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From Busted Flush to a Deal!

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Shortly after it was negotiated, it looked like the Public Service Agreement 2010-2014 was a proverbial busted flush such was the level of opposition to it. Today, barring a miracle, the Agreement will be accepted by ICTU’s Public Services Committee next Tuesday 15 June.  The ‘big battalions’ of the public service union world, SIPTU and IMPACT, have both voted by large majorities for the agreement, along with several other trade unions, thus ensuring acceptance. What are the implications of this deal going through for the various stakeholders?  And what might we expect to see happening soon in the public service when the deal is formally ratified?

Government

For government, currently languishing at a poor third position in the latest Irish Times opinion poll, the deal represents a respite from further conflict with the public service unions.  There is one less stick for the Opposition Parties to use on them.  The government will no doubt argue that ratification of the agreement provides support for the ongoing moratorium on recruitment and on the filling of vacancies and on other public service cutbacks. Internationally, the government will be hoping that the agreement will be a signal to the markets that they have resolved industrial unrest and have a measure of compliance if not active support for cuts in spending.

They will be hoping that the detail of the concessions that they had to make to secure an agreement (guarantees of no compulsory redundancies, guarantees of no further pay cuts before 2014, and a facility whereby unions can seek the return of pay losses based on savings made) will not attract attention and will not be seen as any type of cave-in on their part to union pressure. While there are distinct advantages for government in having this deal there is no denying that they have given up access to further savings through additional pay cuts in the immediate future – barring a deepening of the economic crisis to an unexpected degree.

Public Service Unions

For the public service unions generally the agreement represents an opportunity to credibly cease the campaign of industrial action which their members supported but not with great enthusiasm. The task for them is to now ensure that the agreement is implemented in full and, in particular, that over the next few years, they begin to claw back some of the pay foregone through the 2009 budgetary decisions. One of the concerns that the unions had about the agreement was that public service management would not have the will or the capacity to see through the agreed changes that, if implemented in full, might provide the basis for unions claiming back lost pay on the basis of savings made through these changes. See Croke Park Deal = New Ballgame on Public Service Pay?

It remains to be seen how matters are handled in sectors like education where there are clear divisions over the agreement between ASTI, IFUT and TUI which all voted against and the INTO which voted for. In the health arena the INMO voted against while the majority of health service employees voted for through SIPTU, IMPACT, MLSA and other trade unions. In the civil service, AHCPS, PSEU and IMPACTvoted for while CPSU and the POA voted against.

If the public service unions stick with tradition, then the unions that voted against will abide by majority rule notwithstanding some suggestions to the contrary. CPSU and some others have already indicated that they will abide by majority rule. Nevertheless it would make sense for the unions that voted for and for public service management to find ways of bringing the other unions along with them.

Unions Outside the ICTU

Some of the unions that are not affiliated to ICTU such as PDFORRA, the representative body for rank and file military personnel, voted against the Agreement while others such as the AGSI, representing garda sergeants and inspectors, voted for.  Such trade unions are not entitled under current legislation to affiliate to ICTU. They are not directly involved in the negotiations but were party to a ‘parallel process’ within the Croke Park negotiations. Interestingly, ICTU undertook to investigate the possibility of these organisations affiliating to ICTU a number of months ago during the period of union protests against public service pay cuts. Their votes will not be taken into account at the ICTU Public Services Committee but they will no doubt make their views known directly to their employers and to the government.

Public Service Management

For public service management there is now the opportunity – as well as the challenge – to deliver on all the changes that the unions have just voted through, including quire radical changes in the HSE which is on the receiving end of a lot of very negative publicity over standards of patient service. The agreement will almost certainly make life a little easier for new HSE Chief Executive Cathal Magee when he takes over the reins from Professor Drumm in the autumn. There will also be a cessation – ended in most places anyway at this stage it seems – of further industrial action on the issues covered by the agreement.

