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WORKFORCE BRIEF #3
EMPLOYEES AS PARTNERS IN CHANGE
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* This brief was developed based on *
* 18 focus groups that the National *
* Workforce Assistance Collaborative *
* conducted in February and March of *
* 1994: seven with businesses, six with *
* service providers, and five with *
* employees. Sessions were held in *
* Atlanta; Baltimore; Chicago; *
* Cleveland; Dallas; Detroit; Los *
* Angeles; New Brunswick, NJ; *
* Washington, DC; and Westmoreland, PA *
******************************************
INTRODUCTION
Companies striving to reinvent themselves in order to compete
successfully are beginning to recognize that it is the combined
knowledge of all of their employees that can differentiate them from
their competition and give them the competitive edge they need in
the marketplace. Realizing this competitive advantage requires that
employees and managers be partners in change. This offers a special
challenge to many companies.
To learn more about how employees can serve as partners in
company change efforts, the National Workforce Assistance
Collaborative conducted a series of 18 focus groups with employers,
employees, and service providers from across the country. They told
us:
* Why employees are a critical part of any change effort;
* What the elements of a new covenant between the company and
its employees are; and
* How to engage workers as partners in change.
EMPLOYEES: THE KEY TO CHANGE
Companies have a limited number of levers by which to
orchestrate organizational improvements. How these levers are used
affects the degree to which employees become partners in change.
Unfortunately, these levers are often handled in a manner that
limits employees' engagement as partners in the change process.
Focus group participants noted only three levers for making change
in a company: design, technology, and people.
*************************************************
* "It is no news to business leaders that a *
* skilled workforce can be a strategic trump *
* card. Other elements of a business can be *
* replicated by competitors - machines, *
* processes, raw materials, access to cheap *
* labor around the world. But a skilled, *
* flexible workforce that can create value in *
* ways that matter in the marketplace can offer *
* enduring competitive advantage." *
* *
* - Robert Reich *
* Secretary of Labor *
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Design
The design of an organization - the systems, structures, and
processes within which work gets done - is one lever for change.
Reengineering (identifying and focusing on core business processes),
restructuring (continually improving day-to-day work processes), and
the adoption of self-directed teams are each a method focus group
participants used to change organization design and improve
competitiveness.
The most visible by-product of many design changes is the loss
of jobs. Recent research indicates that change efforts resulting in
job loss have produced only short-term productivity improvements,
along with a demoralized workforce and high levels of stress for the
remaining workers forced to absorb additional work.
New Technology
There is no doubt that technology plays a key role in
transforming organizations. Technological advances have been
instrumental in enabling firms to produce better, faster, and
cheaper. For a limited time, state-of-the-art technology can
provide a competitive advantage to early adopters; to late adopters,
it is the price of entry into the game.
Despite its power, however, technology can simply enable and
facilitate transformation - only people can cause transformation.
Thus, technology is only as effective as the people who use it.
Focus group participants noted that involving employees "up front"
in the design and selection of new technology, and ensuring
employees are trained to use the technology, increase the benefits
obtained.
People
Successful change requires that organizations have employees
capable of functioning in the new environments resulting from design
or technology innovations. The need for more flexible and skilled
workers compels companies to invest in employee learning and
stimulate employee commitment.
As technologies and processes become more complex, businesses
find it necessary to either hire workers with more skills or retrain
current workers. Replacing current workers with new hires can have
the same demoralizing effect on remaining workers as downsizing.
While effective retraining can provide tremendous benefits to
companies and workers, employees in the focus groups cautioned that
poorly planned and/or executed training programs are frustrating and
dysfunctional. Group members mentioned some examples of inadequate
training, including training in skills that are never used, or
"cross training" by placing employees before a new machine without
any instruction or guidance.
****************************************************
* A Baltimore area company send workers to a *
* two-day TQM seminar and a four-day seminar on *
* team building and team leadership. The employees *
* liked the classes, but when the company lost the *
* manager who started this employee involvement *
* initiative, the employees never used the skills *
* learned in the classes. *
* *
* The end result: *
* *
* increased employee frustration. *
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Employee involvement has been one of the most common approaches
for inspiring employee commitment. Unfortunately, employee
involvement programs are not always deployed effectively. Focus
group participants involved in failed employee involvement programs
blamed these failures on the limited scope of the programs or on
management's failure to follow through on employee recommendations.
