rulesÕ.

37

transmissions. At that time the forecast was that80% of European and Japanese cars would haveautomatic transmission by 1990, and the plantwas built to take account of this prediction.

Whilst automatic transmission systems took offin Japan (85-90%), they didnÕt in Europe(10-12%), production peaking in 1974. This ledto redundancies in 1975, operated on the basisof Last In First Out (LIFO). As a consequencethe company lost specialised, qualified people,and faced difficulties in supporting thebusiness that they had.

Borg Warner concede that by the late 1970s,their industrial relations climate wascharacterised by:

- Them and Us- Lack of respect for management- Low morale and low motivation- A management policy of Ôclose the plantÕ- An employee policy of Ôkeep it openÕ

By 1983 the situation had reached crisisproportions and the plant was faced withimminent closure.

The Partnership Philosophy

Against this rather grim background,the company began to develop a morepartnership-based approach. In the words of theworks convenor, The crisis gave the companythree things:

Ôa common vision Ð we are going to survivea common aim Ð keep the plant opena spirit of working together Ð what neededto be doneÕ

Management and union representatives beganto place the emphasis on the importance ofÔworking togetherÕ, and on ÔtrustÕ andÔhonestyÕ. One union representative, who hasbeen with the company for some 24 years,noted that the hardest thing about adopting apartnership-driven approach was Ôgetting overto people that we had to change. They hadalways seen shop stewards as knocking themanagerÕs door down. It was now us trying toget people to understand we wouldnÕt alwaysstand by everything they wanted. We had to saythings like, "The company are right; weÕve gotto look at it from their side". In all fairness tothe company, they took time speaking to peoplein groups, and in masses, encouraging, training,and taking the fear out of peopleÕ.

The challenge facing the business in the earlyeighties was a profound one. As the worksconvenor described: ÔWe had to reposition thebusiness with new products and customers.We had to change the way we worked.Our behaviour and practices had to improveif we were to remain in business and fight thecompetition. We listened to each otherand implemented the initiatives andchanges together.Õ

By the early 90s trust had got to a point wherethe senior management were prepared to set upand empower a cross-functional team to workon how initiatives should be implemented inorder to take the company forward. The teamconsisted of all levels and roles, including unionrepresentatives, who worked together to set newgoals so that the companyÕs future could bemore secure.

The new climate of partnership was quickly putto the test, when the company was forced tomake another tranch of redundancies in 1993.

LIFO had been the accepted procedure forlaying people off within Borg Warner, and hadbeen applied since the first redundancies in the70s. Management wanted to break this acceptedpractice, stating that if they laid this number ofpeople off using LIFO, Ôthen a skill shortagewould occur, and we would not be able toservice our remaining customer requirements.Õ

Originally the union had been adamant that thiswas not the way to go. But by listening to eachother and analysing the situation, the outcomewas a compromise. A team was formedconsisting of management and unionrepresentatives, with the objective ofdeveloping plans to secure the future and, byworking together, keep the plant open and, itwas hoped, grow the business.

From the crisis a 10 point plan was createdwhich centred around behaviour, team work,and communication, and after a number ofmeetings and discussions, a betterunderstanding of the way forward developed.This 10 point plan developed into a set ofpractices called the ÔMargam WayÕ. It is asubstantive agreement between the managementand the union, and is reviewed periodically.

The relationship between the companyand the union is now described as apartnership Ð Ôrather like a familyÕ, suggestedthe works convenor.

38

Management Role in Partnership: Leadingfrom the front

In changing the behaviour of management,union and employees, the senior staff believethat the management behaviour had to changefirst. The HR Manager identified a number ofways in which management had to take thelead:

ÔThere was a need to be more open about thestate of the business, being honest with nohidden agendas. We had to be consistent in ourbeliefs, with longer-term goals, and not float inand out of "flavour of the month". Managementbehaviour sets the role model.Õ

ÔManagement had to be prepared to listen more,take on other viewpoints about how thingscould be done, and this would mean moreinvolvement of union representatives andemployees in planning the business.Õ

As the HR Manager commented, ÔWe neededharmony to achieve this. This doesnÕt mean thatwe all have to think the same way on howthings are done but it does mean that we allhave to have the same working beliefs andagree on what needs to be done.Õ

These commitments have been translated into aclear ÔsetÕ of partnership practices.

Partnership Practices

Communication and TransparencyThe company has an open-book policy underwhich the financial performance of thecompany is openly discussed Ð costs, profitsand sales. Long range plan forecasts are sharedwith employees, Ôshowing everything, wartsand allÕ. Union representatives are involved inhelping put these plans together. Company,departmental and team performance, includingfinancial results, are regularly reviewed throughbriefing sessions.

There are short regular weekly team meetings atwhich team leaders discuss production issues Ðcomplemented by departmental level meetingsonce a month at which group leaders leaddiscussion about business/operating matters.

Trade Union RelationsThe union, which has 98% of employees inmembership, is divided into two Ôshop floorÕbranches and one representing the office. Thecompany has always encouraged employees tobe union members, and regard the single unionpartnership with the AEEU as the best way of

planning and growing the business together.As the HR Manager commented, ÔWe put nobarriers in the way nor discourage unionmembership amongst our employees.Õ

There is a Convenor and 5 shop stewards withinBorg Warner. The union meets management ata monthly forum, driven by a prepared agenda.Whilst most problems are settled informally, themonthly forum is useful as a means ofsummarising actions taken; it is flexible enoughto create break-out groups, or small teams toexamine particular problems.

Team workingImproving teamwork has been a key element ofthe culture change process at Borg Warner,leading to improved flexibility and minimaldemarcation practices. As one of ourinterviewees commented:

ÔTeamwork is essential if we are to succeed withour initiatives and we are constantly developingteams and team leadership to achieve set goalsand targets of improvementÕ.

The company has developed what they callÔprocess teamsÕ. Here, small teams take on theresponsibility for improving a defined part of amanufacturing process. Teams of this type havebeen set up right across manufacturing andthere are 24 in place. They are not there Ôjust tobe empoweredÕ but are there to improveperformance as a company by challenging thestatus quo and improving the process.

Assembly is carried out by teams in cells,organised on Ôsingle piece flowÕ as far aspossible. Job assignments within teams aredecided on by team leaders. Team leadersreceive the same pay as other members.Production is thus carried out by 24 teams, eachwith a team leader, divided into groups undergroup leaders. As a consequence of this systemof work organisation, in the convenorÕs words,ÔOperators take on more functions, they aremulti-disciplined or multi-skilled. Theyconduct their own minor maintenance,undertake their own quality assurance, organisetheir own work schedules to a large extent andmeasure themselvesÕ.

Employee DevelopmentEvery employee has an employee developmentreview at least once a year, so that plans can beput in place to improve their abilities to do theirjob, and to meet both company and personalobjectives. Once a year the employee seeshis/her immediate boss to discuss

39

development, building it in to the objectivesof the organisation. Nobody is forced into beingdeveloped, but the companyÕs support extendsto cash funding and day release for those onfurther education. Apprentices from thecompany have won ÔApprentice of the YearÕ forSouth Wales in the last two years.

The principle underpinning the organisationÕsemployee development philosophy is tomake full use of the intellectual abilityof all employees.

Reward mechanismsBWA stressed the importance of rewardpolicies which encourage the right behaviours.For example, the company has introduced a payand grading system (the number of grades hasbeen reduced from 20 to 7) Ð now well into itsthird year Ð which supports teamwork. It isbased upon role profiles, which not onlysupport teamwork, but these profiles alsosupport employee development and are used asa reference during the annual reviews. They arealso used for recruitment. Instead of a precisejob description for each job within theorganisation, groups of jobs were positionedinto roles and a wide banding approach used forthe grading and the resultant pay.

All employees receive the same incrementalincrease as a result of pay talks. This increase isbased upon the plant performance and not uponindividual appraised performance.

Self-Financing Reward SchemeThe scheme is designed to encourage thesharing of new ideas. Any suggestion, activityor idea from any employee, if accepted, gets £5,which is put in a ÔpotÕ. The resultant savingsfrom the implementation of the suggestion areshared 35% to the pot and 65% to the company,based upon the first yearÕs savings only. Thereason for this split is explained by the fact thatsome money may have to be spent to implementthe ideas to support price pressures, andanyone, including those employees consideredto be employed to generate improvements, canput into the scheme. The value of the pot isshared out equally to all employees twice peryear. On average, the scheme pays out £500 peryear to each employee. This scheme wasdevised in 1996 by a cross-functional team.

Continuous ImprovementThe company has studied ToyotaÕs practices andhas adopted Kaizen techniques for continuousimprovement, and Kanban for materials andprocess control. There are no quality inspectors

Ð with all employees seen as being responsiblefor their own quality. There are 3 key policies:

1. Time to market. Improving product introduction. This ischampioned by the Engineering function.

2. Production system. Improving processes by using the toolsdeveloped by Toyota. This is championed bythe Manufacturing function

3. Supply chain management. Improving total cost of supply bydeveloping suppliers to adopt time to marketand the production system philosophieswithin their organisations. This ischampioned by the Supply Chain function.

All functions are reliant on one another andall have goals and measures to show success.Through policy deployment, the actions andtargets for teams can be agreed, set and thecontinuous improvement culture driven, asfar as process improvement is concerned,by these 3 key policies.

The company is accredited to QS 9000, and willbe seeking Investors In People accreditationnext year.

Other Partnership Practices

These include:

● Harmonisation of Terms and Conditions● Financial participation. There is a share

purchase scheme, run through the USparent, by which employees can buy sharesin the company on the NY Stock Exchangewithout paying transaction costs.

● Employee Benefits. The company providesfree medical examinations, free safetyspectacles, free uniforms, safety footwear,and there is a fitness centre on the site.

Outcomes

These partnership practices have led to clearperformance improvements and Borg Warneris now a growing business. In 1993 it had 183employees; it now has 310. The company hasenjoyed sustained growth through new products,and a larger customer base. It has experiencedits longest period ever without compulsoryredundancies, employee turnover is below 0.5%and employee attendance is 98%. In 1993 thecompanyÕs turnover was £20 million, withproducts nearing the end of their life cycle. In1997 turnover had increased to £35 million,with new products in expanding markets.

40

From the union viewpoint, the works convenorsees the main outcomes since 1993 as being:

● single union Ð 98% are represented by theone union, AEEU

● single status Ð everyone clocks in and out;all are on the same basic terms andconditions, and everyone wears a companyuniform (including managers)

● union representatives attend seniormanagement meetings, are party to planningthe business

● what were considered to be restrictivepractices have been eliminated

● a new pay and grading structure wasintroduced which has benefited allÐ ÔCollective bargaining or pay talks nowtake half an hour and it fits into ourteamwork philosophyÕ

● a reward scheme in which all employeesshare the benefits Ð suggestions and ideasare publicised, and savings are putinto a pool which is shared by all (there isno special reward for the individual makingthe suggestion)

● ÔWe reward attendance and we believe wehave an environment in which teamworkcan flourishÕ.

The Future

Borg Warner had a clear vision of how theyintended to develop partnership in the future,outlining three key activities:

1. Develop the relationship. It is important tocontinue to develop relationships and buildupon the companyÕs success.

2. Teams and teamwork. ÔTeams are importantto us as well as our improvement strategiesand we must implement the tasks we haveset ourselves if we are to be successful, beatthe competition and surviveÕ.

3. Continuing our total quality philosophy andsustaining the improvements.

41

The Margam Way: Extracts from the Ôpartnership agreementÕ

The Management, Trade Union and Employee Representatives have agreed with the purpose of thisagreement, which is to meet the needs of the customers and to achieve long-term success for boththe company and its employees.

Through the contribution of employees, this live document will be improved to ensure our workingpractices are effective and fair. The company recognises the importance of employee representativesin helping achieve this objective by the use of a forum partnership.

The company will support the involvement of the trade unions in the forum partnership, in workingwith the company to ensure harmonious working relationships and an effective competitiveorganisation.

To this end, the company is committed to progressive employee relations, and all parties willdemonstrate their commitment to the achievement of the companyÕs objectives through theiradaptability and co-operation, and will facilitate the efficient and productive use of new andadvanced technology, flexible attitudes and working practices.

The company and the employee representatives recognise that a high labour turnover rate does notserve the best interest of the company or its workforce. Therefore the company is committed toseeking ways to actively retain employees.

It is intended that there will be a periodic review of this agreement by the respective negotiatingbodies to assess the effectiveness of the agreement, and to make improvements where required.

The nature of this ÔMargam WayÕ is dependent for its success on the active participation andco-operation of all concerned, in line with the desire by all parties to work in a ÔpartnershipÕ.

It is understood that it will require some time for confidence in the method of operation to grow,and the parties commit to fully discuss any difficulties with a view to resolving such problemsas may arise.

In the event that any signatory party (i.e. AEEU or management) despite discussions reach theconclusion that this partnership-based plan will not work, then that party may give three monthswritten notice of their intent to withdraw from the agreement.

BRAINTREE DISTRICT COUNCIL

Sector: Local GovernmentProducts/Services: All local governmentservices (about 70 different services) providedat District levelNo of employees: About 1200 (about 800Ôfull-time equivalentsÕ)Unionised: recognised unions: Unison,GMB, T&G and AEEU

Introduction

Braintree DC is an excellent example of whatcommitment to best practice and partnershipcan produce. The Council has gone a long wayto enhance the role of individual employees aspartners in the business of running the localauthority. Indeed, there is frustration withinBraintree District Council about the attitude

prevalent within the private sector that theyhave nothing to learn from the public sector.

Company Background

Braintree DC serves a population of 127,000in an area of some 61,000 hectares, covering54 parishes and two town councils.

Braintree was one of the first local authorities toadopt the best of private sector principles inlocal government. Besides the adoption of amission statement, the development of corevalues, and a regularly reviewed corporatestrategy, this includes the introduction ofperformance management, the harmonisation ofterms and conditions of employment and teamworking Ð all in an actively unionisedenvironment. The principal unions areUNISON and GMB, and there are some T&Gand AEEU members.

42

Braintree DC is a pilot authority for theGovernmentÕs ÔBest ValueÕ initiative. Manypublic sector organisations applied for pilotstatus, some for particular services Ð Braintreewas selected for all its services.

ÔBest ValueÕ is the present GovernmentÕsalternative to the previous policy ofCompulsory Competitive Tendering as a meansof increasing efficiency in the public service.

The Partnership Philosophy

The Chief Executive (CEO) believes thatpartnership in employment relations atBraintree DC has evolved in much thesame way as the development of qualityinitiatives. She sees partnership as a Ôfour-wayprocess involving:

The various management committeesThe Democratically elected representativesThe staff, in which the trade unions have a key roleThe customers, residents of Braintree, who arethe pivotal part

There is a clearly articulated Ôrights andresponsibilities contractÕ in the partnershiprelationship between employer and employee atBraintree. The CEO always meets new staff aspart of their induction. She says she alwaysexplains that the relationship is a two-way one.Ô"ItÕs a contract; IÕll invest, guide, provide thetools, and development (if you want it). Inreturn I am looking for 100% output,responsibility and accountability on your part.You too must perform, and sign up to the valuesof our organisation." In this way weÕremajoring on the partnership agendaÕ.

The union is also happy to use the wordpartnership, and they also use the wordÔstakeholderÕ. The Branch Secretary describedpartnership Ôas having an input into all themajor decisions the Council makes and theytake our views seriously because we representthe workforceÕ.

The union regards the Council becoming a BestValue pilot as a genuine part of partnership,albeit in its wider sense which includes partnershipbetween all the stakeholders in local government.

TrustThe interviewees placed great emphasis on trustas a key ingredient of partnership at theworkplace. One of the CouncilÕs core values is,

ÔWe value and trust our staffÕ and the authorityplaces much emphasis on developing a culturebased on trust:

● personal, implicit, emotional trust(emotion based: the right chemistry)

● subject-based trust (trust based on abilitiesand competency)

● process-based trust (on the basis of acceptedand proven structures and processes)

In the CouncilÕs view this trust should existbetween Members (elected Councillors),managers, staff and the communities served bythe Council. As the UNISON Branch Secretarycommented, Ôa lot of it is about relationshipsand trust in individuals rather than organisations.If I didnÕt trust the CEO and the Director ofResources weÕd be in troubleÕ. The wholephilosophy of employment relations in BraintreeDC follows the general ethos that people canhave a say, and can speak up without fear.

Trust is an important ingredient in minimisingthe fears and feelings of insecurity, at a timewhen future cuts in the number of jobs are veryunlikely to be avoided. The perception thatpeople are being treated on an equal and fairbasis helps to improve peopleÕs confidence andpersonal initiative.

Partnership Practices

CommunicationThere are regular monthly team meetings at alllevels in the organisation. These are not onlybriefings but are also designed for consultationwith team members on all relevant issues.There are standard items on the agenda, suchas quality, health and safety, workpressures, training, customer service, andperformance monitoring.

Twice a year, all establishments in the districtare visited by a senior personnel manager andthe UNISON Branch Secretary, who holdopen workplace meetings attended by all staffbelow Head of Service. Feedback from thesemeetings is fed directly to the corporatemanagement team.

The CEO and UNISON representative coverthe feedback on the issues raised at thesemeetings. This produces a list of action pointsto be addressed. The relevant changes are made,

43

then the UNISON staff representatives aretargeted to get the views of staff on whether thechanges have taken place.

Managers and union representatives alike stressthe importance of continually working atcommunications. As the Branch Secretarycommented: ÔIf we have a problem here, 99times out of a hundred, itÕs a breakdown incommunicationsÕ.

The employees interviewed confirmed that theCouncil had been prepared to work at gettingcommunications right. As one commented, ÔIwas made part of The CommunicationsWorking Group which did a full survey of staffviews and a survey on what was communicatedand what not. The management took all ourrecommendations on board. You donÕt have tobe senior to have an influence.Õ

Employee Development through Investorsin PeopleBraintree has been accredited three times forInvestors in People (IIP), and they believe thatIIP has been a positive force for change. TheChief Executive suggested that ÔIt would bedifficult to be an Investor in People withoutmoving towards PartnershipÕ. The BranchSecretary identified a number of partnershippractices, such as creating the opportunity foremployee contribution and employee rights andbenefits and suggested that ÔYou wouldnÕt getIIP if you didnÕt do most of theseÕ.

The employee interviewed confirmed that theworkforce viewed the organisation as a ÔgoodtrainerÕ. As one of the junior secretariescommented ÔThere is a huge range of coursesavailable. Even though IÕd just come out ofcollege I was given full training on MicrosoftWord and Powerpoint and I have recently donea first aid course.Õ

A Commitment to Employment SecurityThis aspect of workplace partnership isacknowledged still to be of concern to staff.Everybody knows that the old ethos of publicservice providing Ôa job for lifeÕ has long gone.However, working in an environment ofconstant change and being actively involved incontinuous improvement Ð especially with thedevelopment of Best Value Ð is bound to lead toan increase in peopleÕs feelings of insecurity.

However the council has promised to maintainemployment stability, as far as possible. TheDirector of Resource, in reassuring staff whoexpress concern, says, ÔLook at our deedsover the past four years; during that time we

have had no compulsory redundanciesÕ.Redundancy is regarded as a long way down thelist of options.

Teamwork, Empowerment and Self DirectionThis aspect of partnership is considered toapply fully in Braintree DC Ôwithin theboundaries imposed by Government and theCouncilÕ. With only three Directors, wherethere used to be nine, much authority has beendevolved to the Heads of Service.

Accountability for public funds seems torequire a degree of hierarchy and Ôauthority tosignÕ which does not apply so much in theprivate sector. Within these boundaries,however, staff are able to carry out their work inthe way they think best, choose their jobassignments and have a degree of influenceover how their team is organised. ÔWeÕremoving towards a situation in which peoplehave more discretion over how they do thework. WeÕre training people more, and thenletting them use their skills. At team meetings,people have a lot to say about organisation ofthe work. ÔPeople who deliver the service at thefront line are more in touch with whatÕs wantedthan the strategistsÕ.

About two or three years ago the Councilcarried out a comprehensive organisationalreview, looking at the whole council, whatdepartments should be in what directorates, etc.The team picked to carry out this review wasdeliberately picked from people below seniormanagement level. These 13-14 peoplemanaged themselves, designed their ownworking programmes, their owncommunications, their own action plan, andtheir own machinery for scotching rumours, etc.The Chief Executive and the Director ofResources were called in as necessary to giveguidance and to answer questions. The teamproduced all its own reports, and 99% of theirrecommendations were accepted.

Trade Union RelationsFormal relations with the unions are governedby the LJCC (Local Joint ConsultativeCommittee) which meets regularly with electedmembers of the Council. Discussions at theLJCC are structured as part of the business ofthe Council, and officers attend in order toadvise and answer questions.

Beyond a general Ôopen doorÕ policy operatedby all parties, the unions also have regular,quarterly meetings with the chief executive andthe corporate management team. The Councilhas never sought to depart from national

44

negotiations, which cover a whole range ofÔsafety netÕ terms and conditions.

Interviewees placed considerable stress on theimportance of the union playing a positive rolewithin the Council. This involves activeinvolvement in the decision-making process.The UNISON Branch Secretary gave theexample of how the union has been responsiblefor drafting the CouncilÕs official employmentpolicies on: equal opportunities; sexualharassment; sickness absence; racialharassment; mental health; HIV/AIDS; andbullying. The Director of Resourcesacknowledges the value of the union in taking apro-active line on such policies.

Partnership does not mean of course theabsence of genuine disagreement and conflict.The Branch Secretary noted that: ÔI can still goin occasionally and "rant and rave", and get anear. ThatÕs importantÕ. In her view there is nodanger of management/union relationshipsbecoming ÔcosyÕ or a ÔsweetheartÕ arrangement.ÔYou still get a different message when youspeak to people when their managers are notthere Ð even when relationships are goodÕ. Assuch, the Branch Secretary believes there is noconflict between trade unions Ôadding valueÕ tothe organisation whilst at the same timevigorously representing their members.

Continuous ImprovementFor the Council, building on quality is nothingnew, as it has traditionally embraced qualitytechniques and practices, since the days of BS5750. It has been a holder of the CharterMarkand has achieved ISO 9000, as well as IIP.

The Council has a strong commitment tocontinuous improvement, as signalled by itsinvolvement in the Best Value initiative, whichhas an explicit focus on such practices.Employees are expected to suggestimprovements, etc. One of the cultural barriersit has faced in making continuous improvementÔlive and breatheÕ is breaking through theperception that there is the possibility of staffmaking suggestions that Ôput them out of workÕ.