Public Service management and Trade Unions

For both public service management and trade unions there is the challenge of finding ways of quickly improving the quality of relationships in the wake of a major dispute. There is also the challenge of implementing changes together in the spirit of partnership which informs the agreement. It has often been commented that the public service suffers from management weakness and trade union strength. To some extent, the new agreement can be seen as providing a platform for management to become more assertive in pursuing the change agenda while for trade unions it provides them with vital rights to have a say in what happens on the ground.

The Public and Taxpayers

The strongest argument that government and the  public service trade unions have made in favour of the agreement is that it will lead to a ‘transformation’ (should the word be banned it has been bandied around so much?) in the delivery of public services.  The public will be watching very closely to see if standards of service improve, disimprove or remain the same. The agreement puts it up to government, public service management and trade unions to deliver now or to lose credibility very fast.

Comment

When this agreement is ratified it will be the first public service only pay agreement for more than twenty years. Since the Programme for National Recovery in 1987 national pay deals have always covered both the private and public sectors. Last year government, ICTU and IBEC failed to reach agreement on the handling of pay generally and there is now no pay agreement covering the private sector and, needless to say, no ‘social partnership’ at national level. It is highly unlikely that this new agreement will prepare the ground for a deal in the private sector, at least for the coming year if not for longer.

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Employees Don’t Trust Top Management – CIPD Survey

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In my recent post on The Recession and Employee Relations I suggested that a big question for industrial relations practitioners is what impact the recession will have on employment relations strategies in the short and longer terms. The CIPD has published an interesting report on employee attitudes in the UK titled Employee Outlook: Recovery Yet to Reach the Workplace . In the main, the report suggests quite positive attitudes among UK employees towards their line managers but not towards senior managers. And it suggests some areas of concern for those charged with responsibility for leading employee relations developments.

Job satisfaction: overall job satisfaction remains ‘low’ at +36, compared to +46 last year. Men are less satisfied with their jobs than women and young people are the least satisfied. UK employees in the private sector are more satisfied than in the public sector. The proportion of employees saying that they are under too much pressure at work is up from 41% last year to 44% this year.

Employee attitudes towards line management: employees have generally positive attitudes towards their line managers. However, they are critical of line managers in regard to their performance around coaching, addressing training needs, and giving feedback on performance.

Employee attitudes towards senior management: trust in senior leaders has, according to this survey, reached an all time low at -5. Employees are particularly critical of what they perceive as inadequate consultation by senior managers. Only half of respondents said they were ‘fairly’ or ‘fully’ informed about what was happening in their organisation. Employee perceptions of management leadership are much worse in the public sector.

Employee attitudes and the recession: not surprisingly, employees are afraid of losing their jobs because of the recession. This survey, quite surprisingly, suggests that UK public sector employees are now much less confident over job security than last year. 39% of public sector employees said their organisations were planning to make redundancies compared with just 9% in the private sector.

NCPP employee attitudes survey: it will be interesting to see what the comparable findings are from the current national employee and employer attitude surveys being conducted by the National Centre for Partnership and Performance. Certainly, the previous reports from the NCPP suggested that employees were not satisfied with the extent to which they were informed and consulted on issues affecting them in the workplace in either the private or public sectors.

Comments: obviously these findings are from the UK and don’t necessarily ‘travel’ to Ireland. Also, there are some significant differences that need to be noted between the two countries. For example, the Public Service Agreement 2010-2014 or ‘Croke Park Agreement’, as it is commonly called, precludes compulsory redundancies in the public sector here. Also, it guarantees no further pay cuts before 2014 and provides a mechanism for recovering pay already lost through earlier cuts. Nevertheless, there are also similarities. For example, the ‘moratorium’ on recruitment has already led to the suppression of many temporary posts and will lead to the non-filling of more permanent posts over the coming years. No doubt public servants will argue that this will involve additional workloads and pressure.

