CIPD Podcast 26 - Employment relations

Date: 02/12/08 Duration: 00:14:02

In this podcast top experts Mike Emmott, CIPD’s advisor on Employee Relations, John Purcell, ACAS Strategic Academic Adviser, Employment Relations, Tony McCarthy, Director People & Organisational Effectiveness at British Airways and Andrew Case, the National Secretary with Unite share their thoughts and insights into the forecasts for industrial relations.

Transcript

Philippa Lamb: Hello and welcome to the programme. In this podcast we’ll be taking a close look at employment relations. Back in 2007 strike action hit a five year high and now the latest CIPD survey on the subject is predicting union activity to continue into the coming year. Some media reports have compared the current situation to the infamous Winter of Discontent of 30 years ago when a wave of strikes brought down the Labour government. But, while it’s true to say there has been an increase in unrest, is such a comparison really justified or is it over dramatic? 
To find out what’s really going on I spoke to some of the leading experts in the field, including Tony McCarthy from British Airways, John Purcell at ACAS and Andy Case from Unite. You can find out more about the people featured in the programme, and the research, by taking a look at the show notes that accompany this podcast. You’ll find them at:

cipd.co.uk/podcasts

I began my investigation by speaking to the CIPD’s own Employee Relations Advisor, Mike Emmott. Does he believe we are seeing similarities to the Winter of Discontent?

Mike Emmott: My sense is that the talk about revival of industrial action and Winter of Discontent is pretty much hyped up. It may be an understandable reaction because there has been more industrial activity and threats of industrial action, particularly in the public sector, but in the end I think for the majority of organisations, what our survey shows is that that’s really a bit superficial.

PL: Andy Case is the National Secretary at Unite. I put the same question to him and asked how he sees the outlook from the unions’ perspective.

Andy Case: Clearly, as we speak, we’ve got the credit crunch. The economy is not looking as good as it did a year ago and I think that inevitably leads to conflict because it leads to companies wanting to make change, wanting perhaps to lay off staff and that’s going to cause conflict with unions because their key role is to try and keep people in work and to preserve jobs so I suspect it will result in more confrontation. Now how that’s actually going to display itself I really don’t know. I think we’re in a bit of a better position in terms of being able to defend our members, I don’t think it’s going to result in a Winter of Discontent but I do think that there will be some more conflict, more confrontation, more times when our interest as unions are different to the interests of the company.

PL: So a worsening economic situation is likely to cause more tension and potentially more strike action, but what did Andy feel that the unions’ approach to this unrest would be, and how would he like to see it addressed?

AC: If the economy goes the way we think it’s going to go, there may be more conflict. The question I think will be how those conflicts and problems are actually resolved, and I’d like to see them resolved through some sort of meeting of equals where we try and find a way forward which is good for everyone.
 
PL: Next I spoke to John Purcell, he’s the Strategic Academic Advisor Employment Relations for ACAS; what were his thoughts about the likelihood of strikes in the coming year?
 
John Purcell: The picture varies considerably between the private sector and the private sector. There is enormous potential for industrial action in the public sector. In the private sector I think it will be extremely unlikely. For the last 15 years in the private sector we’ve seen declining trade in the membership, significant decline in the number of employees covered by collective bargaining, which is now at 16% and around about 75% of employees in the private sector have their pay determined by their manager whereas in the public sector membership is 60% and collective bargaining covers 86% of public sector employees, so they’re very different.

PL: So a clear distinction there between sectors with the evidence suggesting that industrial unrest is more likely to affect the public sector, but some well known private sector firms have already been affected, including earlier this year British Airways. I asked BA’s Group Director of People and Organisational Effectiveness, Tony McCarthy, what happened.

Tony McCarthy: We had a dispute with the pilots over the formation of a new business earlier in the year. That was a difficult period and I think there was a whole range of issues, it wasn’t just about that particular item, I think there was a whole load of operational things that the pilots were not comfortable with and not happy with because actually those operational issues were causing an impact on them and their delivery of a service to the customers. We got over that. We’re now in discussion with the pilots about a new working relationship. We’ve had discussions about employing a third party to help both sides come together to a new working relationship and how we behave and engage differently, and we are jointly agreeing to employ this third party to help us come to a new of working over how we can engage differently. They want to do it, we don’t want to fight with the pilots, they don’t want to fight us but sometimes you need to have some difficult periods to go through to actually create a new environment to work in, and that’s where we are at the moment.

PL: A difficult period indeed. BA’s own CEO, Willie Walsh, recently commented that he believed the sector to be in a deeper crisis than at anytime since the 1970s, so I asked Tony where he feels the most pressing challenges lie.

TMcC: There’s a lot of issues going on in the industry. There’s a whole lot of industry consolidation going on, that’s the first bit. The second bit is we’re in the middle of a huge financial crisis. The economy is in a huge financial crisis. That crisis is a banking crisis that’s affecting our business, without question. Our premium routes are between London and New York and we fly bankers between London and New York and people see mergers and people see the banking crisis and people also see the fact that the oil price has been as high as $140 odd dollars a barrel and at the time of doing the business plan we were looking at being about $80 a barrel. Now it’s come down, but by the time it’s come down the dollar/pound exchange rate has worsened. Our people can see what’s going on in the industry, our people understand what’s going on in the industry, they can see that the competition will be fighting for the customers and we have to produce better service.