Other Partnership Practices

● Harmonisation of Terms and Conditions● The union is currently discussing with

management a move to single status,to which the organisation is committed

● The Authority has achieved ISO 9000● Every staff member is regularly appraised,

and has a Personal Development Plan

● Suggestions and ideas are constantlywelcomed. There is a suggestions schemeÐ ÔThe Enterprise Award SchemeÕ

Outcomes

The CEO sees the outcome of BraintreeÕspartnership approach as being primarily aboutattitudes and behaviours. ÔIf we train peopleproperly, and support them, they will signup to the value-base, produce the goods,and accept change.

In her view Continuous Improvement has beenidentified as a way of life, and employeesactively seek to make improvements throughoutthe organisation. There is some banter in theorganisation about Ôcontinuous improvementÕ,but in the CEOÕs view, ÔWhen somethingbecomes an "in family joke" thatÕs treated withfriendliness, then itÕs well in placeÕ.

Braintree DC commissions regular surveys ofcustomer attitude, as well as regular staffattitude surveys.

Some of the factors arising from this yearÕssurvey of Residents produced the following:

● 82% of residents said it was easy to get holdof the right person in the council

● 84% said the staff were helpful● 82% said the staff were very efficient● 71% were satisfied with the final outcome

of complaints/queries (this includeslegitimate rejections)

The CEO also emphasises the importance ofrelationships with the elected councillors.ÔWeÕre all on first name terms; they can wanderin here and talk to the staff. This is all part ofproductive staff relationshipsÕ.

On the employment relations side:

● All major working parties have trade unionrepresentation

● Employee attitudes and behaviour areinvariably positive, making a majorcontribution to the success of Braintree DC

● Employees have given their support to BestValue (in the Branch SecretaryÕs viewÐ Ôa massive changeÕ)

● Braintree DC believes it attracts high qualityemployees

● Staff turnover is low● Staff have indicated positive views

(between 78% and 93%) in relationto effectiveness, job demands andjob satisfaction

45

The Future

In terms of future progress, managers andrepresentatives alike stress the importance ofcommunications. It is not enough to set up aÔstructureÕ. Communication is something thatneeds working at all the time.

In addition to the continuous need to improvecommunications, the organisation is facing thechallenge of Best Value which will be a crucialtest of the quality of the services delivered byBraintree DC.

At the moment the energies of staff in BraintreeDC focus around the GovernmentÕs agenda ofmodernising local government. Managers andunion representatives recognise that this is aperiod of change and uncertainty. In theDirector of ResourceÕs view, ÔThis is also a bigtraining issue; training in new ways of workingand new ways of thinking.Õ

The Chief Executive, too, puts emphasis onBest Value, which challenges the nature ofpartnership Ð and which will extend to the whole ofthe Public Sector. ÔWeÕll have to look at everythingwe do, why we do it, and should we be doingit?Õ She recognises that staff are justifiablyconcerned about Best Value, and it could be a majorthreat to the partnership approach. However, theorganisation has committed itself to the fairemployment agenda, and Braintree DCÕs BestValue Statement emphasises that commitment.

In other words, whilst they have made progressas a partnership organisation, they recognisethat partnership has to be continually worked atand Ôkept aliveÕ.

4. DOMNICK HUNTER GROUP PLC

Sector: EngineeringProducts/Services: Filtration and PurificationProductsNo of employees: 1000Unionised: recognised union AEEU

Introduction

Domnick Hunter is a good example of atraditional paternalistic employer, which seespartnership as something which flows naturallyfrom the way that they attempt to manage thebusiness. They can therefore be categorised asan organisation which endorses partnership,and adopts practices consistent with apartnership approach, without having made aformal commitment to pursuing a definedpartnership agenda.

Company Background

The company was founded in 1963, with itsreputation built on the success of its initialproduct, the autoclave filter, which is still inproduction today. Since then the company hasgradually expanded, diversified, and acquirednew subsidiaries world-wide. It has wonnumerous QueenÕs Awards for Exports and forTechnological Innovation. Overseas businessaccounts for over 70% of turnover. There are 4manufacturing sites in the North East.

The company was bought by its management in1990, and went public in 1994.

Employee Relations Philosophy: Partnershipby accident

Reflecting the companyÕs long association withthe north-east labour market, the Group ChiefExecutive stressed that both management andemployees have a strong local commitment, andthat the companyÕs relationship with its workershas always been based on trust and respect.Indeed, he placed the importance of mutualrespect and trust at the heart of theorganisationÕs success. As he commented:

ÔThe important thing is valuing peoplepersonally. If you do that, everything elsegenerally falls into place.Õ

Although comfortable with the word, thecompany does not refer to their employmentrelations as a ÔpartnershipÕ. In more recentyears, Domnick HunterÕs employee relationsphilosophy has been modified and redefined bytheir attempts to align human resourcemanagement questions more closely to strategicbusiness considerations.

Under the title ÔFocus 2000Õ the directors havedeveloped plans to take the group into the nextmillennium. Focus 2000 encompasses five keyareas of focus for on-going action and strategicinvestment:

1. Human Resource Development2. Group structure and management3. International growth: planning to increase

share of world markets.4. Reduced time to market 5. Strategic alliances

At the heart of the Focus 2000 strategy areDomnick HunterÕs plans for human resourcedevelopment, which they see as key to the

46

growth of the group. In their view it is onlythrough developing more competent, higherskilled staff that an organisation will begin totrust them to run the business.

As their Group Chief Executive commented:

ÔIt is easier to run your business by letting peoplemake decisions at their own level. WeÕve createdthe right environment; we donÕt have any of thebaggage of the smokestack industries. Mostpeople want to come to work, and to do a betterjob. You donÕt have to push them.Õ

In other words, Domnick Hunter regardthemselves as a people-centred organisation.

Partnership Practices

CommunicationThe company is convinced of the value ofeffective communications. The keycommunication vehicle within Domnick Hunteris the monthly team briefing. Most of the teambriefings concern themselves with the GroupÕsperformance and progress. The system istwo-way, with employees being activelyencouraged to ask questions and bring up issuesof concern. The company operates on theprinciple that it tries to get a response to thequestioner within 24 hours.

Learning / TrainingThe company developed a comprehensivetraining programme in 1990, involving peopleat all levels of the organisation. For example,the company has run over 50 sessions foremployees at all levels in Ôjust in timeÕproduction and delivery techniques. There arealso team building and group language trainingschemes. Nearly all of the training activity takesplace on site, and much of it is carried out by thecompanyÕs own managers.

Domnick Hunter has also invested heavily insenior management training. The Programmefor Management Development at the HarvardBusiness School has been made a standard partof the training and development of seniorexecutives in the group.

The company has made a clear decision not topursue the Investors in People standard, as theydid not feel that it would add that much value totheir activities, although they recognise thatgoing through the associated assessmentprocess could generate some useful insights.The major priority at the moment is that theGroup HR Manager is currently in the process

of formulating a new comprehensive educationand training programme, operating within theframework set out by the Focus 2000 project.

Personal DevelopmentEvery employee has a training and developmentplan Ð entitled the ÔPersonal Education andTraining ProfileÕ. The document sets out detailsof academic qualifications, specialist training,and short courses/seminars. The document is aflexible record of achievement and ismaintained throughout the employeeÕs careerwith Domnick Hunter, updated at regularappraisals with relevant team leaders.

Financial support is given for people wishing togain qualifications Ð even if they are in subjectsnot directly related to work. The level ofsupport varies from between 30 and 50 % of thetotal cost. The company also has a learningcentre available to employees, which wasoriginally established to meet the companyÕsextensive need for personal computer trainingacross the organisation.

These policies for personal development areunderpinned by the companyÕs commitment togrow people internally as far as possible, andexpand their roles.

Teamwork and flexible workingDomnick Hunter do not regard more flexibleworking patterns as a new innovation, but ratherfeel that the company has been benefiting fromlabour flexibility for the last three decades.

As far as possible, employees plan and carry outtheir work in the manner they think best.Employees are organised into teams, andthrough team meetings are able to influence theway their team is organised, and can to a largeextent choose their own job assignment, withthe approval of the team leader. Teams are eitherfixed according to production requirements, orcross-functional teams are brought togetherfrom different departments to cope withspecific problems.

One of the underpinnings of Domnick HunterÕsteam-working philosophy is the idea of Ôthreepeople, one job, and one person, three jobsÕ.This working principle, formalised relativelyrecently, sets out the aim of developingevery employee to be able to do at least threejobs, and to have every job within theproduction process capable of being covered bythree employees.

There is no annual shutdown Ð other than at

47

Christmas Ð and holidays can be taken veryflexibly Ð Ôwithin reasonÕ, and according to theneeds of the business.

Employees confirmed that to a large extent theycan plan and carry out their work in their ownway. One team member suggested that Ôthis isbecause the company gives us as muchinformation as possible well in advance. Ordersare notified at least 6 weeks ahead, and there isa rolling four week plan. People can see on aregular weekly basis what work is coming up.Õ

Trade Union RelationsThe company recognises the AEEU and paynegotiations take place on a two-yearly cycle.Union density figures within the company arequite low (less than 30%), and industrialrelations within the company were described asÔgoodÕ, which is evidenced by the fact that theyhave not experienced any sort of industrialdispute for well over a decade. The Group HRManager commented that: ÔWe donÕt see tradeunionism as an issue. WeÕre happy to see theworkforce collectively organised Ð they cancommunicate better Ð but it is a non-issue as faras weÕre concernedÕ.

All formal contact with the unions takes place atbusiness unit (departmental) level, not at grouplevel, and regular meetings are heldbetween operational managers and unionrepresentatives. Group level consultation(including works councils representation) is notseen as being very high on the agenda.

Performance ManagementDomnick Hunter does not operate traditionalsystems of performance appraisal, partlybecause in recent times they have eradicated alljob descriptions within the organisation.Currently, the company is examiningcompetencies and skills matrices forthe various roles. The objective is to getmanagers to pull together lists of essentialskills, present and future, for all people androles in the organisation. Such information willaid human resource decisions, underpin arevamped appraisal system, and also encouragemanagers to think more systematically aboutsuccession planning.

The company is beginning to utiliseperformance targets in terms of qualitymeasures and production targets. Team leadershave set the targets at the relevant levels,following consultation with team members.

The value of this system according to the Group

HR Manager is that, ÔPeople who set their ownmeasures will have ownership of themÕ.

Reward MechanismPay is not generally linked to performance,except for some sales staff. However, there is agroup/team-based reward system in some areasof the company. Moreover, the company isproud of the take-up of the employee shareownership scheme (around 80% of allemployees have participated), and it is estimatedthat employees own about 12% of the business.

Employment SecurityThe companyÕs ethos is to strive continuouslyto achieve employment security for allemployees. Recent trading conditions havetested that aspiration. As the Group HRManager commented: ÔThe Far East has hit us.WeÕve tightened our belts, but have not reducednumbers. WeÕve had Directors who took paycuts. WeÕre not going to make a knee-jerkreaction. It goes back to valuing employees asthe major asset of the organisation. Thealternatives are unthinkableÕ.

In keeping with these objectives, the companyhas a long history of internal promotion.All vacancies, even those for seniormanagement posts, are advertised internally,and team leaders are all promoted from he shop floor staff.

Continuous ImprovementThe company is firmly committed to a processof continuous improvement. The companyholds regular, dedicated meetings on qualityissues, and shop floor employees frequentlymeet customers, and vice versa, to help improvecustomer service. This has included sending agroup of employees from production teamswithin Domnick Hunter to spend time withsome of their key customers in Japan.

The company has tried to move from asituation, where quality Ôwas someone elseÕsresponsibilityÕ. Traditionally the QualityDepartment had acted as a sort of police force.As the HR Manager commented ÔEverybodykicked the quality departmentÕ. Now,production people are responsible for their ownquality maintenance, and as a consequencequality assurance processes have taken on amore investigative role.

Employees indicated that there had been atransformation in the quality culture withinDomnick Hunter, and that the company hasdone a lot of work to ensure that this has

48

happened. As one team member commentedÔEvery operative is responsible for their ownquality. The company has hammered this aspectof partnership home, and there are regularquality meetings in the departments, at whichall employees are involved.Õ

The company is accredited to ISO 9000 and isconsidering ISO 1401 (The environmentalstandard) and the Business Excellence Model.

Other partnership practices

Occupational HealthDomnick Hunter has corporate membershipof a health club to which all employeeshave access.

Financial ParticipationAn employee share ownership scheme wasestablished at the companyÕs flotation, and therewas a take-up of 80% Ð which in the view of theGroup Chief Executive, is reflective of the spiritengendered in the company.

Outcomes

The company has enjoyed a period of sustainedcompetitive success. Between 1992 and 1997:

Turnover increased from 27.3m to 65.8mProfit before tax increased from 2.8m to 9.6mPeople employed increased from 515 to 877

In terms of employee relations outcomes, thecompany regularly benchmarks its ownemployee attitude surveys against thenormative data generated by surveys conductedby the Engineering Employers Federation.Their ongoing aim is to remain in the upperquartile of responses in their region.Reflecting this high level of employeesatisfaction, labour turnover at Domnick Hunteris well below the national average, and thecompany has proved very successful atretaining high quality employees.

More generally, in 1997 Domnick Hunteracquired the German firm Zander, and havetransplanted its production techniques into thatcompany. The German ISO 9000 assessor saidhe had never seen a company transformed somuch as since the acquisition.

The Future

The companyÕs main future priority is to furtherdevelop their learning and developmentpractices. Specifically, Domnick Huner is

exploring the possibility of:

● linking skill matrices with NVQs ● generating greater participation from

individual employees and teams in terms ofcontinuous improvements

● securing an increased degree of managementmobility Ð by more actively encouragingthem to move into different parts of theorganisation as part of their development.

5. ELEMENTIS CHROMIUM1

Sector: ChemicalsProducts/Services: Chromium ChemicalManufacturingNo of employees: 400Unionised: recognised union: Transportand General Workers Union and AEEU

Introduction

Elementis Chromium is a good example of howa traditional unionised company has developeda partnership approach. The partnership agendawas driven by a need to adopt new workingpractices, and has led to the drafting of a formalpartnership agreement, which firmly underpinsall aspects of the companyÕs operations.

Company Background

The Elementis Chromium factory has been atUrlay Nook alongside the Stockton andDarlington Railway for 160 years, andgenerations of workers from the same familieshave worked at the site. The company was asubsidiary of Harrisons and Crosfield (Harcros)until 1994. Elementis Chromium is now aspecialised producer and is the world leader inchromium chemicals.

Elementis has benefited from significant capitalinvestment in the business, includingautomation of some processes and thewidespread introduction of new technology.The company has invested £120 million overthe last 10 years.

The Partnership Philosophy

Elementis Chromium does use the termpartnership to describe their employee relations.As the Head of Human Resources commented,ÔWe started using the term "partnership" in1995, but in my view it has recently becomesomewhat "vogue-ish"Õ.

The current commitment to a partnership

49

approach arose out of attempts to changeworking practices, which began in the lateeighties. In 1989 /90, the newly appointedManaging Director agreed with the unions(T&G and AEEU) a security of employmentguarantee in exchange for changing workingpractices (problem-solving teams) andvoluntary early retirements. Since then thecompany have re-committed themselves to asecurity of employment guarantee.

The success of these initiatives led the companyto draft a partnership agreement.

The Partnership Charter 2

The HR Manager suggested that an importantmotivation behind the charter was to directlyaddress the question of Ôhow do we keep evolvingpartnership?Õ He indicated that the companywanted to get away from traditional collectivebargaining and that the partnership approachshould be individual as well as collective. TheCharter was explicit in indicating the need forthe company to move away from the traditionalmethod of industrial relations, Ôa relationshipbased on power, distrust and an ÒI win/you loseÓattitude between the participants to therelationshipÕ (Elementis Chromium PartnershipCharter, 1995). At the same time, the Chartersignalled the companyÕs commitment tomaintaining a Ôpositive, progressive relationshipwith recognised trade unions using existingmethods of consultation and negotiation.Õ

One of the Convenors within Elementisindicated that negotiating and accepting theCharter necessitated changes in the behaviourand attitudes of the union. As he commentedÔAt first we didnÕt want to give up ÒpowerÓ. Ittook us a few years to drop the idea thatÒeverything should go through usÓ Ð and it tooka lot of responsibility on managementÕs part notto abuse the system.Õ ÔBut because we helped towrite the Charter itÕs not just a managementdocument ...we feel more ownership towards it.Õ

The Partnership Charter was agreed on 9thNovember 1995, and was based on thefollowing key elements and objectives:

● Mutual Respect● Involvement● Participation● Open Communication● Security and Continuity of Employment● Fair Terms and Conditions● Training and Development● Personal ProgressWithin these framework objectives, the key

operating principle within the Charter was thatElementis and its employees were striking anew deal and understanding, which broughtbenefits to all, but which also created Ôa newside of the bargainÕ for employees.

Put simply, the company was now offering:security of employment; competitive pay;satisfying jobs; good working conditions;training opportunities and Ôa chance to get onÕ.In return, the employees of Elementis wouldgive the following commitments:

● my best contribution, ideas and involvement● Ôvalue for moneyÕ● be flexible in what I do● seek to continuously improve my

performance● be open and prepared to receive feedback on

what I do and give the same to others● actively learn new skills and use them

to mine and the companyÕs benefit

Therefore at the heart of this partnershipapproach, lay a commitment to a newÔemployability dealÕ at work, which wasbased on a transparent understanding of therights and responsibilities of both sides of theemployment contract.

Partnership Practices

CommunicationElementis Chromium tries to achieve open,two-way communication processes on allmatters affecting the business. Their HRManager indicated that, ÔWe put a lot intoachieving regular constructive feedbackin our communicationsÕ.

In terms of communication methods, there is aweekly bulletin from the Managing Directorwhich is open and candid in its contents.There is also a ÔState of the NationÕ annualsummary of the business and where itÕs going.This is disseminated through a series ofmeetings, which are followed up by a writtenreport to employees.

Two new communications initiatives haverecently been introduced as a consequence ofthe work of some focus groups of employees atall levels, which were organised with the helpof ACAS.

1 Lotus Notes have been introduced, includinga public question and answer forum,to which everyone will soon have access.

2 The Site Management Team (consisting

50

of eight employees) has started ÔsurgeriesÕ.These have no agenda, and consist of tellingpeople when and where the relevantmanager is going to be for the purpose ofdiscussing anything with anyone.

The improvement of communications betweenthe management and individual employees hasled the unions to feel somewhat marginalised.As a consequence, to combat that feeling,regular consultative meetings in the form of aPartnership Forum have been established withthe unions. The committee meets at leastmonthly and talks about the business(investment programmes, communicationinitiatives etc.) and employee voice issues.

Performance ManagementElementis Chromium defines performancemanagement as a process for establishing ashared understanding about what is to beachieved, how it is to be achieved and anapproach to managing people which increasesthe probabilities of job-related success:

● It stems from business aims and objectivesto individual contribution

● It is continuous● It is based on getting better and constant

improvement● There is a shared determination

of objectives and development needs● It is not about forms, but a way of leading

and managing others● It is a way of life (part of partnership).

The way we do things around hereÕ.

Reflecting these clear operating principles,Elementis Chromium has placed greatimportance on developing effectiveperformance management systems, withmanagers receiving comprehensive training.Across the whole organisation, employees havebeen trained and encouraged to be more Ôself-directingÕ Ð thinking through the consequencesbefore taking decisions.

On the back of these training initiatives somenew systems have been developed. Forexample, the traditional appraisal system hasbeen scrapped. Instead there is a simpleone-page Performance Agreement, entitledPartnership for Performance. It consistsof four sections:

1. agreed work objectives for the coming12 months

2. personal development plan (agreed skillsand behaviours to be developed in the next12 months)

3. what each partner will do to achieve thePDP content (commitments by bothmanager and employee)

4. names and signatures of both partners tothe agreement

Everybody concludes a Performance Agreement,which is followed up and reviewed three timesa year. The HR Manager emphasises that it is atwo-way process, and that it is a ÔrollingÕ affair,always looking one year ahead. This appraisalsystem has been in use for two years, and hasgenerated high staff satisfaction as measured byregular staff surveys.

The HR Manager was keen to stress that, ÔThisprocess is not related to the pay review process.We spent a lot of time on the skills, and fittedPartnership for Performance into the context ofthe Partnership CharterÕ.

Pay and Conditions Ð ÔCreating a new industrialrelations climateÕThe company considers pay rates to becompetitive, because it benchmarks itselfagainst competitors and other organisations.Elementis also now shares data with the tradeunions on such pay issues, so that both sides canagree upon relevant pay information. Thisdegree of collaboration is a direct result of thenew partnership approach, enshrined in the factthat the company spent some time with theunions on understanding Ôwin/winÕ negotiating,with managers and representatives attendingjoint training. This exercise has been sosuccessful that, ÔIn 1996 we reached our annualpay agreement in time for it to be paid on the dayit should have been paid for the first time ever!Õ

The HR Manager now thinks that, Ôour paynegotiations are now much more realistic.Nobody wants the traditional shenanigansÕ.

Security and Continuity of EmploymentElementis has made a formal commitment, thatas far as is possible within a changing marketplace, the company will guarantee security andcontinuity of employment.

Financial ParticipationThe company has a long history of profitsharing; Elementis pays on the basis of aÔrealistic gain-shareÕ system, in which everyone

51

receives the same amount. The company willkeep the scheme in operation even after the taxbenefits expire. In the HR ManagerÕs view thescheme is quite powerful in demonstrating topeople that they can share in success.

Harmonised terms and conditionsNearly all terms and conditions are harmonisedwithin the company. The HR Manager indicatedthat the only non-harmonised terms now arethat some people still prefer to be paid weekly,and the company have not wished to force theissue and that there are slight differences inworking hours, some do 38 and some do 36.

Learning and DevelopmentThe company has a long-standing commitmentto education and training within theorganisation, and they operate on the basisthat training is available to all; there is noÔgate-keepingÕ function.

In terms of specific initiatives, Elementis hasinvested heavily in accredited training. Peopleat all levels are working on NVQs in suchdisciplines as chemical process, warehousing,and distribution. The organisation has also runtwo management development programmes inconjunction with the University of Teeside.These lead to a Certificate in ManagementCompetence (NVQ 4) and a PostgraduateDiploma in Management Practice. To furtherembed this qualifications pathway, Elementis issending two employees to study for a Mastersin the Management Practice Programme.