Implications: if it is the case that employees in Ireland, whether in the private or public sectors, have similar attitudes towards management as their counterparts in the UK then it suggests that employers here need to attend to their employee relations strategies.

Employee criticisms of line managers in regard to their performance around coaching, addressing training needs, and giving feedback on performance suggest that work needs to be done in these so-called ‘soft’ management skills areas.

Openness with information and a willingness to consult regularly are probably key to effective employee relations. They are the foundation stones of workplace trust which in turn is an essential ingredient in the effective management of change. Despite all the talk about ‘employees being our greatest resource’ and so on, many employers here in both the private and public sectors only pay lip service to information, consultation and involvement. This report suggests that continuing to do little by way of informing and consulting employees may present serious problems in the not too distant future as far as employee attitudes towards management are concerned.

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Book on Organisational Change through Partnership

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In January The Liffey Press, with support from the Labour Relations Commission, published my book Organisational Change through Partnership: Promise, Prospects and Performance for Irish Firms’. This book is based on a comprehensive survey of all known cases of partnership in the unionised parts of the private sector in Ireland. It adds to the already significant body of research into workplace partnership in Ireland. The book was reviewed recently in the specialist publication Industrial Relations News.

Partnership – the early days: readers will recall that in the late 1990s in Ireland there was a surge of interest among employers, trade unionists and policy makers in the idea that workplace relationships and organisational performance could be significantly enhanced through a ‘partnership’ approach to organisational change. By a ‘partnership’ approach was meant that managers, union representatives and employees would work together through joint bodies to effect changes and to resolve difficulties using a ‘problem-solving’ as opposed to a conflictual approach. This book describes in considerable details the main features of these ‘pioneering’ cases and also looks at their survival rates over a ten year period. It is in a way, then, a ‘history’ of these early cases of experimentation with partnership as a new way of involving employees and trade unions in organisational changes.

Partnership structures: partnership structures broadly followed the ‘two-tiered’ US pattern of higher level groups involving senior managers and trade union representatives coupled with ‘working groups’ or ‘task groups’ devoted to operational changes and improvements. More than half of all cases had strategic partnership bodies and more than eight out of ten had operational bodies.

The issues dealt with: agendas focused more on ‘hard’ issues such as financial performance, changes in work practices etc than on ‘soft’ issues such as communications and relationships. Most agendas reflected the concerns of management and unions. However, agendas tended to focus to a greater extent on issues of concern to management than to employees and trade unions. Issues of importance to employees and trade unions such as job security and staffing levels featured very low down in order of importance on partnership agendas. Industrial relations issues were not precluded from partnership agendas in most cases.

Outcomes for employers, employees and trade unions: the main areas of improvement for employers included business performance, workforce productivity, union members’ understanding of business issues, union members’ flexibility and support for change. There was no evidence that partnership either slowed decision-making down or caused confusion around managerial authority.

Less than half the respondents considered that security of employment was higher as a result of partnership. Slightly more than half considered that job satisfaction and pay and conditions were higher. Partnership had no obvious effect on staffing levels.

In most cases there were positive outcomes in terms of union influence on management decision-making and management involvement of the union and there appeared to be no negative outcomes for trade unions.

In most cases there were positive relationships outcomes, e.g. the quality of communications and level of trust. In most cases the incidence of industrial disputes and grievances was lower, and collective bargaining was more effective and less adversarial.

Taken together, the findings confirmed that through partnership management, employees and trade unions could achieve positive outcomes, i.e. ‘‘mutual gains’’. However, benefits appeared to be skewed somewhat in favour of management as opposed to employees. In addition, the full potential of the partnerships had not yet been realised and most respondents expected more from partnership in future than had been achieved to date.

Types of partnership: the book explores if particular types of partnership deliver more significant gains than others. It emerges that having partnership structures at different levels of organisation—typically at strategic and shop floor levels—makes a difference. As does having direct forms of involvement such as teams alongside indirect forms involving union representatives.