With technology and ideas moving around the globe at increasing
speeds, a company's workforce is fast becoming its only mechanism
for distinguishing itself from its competitors. More and more
frequently, it is the workforce that enables a company to improve
productivity and firm competitiveness, and create value in the
marketplace. It is ironic that at a time when a skilled, flexible
workforce is being recognized as an enduring competitive advantage,
many companies are adopting management tactics that create an
atmosphere of fear and frustration, not trust and commitment.
Changes in organization design and technology must be aligned and
coordinated with companies' investments in people if employees are
to become partners in change.
*****************************************************
* In one Cleveland company, each employee is *
* trained in all five of the company's work areas. *
* Training is provided by those employees currently *
* doing the work. Employees receive training for as *
* long as they need it. They "pass out" of training *
* when they are able to work two eight-hour shifts *
* in a row without making any errors. *
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THE ELEMENTS OF A NEW COVENANT
Engaging employees as partners in change creates a new covenant
between employers and employees. It is a covenant based on mutual
respect, that reflects the realities of the changing workplace. The
basic elements of this new covenant are emerging from the ongoing
negotiations between employers and employees confronting the reality
of the changing workplace.
Focus group participants discussed a number of elements to a new
covenant:
Employability
Employees and the company share responsibility for enhancing
the individual's employability inside and outside the company. Job
security (the promise of continued employment in a particular job)
is replaced by employment security (the opportunity for continued
employment within a firm if an employee learns new skills) or the
security of employability (the opportunity to learn the skills
needed to find a job of comparable quality elsewhere in the
economy). The shifting nature of security is an emotionally charged
issue. In the new covenant, there is a long-term commitment on the
part of both partners to ensure the worker's employment security, or
at least employability.
Employees are dedicated to the idea of continuous learning and
are ready to improve their skills to keep pace with change. They
take responsibility for managing their individual careers and are
committed to their company's success.
The company helps employees assess their skills and explore job
alternatives, facilitates life-long learning and career development,
and, if necessary, supports no-fault exits.
Training
Ongoing professional development and training strategies equip
workers with a broad range of skills to develop employee
capabilities and flexibility, and to maximize employee
contributions. The company: 1) clearly identifies the skills
needed by employees at all levels, 2) identifies any skill deficits
employees have, and 3) arranges for needed instruction.
The company also develops and supports a learning environment
for all of its employees. While classroom and other formal
instructional activities continue to have an important place in the
spectrum of learning activities, the ultimate act of learning is
embedded in the work that individuals and teams perform. Thus
training still includes formal programs, but also involves
consultation, coaching, and facilitation of performance on the job.
Information
All workers are trained to know what the business is about, the
challenges the company faces, and the contribution they make to
company productivity. All employees are provided with and trained
to read financial information. The organization ensures that
employees can create, receive, and transmit information as needed to
promote continuous company improvement.
Capacity to Act
As part of the new covenant, organizations enable employees to
act. Creating the capacity to act goes beyond the provision of
training and information; it requires providing opportunities for
employees to use their skills and demonstrate their commitment.
Opportunities are provided through individual and collective
involvement in problem-solving at all levels of the company, as well
as individual and collective involvement in decision-making related
to management systems (e.g., plant and equipment, quality and
product, organization and procedures, staffing, and planning
processes).
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* A Cleveland company shuts down for one hour each *
* week for all-staff meetings, at which time *
* employees discuss problems and possible solutions *
* at the plant. Safety problems don't even merit a *
* discussion. If employees have a safety concern, *
* they fill out a form for the maintenance department *
* and the problem is handled that same day. *
*******************************************************
Rewards
The new covenant reflects the concept that employees share in
the risks and the rewards of company operations, and offers
employees both tangible and intangible benefits. It is a given in
the new covenant that the basic terms of employment are fair and
equitable. Through the adoption of such systems as skill-based pay,
wages reflect employees' increased value as a result of training.
In many cases, employees are made partners in the creation and
distribution of wealth. This may involve gain sharing, profit
sharing, and/or stock ownership.
All of the high performance companies in the focus groups had
profit sharing or bonus plans in which profits were distributed
equally across all members of the company. Companies struggling
with change either had profit sharing or bonus plans that did not
deliver, did not have any profit sharing or bonus plans, or had
plans that rewarded management only.
The new covenant also promotes improved company working
conditions, an enriched quality of work life, and enhanced employee
self-esteem.
