Sunday, 25 September 2011

Ross Gittins on Industrial Relations

Ross Gittins in Reith is wrong: happier staff means greater success in the workplace argues that employers might get greater productivity out of their employees by providing a trusting workplace rather than by using individual contracts.

I'm of the opinion that, beyond a certain level, money is not a positive motivator. There are plenty of people who willingly forgo higher income to stay in a job they enjoy. However, money can indirectly be a great demotivator. If you think your efforts aren't being valued then you're not likely to be very happy or motivated in your role. Some of the most effective ways to tell an employee they're not valued are to pay someone else of equal or lesser talent more (which is why many organisations don't allow their employees to disclose their salary to co-workers) or to offer a lower annual pay increase than was expected. Even then it's not the money that's important - it's just that pay increases are often the only form of recognition many organisations provide to their employees.

Have a look at the video by Dan Pink on the surprising science of motivation at TED.

Back to productivity and industrial relations. I think it's worth noting that Germany and Japan have had very successful manufacturing industries despite, or is that because of, a highly unionised workforce. The thing they have in common is a cooperative industrial relations system (something Paul Howes touched on in Q&A a few weeks back). Admittedly Japan's productivity hasn't been doing as well over the last decade. However, this is more due to Japan's aging workforce rather than its industrial relations system.

There's a great story of how Toyota, through a cooperative team approach transformed General Motor's worst auto plant into its best.

Edit 12/10: A couple of interesting articles - The impact of high pay and Incentives at work: who gets what what really works.

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