What about the future: My conclusions are upbeat as to the potential for partnership as a robust approach to organisational change. The evidence gathered here, as well as in other Irish studies, shows clearly that partnership can be an effective way of tackling significant changes to the benefit of employers, employees and trade unions.

My conclusions are downbeat as to the likelihood of  partnership spreading in the private sector in this recession. This is an issue to which I will return in a later post.

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Workplace Conflict under the Microscope

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Report Suggests Some Uptake of Joint Problem Solving

The 2009 LRC report titled ‘Managing Workplace Conflict in Ireland’ found that large scale workplace conflict has declined dramatically but that a high level of small scale conflicts persist.

The report is based on research carried out among private and semi-state firms in Ireland by Deborah Hann and Paul Teague of Queens University Belfast and Bill Roche of University College Dublin.

Definition of workplace conflict: books on workplace conflict tend to focus either on inter-personal conflict or on management-union conflict. In this case, however, the authors took a broad view of what constituted workplace conflict and they also acknowledged that conflict could have positive outcomes for those involved in it. They defined workplace conflict as follows:

‘Workplace conflict involves differences of view and conflict between individual employees and their employer; among individuals; and between groups of employees, whether unionised or not, and their employer. It is recognised that the resolution of workplace conflict can have beneficial effects for employers, employees and other stakeholders in the business.’

Findings: the report has findings on a range of topics including influences on the development of workplace conflict resolution systems, the incidence of different mechanisms for resolving conflicts at work, variations in conflict management systems between firms of different sizes and ownership and between union and non-union firms, the role of line managers in resolving workplace conflicts, the management of conflicts and the outcomes of conflict resolution. The report can be purchased from Government Publications in Molesworth Street Dublin.

Workplace conflict has ‘gone micro’: the authors argue that low level conflicts are more likely to be found in workplaces today than large scale management-union conflicts, hence their expression that workplace conflict has ‘gone micro’. As evidence they cite the high number of cases before public agencies including the Rights Commissioner Service and the Employment Appeals Tribunal and high levels of sick leave. We could add to this the increasing incidence of cases of inter-personal conflict that are being mediated informally, and the increasing incidence of complaints of bullying and harassment that are being investigated under company policies and Health and Safety Authority and LRC guidelines.

Use of ‘joint problem solving’: given the attention paid to ‘joint problem solving’ and ‘alternative dispute resolution’ or ‘ADR’ in recent years it is interesting that the research found that about a third (31.3 per cent) of small companies used ‘brainstorming, problem solving and related techniques’ to solve problems and resolve disputes compared to about a quarter (24.0 per cent) of medium/large companies. Almost a third (29.4 per cent) of medium/large companies used ‘formal interest-based (win-win) bargaining techniques’ to solve problems and resolve disputes compared to 15.1 per cent of small companies.

It is difficult to know what exactly to make of these figures given that it is not that easy to distinguish in practice between ‘brainstorming’ etc and ‘formal interest-based bargaining’ given the central role that brainstorming and problem solving play in the two approaches. Nevertheless, even allowing for some possible confusion, the findings suggest a fairly widespread use of these ‘joint problem solving’ techniques albeit in a minority of firms.

ICTU, IBEC, SIPTU and the former IPC promoted ‘joint problem solving’ in various guises for some years, going back to the workplace partnership initiatives of the late 1990s that were funded by the EU’s ADAPT Programme and to the national programme ‘Partnership 2000′. The Skillnets system has also been used to fund training and development in this area. In 2005 Jerry Barrett and I published our Interest-Based Bargaining:  A Users Guide which featured examples of ‘joint problem solving’ in eircom and in the health services. In 2008 IBEC published a book on ADR called The Essential Guide to Alternative Dispute Resolution’.

Role of trade unions:the report makes some interesting findings on trade unions. Multiple union representation is not regarded by many firms as having a significant negative effect on conflict resolution. Most unionised firms report satisfaction with retaining their traditional relationship with the union. Significant minorities of firms intended either to deepen partnership with trade unions or to reduce their influence.