These training and development initiatives havebeen supplemented by a new role developed inthe company Ð that of Process Technician, partof whose job is giving training to others, andProcess Technicians have been givenappropriate training in instructional andcoaching skills.

Involvement and ParticipationAs part of the Partnership Charter, the companymade an explicit commitment that partnershipmust be based on the involvement andparticipation of all employees. To underpin thiscommitment, Elementis has establishedworking parties and cross-functional groups toresolve problems and seek improvements inways of working.

Reassessing Partnership: ÔOperations 2000ÕElementis recently reaffirmed its commitmentto a partnership approach, in the context of afuture planning exercise. During 1997 thecompany consulted with all employees about

future needs and then negotiated theÔOperations 2000Õ programme. These resultingproposals reinforced the principles of thePartnership Charter. The mutually agreedprogramme identified the following keyobjectives:

● taking a long-term view● rewards● employment security● training and development● flexibility● new working practices● new roles (including the new role of Process

Technician)

Elementis ChromiumÕs experience is that oncea partnership approach has been adopted, it hasto be enlivened and kept alive, by consistentlyrelating it to the ongoing needs of the businessand its employees.

Continuous improvementLinked to the programme of performancemanagement, the company has achieved IIP,ISO 9002, and is about to achieve ISO 1401 (theenvironmental standard).

More broadly, the partnership approach hashelped create a culture in which the process ofcontinuous improvement is now firmlyrelated to the increased involvement andparticipation of the employees. For example,the company has been more successful atgetting people involved in helping inform thedesign of new processes and operations. As aconsequence the HR Manager suggested thatthe new plant is Ôvery much commissioned bythe people who operate itÕ.

Outcomes

One of the most dramatic outcomes from thepartnership approach within Elementis has beenrapid productivity growth. In 1980 productionwas 100 tonnes per employee; the target for2000 is 600 tonnes. The HR Manager suggestedthat this increase was due to a combination ofcapital investment, skills development, and agradual decrease in headcount.

The combination of security and continuity ofemployment that Elementis has tried to offerhas been a key factor in allowing everyone tocontribute effectively. As the HR Managercommented, ÔYou canÕt make suggestions toimprove things if it does you out of a jobÕ.

52

In terms of other outcomes, Elementis had aclear perception of achievements that had floweddirectly from the adoption of a partnershipapproach (they listed seventeen), which included:

● Management development Ð to developa style that supports the intentionsof Partnership

● Joint training between managers andtrade union representatives Ð lookingat the need for change and the conceptof win/win negotiating

● Flexi-time scheme for a large number ofstaff Ð balancing needs of the company withthe needs of the individual

● Flexible with people Ð especially thosereturning from maternity, nearingretirement, bereavement, personal problems

● Partnership Awareness Days Ð tocommunicate with and involve people in thePartnership idea. Seminar led by bothmanagement and trade union representativesincluded within the day.

The Future

Elementis is committed to try to run projectsand other developments in line with the valuesof partnership, so that their Partnership Chartercontinues to underpin business success.

The company is also determined to take a long-term view. In the view of one senior manager,Elementis ChromiumÕs extensive knowledge ofthe market place and the competition helps thecompany steer a course of reasonable continuitywhile being open to change.

Drawn up in 1995 when the company wasBritish Chrome and Chemicals, the companyÕsÔPartnership CharterÕ is reproduced below:

The Partnership Charter

Only through a Partnership between thecompany and its employees can we realise ourfull potential, enhance our World Leaderposition and stay ahead of the competition.

Partnership at BCC will mean:

● Mutual respect and trust betweenthe company and its employees

● The opportunity for involvement andparticipation for everyone to continue ourdevelopment

● Open, honest communication betweenus all, listening to each otherÕs views andreaching agreement

● Regular, constructive feedback on company,team and individual performance

● Competitive pay and a share in our successthrough PRP

● Security and continuity of employmentcoming from everyone contributingeffectively

● Continuous learning, development andtraining to recognised standards ofexcellence

● Opportunities for those who seek them toadvance or change roles

ÔIndividual and collective responsibility tomake partnership realÕ

The agreed joint statement given to allemployees goes as follows (remember that thiswas agreed on 9th November 1995):

Introduction

Many organisations are quickly realising theneed to move away from the traditional methodof industrial relations, a relationship based onpower, distrust and an ÔI win Ð you loseÕ attitudebetween the participants to the relationship.

The fast moving, ever changing economicclimate we find ourselves in with newcompetition coming from the formerSoviet Union and the Far East, means thatwe at BCC must not rest but continue to striveto achieve excellence.

How we respond to these challenges is the keyquestion.

We, the members of the Joint Steering Groupbelieve that Partnership provides the best wayforward for the company and its employees tomeet the challenges of the future so that thestakeholders in BCC can all obtain benefit fromour continued competitiveness. The relationshipbetween the company and its employees is anessential strategic element of success and issomething we must develop together.

If Partnership is the way forward what will theorganisation be like?

Here are the key principles of a Partnershipdocument that, once agreed, will define the wayforward in the future.

53

It is important to understand that this isdifferent from a traditional agreement; you willnot find details of pay staffing levels and otherspecifics. What you will see are commitmentsto handle our relationship in a particular way.

Partnership: the Key Elements and Objectives

1 Mutual Respect

The relationship between the company and itsemployees will be based on mutual respectof the otherÕs needs and legitimate interestswithin the employment relationship.

2 Involvement

Partnership must be based on the involvementof all people within BCC, allowing each personthe opportunity to have their say and be listenedto, bringing ideas from every part of thecompany to improve its performance.

Coexisting with this, the company will maintaina positive, progressive relationship withrecognised trade unions using existing methodsof consultation and negotiation.

3 Participation

A successful Partnership at BCC will requireparticipation from everyone to influence andshape the working environment at BCC.

The model of Working Parties andcross-functional groups brought together toresolve problems or seek improvements inperformance will be established as a preferredmethod of working.

The company will also give responsibility as faras is possible, to individuals and teams foraction to continually improve their immediatearea balanced by the need to maintain a broadlyconsistent employment framework.

Terms and conditions of employment will remaina subject for collective debate and resolution.

4 Open communication

The company and all individuals within willcommunicate openly on all matters affectingthe business. Information on company, teamand individual performance will be communicatedregularly to ensure that each employee is fullyaware of the companyÕs objectives anddirection and the part they play within this.

Annual surveys of company practice withregard to communication will be conducted toassess progress towards open communication.

5 Security and Continuity of Employment

As far as is possible within a changing marketplace, the company will guarantee security andcontinuity of employment.

To realise this will require flexibility andadaptability to take on new duties andresponsibilities whilst clearly recognising thediffering levels of individual ability andcompetence that exist.

Security and continuity of employmentrequires effective contribution from all of usas only by doing so will company performanceremain competitive, creating conditions thatachieve security.

6 Fair terms and conditions

We will achieve a position where the company,its employees and their representativesseek out, analyse and agree upon relevantpay information as the basis of our ownpay structure.

We will ensure that pay is fair and competitivewhen compared to others within the area andrelated industries.

Where differences exist we will work togetherto identify and agree upon ways to change ourpay structure balanced by increases inproductivity and profitability. Elements of pay,such as PRP, that reflect the companyÕsperformance will continue to form a significantpart of our overall approach to rewards. We willalso work together to ensure that the generalconditions of employment at BCC are fair andmutually acceptable.

7 Training and Development

Training and development are seen as essentialto our continued success.

Training and development will be available toeveryone, with individual needs balanced withthose of the company. Where appropriate,training and development will lead to arecognised qualification.

To enhance the effectiveness of training anddevelopment activity, a process of pre- andpost-training discussions will take place to

54

focus on the training needs to be addressed andthe ways in which new skills will be transferredto the job. This will form the basis of anindividualÕs own training plan.Regular, relevant training will be an essentialelement in attaining flexibility and is integral tothe guarantee of employment security.The opportunity for training and developmentwill be available to everyone recognisingthe differing needs, motivation and abilitiesof individuals.

8 Personal progress

Those who want to progress will be encouragedand helped to do so as far as is possible

This will be dependent upon availableopportunities, the skill level of the individualand their capability. Wherever possible, thecompany will seek to develop for the futurefrom within its own resources.

6. HERGA ELECTRIC LTD

Sector: Other manufacturingProducts/Services: Components for electronic/electric engineering sector.No of employees: 160Unionised: non-union

Introduction

Herga Electric is another example of apaternalistic firm, which operates with a veryclear set of living values. They have placedconsiderable emphasis on changing thelanguage and culture of the organisation tomore fully reflect partnership aspirations, andhave tried to encourage new forms of leadershipwithin the organisation, through and withincross functional teams.

Company BackgroundHerga started trading in 1947, from a garage inHarrow, and moved to Bury St. Edmonds in1969. The company intends to remain for theforeseeable future as a private company whichis self-financing. Herga operates in a number ofniche markets, and regards itself as a worldleader in airswitching systems and distributedfibre optic sensing. The companyÕs productssell across world markets, helped by the factthat due to the nature of the products, it onlycosts one half of one percent to airfreight Hergaproducts to the other side of the world.

Partnership Philosophy

The leaders of the organisation had a very cleardefinition of what partnership at work means.Their Company Chairman defined it as follows:

A true partnership brings together the talentsand abilities of all those involved for the benefitof all. It requires common goals, understanding,transparency and honesty.Õ

More broadly, the company also believed that ifan organisation is committed to partnership,they have to face up to a number of difficultquestions, such as:

● As individuals we are all entitled to differentobjectives. Can we share them with thosewho work with us?

● What do we have to tear down? Should thisinclude old hierarchies which blockopportunities; and language which hasundesirable connotations?

Herga believe that the most effective way toaddress these questions is to adopt a newconcept of leadership. For Herga, thisinvolves giving everyone in the organisationthe opportunity to lead. In response to thisstudy, they defined their partnership approach,and the factors driving their adoption ofsuch an orientation, which are outlined in thebox opposite.

55

Partnership Practices

Shared ObjectivesThe company places significant importance onthe importance of creating shared understandingand objectives. If this is done effectively,individual employees are more likely to feelcommitted to the organisation. The Chairmanidentified a number of key shared objectives:

● to share, with all the team, objectives forthe future of the company

● to be paid fairly ● to share the reward ● to enjoy coming to work on Monday

morning ● to look forward to a challenging and,

as far as possible, a secure future.

Open Management committed to learningThe company believes that to achievepartnership a lead has to be given from the top.There are two vital dimensions. Firstly, leadersmust acknowledge their own need forcontinuous learning. If they do this, it becomesacceptable for everyone in the workforce to

admit ignorance and to identify their learningneeds. Secondly, leaders must seek honest andmeaningful feedback so that they know whereplanning and training should be concentrated.HergaÕs performance review system, called ÔAsOthers See UsÕ, is designed to generate stafffeedback about the way they are managed / led

The Chairman of Herga encapsulated goodleaders as combining Ôconfidence and humilityand never letting one rule the other.Õ

ÔKeeping It FunÕThe senior staff believe that the workplaceshould not lack fun and excitement, andsuggested that making Herga a fun place towork is a top priority. The flip-side of thiscommitment is that it is only possible to achievethis if the company continues to win in allaspects of their business Ð customers Ð marketsÐ profits Ð products Ð people, etc.

One initiative the company has started in thisrespect are Herga Open Days, when the factoryis opened up for friends and relations. As wellas raising money for charity with games and

PARTNERSHIP.

Leadership and Partnership.

1 Leadership in a partnership organisation is more challenging than in a hierarchical organisationwhere you tell people what you want them to hear and keep the rest secret.

2 True leadership and partnership is only possible if those at the top believe it in their hearts.

3 Partnership does not replace leadership. Many aspects of successful business continue to dependmainly on the leaders. These include fundamental innovation, ambition to be best, stretchingmanagement, tough decisions in tough times, keeping the clarity of objectives, maintaining theglobal viewpoint and keeping up the momentum for change.

4 In a partnership organisation, leaders lead because they have earned the respect of their partners.Position, titles, age or being the son of the boss earns no respect.

Is there an alternative to partnership?

We are part of a world economy, many potential competitors work long hours, pay a fraction of ourwages, do not have to pay into a developed social system. We can only survive by offeringsomething special:

Customer Service Ð every partner having the training, the determination and the attitude to give thatspecial friendly on-time first-class service. One person who is not part of the partnership can wreck it all.

Flexibility Ð Really flexible systems can only be achieved if everybody is working in the same direction.

Costs Ð In a partnership everybody can be trusted to play their part and other parts as well.The costs of checking, inspection, surveillance and job delineation are reduced enormously.

56

sales, employees are encouraged to displayexamples of their hobbies. As one leadercommented, ÔitÕs amazing what wonderfulthings people create in their spare time and ithelps us to understand their potential.Õ

Communications, Information and TrustThe company believes that you cannotunderestimate the importance of communicatingfully and honestly with your workforce. TheChairman contrasted Ôold style managementapproachesÕ, where you told people what theythought they needed to know, with new stylemethods where you strive to make as muchinformation available as possible even if theemployees do not fully understand it at first.

For example, the company distributes monthlyfinancial information to all employees and isoffering training to all staff in how to interpretit. As one senior manager commented:

ÔBy sharing our information concerning ourshort-term results and long-term objectives, wedestroy fear and suspicion.Õ

In a similar vein, the company has convertedredundant drawing boards into displays wheretechnical magazines and books can beborrowed freely.

The company has long employed a monthlyteam briefing system, but they have recentlychanged the system, as they found that it hadbecome too slow and boring for the workforce.They have therefore reduced the ÔcascadeprocessÕ from five layers to two. The MD briefstwo groups separately who then briefeverybody else.

More informally, Herga run a series ofdiscussion groups. Every six weeks 6-8 peoplefrom different cross sections of the company allrelax and chat for two hours over lunch with aDirector. The employees set the agenda in termsof what is discussed. The company believes thatthese informal sessions help employees to openup in a way they may normally find difficult.

HierarchyAs mentioned above, the company has a clearambition to avoid the undesirable connotationsof hierarchy while not destroying the feeling ofconfidence and security created by a goodleader. Herga therefore does not use companytrees except for development reviews and hasstopped using words such as Boss, Superior,Manager or Chief as far as possible. Rather,

employees may have different leaders fordifferent aspects of their work.

Senior managers acknowledged that leadershipbecomes more challenging in open systems ofmanagement. As the Chairman commented:

ÔThe old hierarchical systems, modelled on theArmed Forces since the last war never tappedthe latent talent of our independently mindedworkforce. Now, we have to be able to explainourselves when they question the ways thingsare done. Giving people the ownership ofchange works.Õ

Destroying the ÔpermissionÕ societyThe company has tried to erode internaldecision-making systems requiring a seniorperson to give permission for every action.They believe that they are inherently wastefuland undermine discretion and innovation.As a consequence, for example, Herga nowgive ownership and responsibility foreach end product to a product champion.They can make any change they like butmust involve others where the change willbenefit from that involvement.

One of the team leaders interviewed stressedthat the ability individuals had to participate inworkplace and personal employment decisionswas a vital element of partnership in Herga. Asshe commented:

ÔWhilst I usually plan the work for the team, theteam members do it. You give them a deliverydate, and itÕs up to them within reason how theydo the job. They are the ones sitting there 9hours a day; they are the best people to knowhow to do the job.Õ

More broadly, another employee confidentlyasserted that ÔDirectors can go away monthafter month if they want to and we will stillrun the place.Õ

Changing Language to Change BehavioursIn order to support changes, the company hastried to move away from language which is tiedto traditional conceptions of the workplace. Forexample, at Herga they do not talk about havinga Ôshop floorÕ, and nobody is defined asworking on the floor. The company has alsodropped the word ÔmanagerÕ, as they believethat the notion of a manager, ÔmanagingÕ, goesagainst the spirit of empowered teams. As theChairman commented, ÔEveryone should knowtheir job and how to do it. What we need is

57

Leaders who can generate ideas. InevitablythereÕs some hierarchy, but most people can have leadership roles in different areas.So we set up teams and give different people anopportunity to lead these teams.Õ

Employee Development and EmploymentSecurityHerga operates on the basis that loyalty andopportunity should be strongly linked. Thecompany therefore has an explicit commitmentto offer loyal, long-term employees preferencefor new jobs. They have a formalised rule that ifan internal applicant is 70% as good as onefrom outside, he or she will get preference.Herga also offers training and the reassurancethat they will try to keep their old job open if thenew position does not work out for theindividual concerned. The importance of this,as one leader commented, is that:

ÔIn this way we try to avoid peopleÕs fear ofpushing themselves forward. We mustcontinuously search out ways in which toencourage people to use their hidden talents.Õ

The company has achieved the Investors inPeople (IIP) standard, and employeesinterviewed indicated that the IIP developmentreviews had given them a genuine say in theirown development. The multi-skilling withinteams has also been an important factorencouraging employees to identify newtraining needs for themselves and theorganisation as a whole.

In addition to formal training schemes, Hergaoperates a lunchtime learning system. Toovercome some employees resistance of formallearning, Herga has encouraged employees tocome along during their lunchtime to share alight lunch in a relaxed atmosphere and to learnsomething which normally relates to thecompany. Presentations have been made byboth employees, and external speakers.Subjects have included Ôhow to read a companybalance sheetÕ Ôthe InternetÕ, Ôour companyhistoryÕ and Ôharmonized standardsÕ.

Occupational Health and Stress AwarenessThe company accepts that inevitably, people aresometimes over-stretched, and become stressedas a result. Herga is therefore trying to raiseawareness about stress amongst employees, andto establish a culture where it is accepted thatthe best way to cope with this problem is toshare it. As a senior leader commented, ÔOurapproach is to say ÔLook, I know you are

anxious about this issue Ð now letÕs work outtogether how we are going to solve itÕ.If you put the employeeÕs well being first,they will put you first as well. We findthis really works.

TeamworkingThe company is committed to team working,not least because they firmly believe that whilstfocusing responsibility on one person is good insome cases, sharing responsibility with a teamis better in others. They formulate teams on thebasis of cross functionality. For example, a newproduct design team would include assemblyworkers and sales engineers as well asdesigners, to ensure that any possibledifficulties are more likely to be identified asthe process moves from conception to customer.

Herga also encourage cross-team integration.For example in engineering, whilst one leaderco-ordinates the activities and priorities ofteams working on different projects, another isresponsible for technical development andemployment matters. Others lead project teamsset up for specific tasks. The result, as oneleader commented is that ÔEverything is fluid.Everyone has an opportunity to shine.Õ

Achieving this objective has taken significantinvestment in training and support systems.Team leaders have all received training inrunning teams, quality techniques andbrainstorming methods. Herga have alsointroduced a sponsor system to fosterteamworking. Sponsors are assigned to overseeand assist teams. The sponsorÕs role is toprovide clarity to complex problems, and toensure that teams do not become preoccupiedwith projects that are too large or that theycannot influence. Preferably a sponsor hasknowledge of the functions of the department;however, their ability to apply problem-solvingtechniques is more important.

Continuous Improvement The company operates a formal suggestionscheme, entitled HOPIs Ð Herga Opportunitiesfor Performance Improvement. There are threeessential ingredients to the scheme:

1. The MD replies personally and allocates theresponsibility for actioning the suggestion.Continuous records are kept so thatno suggestion is taken off the list until it hasbeen dealt with by the person responsible.

58

2. Every HOPI has on it a box which must befilled in to show that the suggestion has abenefit for Herga, either in financial termsor quality terms, etc.

3. A payment for suggestions is made, althoughthis is regarded as symbolic, insofar asinnovation and improvement are seen aspart of everybodyÕs job.

The company has achieved ISO 9002 andInvestors in People (IIP) and is now in theprocess of developing Ôworld classÕ production.

Performance Management and AppraisalHerga call their regular performance reviewsystem ÔAs Others See UsÕ, which as the nameimplies, is a form of 360 degree review.Individual performance targets are openlydiscussed and agreed at these reviews, and thecompany believes that an Ôas others see usÕanalysis, which is totally confidential,effectively reveals co-worker attitudes and theresulting training needs. Colleagues fill inreviews concerning others in their team whichhelp in identifying training needs which maynot be obvious to team leaders.

One team leader indicated that the key functionof the reviews was to Ôdevelop employeesand to try and really find out what people wantfrom their work.Õ

The appraisals take place before the academicyear of local colleges begin so that anyidentified learning needs can be quickly metwithin relevant courses, and employees havetime to register. The company has recentlylaunched a successful new initiative with thelocal College enabling their teaching staff tocome and provide training on HergaÕs premises.

Flexible Working and Work / Life BalanceHerga has adapted their working hours cultureto enable valued employees to balance theirwork and life commitments. As a seniormember of staff commented:

ÔMany good people are available who cannotwork standard hours. We continue toexperiment in offering alternatives.Õ

The company has introduced a system wherefull-time employees now have the opportunityto complete their weekly work (37 hours) infour days and the fifth day does not have to bea Friday. Herga also offers three different formsof part-time working, and they are consideringopening the factory on a Saturday so that people

who can only fit in a few hours each day cancomplete a full working week if they want to.

The employees interviewed were extremelypositive about these working time policies. Onecommented, that as a result, Ôyou get betterrelationships, with people giving their best shotwhile theyÕre here.Õ

Valuing a Mixed Age Workforce: ÔOldiesÐ our valuable assetÕHerga have developed a positive policy ofencouraging their older employees to hand ontheir knowledge to other employees in thecompany. They are invited to work the hoursthey wish, and to switch their efforts into amentoring role, for which they are trained.ÔteachersÕ they have real status.

Culture Surveys Ð what does our team reallythink about Herga?When Herga conducted its first Culture Surveysix years ago, the results came as a shock. Teamleaders realised that employees and individualteams were much more negative about workingat Herga than they had realised. Following aTeaching Company-led total quality programme,the next survey three years later showedenormous change. The most recent survey hasconfirmed a continued improvement in employeeattitudes and the company has identified theparticular aspects of the culture and the parts ofthe company which need special attention.

Reward Mechanism: PRP Ð sharing therewardsHerga has a Profit Related Pay Scheme, whichthey will continue to operate when the taxadvantages disappear. In recent years Hergahave increased the percentage figure rewarded,the extra payments based on meeting definedobjectives regarding the level of serviceprovided to customers.