PL: But in such a pressured environment and with so many challenges to deal with, how does BA plan to keep its people motivated?

TMcC: It’s all about the team they work in, ‘How do you work in that team? What’s your responsibility to the team and what are your team goals and aspirations?’ and ‘What about your manager? Does your manager do for you the things they need to do; managing your performance, coaching you, mentoring you, helping you through some of the difficult periods, getting rid of some of the barriers?’ and then it’s feeling strong about the company and the brand. You’ve got to work on those four areas, and that’s the plan that we have. Work on those four areas, because that then brings you rational and emotional engagement, rational and emotional engagement means people stay with you and deliver more for the customer. It’s easy, to say.

PL: An interesting insight into one sector there, but as the CIPD’s Mike Emmett pointed out, there’s also been a substantial shift in the nature of employment relations generally.

ME: What really matters to employers, in both public and private sectors actually, is what they often call employment engagement and that’s the name of the game, that is by far and away the model of the employment relationship that most people said was the future for them.

PL: But what does employee engagement involve in this context, and is it possible to effectively engage people at a time of pay restraint?

ME: Employee engagement isn’t really about pay and conditions, it’s really about peoples inner sources of motivation; what makes them want to get up and go to work in the morning? What makes them want to do a good job? By and large people do want to do this so in many ways engagement is about stopping managers inhibiting people from giving their best shot. It’s about drawing out about what’s there, it’s not a great deal about how much you pay them. All the evidence is that paying people more has a very short term effect, although if you underpay them they may never come or they may go, so you’ve got to kind of get it right but pay isn’t actually the driver for getting people to do a great job.

PL: I asked ACAS’s John Purcell for his views on the role of employee engagement. In difficult times like these, what contribution does he think it can make to the wider business needs of organisation?
 
JP: It’s very interesting that engagement in the periods of economic growth and employment growth was focused upon the individual employee and their hearts and minds because the employee had the capacity to leave, to move on, they had labour market power so the HR agenda was individualised. In the emerging difficult, troubled economic climate the only way in which you’re able to do this is you continue with the same focus on the individual, but in addition you have to have a form of collective dialogue. You have to be able with employee representatives in the union and non-union settings to share information, to share information on a confidential basis of the challenges facing the organisation and to discuss ways in which you are able to meet the challenges to the business.

PL: I asked Mike if he agrees with John that encouraging a collective dialogue is the best way to strengthen relations and to build understanding between employer and employee. Does the focus need to shift away from immediate individual concerns and towards the bigger picture?

ME: We can’t get too stuck in selling an individualistic model because employers show by their behaviour that they want some mechanism, some machinery, some arrangements for having a dialogue at a collective level. That’s the most interesting thing perhaps, the single most interesting finding from our recent survey is that if you ask them ‘Okay, do you have consultation arrangements?’ and quite a high proportion do have arrangements for consulting employees and then you ask ‘Well is it union or non-union or both?’ there are twice as many people say that they have non-union arrangements for consultation only – twice as many – as say they’ve got union only, and that’s a real turnaround. That’s really something that’s emerged out of a bit of a blue sky. I don’t think that until recently people understood how much employers were pushing the idea of consulting at a collective level, but in many cases they don’t have unions to consult or many groups of employees or some groups of employees within their workforce are not unionised so they need to look for others ways of doing it, and they are doing that and that I think is quite cheering news.

PL: So consultation is clearly a hugely important process but how should it work in practice?

ME: All the evidence is that if you try and set up consultation arrangements ad-hoc it’s tough to find people who want to do it, it’s tough to find people who feel comfortable or capable of doing it and you’ve got to sort of think about it in advance. Just one word about it, it’s not all about setting up machinery, the important thing (as ever) is what underlies that machinery – are the relationships around the organisation (the informal relationships) supporting the machinery or undermining it? So it’s important that, if you’ve got unions, that you maintain a dialogue offline as well as online, that you actually know who you’re talking to, if they’re non-union reps again you just need to remember you can’t save all the communication to when you’re sitting across the table, you must have other ways of actually taking the temperature. It’s not a single shot, one size fits all as they say but certainly consultation machinery is part of the big picture.

PL: Some good advice there on the importance of establishing an ongoing dialogue and strong relationships in the workplace. 
Finally I asked John Purcell for his thoughts on the limits of consultation.

JP: The really important consultation is not over the decision itself, it’s over the implementation and implications of that decision. If your business is consulting about a major outsourcing deal or an off shoring deal or a restructuring deal, they have really made that decision. Consultation with employees is very unlikely to change that decision. What is important is how that decision is then implemented and explained and there are no restrictions, regulatory or anything else, about the nature of the implementation process.

PL: If you’d like more information about the research I mentioned or the interviewees, you’ll find everything you need in the show notes at

cipd.co.uk/podcasts

Also, if you’re a CIPD member and you’re wrestling with the sort of challenges we’ve been talking about, why not discuss them online with other people in the same situation? You can log onto our online community at

cipd.co.uk/community

Thanks for listening to our podcasts this year and we hope you found them useful. 

Next month, our New Year podcast will feature an array of leading HR experts, all giving us their predictions about what’s in store for 2009. Until then, goodbye. 

 

Subscribe, download and more

You can stream each episode, download the podcasts to your computer or subscribe to the series free via iTunes.

Trouble listening to podcasts?

If you are having trouble listening to the podcasts, you can access them directly via Soundcloud.