More research needed: it would be invaluable to have some case study follow up to this research that could provide a finer grained picture of why the ‘joint problem solving’ approaches to conflict resolution were adopted, how they were used, on what issues they were used, and with what outcomes for the parties and organisations concerned.

Conclusion: a final summary conclusion drawn by the authors is that most organisations considered that workplace conflict was not a big cause of concern and that they were satisfied with their conflict management procedures. This is a very worthwhile publication that should have something of interest to most HR and IR practitioners who have a role in the design, management or operation of workplace conflict resolution systems.

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The Recession and Employment Relations Strategies

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Competition in the Skies

A big question for industrial relations practitioners is what impact the recession will have on employment relations strategies in the short and longer terms. Already we can see from Industrial Relations News that bargaining agendas in both the private and public sectors have changed substantially. The focus has shifted dramatically from union claims for improvements to employer claims for freezes and reductions in pay and conditions. While there are some arguments as to the precise extent of freezes and reductions, ‘concession’ or ‘give back’ bargaining is now a reality in very many workplaces. Frequent plant closures and threats of ‘off shoring’ jobs, together with widespread layoffs, have undoubtedly shifted the balance of power in the private sector away from trade unions towards employers.

Tougher Employer Tactics: there is also evidence that employers are adopting tougher bargaining tactics. While the evidence is still largely anecdotal, there are examples of the imposition of tight timescales for reaching agreements, of impatience with the use of third parties, and of unilateral imposition of changes. This ‘forcing’ approach to organisational change is usually aimed at quick achievement of cost savings.  Employers appear willing to accept that such an approach may bring collateral damage to workplace relationships but seem prepared to endure this in order to achieve their immediate goals. To date, private sector unions have responded pragmatically to recession-driven changes by emphasising the importance of consultation, due process and protecting jobs through temporary sacrifices in pay and conditions. SIPTU’s Gerry McCormack reflected the union position clearly at this year’s IRN conference.

Industrial Relations Fragmentation: for several years now, UCD’s Professor Bill Roche has argued that the adversarial industrial relations model of trade union recognition, orderly collective bargaining, use of state agencies to resolve disputes and so on, has been fragmenting into a number of competing models. Alternative models available to employers include the adversarial model, a new non-union human resource management model, a partnership type model that embraces elements of the adversarial model and elements of human resource management, and a non-union model that rejects human resource management policy and practice. He has argued that each of these alternative models could sustain a significant presence across Irish workplaces and that it was unlikely that any single model would come to dominate the landscape.

Experience to date suggests that both the traditional model and the partnership model can be stretched without breaking by accommodating ‘forcing’ strategies from employers in situations where unions can see economic justification for cutbacks and where they have some confidence in future recovery. It will be interesting, then, to see how the recession will impact on the nature and incidence of these alternative employment relations approaches.

Aer Lingus versus Ryanair: one headline case where different employment relations strategies are being used in the common drive for competitiveness is the battle between Aer Lingus and Ryanair.  Aer Lingus, once the site of formal partnership arrangements, has been a battlefield in industrial relations terms in recent years. Notwithstanding threats to the contrary, the company has stuck with the key elements of the traditional model, i.e. union recognition, change through collective bargaining, and use of state agencies to resolve disputes. Ryanair, on the other hand, has maintained a stoutly anti-union stance.

Are Lingus and Ryanair are featured as examples of different employment relations strategies in the airline industry in a 2009 book called Up in the Air: How Airlines Can Improve Performance by Engaging Their Employees’. Written by Greg Bamber, Jody Hoffer Gittell, Thomas Kochan, and Andrew Von Nordenflycht, the book is published by ILR Press. The authors cite three broad employment relations strategies: ‘avoid’ which is a ‘union suppression’ model they associate with Ryanair, among others; ‘accommodate’ which is what we might call the traditional adversarial model associated with Aer Lingus and many other companies; and ‘partner with unions’ where employers establish a deeper and broader relationship with unions than is associated with the traditional adversarial model.