Outcomes

1998 was the most profitable year in the historyof the company. This success has been built ongood design, unbeatable quality and first -classservice differentiation.

Although unemployment in Bury St. Edmondsis currently only 2.1%, Herga has very littlestaff turnover.

59

The Future

Herga regard their management systems to bein a state of constant evolution, that will changein the future. More broadly, two key objectiveswere identified:

Firstly, Ôhow can we go on making Hergaa better place to work.Õ

Secondly, to recognise that partnership does notjust relate to the workforce, but also applies tocustomers and suppliers as well.

The Chairman summed up their overall futurevision as ÔCompetition and the profit motivewill keep us all on our toes. Fair shares and theavoidance of greed will keep us going in thesame direction.Õ

7. H.P. BULMER HOLDINGS PLC

Sector: Food/drink/tobaccoProducts/Services: Cider makingNo of employees: 1250 worldwideUnionised: recognised union: T & G

Introduction

HP Bulmers, despite displaying a long-standingcommitment to a partnership approach,provides compelling evidence that it can take asignificant period of time for an organisation tofully embrace a partnership culture. The keyvehicle to promote and encourage partnershipwithin Bulmers is the Employee Council. Thesuccess of this representative body providesinteresting insights for those organisations andunions currently involved in setting up similarbodies, or who are considering doing so.

Company Background

Bulmers was founded in 1887, and becamea public company in 1970. The Bulmer familystill own approximately 50% of the shares.Subsidiary companies include Symonds(Herefordshire), InchÕs (Devon) and firmsin Belgium, Australia and New Zealand.

Bulmers has a 57% market share in the UKand accounts for 80% of all UK cider exports.

The company is operating in a very competitiveindustry, with a mature market, which has beenenlivened by the emergence of new drinkcategories, such as ÔalcopopÕ type drinks. Thisis leading the company to reassess its business,by investing in new brands, and generating real

business improvements. In recent years,Bulmers have invested significantly in capitalequipment, including a £70 million sitedevelopment, and some overseas expansion.

The Partnership Philosophy

There is a long history of partnership practicesin Bulmers. Some examples include:

● 1920: Life Assurance and Pension Schemefirst introduced (A policy for providinghousing for employees was also in operationat this time)

● 1938: The Welfare Trust, providing familyallowances, non-contributory sick pay andholiday pay to all employees

A concerted effort to embed partnership in theworkplace began in the late seventies and earlyeighties. The MD (Peter Prior) at that timeoutlined his beliefs about partnership at theworkplace. He believed that the success of thecompany would be based on: team building;workersÕ co-operative efforts and participation;an erosion of authoritarian management styles;and a movement away from an adversarial styleof industrial relations.

The current Group Personnel Directorsuggested that BulmersÕ experience indicatesthat partnership was all about changing theemployment contract from outmodedcharacteristics to more vital and sustainingdimensions. He summarised those changes asmarking a shift from and to:

From To

Paternalism PerformanceJob for life EmployabilityStagnation Self-developmentConformity EngagementUs and Them Us and Them(in the workplace) (versus the competition)

In order to support this shift, Bulmers haverecently established an Innovation Centre(in November 1998) to explore, ina participative atmosphere, new products andnew ways of working.

A senior manager, commenting on the benefitsof a partnership approach, noted that ÔWe thinkit leads to superior business performancethrough superior people performance.Õ

60

The union Convenor within Bulmers feels thatÔthe organisationÕs approach to partnership hasbeen progressive rather than a sudden change.Õ

Partnership Practices

The Employee CouncilThe Employee Council is regarded as the mainvehicle to promote and encourage partnershipwithin Bulmers. It was established in 1977,originally consisting of 10 managers and 10shop stewards, charged with the originalobjective of becoming the main participatorybridge between the Board and the employees.

The CouncilÕs Constitution specifies thatÔThe Council is empowered to discuss mattersconnected with company policy and decisionsthat affect the employeesÕ future, but not theday-to-day management of the businessÕ.Discussion therefore covers a wide range oftopics affecting the running of the businessand the interests of the employees.Pay and other matters which involve unionnegotiations, or matters which may haverelevance to the share price, are specificallyruled out for consideration.

The current T&G Convenor in Bulmersindicated that the Council has historically,and is still, operating effectively.As he commented ÔSince 1977 we haveintroduced some 20 policies to benefitemployees and the T&G still plays an activeand often leading roleÕ. Policies developed andproposed by the Council include:

● Alcoholism and drugs● Company retirement benefits● Code of practice on job losses● Smoking● Equal Opportunities● Stress policy

The Council also monitors a wide range ofactivities through sub-committees, including:catering services; the introduction of newtechnology; health and safety issues; the sportsclub; and the companyÕs charitable activities.

The CouncilÕs structure is now somewhatdifferent from that of the 1970s. It is chaired bythe Group Managing Director, and consists offour shop stewards (ex-officio) and 17 electedrepresentatives from all over the GroupÕs UKoperations. In addition to these 22 votingmembers there are three ex-officio, non votingmembers:

● A Holdings Board Director ● A District Official of the T&G● The Personnel Director, who acts as

Secretary to the CouncilThe Council elects the Deputy Chair, anemployee representative, who acts as Chair inthe absence of the Group MD. The Councilmeets seven times a year, with additionalmeetings as necessary.

At least once a year, the Deputy Chair of theEmployee Council addresses the Board ofDirectors and answers questions aboutemployeesÕ views and the work of the Council.

Twice a year the Board meets the Council on aninformal basis Ð once for lunch and once priorto the EmployeesÕ Annual General Meetingwhich is held on the same day as theShareholdersÕ AGM. This gives an opportunityfor Board Members, including non-executiveDirectors, to Ôcheck on what they are being toldby the ExecutiveÕ and for Councillors tobecome acquainted with Directors.

The managers and councillors interviewedidentified a number of clear benefits of theCouncil, which included:

● Councillors know that they have Ôthe ear ofthe BoardÕ, and for their part the Boardknow they can check on the views of theshop floor at any time.

● The Council has real power in the sense thatit serves as a stabilising influence, leading toimproved communications, the ownershipof key issues, and also as a ÔbackstopÕ. In thewords of the Group Personnel Director, ÔWedonÕt have causes celebres, because allmanagers have learned to accept theCouncil. If the management/employeeinterface were to break down, somebodywould quickly say to the Chief Executive,"We have a problem"Õ.

The Council has proved itself capable ofadapting to changed circumstances andfeedback about its activities. In 1994 theCouncil decided to design and carry out anemployee survey covering a range of topicsincluding communications, training andemployee representation. One of the issuesarising from the survey was a perception thatthere was a lack of positive feedback about therole of the Council itself.

As a consequence the CouncilÕs constitutionwas amended, in line with the Partnershipphilosophy of the company. Constituencies are

61

now based on teams rather than on traditionalcommon interest groups; for example, there isno longer a constituency for middle managers.

The benefits of these changes are that:

● nearly all elections are contested● employees tend to think more about how

they will vote, and for whom● it has caused the Council to look at itself,

market itself better, and realise the dangersof becoming a talking shop and notdiscussing matters of real relevance

Councillors interviewed indicated that thesuccess of the council is partly due to the factthat Bulmers have invested significant resourcesin training representatives on the Council.Much of the training of councillors involveseducation about business operations, financialmatters, long-term strategy, marketing etc. Eachhalf year, when the results are announced, anexternal trainer comes to facilitate thepresentation of financial information.

Additionally, twice a year there is a Ôteach-inÕfor representatives about the City, how it works,and the importance of maintaining shareholdervalue. All the employees are shareholders, andas the Group Personnel Director commented, ÔIfthe share price twitches, the phone ringsÕ.

The experience of the Employee Councilsupports the view that developing apartnership approach can be effectivelyunderpinned by joint manager /employeerepresentative training.

In looking to the future, the company isconfident that should its hoped-for expansioninto Europe take place, the Employee Council isoperating well enough to form the nucleus of aneffective European Works Council.

CommunicationsBulmers is strongly committed to open and fullcommunication systems. The company uses anumbers of communication methods. Normalmanagement communication is via a monthlycascade briefing from the Group Executive.

Bulmers produces a monthly companymagazine, given to all employees andshareholders, which provides prominentcoverage of Council business. Regular teambriefings are also held throughout theorganisation. Additionally, individualCouncillors have the responsibility of reportingdirectly back to their constituents, on the latest

issues arising within the Council. A number ofthe Councillors feel that the sheer volume oftheir Council sometimes makes it difficult toeffectively communicate everything that theCouncil is involved in. More generally, tounderline the spirit of open communications,employees are encouraged to attend Councilmeetings as observers.

The employees interviewed were positive andnon-cynical about the quality of employercommunication. As one employee observed,Ôthey tell us the truthÕ.

Employee DevelopmentBulmers are committed to becoming a learningorganisation, and they have already securedInvestors in People accreditation. Theybelieve that they can achieve their learningaspirations by adhering to a number of vitaloperating principles:

● every individual working to their own roleprofile, and to their own objectives,measured against competencies andqualifications required

● appraisals at least every 6 months, carriedout under the philosophy of Ônot makingthem special occasionsÕ

● basing all training on individualrequirements, limited only by the budget;people are encouraged to work out their ownplans for their own education anddevelopment through their PersonalDevelopment Plans

The newly created Learning Centre, has playeda key role in producing a performancedevelopment plan for every employee, andnearly all employees have been involved informal training programmes, including acomprehensive menu of NVQs.

New forms of work organisationBulmers are currently reorganising theirproduction and work organisation processes,under the working title of TPM (TotalProductive Manufacturing) by introducing:

● cross-functional teams● the development of team leaders● a move to cellular production ● customer-facing teams● getting customers and suppliers together

to discuss how to improve servicein both directions

● an Ôinformal dressÕ policy (now ÔsmartcasualÕ) to help break down barriers

● open plan offices

62

The objective is to enable Ôemployees to addvalueÕ and everyone is going on two-dayÔBreakthroughÕ workshops to assist Ôthinkingoutside your boxÕ. In the view of one of theEmployee Councillors, the changes arebringing immediate successes; feedbackindicates that they are building relationshipsand people are getting more Ôout of their jobsÕ.

The Group Personnel Director was clear that thedriving force behind this policy is to encourageemployees to use their increased discretion, andto see their contribution to the wholeorganisation. As he commented:

ÔOur organisational capability is only a sumof the individualsÕ capabilities. Our capabilityis enormous. We only achieve it if peoplegive of themselves which traditionallytheyÕve withheldÕ.

He described this aspiration as Ôgetting intotop gearÕ.

ÔYou cannot command top gear Ð only inspire it.This predicates everything we doÕ.

Culture change processes: making aÔBreakthroughÕIn addition to these changes in the productionand work organisation processes, the companyhas embarked on a complementary culturechange initiative. The current MD isintroducing a new concept of thinking,mentioned above, Ð entitled ÔBreakthroughÕ.This involves making a transformation frompast Ôwinning strategiesÕ to new ways ofthinking and talking about the business. Nearly200 managers have undergone a two-dayworkshop in Breakthrough, and the rest of thecompany will also be exposed to it. A numberof people have been trained as facilitators inBreakthrough.

As the Deputy Chair of the Employee Councilcommented, the aspiration of the project is thatÔevery employee will be able to contributetowards the New Vision and Strategy whichweÕre currently pulling togetherÕ.

A union representative interviewed commentedthat, ÔWeÕve taken Breakthrough on board andto date it seems to be a better way of operating.Opinions are aired, and because timeconstraints are put on meetings and comingback with replies, this has resulted in animproved way of working up to nowÕ.

Team workingThe aspiration underpinning the spread ofteam working through Bulmers is to provideemployees with the discretion to take decisionsabout their own work. The new Chief Executivetalks about enabling people as far as possibleto plan and to vary the way they carry outtheir own work. A vital underpinning of thischange is to quickly establish amongst theworkforce an understanding that ÔitÕs OKto make a mistakeÕ.

The TPM re-engineering process has beengoing on for the best part of a year, and teamshave been designed to have their own qualityand engineering staff, with specialist teamsworking alongside them. At least four jointunion / management working groups have beenestablished to flesh out the detail of the newworking arrangements.

The overall aim of these changes, is to achieve:

● high levels of skill● flexibility● self-motivation● willingness to take responsibility● creativity● profit focus● a continuous improvement ethos

Commenting on these changes, the unionconvenor suggested that ÔWeÕre trying to doa lot of things at the same time Ð workingparties, management structures, andBreakthrough Ð all at onceÕ.

The union representatives regard the currentteam working initiatives as progressingnaturally from the companyÕs programmeof developing people and getting them to gainNVQs. As one commented ÔWe began withNVQs about 5 years ago. This LearningCentre evolved about the same time or a bitlater. It was always the plan. Managementhave got into team working and NVQs and thisis the way to progress.Õ

The shop stewards believe that good trainingprovision and progressive team workingsystems reinforce themselves, and have aknock-on effect in terms of producing the desirefor continued learning amongst the workforce.One steward argued that, ÔThe concept of teamworking evolves from NVQs because it givespeople training and understanding, empowersthem to produce to standard customerrequirements, and people get hungry for more

63

knowledge. So we can move into other areassuch as TPM, with the shop floor putting upideas and being supported by managementÕ.

For the shop stewards, the companyÕscommitment to support continuous training,learning, and up-skilling is a vital component ofdeveloping a genuine partnership approach.As one suggested, ÔThe development ofpeopleÕs skills is obviously one of the bestways of preserving employment security andemployability, in that they then have atransferable qualification to take somewhere else.Õ

The Strategic VisionIncluded in the deliberations about the newstrategic visions is the whole question ofpartnership. Senior managers have reviewedwhat might be the new company vision Ð thekey strategic levers, and what might be thevalues. These have been shared with about 200employees in smaller groups of 30, includingEmployee Councillors and Shop StewardsÕ.

Bulmers are now designing one-day sessions totake every employee through the new vision.These Ôroll-out daysÕ for the new vision, corestrategies and shared values statements arebeing co-designed by Shop Stewards,Employee Councillors and the union.

The Group Personnel Director stressed thatemployees are not being presented with afinished piece of work, but rather suggestionswhich are tentative and open to amendment.As he commented:

ÔI use the analogy of a "show home" to get thispoint across; the spirit of what we are doing isto say "this is not a show home, more like theone next door which is only half finished Ð tellus what you think"Õ. So the invitation is to allemployees to have a walk through a half-builthouse. The consultation process is thereforesomewhere between being given a blank sheetof paper (which is not leadership on the part ofthe company) and a fully developed statement(which is not serious consultation).Õ

With regard to partnership in the wider sense,there is a group of people working on the supplychain, which includes customers and suppliers.

Trade union relationsBulmers believe, partly because of its long-standing system of participation, that the role ofthe Employee Council and the trade union isbecoming increasingly more central.

In the Group Personnel DirectorÕs view the roleof the trade union is fundamental.

ÔOver the years here it has earned respectamongst its membership, and thereÕs a strongidentity of employees with the union; we have abunch of shop stewards who are extremelypositive. When you have them engaged, theyhelp facilitate the engagement of othersÕ.

The shop stewards have already had aconsiderable input into the revision of thecompanyÕs vision, mission and strategic goalsstatement. Their participation has been stronglysupported by the Chief Executive.

Managers and employees interviewed didindicate that not everything has been Ôsweetnessand lightÕ. As one employee representativecommented, ÔThere have been grittyconversations about some of the changes thecompany are trying to achieve, and oftenequally gritty conversations between shopstewards and their membersÕ.

In addition to the four ex-officio shop stewardson the Council, many of the representatives arealso T&G shop stewards, and are thus alsoinvolved in the negotiating forum. Thebackground to most things covered in unionnegotiations will have been discussed inadvance at the Council.

The Union Convenor is comfortable with theCouncilÕs role, and agrees that it should not bea negotiating body:

ÔThe Council provides an opportunity fordiscussion and enhanced understanding of allsides of the business, as well as formulating anumber of very important policiesÕ. TheConvenor was a key player in the Partnershipagreement between the company and the union,and feels that this approach is the way forwardfor the unions:

ÔIf we make companies better, it improvespeopleÕs jobsÕ.

Continuous ImprovementThe company utilises a number of methods toencourage direct participation from theworkforce in continuous improvementinitiatives. Bulmers have recently re-launchedtheir long-standing suggestion scheme underthe slogan ÔBIGÕ (= BulmerÕs Idea Generator).BIG operates through the company Intranet,and employees feed ideas in through their PCs.One component of the BIG initiative is to

64

concentrate employeesÕ minds on ÔCampaign ofthe MomentÕ (e.g. Ôthink of a slogan for aparticular productÕ), and ÔGeneral InnovationsÕ(e.g. ideas unrelated to a personÕs normal job).

Other Partnership Practices

Occupational HealthCurrent work by the council includesdeveloping a policy on drugs and drugsawareness. This is not being formulated withjust the company in mind, but is intended tocover these issues in the community as well.Another initiative from the Council has beenthe opening of a new Health and Fitness centre.

Reward mechanisms and FinancialparticipationThe company operates a limited form ofperformance-related pay, and two forms offinancial participation, namely a shareownership scheme (of which nearly allemployees are members) and a profit sharescheme which give group rewards based on thecompanyÕs annual profit performance.

Outcomes

Despite BulmersÕ long-standing commitment topartnership, they believe that their currentchange process will further embed the values ofpartnership within the organisation. When allparts of the new system are aligned, Bulmersbelieve that they will produce:

● A management style which is informal,participative, and supportive

● Pay and benefits which are single-statusand gainsharing

● Employee relations which are regardedas a partnership for positive change

● Learning and career development whichincreases employability, involves employeesin self-managed learning and continuousgrowth

● Structures and systems which are process-aware, open and fluid, and which promoteteamwork

In addition to these process and behaviouraloutcomes, Bulmers indicated that as a result ofthese improvements, they can now moreprecisely define the manifestation of partnershipwithin the organisation, which they defined as:

The day-to-day relationship between teamleader and team

- Total Productive Management

The framework of their institutions- The Employee Council - The trade union

Lifelong Learning- The Learning Centre- NVQs- Personal Development Plans

Gainsharing- Profit related pay- Deferred profit share scheme

8. LITTON INTERCONNECTIONPRODUCTS

Sector: Electronics EngineeringProducts/Services: Electronic packagingsystems for the worlds leadingtelecommunications and EDP corporationsNo of employees: 125Non-union company

Introduction

Litton Interconnection Products (LIP) is asmall, genuinely leading-edge company, whichis adopting innovative working methods, andhas a holistic, customer-driven definition ofwhat a partnership organisation looks like andhow it should operate.

Company Background

Litton Industries Inc. is a US-based corporation,engaged in advanced electronics and informationtechnology, including defence applications,marine engineering (including surface combatships) and other industrial products.

The company is part of Litton InterconnectionProducts Division, mostly serving thetelecommunications market. The companybelieves that their customers have becomeincreasingly sophisticated over the last decade,which has meant that Litton has had tosatisfy a demand for more openness, costsharing, and technology partnership amongsttheir customer base.

The companyÕs integration with customers andcustomersÕ markets varies according to thespecific customer need (for example somecustomer products are delivered direct to endusers under the customerÕs label).

Developing the strategic vision

When the current General Manager joined thecompany in 1991, Litton was a traditionalcomponents supplier, under the threat of

65

closure. Since that time, it has embarked upon amajor change process. The key objectiveunderpinning the change was to create anorganisation which worked as a system, not justa collection of people.

The companyÕs strategic intent, drawn up in1991, explains much of the philosophy behindthe way it currently operates:

● Imitation cannot lead to competitiverevitalisation

● Create an organisation that works asa system, not just a collection of people

● Create shared meaning- why do we want to work together?- what are we trying to do together?- what does our company stand for?

● Create an IPD chemistry throughdevelopment of purpose, people and process

The commitment to these objectives has led toa transformation in work organisation withinLitton. Traditionally, they had an organisationalphilosophy under which Sales dealt withcustomers, Manufacturing dealt with suppliers,and Customer Service dealt with customers. Allthis has been changed to create a structure ofself-managed, multi-skilled, customer-facingteams, called business cells (see below).

The Partnership Philosophy

Whilst Litton do use the partnership notion, thekey concept underpinning operations issynergy. Within the company synergy meansthe ability of many people to generate greatervalue working together than they could workingapart. As the General Manager observed:

ÔWe are finding ways to truly understand howto deliver unique synergies, by working closelywith our people, customers and suppliers.Partnership depends on the whole chain. If asingle link is broken then there can be no realsynergy and no true partnership.Õ

Thus, whilst Litton believes that ÔpartnershipÕ ispart of the equation to improve performance,they operate on the basis that the organisationwould not succeed if all it had was a partnershipwith its employees, which they see as justone link in the Ôsynergy chainÕ. This aspirationis encapsulated in the phrases that Littonshould be Ôa great place to work and a greatplace to buy from.Õ

The synergy extends, of course, to suppliers.The company holds supplier days at whichmembers of the cell are presented to thesupplier, and presentations are given on how thecompany works, who the customer is, and howwork can be done to the mutual benefit of thecell, the supplier and customer.

On the social side, business cells socialise withcustomers and suppliers Ð for example at thecompanyÕs Annual Training Awards dinner,the tables are organised as business cell tableswith customer and supplier guests at theirrespective tables.

Management Style

The General Manager had a clear perception ofthe desired management style that fosteredpartnership and synergy in the workplace. In hisview, there are two types of management.

Type A. Those who believe:

● most people dislike work and will avoidit if they can

● people need to be directed, want to avoidresponsibility, have little or no ambition butwant security above all

● people need to be controlled, directed andthreatened with punishment if they are toput in adequate effort

We believe those with the attitude of ÔAÕ mustchange if they are to enjoy a bright future inbusiness, and we have no place for themin our company.

In contrast to this attitude set, he suggested thatmanagers within Litton operated with thefollowing beliefs:

● Whether information is good or bad, ourpeople will know

● We want everyoneÕs knowledge of thebusiness to be up to that of the mentor group

● We want to make learning new skills amajor emphasis

● We want to develop multiple skills notseniority

● We want people to reach for responsibility

66

Litton believes that this set of beliefs andbehaviours lead to business success, byfacilitating three vital outcomes:

1. creating an environment where peopleare allowed and expected to maximisetheir contribution as Ôbusiness ownersÕand naturally contribute to the successof the company.

2. developing a culture without barriers thatallows for individual and team contribution.

3. ensuring that the long term needs andsuccess of our business and our needs asindividuals are inseparable.