ENGAGING EMPLOYEES AS PARTNERS IN CHANGE
Change is neither good nor bad; it may have good or bad effects
depending on its implementation. Companies that want change to be
a positive force must understand how to engage employees as partners
in change.
The ability to engage employees depends on a company's previous
history with organizational development efforts. It is more
difficult to gain employee commitment when prior change efforts have
failed to take account of employee needs and concerns. However,
focus group participants from companies with a history of failed
reform efforts noted that, when management communicates with its
workers, treats workers as individuals, and shows commitment to the
change process, employees are still willing to become partners in
change.
Employees and managers from small and mid-sized businesses
involved in both successful and unsuccessful change offered advice
to managers who want to engage employees as partners in change:
* Communicate throughout the change effort. Employees want
to know the company's game plan and the expected results.
Employees expect management to tell them what has happened
and why - both the good news and the bad. They also want
management to admit its errors. Holding both departmental
and all-staff meetings, adopting an open door policy, and
opening the books to all workers can facilitate communication.
* Create a culture that supports change. Workers have been
asked for years "to check their minds at the door," so many
of the changes asked of them as part of the new covenant
are difficult - and scary. Change is also new for many
supervisors. They must alter their traditional perspective
of "us versus them" employer/employee relations. More
importantly, they must alter their behaviors from acting
as lone decision makers to serving as resource providers
and facilitators of teams of decision makers.
Managers must support both employees' and supervisors'
beginning attempts at change if they want them to keep trying.
* Value workers. Assume that employees know what they are
doing and care about their company. Ask and listen to their
opinions. Involve employees in the design and selection of
new technology and other workplace innovations.
Establish an employee involvement program where managers
and employees or employee representatives set the agenda and
all issues, problems, and concerns can be raised. Managers
must make sure they know what they want to accomplish with
their employee involvement programs and set measurable goals
to gauge progress.
* Treat workers equitably. Equitable treatment means no special
treatment of any class of employees, including management.
Employee participants in the focus groups suggested the test
of a supportive culture is whether employees are treated
with respect and dignity.
Substantive actions demonstrating fairness include equitable
reward and compensation plans. More symbolic signs of
fairness include having all workers, including management,
wear the same uniform, abolishing reserved parking spaces,
having all employees eat at a common cafeteria, and
establishing a common office layout to eliminate status
differences suggested by size of office or type of furniture.
This principle of fairness also requires selection, evaluation,
and development systems that ensure that all employees can
"pull their weight."
* Design training to improve performance on the job. Include
managers and workers in planning and delivering training.
This gives training the maximum support and relevancy it needs
to succeed. Provide as much training as possible on company
time. Instruction should last for as long as employees need
it to master new skills.
* Be committed to change. Employees are sensitive to managers'
commitment to the change process. For employees, actions speak
louder than words. Employees gauge managers' commitment by
their follow-through on ideas and their commitment of resources
- time, training, and money - needed to solve identified
problems.
Commitment involves sticking with change efforts - such as
improving employee skills - in good times and bad. It also
requires managers to keep their word. Managers who do what they
say and demonstrate the patience needed to transform a company
will earn their employees' trust - the ultimate bond between
partners in change.
*******************************************************
* In a unionized work setting, engaging employees as *
* partners in change requires that the employer: *
* *
* -Engage the labor organization as a partner *
* recognizing the legitimate role of the union *
* leadership as a change agent; *
* *
* -Recognize the legitimate role of the existing *
* collective bargaining agreement; *
* *
* -Continue to use the existing grievance procedure, *
* ensuring that employee involvement enhances, not *
* subverts, any existing labor-management *
* processes, and *
* *
* -Be cognizant of the value of equal representation *
* of workers and management on any employee *
* involvement team, whenever possible using the *
* union to select the employee members. *
*******************************************************
Steve Mitchell and Barbara Kaufman
February 1995
The National Workforce Assistance Collaborative builds the capacity
of the service providers working with small and mid-sized companies
in order to help businesses adopt high-performance work practices,
become more competitive, and ultimately advance the well-being of
their employees. The Collaborative was created with a $650,000
cooperative agreement grant from the Department of Labor to the
National Alliance of Business. Current partners on the project
include the Institute for the Study of Adult Literacy at
Pennsylvania State University, The Maryland center for Quality and
Productivity, and the National Labor-Management Association. The
Collaborative provides assistance in four areas: employee training,
labor-management relations, work restructuring, and workplace
literacy. For more information, contact Bernice Jones at the
National Alliance of Business. (202) 289-2915.
.