Getting labour more involved in their companies is essential and possible.
Most human resource or industrial relations experts will agree that getting workers fully involved in the destiny of a company is the ultimate goal of sound employee relations. But, as Moneyweb reported this week, the 2011 Global Entrepreneurs Monitor (GEM) shows that a mere 0.32% of South African employees are actively engaged in Entrepreneurial Employee Activity. At the same time only 16% of employers offer “high” support for new ideas and 52% offer “some” support.
Employers often go to great lengths, through skills and development training, employee benefits, incentives, care services and intense internal public relations, to establish a commitment that transcends the formalised contractual relationship. Yet, even those with the best labour practices fail to unleash true employee involvement and rarely will you find a collective employee loyalty that is prepared to make real sacrifices in the interest of a company’s sustainability or even survival.
Rare, but not impossible.
One such case has been playing out in South Africa in the form of Aurora Empowerment systems. Thousands of words have been written on Moneyweb and elsewhere on this amazing saga of modern day owner larceny that has destroyed mining assets and operations worth millions, and left more than 5 000 people out of work. The story has been reported on extensively enough for me to skip the detail apart from saying that it has been an intriguing if not bizarre story going far beyond company news, especially because of the political connections of those involved.
Of course, this is exceptional, if not criminal shareholder behaviour. The first thought that comes to mind is that you can never create laws to stop this kind of misconduct. The Mervyn King rules on governance, as well as company and other laws were clearly incapable of preventing the mess.
But the real story, the difficult one to tell, is the human one. Again, many words have been written about the suffering of employees, the “cops and robbers” games that were played on the sites, and the deadly illegal mining that followed after formal operations came to a halt. The angle that fascinated me most, and which was told on M-net’s Carte Blanche some weeks ago, was the heroic response of some of the employees. There is Gideon du Plessis (Deputy Secretary-General: Solidarity) whose catchy quote "There are people who are crying, there are people who are dying, because we deal with people who are lying" has underpinned his fight with Aurora and made him a hero to the miners.
Then there’s the Grootvlei mine manager, Herbie Trouw: "These people are just raping the mine; they were stripping for their own benefit." Trouw created a modest profit share scheme from gold still found in the old smelter plant to keep some security people on site. His smuggling of some clandestine gold smelter records to the new liquidators earned him a “suspension” from the owners. He also hid pumps to save them from being cut up and scrapped, in case they could salvage mining operations.
There’s also “Oom” Douw van Niekerk, the veteran smelter who kept his own “secret” records at great risk to himself, and finally, the 120 man maintenance crew that went without pay for months simply to prevent the mine from flooding and causing a fall out in the local town.
One of my favourite labour hero stories goes back some years to the United States, where a metal factory Trade Unionist, Joe Scanlon, managed to save his company by getting labour and management to agree to a flexible pay programme. This later became the well-known and fairly widely used Scanlon Plan.
I saw something similar in South Africa at the Ergo gold reclamation plant, where a flexible pay scheme was hammered out between a shop steward and a middle manager. And then, of course, there was Cash Build, which was saved from severe labour unrest when Albert Koopman introduced a ground breaking participative management system. There have been many more.
Yes, it is indeed possible to get a committed labour force prepared to make sacrifices in the interest of the company. But this requires much more than soft “touchy-feely” programmes and employee benefits including pay incentives.
In my consulting years, I saw employee aspirations crushed the most by an absence of empowering leadership, especially at first line supervisory level. In one case, I had just completed a basic customer care workshop for general staff at a tyre fitment centre. Inspired by the programme, one tyre-fitter suggested that a stronger link be established between the fitment team and the customer, and that the team leader should be allowed to call the customer the following day to check on his or her satisfaction with the job. A supervisor in the workshop immediately shot the idea down on the grounds that it would be too costly. The proposer was left feeling stupid and discouraged.
In another case, a supervisor at a large mining company informed me with great pride how his empowering policy was working. He had enhanced a tea lady’s job satisfaction greatly by teaching her how to capture data on computer. The only thing that concerned him was that she might ask for a pay increase! This supervisor forgot a simple rule – contribution has to be supported by recognition and reward, even if it is not expected.
More recently, we read about loyal bank employees with decades of service, being marched out of their workplace after a staff reduction process. This was followed by a report of multi-million rand executive pay outs at the same bank.
This is the more serious hurdle to employee involvement. It impairs all others and cannot easily be removed. It is the simple and broad understanding that companies exist to make money for shareholders, and that all other resources, including labour, are costs in the process.
It is the long out-dated but persistent one dimensional commodity view of labour that it is little more than a “factor” of production – a view that is still being taught widely today. No matter how well intended other efforts are, including the human resource proclamation that “people are our greatest asset” (also something of a commodity interpretation of labour), the overriding message will come from the accountants that “people are our greatest cost”. The only way to remove this barrier is to forge a common focus on service to customers. In turn a unifying common purpose cannot be sustained and encourage real involvement unless it is underpinned by common fate which implies some or other fortune sharing system. Then Entrepreneurial Employee Activity will be far more firmly grounded.
Ultimately labour involvement is going to depend upon labour itself and its willingness and ability to claim its rightful position in the wealth creation process. This implies sacrifices and a willingness to put pay at risk in exchange for greater job security.
Its real benefit lies in greater labour empowerment because involvement and empowerment are the same thing.