Partnership Practices

CommunicationThe company is committed to sharing allrelevant information with the workforce. Themain formal communication systems are theregular team meetings held by the differentbusiness cells. Each business cell holds a dailymeeting, lasting 5-10 minutes to discuss theobjectives for the day. In addition a slightly moreformal weekly meeting takes place in each cell.

There is a weekly meeting of the administrativestaff from the business cells Ð these discussissues such as forecasts, backlogs, the positionof their markets, and exchange informationabout what is going on in the whole company.

Quarterly, there is an operational review. TheAdvanced Business Skills person from eachbusiness cell, together with the team, presentsto the General Manager the achievements of theteam. At the end of the operational reviewweek, the General Manager gives a presentationto the whole company.

The employees interviewed within LIPdescribed senior managers as very approachable.As one commented: ÔYou are not frightened tosay things, unlike when you used to have ahierarchy. Everyone can have their own opinions.Õ

Self-Managed Teams: The Business CellThe company is organised entirely on the linesof customer requirements, with individualbusiness cells set up to meet the needs ofa specific customer. The companyÕs aimis to create a customised value chain for everyone of the customerÕs products within each cell.Each cell is therefore like an individualcompany, dedicated to supplying the needsof individual customers, securing theequipment, materials, procedures and skillsnecessary to deliver what is required.

The business cells are supported by:

ÔHuntersÕ Ð marketing and sales, who attractand capture customers, and support the cellswhen required; Ôthey do not act as buffermanagers of repeat ordersÕ.

ÔMentorsÕ Ð frequently people who once weredepartmental heads etc, who advise and guideteams on operations, manufacturing,engineering, materials and quality systems.ÔWhere other companies would havedepartmental managers, we now have coaches,trainers, supporters, advisersÕ.

Underpinning the whole structure are teamswhich deal with design, training, and machinetool development.

Litton offered a number of clear reasons fordeveloping the business cells:

● they are customer-focused, with dedicatedmulti-skilled people, dedicated equipment,and dedicated material

● they can focus on what matters● there are no external influences● they provide a real time response to business

issues● there is direct labour management of

indirect activities

The advantages are:

● reduced cycle times● improved responsiveness● reduced operating costs● the environment helps motivate people● there is a high innovation level● no clashing priorities● agile supply networks● service capacity locked to manufacturing

capacity

Team Working and creating a leadership cultureThe business cells operate on the basis of self-managed teams, which have the discretion to:

● make decisions on the tasks of a given day● set their goals● take responsibility for order entry,

scheduling, materials control and handling,building, testing, costing and profit and loss,shipping, invoicing, quality and training

The company believes that this creates anenvironment where people can be highlymotivated and hence innovative. Underpinningthe creation of the teams has been the idea that

67

everyone in the company can lead. As theGeneral Manager commented, the search forimprovement has:

Ôled us to restructure our company, abolishdepartments and managers and establishenabled, empowered business units(or business cells) which are configured andutilise dedicated human resources, capitalequipment, point-of-use inventory and MRP, allof which are deployed to meet the uniquerequirements of specific customersÕ.

Skill-based structuresLitton has a defined skill-based structurewithin the organisation, which is based on therequirement for each team to possess thefollowing skills (emphasis is placed ondeveloping people to possess more thanone of these skills):

● CSS Ð Customer Support Skills (concernedwith managing the supply chain)

● TSS Ð Technical Service Skills (concernedwith all technical aspects of the cellÕsbusiness)

● ADMIN 1 and 2 Ð Administrative Skills● QAM 1, 2 and 3 Ð Quality and

Manufacturing Skills● ABS Ð Advanced Business Skills

(concerned with developing the cellÕsbusiness plan with the customer and team,and then delivering against it)

Employee DevelopmentThe company sets clear objectives for thedevelopment of their workforce, which include:

● creating an environment for personal growthand development

● support for ideas and innovation ● empowered teams and individuals (self-

managed and directed)

Reflecting this, Litton has a strong commitmentto the importance of upgrading employee skillsand competencies. Training and developmentwithin the organisation is geared towards threeclearly specified ends:

● Technical Competence, task-focused tobuild skills

● Social Competence, group-focused to buildtrust

● Business Competence, goal-focused to buildsuccess

The HR and Training Co-ordinator indicatedthat development of individual employeesbeyond the immediate needs of the jobis encouraged. There are spin-offs interms of people developing social skills, andworking in teams, even if the training isgiven in unrelated work.

The company runs its own training schemes,QAMs are aligned to SVQ Level 2Ð Performing Manufacturing Operations. Ofthis group, some 10 people are studying NCsand HNCs in Engineering, and the company isconsidering training everyone to SVQ Level 3.Last year 23 people achieved the Certificate inOperations Management, and at the momentfour of them are going on to study for aDiploma in Operations Management. Someoneelse is studying for CIPS (Chartered Institutein Purchasing and Supply) qualifications.

A range of further education qualifications havebeen identified as appropriate to the variousskill levels within the cells. For example:

● Admin Ð HNC Business Admin, OperationsManagement IOM Foundation Course,IOM Diploma

● QAM 3 Ð HNC Electronics, HNC BusinessAdmin, Operations Management IOMFoundation course IPM Diploma,and SCOTVEC Level 2c.

Litton also places considerable emphasis on theneed to train employees in the ÔsoftÕ skills suchas team building, mentoring and coaching.

The employees interviewed confirmed that thecompany has been successful in developingpeople in their jobs, investing in training, andadvertising job opportunities internally. One ofthe employeeÕs interviews described thecompany as Ôvery training-orientated, which isgreat. We are having another evening out soonto give everyone their certificates.Õ

Task discretion through clearly understoodrulesOne of the clearly articulated cultural systemswithin Litton is that for the business to besuccessful, there needs to be clearly understoodboundaries based on the way the organisationcan work. In other words, these boundariescreate the rules within which everybody works.

The boundaries are:

● show up for work● support other team members● meet your short-term purpose and objectives● safety and housekeeping

Within these boundaries people are then free todecide the ÔhowsÕ of the business.

As the HR and Training Co-ordinatorelaborated, the short-term purpose of thebusiness cells tells people what must be done,and an empowered workforce decides how todo it, and within each cell the business cell rulesensure that the task, team and individual needsare identified in the business plan.

The employees interviewed confirmed that theyhave complete control over their own workingtime, and that they are responsible for seekingout and suggesting improvements to workingarrangements. Targets and objectives are agreedwithin each team, rather than imposed orhanded down by senior managers. Commentingon these working practices, the employeesemphasised the elements of job satisfaction thatcan come from teamworking, self-developmentand flexibility. As one employee noted:

ÔI just find it an excellent place to work. OverallI think everyone else would say the same Ðbecause you have this responsibility, and thereÕsno hierarchy.Õ

Reward MechanismsEmployees are paid on the basis of the skillsthey possess, with extra pay being awarded tothose people who have qualified as trainers andSVQ assessors. The company does not haveindividualised performance-related pay, ratherthere is an end of year profit-related bonus paidto everyone within the company.

OutcomesLitton Interconnection Products is consideredas a benchmark company in Scotland byScottish Enterprise.

In terms of bottom line performance, thecompanyÕs sales have grown steadily, year onyear from around £4m in 1992 to around£14.2m in 1998, with target growth figures of£19m in 1999 and £24m in 2000.

The management team is confident that visitorsto the company will be able to sense the energyand confidence of all the people, which hasbeen established in a climate of respect, trust

and value for the individual. As the GeneralManager observes:

ÔWe recognise that cultures are fragile andrequire protection. We are therefore committedto ensuring that everyone understands thecompanyÕs values with respect to employees,customers, suppliers and the wider community.This shared culture binds us to meet thechallenge of the futureÕ.

The Future

The company has a leading-edge vision of howit will operate in the future, namely as a Ôselforganising organisationÕ which changes in realtime, with a multi-skilled workforce.Õ In otherwords, it imagines itself as a truly flexible andadaptive system, which can form and reshape tomeet the changing requirements of its business.

It believes that enduring partnerships are builtbetween management, employees, customersand suppliers, and that this group is creating thefuture of Litton together. In this vein, they haveidentified the need for ongoing improvementsin the following areas:

● shared know-how● coordinated strategies● vertical integration from one unit to another

Finally Litton has a very future-focused attitudeto its business, firmly believing that it activelycreates its business and operating environment.This is not treated as a given.

9. LEYLAND TRUCKS LTD

Sector: Engineering/ManufacturingProducts/Services: Motor Vehicle ManufacturingNo of employees: 804Unionised: recognised union: AEEU

Company Background

This organisation was part of the much troubledÐ and well-documented Ð British Leylandgroup. The truck and bus part of the businesswas sold to the Dutch firm DAF NV in 1987.DAF NV quickly recognised that it had to dosomething with the ÔcultureÕ of theorganisation. The company therefore embarkedupon a new initiative, initially christened LeanEnterprise, but subsequently changed to TeamEnterprise to reflect more accurately its intent.The changes put in place by this project havecompletely transformed the fortunes of thecompany, with a £10 million per annum operating

68

cost saving within two years, and a halving ofbreak-even point within thirty months.

These changes enabled the company towithstand the collapse of its parent in 1993,through a management buyout, and emergeindependent again despite a market totallydominated by the giant and aggressiveEuropean manufacturers. This year in June theowners sold the company to PACCAR Ð theSeattle-based truck consortium.

The Partnership Philosophy: TeamEnterprise

When John Oliver took over as ManagingDirector in 1989 he inherited a typicalÔbrownfieldÕ British factory, in which Ð JohnOliver estimates Ð 75% of people adopted anattitude of passive neutrality/acquiescence, and25% one of outright hostility to change.

The question was, how to change it? To start theprocess of change he gathered together a groupof some 15 managers from every function (TheManufacturing Strategy Team), and describedhis outline vision of the way to get people froma reactive to a pro-active mode.

Together they came up with the definition,ÔEmpowered People Working TowardsMutually Beneficial ObjectivesÕ. In JohnOliverÕs words, Ôthe first thing to do wasto talk people to deathÕ. He held sessionsof 4 to 7 hours at a time in groups of 40people. Gradually, from talking to people,a plan emerged.

The idea of team enterprise is encapsulated in aset of guidelines which is given to all managersin the organisation. This Guide to TeamEnterprise sets out the companyÕs philosophyand approach to:

● management style● training● problem-solving● recognition● citizenship● positivity● project sponsors/teams● company journeyboard● audit and measurement

Signing up to Team Enterprise, and the newapproach, posed a number of challenges to theunion. The works convenor acknowledged that:

ÔSome of my members would still love me tostop a manager in the middle of the shopfloor and have a blazing row. Our relationshipwith the company is much more aboutÒwin/winÓ nowadaysÕ.

Whilst there is no ÔpartnershipÕ agreement inwritten form, the union have a clear view of thefoundations of their relationship with thecompany. For the convenor, partnership meansÔproper communication and a willingness tocommunicate, and we want a share now andthenÕ. Moreover, whilst the union accepts that Ôajob for life is not on nowadaysÕ, the benefits ofa partnership approach is that when facedwith a problem Ôredundancy is about 170thon the list of optionsÕ.

The Management Role in Partnership:ÔRetraining the RottweilersÕ

The company began to change its managementstyle. ÔThe Rottweiler Brigade had to beretrained, not got rid of.Õ The process was calledÔchange initiationÕ. John Oliver says that it wasnot easy to change Ôthe rottweilersÕ. Onetechnique was to invite managers in, on a one-to-one basis to outline their experiences.

The three key elements, which are incorporatedinto individual management style arerecognised as:

1. An appropriate leadership style2. The effective management of performance

within the business3. Effective communication at all levels

in the function

These three factors are seen as overlapping, tocreate empowerment. If managers fail to payattention to any of the key areas, they would failto achieve an empowered organisation.

Partnership Practices

Quality and Continuous ImprovementThe company espoused Kaisen techniques toachieve many of the improvements. Thisstemmed from the recognition that newinvestment alone was not going to transform theperformance of Leyland. In John OliverÕswords, ÔIn the 1980s we invested an enormousamount in technology with little results. Nowwe emphasise building employee commitment,teamwork, slim organisation structure, andeffective communicationÕ.

69

Even after Leyland introduced the newstructure, involving business units, delayeringand improved systems, management found thatthese measures were not enough to take thecompany where it wanted to go. Additionalefforts to involve employees were needed.

Small focus groups addressed some of the morelong-standing and vexatious questions.International visits to key competitors exposedrepresentatives to the value of benchmarkingagainst world best work practices.

This in turn led to a greater spirit of innovation.For example, a small experiment thatintroduced cell work got very positive internalpublicity. The local management of the arearecruited the operators to work and involvedthem in the design of everything from plantlayout to process design. The outcomes of thisexperiment were startling. Quality levelsimproved. Floor-to-floor times shrank by 80%.Inventories fell to previously unheard-of levels.Absentee levels in the same group of people fellfrom 8% to less than 2%.

Employee involvementA key part of the partnership strategy atLeyland has been to encourage employeeinvolvement and initiative. With the help ofconsultants, the company offered everyemployee the opportunity to express his or herreal views and concerns in a structured manner.The key benefits of the change initiationprogrammes were:

● independently generated information● quantifiable conclusions which gave an

indication of relative importance● a representative, cross-sectional sample size

so that all groups felt involved● feedback facilitated by a consultant who

was independent of the company to avoidbias and partiality

● most important, ownership of both theproblem and the solution by the workforce;it was important that they knew andunderstood that it was their collective view

Seeking employees views in this way, andgenerating their ownership of the changeprocess, was seen as a superior method tostandard attitude surveys which, in the minds ofsome people, were often seen as solutionsimposed on employees to problems defined bymanagement.

Leyland also makes explicit attempts toencourage innovation and new thinking withintheir workforce. There is an expectation thateach employee will produce 20 ideas a year.The idea is to create a ÔsnowstormÕ of ideas.Ideas are acknowledged by a Ôthank youÕ in theform of a £1 voucher. The ideas scheme is runby a factory committee of employees. Theyknow the terms of reference of the scheme, andtheir brief is to produce 20 ideas per employeeÐ and, in John OliverÕs words Ð Ôto keep it funÕ.

Team Working and Recognition SystemsTeam working lay at the heart of the teamenterprise project, and additionally teamworking was partly driven by a desire tosimplify the structure of the organisation, as thecompany reorganised into business units.There are now effectively three levels:

● Manufacturing Manager● Business Unit Managers● Teams

Teams consist of approximately 15 people.Each team is led by a ÔKey OperatorÕ who ispaid the same as his/her colleagues. Withineach team there are likely to be four or fivepeople engaged in other specialities, and whowill be ÔchampionsÕ of such matters as healthand safety, training and quality.

In the companyÕs experience problems tend tolie at the boundaries of functions. If a problemexists Leyland will set up a multi-functionalteam to solve it, and will subsequently disbandthe team. Every Quarter, there are TeamRecognition events. Teams are brought togetherto recognise their achievements. Thesecelebrations typically involve some 25% of theworkforce on any one occasion.

Informal individual recognition is encouraged.The company considers that the ideal form isthat of Ôpeer groupÕ recognition, that is oneindividual recognising the contribution thatanother individual has made. To this end ÔthankyouÕ cards are made available for employees Ðat all levels Ð to register their appreciationto others for a job well done or a servicebeyond the call of duty.

CommunicationThe operating philosophy of the company is toensure that communication is natural andongoing throughout the organisation and themajority of communication takes place betweenan employee and his/her immediate team leader

70

or manager, at the same time as ensuring thatthere is regular access to senior management asfrequently as appropriate.

Communication is seen as an integral partof management style, and its elements include:

● employee appraisal● weekly written briefs● daily briefings● training and development discussions● key operator meetings● key operator buddying● monthly business review meetings● meet the team● meet the boss● continuous improvement teams● quality notice boards and signage

Each function is required to have a clearlydefined communications programme withregular reviews of its communication process.

Employee DevelopmentThe company displays a strong commitment tolearning. There is an Open Learning Centre onsite where people can develop their knowledge,both within and outside the needs of thebusiness (eg interactive language training).Employees are encouraged to gain qualificationsunrelated to immediate business needs, and thecompany will give up to £50 a year for peopleto enrol in any sort of training or education.

The company is currently embarked on an NVQprogramme, and is developing a comprehensiveteam enterprise induction programme fornew recruits.

This commitment to learning is underpinned bythe appraisal procedure at Leyland Trucks.Every employee sits down with his/herimmediate superior at least once a year todiscuss their personal development, and toanalyse their training needs. At the same time,job objectives are discussed. The PersonnelDevelopment Plan consists of just two simpleforms on which the employee records, and thendiscusses with their manager:

● training and development they need in theircurrent job

● training and development they needin respect of future career development

● job objectives● self-assessment of their ÔcompetenceÕ in the

area of ÔcitizenshipÕ

The Personnel Director admits that ÔcitizenshipÕis a somewhat clumsy word for measuring andself-assessing a personÕs behaviour in thosefactors which all add up to a belief in LeylandTrucks. The form sets out ÔcitizenshipÕ in acircle, where people can rate themselves from 0to 10 in the following competencies:

● Commercial awareness● Commitment to achieve● Communications● Teamworking● Respect● Judgement● Commitment to quality● Flexibility● Innovation creativity● Leadership● Planning● Training and development

The Personnel Director suggested that thecitizenship notion is all about getting people tobe pro-active, and is an effective mechanism forgenerating common themes between corporateand individualsÕ objectives.

Trade Union RelationsThe principal union is the AEEU. Since 1993the formal recognition rights and rights tobargain collectively have not changed. Thecompany took a positive decision not to de-recognise the unions, but decided instead tohelp the unions change the nature of their role.This was done, not by narrowing their agenda,but by broadening it. For example, the unionshad traditionally played a major role in healthand safety issues. In the past, safety meetingshad provided an opportunity for ÔgamesplayingÕ and point scoring. But by keeping thegroup empowered, the company moved theagenda away from controversy, activelyinvolving the unions in a pro-active way, eg,spreading the word about Risk Management,and also getting shop stewards involved ineducation, training and pensions etc.

The Personnel Director gives a number ofexamples of gradual change in the unionsapproach. ÔGoing back 15 years, the shopstewards were furious when we did our firstteam brief; going back 10 years, they didnÕtwant to take part in the first Recognitionceremonies. All this has changedÕ.

The Personnel Director also acknowledged thatthe trade unions have successfully faced up toconsiderable changes. There is now just onebargaining group, shop floor and staff terms

71

being negotiated together. Additionally, there ismore of a problem-solving approach to issuesas they emerge in the workplace. As the AEEUconvenor indicated:

ÔIn the past the shop stewards kept going tocommittees to deal with problems. Now, if I geta problem I can go and knock on the door of theperson who can solve itÕ.

Reward MechanismsThe old company gave employees ÔtrackersharesÕ as a means of providing a reward forgood group performance.

In general, however, the companyÕs philosophyis to Ôde-coupleÕ money from personalperformance, such as suggestions and teamrecognition. The objective is to make sure that pay systems are Ð as far as possible Ð notvariable. ÔWe donÕt agree with PerformanceRelated Pay, which can be so divisiveand seen as unfairÕ.

Stress ManagementThe company has devised a programme to helpemployees handle their stress levels moreeffectively. Using an outside personaldevelopment consultant, employees give up anentire weekend to learn how to manage stress.About a third of the employees have beenthrough the programme, and John Oliver saysthat the impact has been unbelievable. ÔOn theMonday we had to peel them off the ceilingÕ.

John Oliver sees such programmes as a vitalpart of building better, partnership-basedrelationships at work:

ÔIf I want him or her to be a partner, I mustprovide the tools. We have worked on thisfor the past year. The fact that the companytakes an interest in the employeesÕ bettermentreally worksÕ.

ÔTelling the WorldÕ

The company does not claim that LeylandÕsexperience is unique. Other companies haveexplored the same principles, perhaps to bettereffect. However, in the view of LeylandÕsmanagement there are very few examples ofthese companies opening the door to the rest ofBritish business both to generate an interest innew ways of working, and share good practice.

Therefore, since 1993, Leyland has operated anopen-door policy to those companies, big andsmall, for every sector of business andcommerce, who want to visit Leyland to see atfirst hand the benefits of treating people asindividuals not as simple ÔresourcesÕ.

Outcomes

In terms of practices, one of the key outcomesis that every employee takes responsibility forthe day-to-day performance of the plant.The Continuous Improvement approach ofTeam Enterprise means that employees at alllevels are prepared to audit and measure theprocesses which drive the company towardsachievement of its goals. Such audits areundertaken at individual, team, departmental orcompany-wide levels.

Journey boards are used for recording anddisplaying the Ôfunction journey towards a moresuccessful future for the company and itsemployeesÕ. Each function concentrates on itsown improvements with targets that can beachieved without outside help or influence.The boards are audited at 3-monthly intervals.Journey boards are placed in an area wherethey are visible to both employees and visitorsto the department.

The organisation has also become better atmanaging new innovations and changes to workingpractices. In John OliverÕs experience systemschanges in the past usually led to a debacle.

ÔLast July we had the biggest systems changefor 10 years. I came back from holiday Ð withsome trepidation Ð to find that the plant wasalready running, with no problems. Everythinghad been sorted out. It illustrates the valueof the user defining the requirements, and thesystems following rather than leading thechange. From now on the fundamental taskis to keep pushing the barriers back, and tokeep on introducing new ideas to maintainthe momentumÕ.

Health and safety has improved within Leyland.Before 1989, there were about 90 reportableaccidents a year. In the last five years there havebeen less than 5 per year. In the companyÕs viewthis reduction is due to the way health andsafety is now approached, getting people torealise their own accountability for safety.

72

Some of the achievements of Team Enterprise are:

● Break-even point halved in the first30 months

● Operating costs reduced by 14%● Quality improved by 35%● Negligible absence rates

John OliverÕs view is that teamwork has been away of life at Leyland from the beginning.In addition involvement and participation havecome to life. The autonomous workinggroups on the tracks with their peer keyoperators have demonstrated efficiencies neverpreviously encountered. For example, for thepast two years teams have carried out theirown re-manning assignments Ð without anyof the Ôhot spotsÕ that were invariablyencountered when re-manning was carried outby industrial engineers.

In the companyÕs view allowing people tobecome pro-active in the world of work isincreasingly demonstrated as the key to success.

10. MICHAELIDES AND BEDNASHLIMITED

Sector: CommunicationProducts/Services: Media/Communications/MarketingNo of employees: 19Unionised: Non-unionised

Introduction

Michaelides and Bednash Ltd (M & B Ltd) is avery unusual small company, which employsimaginative ways of working and relatingwithin an organisational context. As such, theyare a fascinating example of the role thatcreating a particular type of workingenvironment can play in encouraging openness,transparency and partnership at work, and inattracting a particular type of skilled person in ayoung and vibrant industry. Michaelides andBednash also serve to emphasise that there is noreason why working in a knowledge-basedindustry shouldnÕt be fun.

Company Background

M & B Ltd was founded four years ago, andoperates in the media, communications andmarketing sectors, offering a niche servicebased on the organisationÕs specialist skills inmedia strategy. Media strategy is usuallyconducted as an integrated task within anAdvertising Agency or Media Buying Agency.

M&B Ltd provide this service without theperceived disadvantages of other internalinfluences. The company deals with a short listof high profile clients, providing competitiveideas and insights to help develop the clientÕslonger term media and communicationsstrategies, and therefore offer a service which issignificantly more comprehensive than a morenarrow advertising strategy brief.

The company uses the word partnership in thespecific media sense to describe people engagedin the creative management of the work.

The Employee Relations Philosophy

M & B Ltd have a clear aspiration concerninghow they want to run employee relations withinthe company. The company does not describeits employment practices in partnership terms.Rather, the company culture is defined asoperating on the principle of ÔcollaborationÕ. Asthe person responsible for personnel commented:

ÔWe have removed the closed door syndrome;we have a common cause, a common goal anda common aid, and we donÕt want to impedethat by putting hurdles in peopleÕs wayÕ.

In order to achieve this aspiration M & B Ltdplaces considerable emphasis on creating theright physical-working environment to allowthis to happen, namely a communal interactiveworkspace. At M & B Ltd everyone works inthe same large room round a specially designedseventy foot long table, with integratedtelephone and computer networking The onlyperson separated by a few feet from this longtable is the receptionist. There are no separateoffices for anyone, and no fixed workstations;people plug in their laptops at any convenientpoint, and sit where they like. Clients areinvited to work with M & B Ltd staff at thetable. As one of the Managing Partnerscommented, Ôour table is therefore the antithesisof the virtual officeÕ, as it has fostered a greatersense of collaboration and participation.Õ

M & B Ltd believe that the workingenvironment it has created is an importantsource of competitive advantage for thecompany. The advantages of these workplacearrangements are seen as:

● the critical part of the creative process isbeing together

● it is participative, not hierarchical● there are no office politics● it is creating a Ôhappy placeÕ

73

Partnership Practices

Whilst M & B Ltd do not use partnership todescribe their employee relations practices, theyfall comfortably within accepted definitions ofpartnership practices.

CommunicationsReflecting its operating philosophy and size,M & B Ltd has a very open communicationsculture. For the past one and a half years therehave been regular company meetings to discussall business issues. These are called Forums andare held monthly. At these meetings the wholebusiness is discussed, including operatingresults and business plans.

There are also meetings of Partners, and at thesemeetings the core team decisions about staffissues, such as recruitment, are taken.

At the end of each year the whole company getstogether to receive a presentation and to discussin depth Ôwhere we are goingÕ, and the visionfor the next year.

Staff DevelopmentM & B Ltd have a strong commitment to developthe skills base of the company. Reflecting this,whilst all but one of the staff are graduates, thecompany is willing to fund further course feesas part of an individualÕs ongoing development.A number of employees are studying for anMBA at the companyÕs expense.

The companyÕs view is that it is in thecompanyÕs interest to develop people. ÔAll our peoplehave better skills than when they came hereÕ.

As to the provision of training and developmentbeyond the needs of the immediate job, thecompanyÕs view is Ôyes, but not basket makingÕ.

Performance ManagementEveryone is appraised annually. Staff discusstheir own career plans and development at theseappraisals, as well as their pay. Pay isindividualised, based on an employeeÕsperformance, experience and workload, andthere is no standardised element withinindividual pay settlements.

The review process is quite comprehensive,operating on a form of 360 degree appraisal. Anew staff member will be reviewed after threemonths, and then, after six months, there is afinancial review, thereafter 12-monthly. Duringthe review process employees are consulted Ôallround the personÕ, covering all the people they

work with. There are two reviewers at Partneror Managing Partner level. The idea is to createa balanced picture. Before the formal review,the staff member has a pre-meeting giving achance for them to raise issues. This is intendedto be a two-way process.

Whilst there is no formal disciplinary orgrievance procedure, sub-standard performanceis discussed in a very open way. The personresponsible for personnel issues emphasised thefact that the staff are very self-regulating andself-managing. As she commented, ÔThe peergroup disciplines people; IÕve never seen itdone in a negative wayÕ.

Job discretion and flexibilityWhilst staff can choose their job assignments toa certain extent, this is usually determined on aclient basis. Employees are free to choose theirown start and finish times, and are encouragedto manage their own progress on assignments,and to set their own performance targets inconjunction with clients.

Job descriptions are flexible, work teams areessentially self-managed and as far as possiblestaff are allocated assignments which make thefullest use of their skills and abilities. As oneemployee commented ÔWe actively use thewhole resource poolÕ.

Company Structure / Team WorkingDespite its very flexible working practices, thecompany has a clear structure. Employees fallinto the categories of Managing Partner, Partner,Media Strategist, and Support Staff. Theemployee responsible for personnel admits thatthis appears to create a hierarchy out of a non-hierarchical organisation Ð ÔBut itÕs not likethatÕ. This company has never produced anÔorganogramÕ, and ÔWe just get on and do it,and people work fairly independently in thisorganisation.Õ. The need for clear levels of staffis often client-driven, with certain clientsrequesting a specific ÔlevelÕ of staff.

A Media Strategist within M & B Ltd spends100% of their time on one account Ð or two atmost. Other staff may be in several teams. Forbigger accounts, people may be combined.Usually, however, there is a team of threeworking on any one account. There is also oneperson Ð with a research background Ð who actsas a general research resource as well asworking on other projects.

74

Terms and ConditionsAn intangible, but very important perk withinM & B Ltd, is their work / life policies. Peoplecan work from home if they want to, can dial in,collect E-Mails etc. More broadly, oneemployee who has been with the company threeyears has just taken four months off to travelwithout losing her job.

In terms of other terms and conditions, whilstthere is no pension scheme, there are someother benefits:

● travel insurance cover is about to beintroduced

● comprehensive medical screening isavailable every 12 months

● BUPA ● subsidised gym membership● the company takes people away to celebrate

the companyÕs birthday in October.This year they went to Copenhagen

● Winning Agency of the Year in 1997was celebrated by a weekend off in Iceland.

Outcomes

Against the background that the company isfour years old, during the last 2_ years M & BLtd has doubled in size, and business resultsshow a high rate of profitability, with turnoverincreasing year on year (20% last year). Asimportantly, the company has already achievedsignificant recognition within its usercommunity, winning two top prizes within itsindustry, namely CampaignÕs Media Agency ofthe Year, and Media WeekÕs Agency of the Year.

In terms of labour turnover, only three peoplehave left the organisation, all of them securinghigh-powered external positions. Overall thecompany is satisfied that it attracts highquality employees and retains them,and absenteeism is negligible.

11. NATWEST RETAIL BANKINGSERVICES LTD

Sector: FinanceProducts/Services: Retail Banking ServicesNo of employees: 35,000Unionised: recognised unions are BIFUand NWSA1.

Introduction

NatWest Retail Banking Services (NatWestRBS) is an example of an organisation which ismaking the first steps towards adopting a

partnership approach, and therefore providessome interesting lessons for organisations in asimilar stage on the partnership route. Theseinclude the need to develop a genuine workingpartnership with employees and employeerepresentatives, so that they can influence thedecision-making process, and the positivebenefits of having to substantively definepartnership whilst formulating a writtenpartnership agreement.

Company Background

NatWest RBS, like other financial servicesfirms, has had to adapt to the changes that haveresulted from the de-regulation of the industry,in particular increased competition and theimpact of new technology. In terms oftransactions, the bank forecasts a continuingdecline in the use of cheque-basedbanking, with ongoing increases in theuse of Direct Debits and (in particular) DebitCards. Customer contacts are increasinglythrough ATMs (automatic teller machines), andthe telephone centres, accompanied bya potential decline in the number of customercontacts over the counter.NatWest RBS has had to embrace andrespond to these new imperatives shaping thebusiness. In the Managing DirectorÕs words,ÔWe were otherwise on the glide-path tooblivion: income was declining, traditionalprocesses were not meeting business needs, andcosts were escalating.Õ

Thus, from the end of 1995 NatWest RBSinstituted a major programme changing theway it conducts its business. Under the titleÔBuilding a new Retail BankÕ the companyis moving to a situation in which the brancheswill be entirely devoted to customer service,with the process work located in about 60nation-wide centres. These operational shiftsinvolve considerable downsizing Ð the Bankexpects to lose about 10,000 jobsÐ accompanied by a movement towards moreflexible employment contracts for remainingstaff, including Annualised Hours.

The Partnership Philosophy

In order to implement these changes, theExecutive of NatWest RBS realised thatthey need to develop a more partnership-basedapproach to their employee relations.As a consequence, in 1996 the ManagingDirector pledged to all staff that during thistransition period:

75

● ÔThere will be regular communication tokeep you informed of the progress weare makingÕ

● ÔAs soon as significant decisions are takenwhich affect you as an individual or yourplace of work you will be told and this willbe at least 3 months in advanceÕ

● ÔThere will be no new compulsoryredundancies in Retail Banking Servicesduring the rest of 1996Õ. Ð A commitmentwhich remains in force until further notice.

Until comparatively recently however, NatWestRBS has not used the word ÔpartnershipÕto describe their employment relationships.However, the unions are currently in discussionwith the objective of concluding a formalpartnership agreement. The General Secretaryof the NWSA outlined three operatingprinciples for a partnership agreementwithin NatWest RBS:

● the agreement should be written down● should be transparent; people should be

able to monitor it, and measure successand failure

● should be Group-wide

The development of the partnership philosophyhas been the product of a joint effort byNatWest RBS and the two unions BIFU andNWSA. All sides acknowledge that they mustcontinue to work together in order to improveupon existing levels of trust within NatWestRBS, and to further enshrine the habit ofworking together to achieve mutually beneficialoutcomes. The General Secretary of the NWSAdescribed firm-union relations as one ofÔconstructive engagementÕ. As he commentedÔWe want to be involved in running the Bank,and the Bank has warmed to this.Õ

Partnership Practices

CommunicationsDeveloping a more partnership-based approachhas involved what for the Bank was a differentway of communicating Ð Ôbeing honest, open,and Òup frontÓÕ. An important part of this newspirit of openness, is the commitment tocommunicate decisions as swiftly as possible.As the Head of Strategy and Communicationscommented: ÔWe would try to beat the media toannouncements as much as possible, and wewould be willing to take the risk ofcommunicating even in situations where wewere not yet certain about the final decisions.Õ

The principal communication method withinNatWest RBS revolves around the cycle ofteam meetings. On the first Thursday of themonth managers receive a copy of the monthlyÔBuilding a New Retail BankÕ Journaldescribing activities in Retail Banking; this ispassed to all staff by the following Friday.Every Wednesday there are team meetings, andmost branches are closed between 0900 and0930 for this purpose. The feedback processfacilitated at these team meetings is seen as acrucial element of effective communication.Part of the discussion revolves around thecontent of the Journal. Regions produce theirown journal (usually a week later) which arealso discussed at the relevant team meetings.

In addition, there is also a monthly teammeeting cycle, which is now built around theÔBuilding a New Retail BankÕ journalmentioned above, which is sent to all staff. Eachmonthly edition is accompanied by managersÕbriefing notes, covering any Ôstop pressÕinformation, and responding to staff feedbackfrom the Team Feedback Forms, andcommenting on concerns expressed toexecutives on the Hotline.

The Hotline is an innovative mechanism byNatWest RBS, to use the telephone system toencourage employees to communicate directlyto the Executive. The employee is greeted bythe Chief ExecutiveÕs voice and asked to leavehis or her message, and there is a drill for adetailed response to be returned within 24hours. The analysis of calls not only goes to theExecutive but also to the staff unions, and tomanagers as part of their monthly briefing. TheHotline also gives an immediate indication ofsomething that could be going wrong, whichenables the Bank to take earlier correctiveaction than would otherwise be the case. TheHead of Strategy and Communicationscommented that, ÔItÕs super Ð you donÕt have towait for feedbackÕ.

In summarising the progress that has been madein improving communications within NatWestRBS, she says, ÔIt is now very rare for us to beaccused of not giving true and accurateinformationÕ.

The Retail Bank also carries out regular staffopinion surveys, the latest Ð ÔWhat Do YouThink?Õ Ð was conducted in October 1998.

76

Employment SecurityThe Retail Bank has committed itself to nocompulsory redundancies, and to acomprehensive programme of relocation,retraining and out-placement for thoseemployees requiring such services. In addition,all vacancies are advertised internally.

In the Head of Human ResourceÕs view, ÔNoCompulsory RedundancyÕ has been quite asustaining element of the new partnershipapproach, and, ÔI donÕt think people would havepredicted it would be so strongÕ. In commentingon the alternative Ð compulsory redundancies Ðthe Managing Director has expressed the viewthat he would be very disappointed if thecompany had to return to that sort of option.

Trade Unions RelationsWhilst there has traditionally been a high levelof union membership within NatWest RBS, therelationship between two of the trade unions,BIFU and NWSA, has not been characterisedby a history of mutual co-operation. Three yearsago NWSA started working together with BIFUin a more concerted way, driven by therealisation that there is too much retail bankingcapacity in the UK.

The unions continue to meet the bank in a JointNegotiating Committee (JNC). NatWest RBSinvited the principal negotiators together on theprinciple that there were only two main optionsfacing the company. Either to talk to andpersuade the workforce directly to embrace thechanges required, or to persuade the unions tojoin in with the company and work out a way ofmaking these changes happen to the mutualbenefit of the company and the employees.

The unions agreed to work with the company,and the first challenge facing the newrelationship was dealing with redundancy.

Managing Redundancy: A partnershipapproachTogether with the unions the company devised adeparture strategy to help people into their nextjobs. The Head of Human Resources cited thepositive response from the unions in two areas:

● they persuaded the company to buy a PCfor all those going into full-time educationon leaving

● they were instrumental in persuading thecompany to put together a training packagefor people attempting to gain qualificationsequipping them for work outside banking.

As a result of talking in a positive way, bothunions signed a joint announcement with theManaging Director confirming that the partieswould be working together to achieve theprogramme. It urges staff to use the feedbackprocess explained in ÔBuilding a new RetailBankÕ, Ôto give your views and ask questionsabout the proposals, or, if you prefer, contactyour local NWSA or BIFU representativesÕ.

Since then the company has continued workingwith the unions on making the programme worksuccessfully, which has involved a 10,000reduction in head count.

The union has played a vital role in advisingmembers on their employability. As the GeneralSecretary of NWSA observed, NatWest Groupnow employs in excess of 60,000 world-wide Ðwith many of the jobs and technologiesbecoming comparable to other industries. ÔSo,weÕve said we can cooperate with the bank, andin return there has been a guarantee of nocompulsory redundanciesÕ.

Terms and ConditionsNatWest RBS operates Ôsingle statusÕcanteen/eating arrangements, and have doneso for some time.

The NatWest Group Staff Council

Employees of NatWest RBS electrepresentatives to the NatWest Group StaffCouncil. Taking an early decision on theintroduction of the European Works CouncilsDirective, the Group was one of the firstorganisations to decide upon a ÔworldÕ council,which held its first meeting in April 1996.

The Group Staff Council represents all of theGroupÕs business world-wide and gives staff thechance to contribute to discussions aboutGroup-wide issues through elected Councilmembers. It is an information and consultationforum designed to strengthen and complementexisting communication processes at sector andlocal business unit levels. It is not intended toreplace national or local consultation andnegotiation activities, and so does not considerissues such as local pay and reward, which arereviewed on a business-by-business basis.

77

The GroupÕs Chief Executive sees theCouncil as a major contributor to thepartnership agenda.

ÔFirstly, by debating the way forward, wherepossible in advance of the changes, andsecondly, helping to explain them to colleaguesas they impact on different business areasacross the world.Õ

Retail Bank representatives play a full part inthis Council, which is fully supported by theunions. Details of the business of the GroupStaff Council are published in the GroupÕsbimonthly ÔAgendaÕ magazine.

The General Secretary of the NWSA believesthat a good early test of partnership within thebank, will be how far employee representativeshave been able to influence the strategicthinking of the company through the Council.

Other Partnership Practices

Flexible working Ð annualised hoursNatWest RBS has recently reached agreementwith BIFU about Annualised Hours, and thenewly agreed arrangements are currently beingimplemented.

LearningNatWest RBS has recently been awarded theInvestors in People (IIP) standard, at the sametime as changing the nature of the business.They are the biggest UK organisation to haveachieved accreditation.

Continuous ImprovementNatWest RBS has had in place for some years ascheme for inviting suggestions and ideas forservice improvement.

The Future

A key development in the future will be therealisation of a formal written partnershipagreement.

The Unions have presented a draft document onPartnership to the NatWest Group, and thecompany is holding a one-day seminar in theNew Year to discuss what partnership means.The bank has agreed to host two guest speakers,Mark Goyda, and John OÕDowd (The Architectof the Irish model of Partnership). As theNWSA General Secretary commented ÔWehope to have a debate about what Partnershipmeans and come up with a formal documentÕ.

The complexity and rate of change is set togrow ever more quickly. The role of the HeadOffice is to help people handle these changesand put them into a clear context. The BusinessPlan for 1999 covers a whole raft of activitieswhich have been grouped into areas for actions:

● Managing local markets and meetingcustomer needs

● Operational excellence● Investing in people; effective communications

are seen as crucial to meeting the ÔpeopleÕrequirements of the Plan.

12. SCOTT BADER

Sector: ChemicalsProducts/Services: Resins and specialist polymersNo of employees: 650 world-wideUnionised: non-union firm

Introduction

Scott Bader is an unusual company, and themost idiosyncratic of all of the case studies, in-so far as it is strongly influenced by its originalQuaker principles. As such, Scott Bader is afascinating example of the benefits of aworkplace culture based on the maintenance ofhuman dignity at work, and an ownershipstructure dominated by a high level ofemployee ownership. These characteristicshave generated both strengths and weaknessesin responding to change and newbusiness imperatives.

Company Background

Scott Bader was founded in 1920 by ErnestBader, operating as the sole agency for Swisscelluloid in Britain. In 1951 the Scott BaderCommonwealth (which simply means Ôwealthheld in commonÕ) was formed, whichtransferred over 90% of the shares of thecompany to the employees, then numberingaround 150. They all became members of theScott Bader Commonwealth, and thusco-owners of Scott Bader Company Limited.

Through its lifetime, the company has graduallyacquired subsidiaries in France, Sweden, USA,Dubai and South Africa.

Scott Bader is a small company within thechemicals industry, which competes byproviding products giving high margins, betterquality and added value.

78

The Employee Relations Philosophy

Scott Bader has been shaped by the beliefs of itsfounder, Ernest Bader, who believed ferventlythat labour should employ capital, and notcapital employ labour. He also believed that Ôweare all equal as human beings and therefore weall have the right of human dignityÕ. In his viewthis aspiration was not widely achieved inconventional industry.

When the family transferred the ownership ofthe company to the employees, Ernest ensuredthat his beliefs and values became enshrinedwithin the Constitution, along with certain othersafeguards to secure the continuation of theenterprise. The safeguards were also designedto ensure a balance so that no one interest couldwield excessive power.

As a consequence, the company is rununder a Code of Practice2, which lays out theconditions under which the business isorganised and run. Some of the key elementsare reproduced below:

● Our work involves four tasks, economic,technical, social and political, neglect of anyone of which will in the long term diminishthe Commonwealth

● We are conscious of a commonresponsibility to share our work amongourselves in such a way that it becomes ameaningful and creative part of our livesrather than merely a means to an end

● We recognise that there are somemembers in a position of authority to act asÔcatalysts of human effortÕ and not asauthoritarian ÔbossesÕ

● Since management by consent rather thancoercion is an appropriate style for theCompany, a corresponding effort to acceptresponsibility is required from us all

● Solve problems by discussion andagreement rather than throughreference to a third party

● We are agreed that in the event of adownturn in trade we will share allremaining work rather than expect any ofour fellow members to be deprived ofemployment, even if this requires areduction in earnings by all

A Partnership Philosophy

As our discussion of Scott BaderÕs employeephilosophy has revealed, partnershipaspirations are central to many of the organisingprinciples of the organisation, and there is astrong culture of rights and responsibilities

within the workforce. Another strong elementin the philosophy is the conviction, as set out byErnest Bader, that Ôwe should strive to settle ourdifferences "without recourse to a third party"Õ.

The Group Head of Business Developmentindicated that for all employees the philosophyand the constitution are ÔgivenÕ. ÔI canÕt changeit. ItÕs the fundamental thingÕ. People joiningmust understand the implications of this, andthe requirement for commitment of theirpersonal contribution to the ideals.Õ Oneimplication of this, as the Head of HRcommented, is that employees call themselvesÔtrusteesÕ of the company. ÔBasically we are intrusteeship of the assetsÕ.

The company tends to use the wordÔPartnershipÕ to describe the relationship withcustomers and suppliers, and there is a strongphilosophy of helping customers and suppliersin the bad as well as the good times.

The Group Head of Business Developmentsignalled that despite the lofty ideals driving thecompany, Ôwe are not a perfect organisationÕ.Indeed, he spelt out a number of ÔdownsidesÕ ofan organisation such as Scott Bader, including:

● difficulty in moving ahead in such ademocratic structure

● cannot easily seize a commercial advantagequickly

● decisions are taken slowly● Ôwe can become introspective and

dangerously self-interestedÕ

Changing Working Practices

The Commonwealth principles on which ScottBader is run, have proved both strengths andweaknesses in the companyÕs attempt to adaptto changing business imperatives, and adoptpartnership-based approaches.

When the current Head of BusinessDevelopment arrived at the company 8 yearsago, he found a less that satisfactory set ofworking practices. At that time the organisationÔseemed to be in a time warp; for example therewas endemic overtime, and inflexible working,and a lot of people had been doing the same jobfor years and years. For example there was onlyone person who could operate the effluent plant,though now there are sevenÕ.

The Head of Business Development suggestedthat the organising principles of the companyhad partly produced the problems. He

79

commented that, ÔThe democratic structureperhaps protected people from the pain barrierof changeÕ. Similarly, the HR Manager notedthat Ôdiscipline can be a problem, when peopleare fully aware that their status as members isthe same as anyone elseÕsÕ.

However, the organisational culture also bringswith it very positive drivers fostering theadoption of change, including:

● Ôpeople are flexible by most yardsticks;people seldom say ÒitÕs not my jobÓÕ

● Ôthere is a high personal commitmentto customersÕ

● Ôwe are the only British company inour marketÕ

Partnership Practices

CommunicationsScott Bader operates on the principle of open,direct and honest communications. Monthlybriefings are compulsory in all sections, whichare explicitly geared to generate feedback fromthe workforce.

There are quarterly general meetings of ScottBader Co Ltd which all employees are invitedto attend, which report on the overall plans andstrategy of the company as well as reportingprogress to date against the annual budget. Anindividual Executive member each quarter willdo a specific report for their area ofresponsibility.

Continuous ImprovementScott Bader has a number of continuousimprovement systems and working practiceswhich have been in operation since the early1990s. The company is accredited to ISO 9001throughout, and is an Investor In People.

Management StyleAs you would expect given the ownershipprinciples of the company, Scott Baderhas a commitment to ÔopenÕ management, anddescribes the management style within theorganisation as one of Ôparticipative leadershipÕ.

Employee Representation: The CommunityCouncilThe main employee voice mechanism withinthe company is the Community Council, whichhas significant decision-making powers. TheCommunity Council represents the interest ofall the staff in the UK and Ireland, and it candiscuss any matter referred to it by any member,and make recommendations to management or

the Company Board. Representatives areelected to the Community Council bygeographical area to enable elected people tohave regular contact with those that theyrepresent (only Commonwealth members areallowed to stand for election).

The Community Council approves theappointment or removal of the Chairman ofScott Bader Co Ltd and all its Directors, as wellas approving DirectorsÕ salaries. It also has thefinal say on internal disciplinary matters. TheCommunity Council carries out many taskswithin the areas of working conditions andemployee welfare, and works closely withmanagement on these issues. They also raisebudgets and administer funds for social andeducational functions.

Employee DevelopmentThere is a strong programme of selfdevelopment. It is set out in the Principles of theCommonwealth, which advocates learningfrom Day One. Learning includes secondmentopportunities. The company recentlyconducted, with Ashridge Management Centre,a major programme in which 40 managerslooked at their own careers and developed theirown personal learning strategies.

Learning and developmentThe company has a long-standing commitmentto education and training, and has developed aLearning Centre, which offers dedicatedlearning resources to its employees. The HR

Manager indicated that he has neverexperienced any difficulties with gettingtraining budgets approved within the company.

Occupational HealthThere is a swimming pool on site, availablefor employees.

Pay and RewardThe company believes that pay is Ôin line withthe marketplaceÕ. Pay is based on:

● individual performance as rated by the linemanager at regular appraisals

● company performance, related to apersonÕs salary

● the annual bonus, related to the share ofprofits, distributed according to theConstitution

80

The pay system, pension scheme and holidaysare all harmonised.

Not all potential employees are attracted to thephilosophy of the Commonwealth, and there issometimes difficulty in attracting Ôhigh flyersÕ.However, the company is successfully bringingin more dynamic people into the organisation,Ôwho can work with the way we operateÕ.

Reward and ProfitThe financial participation and reward practicesof Scott Bader are firmly enshrined in a set ofrules. For example, a key element in thesafeguards is the constitutional elementregarding profit. A minimum of 60% isploughed back into the business for futureinvestment and development. Of the remaining40%, a maximum of half could be paid asbonus to staff. However, whatever percentageis set as a bonus, an equal or greateramount must be given to charity.

In the wording of the Constitution, Ôwheneverwe, as individuals, benefited from the profits,we should share equally our surplus with thoseless fortunate than ourselvesÕ. Over the yearssubstantial amounts of money have beenallocated to charitable purposes as part ofthe profit sharing process. The charitable givinghas been enhanced by allocating £200 toeach employee to allocate themselves to thecharity of their choice.

Employment SecurityScott Bader is firmly committed to a policy ofno redundancies. There is a specific policy Ð setout in the Code of Practice Ð of job sharing andagreed pay cuts as an alternative to redundancy.

Environmental SustainabilityThe company has a long-standingenvironmental policy concerning responsiblemanagement of the earthÕs resources.

Commonwealth MembershipMembership of the Commonwealth and with itco-ownership of the company is open to allemployees after a specified period of time. It isby application, and rights of membership areconfirmed by the Commonwealth Board ofManagement. Not every employee chooses toapply for membership, but the vast majoritychose to do so.

The Future

While the principles will remain the same, thecompany is examining its structure to try andmake it less cumbersome. Scott Bader is alsolooking at ways of extending theCommonwealth to their international subsidiariesas far as possible, within the constraintsimposed by the different cultures and legislativeframeworks of the countries involved.

81

Scott BaderÕs principles for the development of the partnership approach are set out in the box below:

82

Principles of the Commonwealth

The Constitution safeguards the principles on which the Scott Bader Commonwealth was founded.In essence these principles are:

¥ Human dignity and spiritual awareness¥ Opportunities and commitment to personal growth and development¥ Releasing the best in all and recognising the well being of all are inextricably intermixed¥ Recognising and sharing talents both internally and with the wider community¥ Mutual responsibility and ethical behaviour¥ To render the best possible service as a corporate body to oneÕs fellow men¥ To produce goods beneficial to the community¥ Providing fair conditions¥ Job and wealth sharing¥ Democratic involvement and accountability¥ Management by consent and not coercion¥ Sharing with the less fortunate¥ To order all affairs so as to live in such a manner as to take away the occasion for war¥ Responsible management of the EarthÕs resources

Vision Statement

We strive to build and sustain an enterprise which is successful because:

¥ We provide education and training, and show willingness to learn, grow and acceptresponsibility

¥ Managers lead by example, involving their teams, and enabling each person to maximisetheir contribution

¥ We are committed to meeting customersÕ needs by constantly improving our productsand services

¥ We have the courage to face and resolve conflict openly and honestly¥ Our work is founded on collective responsibility and mutual trust, and we commit ourselves

to decisions once taken¥ We make our decisions on an ethical basis, caring for each other, the wider world,

and the environment¥ As joint stewards of all our economic resources, we use them effectively, not only for our own

livelihood, but for coming generations

Behaviours Statement

In enhancing the vision we must:

1 Be committed to the care and welfare of the working community and those within it2 Meet the needs of customers by dedication of our own skills within the framework of the

vision statement 3 Seek to use the resources as effectively as possible by flexible, waste-conscious, creative

working practices4 Recognise our own failures and weaknesses and to strive to improve ourselves5 Participate fully in the consultative and democratic processes of the community, and to support

the decisions of the community bodies6 Talk openly, directly and honestly with others and not about them in their absence7 Act in a way which is worthy of the trust of others8 Carry out our own duties conscientiously, striving to meet work objectives and constantly

improving the quality of what we do9 Support the good, positive and creative in others and avoid being negative10 Enjoy working co-operatively and enthusiastically with fellow workers

13. SHELTERSector: Voluntary OrganisationProducts/Services: Provision of housing adviceand solutions to homelessnessNo of employees: 456Unionised: recognised union: Transport andGeneral Workers Union

Introduction

Shelter is an example of an organisation takingits first tentative partnership steps. Touchstonepolicies include a commitment to transparentand open communications, and the importanceof high levels of discretion in the wayemployees manage their working time and dotheir jobs.

Company Background

In 1966 five Church housing trusts working inthe field of housing and homelessnessamalgamated to form Shelter, which today isthe UKÕs largest registered charity. Of itsincome of £19.6 million in 1997/98, most(52%) came from donations and legacies, 24%from Shelter Shops and other merchandising,and only 17.4% from grant income from localauthorities, and central government.

Shelter has about 60 Housing Aid Centres inGreat Britain, most, but not all, directlymanaged. It has recently embarked on a newinitiative ÔShelterline,Õ which is a 24 hourhelpline, started on 4 December 1998. Thisis a freephone helpline service covering thewhole of Britain. It draws on the experience ofproviding Londonline, a 24 hour helplinefor people facing a housing emergency inLondon that has been running since October1996, and which has demonstrated the value ofproviding early access to housing advice inpreventing homelessness.

Shelterline reflects the changing nature of theorganisation, which is becoming moreprofessional, expanding, and facing up tothe need to reach its user communityvia different methods.

Indeed, one of the most difficult challengesShelter is facing is how to deal with its currentpace of expansion. Shelter has doubled in sizein the past five years, and it has been difficult tocope with the rapidity of this growth, withoutencouraging a growth of bureaucracy andmanagement levels within the organisation.

Vision and Values

Shelter does not build houses. It is acampaigning organisation which aims toeliminate long-term homelessness by thecreation of a housing system that:

● meets need● is affordable● is fair to all sections of society● is socially and economically sustainable

Everyone in Shelter works according to theVision and Values statement which is boldlyencapsulated in the sentence: ÔShelter believesthat homelessness is the result of a failedhousing systemÕ.

The statement goes on to define a home asÔsomewhere affordable, of adequate size anddesign, in good repair, safe, secure and withsupport when requiredÕ.

The Vision and Values statement goes on toexpress the view that Ôto be without a home isunacceptable. It is degrading and damaging toindividuals and the community and hasenormous social and economic costs for us allÕ.

The organisation refers to its service usersas ÔclientsÕ and its donors as ÔcustomersÕ.

The Partnership Philosophy

The Human Resources Manager indicated that,ÔWe donÕt really define our employmentrelationship in one word.Õ Nonetheless, Shelterhave identified what they would agree areÔpartnership practicesÕ, and these are incorporatedinto many of the organisationÕs policies.

A trade union representative indicated that thechanging character of ShelterÕs activitiesincreases the need for such an approach. As henoted, Shelter is changing its nature fromcampaigning about poor housing andhomelessness into an organisation moreactively trying to prevent the occurrence ofhomelessness and helping people with their rentarrears. This has implications for ways ofworking, and the union representative believesthat ÔManagement have to carry the staff alongwith these changes.Õ

83

Partnership Practices

CommunicationsThe Staffing and Resources Director placescommunications high on the list of priorities inestablishing partnership at the workplace.Shelter has set up a cross-functional InternalCommunications Project Group to considerhow the organisation can communicate moreeffectively. As the staffing Directorcommented, ÔCommunications is a bithaphazard, but to motivate staff it is absolutelyvital. Another reason for reviewing the way wecommunicate is our growth. WeÕre movingfrom around 150 to nearly 500 in the space oftwo years Ð this changes the culture and the waythe organisation worksÕ.

Shelter has a policy that all employees are keptinformed on all business matters, as far as isreasonably possible; if anything is kept fromemployees it is only done so to avoid acommunications overload.

There are regular staff attitude surveys elicitingemployee views about specific companypolicies and the general progress of Shelter.Employees receive regular updates aboutsuch issues as developments in legislationaffecting the organisation, the developmentof Shelterline, etc.

Team meetings are held regularly at all levels,from the Board and Finance Committee,through to the Senior Management Team, andall relevant teams at ShelterÕs various operatingsites. A staff conference Ð involving all staffÐ is held every two years. Housing Servicesalso hold a separate conference every two years.

There is a monthly staff newsletter ÔKey PointsÕwhich incorporates news from the Director andfrom the various departments/regions.The newsletter also keeps staff in touch withcampaigning issues, news of ShelterÕsactivities, and staff news and views.

Comprehensive induction proceduresThere is a formal induction procedure for allnew staff, where they have the opportunity tomeet key people, spend time with HumanResources going through procedures, such asthe appraisal system; how communicationworks through line managers; and the variouspolicies such as pay, annual leave, etc. Detailsare also given about what departments andsections do, and where to get further informationabout such matters as equal opportunities,the trade union, the E-Mail system, etc.

Employee SecurityAlthough employment patterns have beenstable, and Shelter is currently expanding, theorganisation cannot provide any long-termguarantee of employment because of itsdependence on outside funding for most of itsvarious activities, and in some cases people areemployed on fixed-term contracts.

In the Housing Services area there is a highproportion of long serving employees, althoughin Head Office there is a higher turnover. This isin line with the charityÕs need to attract newblood. Some of the work on the new Shelterlineproject has been sub-contracted.

Terms and Conditions of EmploymentFair and equitable treatment of employees isconsidered to be an absolute requirement ofemployment policy within Shelter.

Staff are employed on a wide range of terms tosuit their personal needs as well as those of theorganisation. Where possible use is made of:

● flexible working hours, with staff able tochoose their own start and finish timeswithin the constraints of maintainingservice to clients

● job sharing● part-time work

Shelter has policies covering many aspects ofthe employment relationship, including thepension scheme, ensuring reasonable workingconditions, and working life.

The Union representative acknowledged thatwhilst in terms of pay Shelter cannot competewith comparable private sector pay levels, itdoes compete effectively on other aspects ofworking conditions, for example flexibleworking hours, home working, sabbaticals,employee development and learning strategies.It is these measures which ensure that despitethe stressful character of the work, labourturnover rates are low.

Team Working Shelter is organised completely on the basis offunctional teams. Under the Board of Trusteesthere is a Senior Management Team, then aseries of Divisional Managers, below whicheveryone is organised into working Teams. Inthe Housing Services area there are RegionalTeams which manage the Housing Aid Centres.These vary in size from 3 to 15 people.

84

Flexible Working and EmpowermentIn general terms employees have a high degreeof discretion over the organisation of theirwork. They plan and perform to their own workschedules within their job descriptions. Theycan carry it out in the way they think best to acertain extent, depending on the needs of teamworking. Ideas and suggestions are taken onboard at the regular team meetings.

As one of the trade union representativescommented in this respect, ÔShelter is verymuch team-orientated, and there are regularteam meetings. People can plan their own workand their hours within boundaries.Õ

HarmonisationAlmost all terms and conditions areharmonised. This includes holiday entitlement,pension scheme, maternity, paternity and sickleave entitlements.

As befits its mission and vision, Shelter has astrong statement of intent in relation to EqualOpportunities, part of which says:

ÔIn its work towards putting an end tohomelessness Shelter must confrontdiscrimination in housing, and ensure itpromotes equal opportunities in all aspects ofits own policies and practices as an employer.Shelter therefore declares that it will attempt tochallenge discrimination in all its forms, directand indirect, in the following ways:

● by adopting measures to eliminatediscrimination in its employment andmanagement practices

● by exposing and suggesting remedies todiscrimination in housing

● by ensuring its services are equallyaccessible to all

● by actively encouraging others to do the sameÕ

Employee DevelopmentShelter employs a high proportion of graduates(85% of all the employees, includingadministrative staff), and provides opportunitiesfor development and promotion within theorganisationÕs tight funding constraints.

Employee development within Shelter is basedupon its competency-based appraisal system.Job Descriptions set out the competenciesrequired for each function, and the developmentobjectives of individuals are set through annualappraisals and monthly one-to-ones. Staff areencouraged to discuss the development of their

own career plans, and these are also furtheredby employing staff Ôcross-functionallyÕ ondifferent projects which aid in their development.

12 daysÕ study leave is available per year forstudying for qualifications related to theemployeeÕs job description. The organisationpays up to 50% of the cost for employeeswishing to improve their educational andvocational qualifications to further their careersand personal development.

Trade Union Relations Shelter recognises the T&G (ACTSS) as theunion representing all employees.There arecurrently 7 union representatives, a number dueto increase in that the introduction ofShelterline will result in the organisationemploying about 80 extra staff.

The Joint Negotiating Committee (JNC) meetsquarterly with the management to consider awide range of issues, including the negotiationof terms and conditions of service, andspecial JNCs are held to deal with pay issues.The Staffing and Resources Director alsomeets the principal union representativemonthly on an informal basis. In her opinion, itis important to keep the dialogue going with theunion, and Ôyou donÕt get anywhere bya confrontational approachÕ.

Industrial relations in the voluntary sector had avolatile image in the past, perhaps becauseorganisations like Shelter attract the sort ofpeople who Ôpassionately believe in the causeÕ.Shelter had some difficult industrial relationswith the union at the time of the merger withSHAC. Over the years this has changed, andShelter and the union are constantly engaged inthe process of improving mutual relationships.While, for example, in the past the union wasmerely consulted on matters such as thedrafting of employment policies, now they areconsidered to be much more involved in thesedecision-making processes.

Continuous Improvement and QualityStandardsIn part, ShelterÕs commitment to achieving arange of external quality standards is driven bythe fact that they are a necessary prerequisite tosecure funding from government agencies andlocal authorities. In particular, quality standardshave to be met by Housing Services. Thesestandards are set by the government and by thelegal aid board.

85

However, in addition to these measures, Shelteris developing its own customer service andperformance management standards.

Shelter actively invites employeesÕ suggestionsfor improvements to working arrangements andservice to both customers and clients.The organisation uses the regular staff surveysto monitor its progress in these areas, and alsoworks closely with the trade union ondevelopment of policies.

Other Partnership Practices

Job Descriptions are competency-based, and areagreed between manager and employee. Thereis an Equal Opportunities Forum Ð an electedforum, but not elected through the unionstructure and also a Health and Safetycommittee, which is made up of unionrepresentatives.

The Future

Shelter is committed to valuing individuals whowork in the organisation, and to making sure allare working to the same end. The Staffing andResources Director sees the future asencompassing:

● improvement of internal communications● improvement of the decision-taking process● empowerment; trying to give people more

power to take decisions

14. ST LUKEÕS COMMUNICATIONS

Sector: Other servicesProducts/Services: Communications/AdvertisingAgencyNo of employees: 97Unionised: non-union

Introduction

St Lukes is an extremely unusual andinteresting company, which has attempted tocreate an organisation which operates withouthierarchy. This employee-owned companydefines itself as a stakeholder organisation, andwas founded on the belief that work should befun, fulfilling and fair. The imaginativeemployee relations policies adopted by StLukes offer a fascinating example to allorganisations, and particularly those wishing topursue a partnership approach. Whilst St Lukesdo not use partnership to describe theiremployee relations, their policies and practicesexceed established definitions of partnership.

Company Background

St LukeÕs was founded in 1995 and claims tobe the worldÕs first ethical, stakeholdingadvertising agency (or Ôcommunicationsresource officeÕ).

The company was formed out of an existingagency, part of the international group ÔChiatDayÕ, as the result of an employee buy-out ofthe advertising side of the business. At the timeof the buy-out, there were 37 employees withinthe agency, who then owned their own company.As the Director of Marketing commented, Ôtheyhad all joined the mutiny and were able tocreate the company they wanted to createÕ.

St LukeÕs is also, literally, a young company,only the MD and two others being over 40.

The Employee Relations PhilosophyÐ A Stakeholder Company

St Lukes tends to use the word ÔstakeholderÕ todescribe the relationship between theorganisation and the employees. As theirPersonnel Manager commented, ÔWe createdthe concept around the people.Õ ÔPartnershipÕis the word used to define client relationships.

Every employee is a shareholder in thecompany. New employees are entitled tobecome shareholders after six monthsÕprobationary service, and the number of sharesheld by an employee is related to their length ofservice, with shares reallocated at the end ofevery year. If you leave the company, you haveto sell the shares back.

The shares are administered by QUEST(Qualifying Employee Share Trust) which isresponsible for their allocation. The principleunderpinning the stakeholding system, as theDirector of Marketing commented is that ÔYoursalary is paid for your day job. Your shares arenot free; they pay for your responsibility as astakeholderÕ (emphasis added).

The agency has four main goals, of which tworelate directly to employee relations. Thesegoals are:

1. financial performance2. quality of work3. impact on clientsÕ business4. the well-being of staff

86

Employee Relations Policies: ÔGetting Outof the BoxÕ

Flexible working and appraisalReflecting the stakeholder principle, work isorganised on a very flexible basis, with a strongemphasis on individual discretion andaccountability, and non-hierarchical processes.

There are no job descriptions within St Lukes,and everyone is encouraged to work Ôoutsidetheir ÔremitÕ, and not to be Ôstuck in a box.ÕStarting and finishing times are very much leftup to the individual employee.

As one of the employee commented, Ôwe have alot more responsibility here which rides off thephilosophy of St Lukes.Õ

In terms of how work is organised, employeeswork in project teams, which are very muchself-managed, although there is also a linemanager for the purpose of appraisal and day-to-day resource decisions.

There is a review system of everyoneÕsperformance. This is a forward-looking exerciseat which an employeeÕs development isdiscussed and planned, and performancetargets are agreed. A ÔtemplateÕ is used(the appraisal is ÔpaperlessÕ) and the parties areencouraged to use it flexibly.

Every year employees choose two otheremployees to review their wages.The Personnel Manager suggested that a veryresponsible reward culture is operating withinSt Lukes. As she commented ÔIn some placesyou steel yourself to ask for more money andyou give reasons why you deserve it, but atSt LukeÕs you and your performance areexposed; there is a lot of self-selection.Õ

Personal DevelopmentPersonal development is discretionary(i.e. employees can define their own learningneeds and targets), with the proviso that staffshare their knowledge with colleagues. St Lukesalso runs a Ômake yourself more interestingÕcampaign which helps finance employees totake courses that are unrelated to work.

Every five years employees are entitled to afour-week sabbatical which they can take forwhatever purpose they wish. (Although thecompany is only three yearsÕ old, previousservice with Chiat Day counts as part of thequalification period).

The Agency does not enter for awards as amatter of policy. This applies to such initiativesas IIP and the ISO 9000 series.

Interactive work spacesThere are no offices or dedicated meetingrooms in St LukeÕs. Instead there are ÔBrandRoomsÕ which are devoted to, and are used by,clients. They are decorated and fitted out to theclientÕs taste (e.g. the ClarkÕs room is like a shoeshop), or to reflect the product that the BrandRoom exists to promote (eg the Boots No 17room is furnished like a teenagerÕs bedroom).

Employees work anywhere they find itconvenient to do so, as there are PCs availablethroughout the building, including therestaurant. No employee has their own desk,and personal space is confined to a lockerper person, although there is a darkened quietroom for relaxing.

There are no fixed telephones; everyone has amobile phone which works both inside andoutside the building. Employees can choose towork at home if they wish to, and the companyhas the internet and IT facilities to allow anyoneto do so effectively. There are no secretaries.

St Lukes believe that one of the advantages ofcreating this kind of working environment, isthat it does genuinely challenge and erodetraditional status symbols, and isolated ways ofworking. As the Director of Marketingcommented, ÔIt is important that you donÕt measuresuccess by how big somebodyÕs sofa is. ItÕs avery collegiate atmosphere, and everyone isencouraged to put their ideas forwardÕ.

In the Managing DirectorÕs view, St LukeÕshave succeeded in eliminating the two moststressful things about work: hierarchy, andmind-numbing routine.

The employees interviewed confirmedthe success of these innovations.One commented that in most advertisingagencies people on the administrative side areÔput out of the way Ð in the basement or the atticfor example Ð because they are not ÒcreativeÓ.Here we are right in the centreÕ.

CommunicationsAs you would expect, given the stakeholdervalues of the organisation, St Lukes attemptsto communicate openly, transparently anddirectly. Staff are fully informed on all mattersrelating directly to the business, including

87

such issues as major capital investment,new products, new services, and theintroduction of new technology.

There are two vital meeting streams, in whichkey information is communicated. Firstly, everyMonday at 9 am, everyone in the company getstogether, to discuss pressing issues. There arealso daily account meetings at which staffparticipate.

Secondly, on the last Friday of every monththere is a creative review called the FlagMeeting at which everyone is brought togetherto talk about their work. This is a structuredmeeting at which people have to makepresentations and talk about, for example, theirÔfive favourite thingsÕ. In the view of thePersonnel Manager, ÔThese meetings givepeople a feeling of empowerment; there is theopportunity to say what you want, and, if youargue articulately, to get itÕ.

One of the employees interviewed said that inher experience, ÔthereÕs nowhere else where youcan say what you think like you can here.Õ

Additionally, the company was born on StLukeÕs Day (18th October) and every year onthis day there is a special meeting at whicheveryone makes a contribution.

Employee RepresentationQUEST is the legal body which issues theshares in the company. It is also the governingbody of the Agency. There are 6 members ofQUEST elected annually by the staff and theyalso have a remit to move the Agency forward.The members are elected by differentconstituencies within St Lukes, and their role isregarded as Ôneither staff nor managementÕ.They hold meetings, and Ôget things doneÕ.

QUEST is collectively responsible for mostaspects of running the company, and wasresponsible for establishment of the pensionfund. As such, St Lukes does not have a formalsenior management team in the usual sense.

Company StructureUnder QUEST there is a managing director, anda chief operations officer. Besides a CentralServices team there are two operating Groups,each of which is self-contained, with its ownoperational head, accounts handling, productionand creative staff. The groups are not rigidhowever, and cross-fertilisation is encouraged.The intention of having two groups is tomaintain the sense of belonging to Ôa familyÕ.

There is also the Treasury, which is responsiblefor monitoring values as well as setting theannual budget, and a quality control committee.There are also several forums that allowanything of importance to be voted on. In thecompanyÕs view, fostering democratic decision-making processes has brought clear benefits. Asthe Personnel Manager commented, ÔIt takeslonger, but the results are better.Õ

The employees interviewed confirmed thatthese structures have enabled them to have areal say in the character of the business. As onecommented Ôwe discuss the whole running ofthe businessÕ, including whether certainaccounts should be rejected on the basisof ethical judgements.

Employment securitySt Lukes is committed to offering employmentsecurity, buttressed of course by the employeeownership of the business. The advertisingindustry as a whole is currently forecasting arecession and the laying-off of staff. However,St Lukes have built up significant cash reserves,and their Managing Director indicated thatÔWeÕll take any other strategy rather than laypeople off.Õ Other possible options, whichwould be adopted instead of redundancies,include all staff undergoing a pay-cut.

Harmonised pay and conditionsAll terms and conditions are harmonised.

Outcomes

The AgencyÕs financial successes is testimonyto the efficacy of its organisational design. StLukes achieved Agency of the Year award for1997, and has secured key accounts such asBoots, Ikea Furniture, and Eurostar. The valueof its billed work in 1998 was £85 million, andthe company does not bid for new accountsworth less than £5 million, unless there is avalid reason for doing so. The company alsoworks as a Ôconviction company,Õ insofar as StLukeÕs has turned down the chance to obtainpotentially lucrative contracts on ethicalgrounds. The company believes that this operatingstrategy is vital if St Lukes is to free itself fromthe widely held image of advertising peoplepossessing low levels of honesty and ethics.

In broader employee relations terms, the moststartling outcome is the phenomenally low levelof labour turnover within St Lukes. Since thecompanyÕs inception, only one person has leftto join another company. This is entirely againstthe norm in an industry characterised by very

88

high levels of labour mobility. As the PersonnelManager commented, ÔThis is a hard industry,not 9-5, it impinges on outside life.ItÕs also quite incestuous, people move aboutin this industry.Õ

Finally, labour absenteeism is negligible withinthe company.

15. TRIFAST PLC

Sector: ManufacturingProducts/Services: Manufacture and distributionof industrial fasteningsNo of employees: 827 world-wideUnionised: Non-unionised

Introduction

Trifast is an interesting example of anorganisation adopting a partnership approach asa direct result of a change process embeddingteamwork within the organisation. The successof these new initiatives within the organisationhas led to the adoption of an employee relationsphilosophy based on trust and mutual respect.

Company Background

Trifast was formed in 1973, and floated on theStock Exchange in 1994. Trifast has built itssuccess on high quality customer service in ahighly competitive market, which is dominatedby a few major players. The company isorganised into small, profit-centred business units.

Employee Relations Philosophy

Trifast has a clearly articulated employeerelations philosophy, based on respecting andvaluing their employees, and that individualsshould aspire to treating each other as fairly andas positively as possible within the workplace.This philosophy is captured in a number of keywords, which are listed on a plastic card givento every employee, which is entitled ÔTrifastFolk are Switched On FolkÕ.

The Partnership Philosophy

Although ÔteamworkingÕ is the principle by-word within the company, Trifast does use theword ÔpartnershipÕ to describe the relationshipbetween employees and the company. Thecompany talks about the idea that everyone whoworks at Trifast are Ôpart of one partnership Ðour partnership.Õ

To re-inforce this aspiration the company hasreinterpreted the companyÕs initials (TR) tomean Total Reliability, and they stressreliability in three main areas:

1 Reliability in dealing with our customers2 Reliability as an employer3 Reliability as an employee

In other words, Trifast places considerableimportance on matching rights andresponsibilities, and that if every employeewithin the organisation Ôkeeps their promisesÕ,this grows respect and trust.

89

We glow and spark when we are:

¥ Valued¥ Respected¥ Recognised¥ Thanked¥ Asked for our opinion¥ Kept informed¥ Trusted¥ Rewarded fairly for our efforts¥ Encouraged to grow our knowledge and

self-esteem

But, because we are only humanÐ We turn off and die when we are:

¥ Criticised¥ Ridiculed¥ Ignored¥ Taken for granted¥ Kept in the dark¥ Made scapegoats¥ Deceived¥ Repressed¥ Treated as unimportant

So please keep us turned on . . . treat us asyou like to be treated yourself

Partnership Practices

CommunicationsThe company places significant emphasis onthe importance of good communications. Thereare weekly two-way team briefings throughoutthe organisation, and monthly progress figuresare distributed to staff within the differentbusiness units. Trifast operates on the basis thatno internal reports are to be considered secretdocuments. There are regular shortmanagement meetings, to communicateinformation of general interest and to enableinformation to be cascaded through theorganisation when necessary. Extensive use isalso made of newsletters, memos, noticeboards, and posters, and there is also an in-house magazine.

Employees confirmed that thesecommunication processes have proved effectivein making employees feel they are valued andhave a voice. As one employee commented:

ÔThereÕs no employee who wouldnÕt know thatmanagement do recognise their contribution,and listen to them. And we communicate two-way all the time. All employees feel there issomeone to go and talk to.Õ

TeamworkingTeamworking is a vital part of the operatingphilosophy at Trifast, and the key foundation ofchanging working practices. At the outset of theteamworking change process within Trifast,which began four and half years ago, thecompany invested significant resources inteambuilding and teamwork training, utilisingoff-site and outward bound facilities. Under theslogan, ÔNone of us is as smart as all of usÕ theobjectives of the training were to assistparticipants to:

● become aware of the criteria for goal setting● improve communication towards a common

understanding● become aware of the steps required for

effective teambuilding● realise the importance of interpersonal

behaviour and relationships● realise that real success can only be

achieved through teamwork● appreciate that experience can be a block,

and that creativity is important

The Deputy Chief Executive indicated thatoriginally the companyÕs thoughts were thatteamworking would improve Ômonitor andcontrolÕ processes, but it was soon realised that

team members themselves can drive thebusiness through their activities. For example,whenever necessary, key players meet to formproject-based teams which are disbanded whenthe work has been done. Examples of thisinclude quality improvement and the companyÕscustomer service programme, called MAD(Make A Difference). A feature of all theseproject-based teams is that they arenon-hierarchical; the main qualification for thechair of the team being that they are Ôa personwho can run meetingsÕ. The chair role is bydesign not usually played by the mostsenior person on the team.

These measures have helped to createan organisational culture where staff at alllevels are actively encouraged to make acontribution, to question what they are doing,and how they do it.

One symbol of these changes is that jobdescriptions are becoming less and lessimportant in structuring work and tasks. TheHead of Human Resources talked about thespirit of these changes. She indicated that, ÔTheway weÕre moving, we may not have jobdescriptions much longer Ð more ÒroledescriptionsÓÕ.

In terms of the teamworking structure, the 80employees at the Uckfield factory site areorganised in seven teams. Team size varies fromtwo to 14, and larger teams are frequentlydivided into smaller units, depending on thenature of the work being completed. A strongemphasis is placed on cross-functionality andcommunication between teams.

The employees interviewed confirmed that theteamworking processes have led to increasedjob autonomy. One employee, comparingworking with Trifast with her previousemployer, noted that: ÔYou are given a lot ofautonomy and responsibility in this company.This is good, but on the other hand a cultureshock for some.Õ

Trifast organise a TQM tour every year wheresenior directors will visit every site to talk tostaff, giving them a chance to ask questions.The meetings are held in small groups and thedirectors update staff on companydevelopments, philosophies and aims for thefuture. These tours are seen as an effective wayof enhancing 360 degree communication.

90

Terms and ConditionsTerms and conditions of employment are underconstant review to ensure that the companyoffers competitive benefit packages, includingsick pay and other benefits. There is a pensionscheme, which is harmonised for all employeesbar executive directors, and holiday provision isalso identical for all staff.

Reward Mechanisms and FinancialParticipationTrifast operates a limited system ofperformance-related pay, and financialparticipation. Some pay is related to profits, andis based on Group results Ð giving people anincentive to be cost conscious. After 1 yearÕsservice employees can join an employee shareownership scheme.

Learning and Development TrifastÕs overall vision statement is backed upby a Training and Development Mission Statement,which outlines that the organisation aims to:

Ôenable every Trifast employee to learn theskills necessary for them to perform theirfunction to the best of their ability, bycontinuously assessing and implementing thetraining and development needs of theindividual, team and organisation, and linkingthem to our businessÕ.

Reflecting these aspirations training is closelytargeted to meet the needs of each job and theneeds of the business. As the Head of HRcommented, ÔWe are targeting training moreclosely, and are expecting individuals morethan ever to give up, for example, an evening aweek and to do assignments. In return, ourpeople also feel specialÕ.

Employees indicated that it has been a usefullearning experience to have to make theirtraining requests along two dimensions Ðbenefits to the employee, and benefits to thecompany. One employee commented that Ôwedo have a real say in our training anddevelopment. I want to develop myqualifications in training, and I am confident thecompany will pay for this.Õ

The companyÕs achievement of the Investors InPeople (IIP) standard is viewed as an importantaid to staff motivation. IIP accreditation hasrecently been gained for the second time. Whilethere are no formal procedures for givingfinancial support to employees wishing toimprove their education qualifications, thecompany will help anyone wishing to do so.

The companyÕs learning strategy is underpinnedby its employee appraisal system. Appraisaltakes place at least twice yearly, and covers allstaff. Considerable stress is placed onconducting discussions with individuals aboutwhat they want to achieve. Each staff memberhas ownership of their own development planwhich is kept in their Personal History andDevelopment Folder.

The Deputy Chief Executive envisages thewhole system of appraisal and employeedevelopment as a triangle, divided intofour ÔlevelsÕ

1 The vision Ð what are you trying to achieve?2 Who is going to do what and whoÕs

accountable?3 How are you going to do it, and deliver what

you say you are going to?4 ÔProve itÕ and show me youÕve done it.

This four-stage process applies at all levels,including the Board, who have used it todevelop the Corporate Business Plan.

Maintaining a commitment to continuousimprovementWithin Trifast there is a high degree ofemphasis on quality Ð with most establishmentswithin the group accredited to BS EN ISO 9000.

The company has adopted a ÔFit for the FutureÕcampaign, which they regard as an importantdimension of their future continuousimprovement plans. Through the campaign,Trifast has the aim of being the ÔBest Companyto buy from, the Best Company to sell to andthe Best Company to work for.Õ For each ofthese elements, the organisation has adoptedbusiness plans which show the vision, how thisvision is going to be achieved, and what theproof of success will be.

The company has also instituted a number ofinitiatives to make a Ôquality cultureÕ live andbreathe within the organisation, in terms of bothinternal, and external, customer service levels.On a regular basis the company runs MAD[Make a Difference] campaigns, to reinforcethe commitment to quality.

The gaining of new business and new orders iscelebrated, and teams are encouraged tocommunicate positively with each other inachieving improved customer care. Every teamdisplays its targets/goals and maintains its ownGood News Board about the teamÕsaccomplishments.

91

Other Partnership Practices

ÔKeeping it FunÕThe company places explicit emphasis on theimportance of fun at work. To underline theimportance of fun, the company engages inwhat the Head of HR calls the Ôlittle thingsÕ,such as:

● team events, and occasional gifts,to celebrate successes

● Ôdress downÕ day (Friday)● occasional fancy dress days● giving a present to all staff to celebrate

the 25th Anniversary of the company (1998)

Towards EmployabilityThe HR Logo is ÔQuality through your CareerÕ.This symbolises what the company refers to asthe partnership between management and thestaff. The company makes a commitment toproviding a good working and learningenvironment, and in exchange the staff areexpected to put quality into their work.

Comprehensive Induction ProcessTrifast makes a concerted effort to induct newemployees effectively into the organisation.Every new staff member is issued with theirown personal folder Ð Your Personal Historyand DevelopmentÕ. It expands and develops asthe employeeÕs career progresses and becomesa permanent record Ð or portfolio Ð of a personÕsgrowth with Trifast. It has sections for:

● Personal● Corporate● Training and Development● Benefits● Information, such as company history,

the family tree, the vision statement, qualitymanagement policy, training anddevelopment mission statement andtelephone numbers

Employment SecurityAll vacancies including senior managementposts are advertised internally, and theemployees interviewed confirmed thatcandidates are mostly promoted from within.

Outcomes

Trifast operates in a very competitive marketplace, which is dominated by a small number ofmajor suppliers. Nonetheless, during the pastfive years the company has increased its world-wide presence, doubled its turnover, trebled itsprofits and doubled its workforce. In terms

of the most recent performance figures, duringthe first half of 1998, turnover is up 16%and pre tax profits are up 14%.

The Future

Trifast has a targeted growth strategy, driven byoverseas expansion, in particular by targetingmultinational customer plants rather thangeneral overseas markets.

On the employment relations side, the managersemphasised continued action on Ôdriving ÒbestpracticeÓ deeper into the 30-plus business teamscombined with the planned recruitment ofprocess champions.Õ

92

End Notes

1 Elementis Chromium was formerly known as BritishChrome and Chemicals.

2 Extracts from the Partnership Charter can be found at theend of this case study.

3 These two unions will soon vote on merger proposals.The ballot is due to take place in January, and the merger isexpected to be complete by May 1999.

4 Extracts from the ÔPrinciples of the CommonwealthÕ canbe found at the end of this case study.

BIBLIOGRAPHY

Ackers, P. and Black, J. (1991) ÔPaternalist Capitalism: An Organisational Culture in TransitionÕin Cross, M. and Payne, G. (eds) Work and the enterprise culture, The Falmer Press.

Ackers, P. and Payne, J. (1998) ÔBritish trade unions and social partnership: rhetoric, realityand strategyÕ The International Journal of Human Resource Management, Vol 9, No. 3.

Anthony, P.D. (1977) ÔThe Conduct of Industrial RelationsÕ London: Institute of Personnel Management.

Appelbaum, E. and Batt, R. (1994) The New American Workplace: Transforming Work Systemsin the United States, New York, ILR Press.

Beaumont, P.B. (1991) ÔChange in Industrial RelationsÕ London, Routledge.

Beer, M.,Spector, B., Lawrence, P., Mills, Q. and Walton R. (1984) Managing Human Assets,New York: Free Press.

Birecree, A., Konzelmann, S. and Wilkinson, F. (1997) ÔProductive systems, competitive pressures,strategic choices and work organisation: an introductionÕ in International Contributions to LabourStudies, 7, 3-17.

Bradley, K., and Hill, S. (1983) ÔAfter Japan: The Quality Circle Transplant and ProductiveEfficiency.Õ in British Journal of Industrial Relations, pp. 291-311.

Bradley, K. and Hill, S. (1987) ÔQuality Circles and Managerial InterestsÕ in Industrial Relations,Vol. 26, No.1.

CBI. (1998) ÔIn Search of EmployabilityÕ A CBI discussion document.

Department of Trade and Industry (1998) ÔFairness at WorkÕ, DTI, London.

Edwards, P.K. (1992) ÔIndustrial Conflict: themes and issues in recent research.Õ in British Journalof Industrial Relations, 30:361-404.

Fombrun, C., Tichy, N.M. and Devanna, M.A. (1984) ÔStrategic Human Resource Management.New York: John Wiley.

Guest, D., and Peccei, R. (1998) ÔThe Partnership Company: Benchmarks for the future.ÕInvolvement and Participation Association, London.

Hendry, C. and Pettigrew, A. (1990) ÔHuman Resource Management: an agenda for the 1990sÕ,International Journal of Human Resource Management, 1 (1):17-44.

Hill, S. (1991) ÔHow Do You Manage A Flexible Firm? The Total Quality ModelÕ in Work,Employment and Society, Vol. 5, No. 3, pp. 397-415.

Hyman, R. (1997) ÔThe Future of Employee RepresentationÕ in British Journal of IndustrialRelations, 35:3 pp.309-336.

Industrial Democracy in Europe, International Research Group. (1993) ÔIndustrial Democracyin Europe revisitedÕ Oxford University Press, Oxford.

Involvement and Participation Association (1998) ÔIPA MagazineÕ April.

The Irish Government (1996) ÔPartnership 2000 for Inclusion, Employment and CompetitivenessÕ.

Keep, E. (1993) ÔCorporate Training Strategies: the vital component? in J. Storey (ed)New Perspectives on Human Resource Management, London, Routledge.

93

Kochan, T. and Osterman, P. (1994) ÔThe Mutual Gains EnterpriseÕ Cambridge Mass.:Harvard Business School Press.

Kochan, T. and Weinstein, M. (1994) ÔRecent Developments in US Industrial RelationsÕin British Journal of Industrial Relations, 32:4, pp.483-504).

Legge, K. (1989) ÔHuman Resource Management: a critical analysisÕ, in Storey, J. (ed)New Perspectives on Human Resource Management, London, Routledge.

Lovering, J. (1990) ÔA Perfunctory Sort of Post Fordism: Economic Restructuring and LabourMarket Segmentation in Britain in the 1980sÕ in Work, Employment and Society, pp.9-28.

Marks, A., Findlay, P., Hine, J., McKinlay, A. and Thompson, P. (1998) ÔThe Politics of Partnership?Innovation in Employment Relations in the Scottish Spirits IndustryÕ in British Journal of IndustrialRelations, 36:2 pp.209-226.

Melville Ross, T. (1988) ÔPutting People FirstÕ Introduction to ÔPartnership with PeopleÕ Instituteof Directors, Director Publications Ltd.

Nolan, P. and OÕDonnell, K. (1991) ÔFlexible Specialisation and UK Manufacturing Weakness:A Comment on Hirst and ZeitlinÕ, Political Quarterly, 1:106-124.

Nolan, P. and Walsh, J. (1995) ÔThe Structure of the Economy and the Labour MarketÕ, in Edwards, P.(ed) Industrial Relations: Theory and Practice in Britain, Blackwell.

Noon, M. (1992) ÔHRM: A Map, Model of Theory?Õ in Blyton, P. and Turnbull, P. (eds) ReassessingHuman Resource Management, Sage.

Osterman, P. (1994) ÔHow Common is Workplace Transformation and Who Adopts It?Õ in Industrialand Labor Relations Review, Vol 47, No.2.

Provis, C. (1996) ÔUnitarism, Pluralism, Interests and ValuesÕ in British Journal of IndustrialRelations, 34:2 pp.473-495.

Royal Society for the Encouragement of Arts, Manufactures and Commerce. (1995) ÔTomorrowÕsCompanyÕ London, RSA.

Scase, R. (1998) ÔThe Challenge of Work and Employment beyond 2010Õ in Institute of Directors,ÔPartnerships with peopleÕ Director Publications Ltd.

Schuller, T. (1985) ÔDemocracy at workÕ Oxford University Press, Oxford.

Sisson, K. (1996) ÔClosing the Gap Ð Ideas and Practices: Direct Participation in OrganisationalChangeÕ European Foundation for the Improvement of Living and Working Conditions, Dublin.

Streeck, W. (1989) ÔSkills and the Limits of Neo-Liberalism: The Enterprise of the Future as a Placeof LearningÕ, Work, Employment and Society, 3 (1): 89-104.

Streeck, W. (1991) ÔOn the Institutional Conditions of Diversified Quality ProductionÕ, in Matzner, E.and Streeck, W. (eds) Beyond Keynesianism. The Socio-Economics of Production and FullEmployment, Cheltenham, Edward Elgar pp. 21-61.

Taylor, P. and Ramsay, H. (1998) ÔUnions, Partnership and HRM: Sleeping with the Enemy?in International Journal of Employment Studies, Vol 6, No. 2.

TUC (1996) ÔPartners for ProgressÕ TUC, London.

Warner, M. (1984) Organisation and experiments, John Wiley & Sons Ltd.

94