Big Issues: employer choice of employment relations strategies is not simply a ‘private’ matter without public policy implications. As the authors of ‘Up in the Air‘ point out, shareholders, customers and employees all have a stake in company outcomes and, therefore, have an interest in what competitive and employment relations strategies companies might pursue. Given the central importance of many industries, including airlines but also many others, for national competitiveness and quality of life, governments also have a stake in competitive and employment relations strategies.

There has been considerable government attention in recent times to employment creation strategies, including the ‘knowledge economy’, but less attention to what is happening or to what the government might desire to see happening, in regard to employment relations policy. Needless to say, the government has been heavily preoccupied with its own role as employer in the handling of ongoing disputes and negotiations about public sector pay. In these circumstances and in light of the collapse of social partnership at national level, the government is clearly less concerned right now with the emerging shape of employment relations in Ireland. This is an issue to which we will return in later posts.

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Croke Park Deal = New Ballgame on Public Service Pay?

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As it now looks likely that the Croke Park Deal or the ‘Public Service Agreement 2010-2014’ will be approved by the public service unions, it is worth noting the radical implications of the deal for public service pay. A key part of the deal is that unions can claim back pay foregone through cuts provided they can point to savings made under the deal. At face value this looks pretty straightforward but it merits closer attention. Clause 1.16 of the Agreement provides that public service pay will be reviewed annually starting in Spring 2011 and that the review will take account of sustainable savings generated from the implementation of the overall Agreement as well as implementation of the agreements in each sector (health, education, local government, state agencies etc). Those savings will be independently verified by an Implementation Body, yet to be established.

Cost savings: if savings are made through staff reductions and elimination of overtime then it’s not rocket science to measure that. But what about savings that are made through less straightforward means?  In addition to ‘generic’ changes that fall to be implemented in all parts of the public service such as redeployment, there are specific lists of changes in each part of the public service. In health, for example, there is agreement on a very wide range of changes including an extended working day, a more productive match between staffing and activity levels, reduction in the number of in-patient beds and increases in day cases in order to reduce unit costs, and many more. Certain of these changes may involve significant staff contributions to quality as well as to productivity. Putting a monetary value on such changes is not so straightforward and, truth to tell, it will represent a new departure for public service management and trade unions.

Dynamics of organisational change: the whole dynamic of organisational change and reward will now change if the Croke Park Deal goes through. Trade unions will have a stake in ensuring that changes happen on time and that the value of those changes is measured to their satisfaction. If they are tardy about agreed changes or resistant to them then they will be undermining their capacity to claim back monies foregone through pay cuts. Public service managers will be under pressure not just from the political system and department of finance to deliver on the change agenda but also from the trade unions. A key part of the implementation of the Croke Park Deal will be agreeing formulae for converting performance indicators into monetary values.

Measuring outcomes: public service managers who have worked mainly in the public service to date will have little experience of measuring organisational changes and putting monetary value on them. Those who have recently entered the public service may indeed have such experience. On the other hand, union officials such as those in SIPTU and IMPACT, who also represent employees in the private and commercial state sectors, are likely to have more knowledge and experience of productivity, gain sharing, measuring the value of savings and so on.

We all know that changes to any significant part of human resource systems such as pay determination are likely to have implications for other parts of that system. We will return in later blogs to some of these wider implications.

The future: for the moment it is far too early to speculate on the likely outcomes of this new ballgame. However, the likelihood must be that if it works there will be pressure from government and the department of finance to continue it after 2014. It is worth recalling that there have already been a number of significant attempts to restructure public service pay determination. There were attempts to simply abolish the so-called ‘specials’, then there was public service ‘productivity bargaining’ or ‘grade restructuring under national pay deals, then there was ‘benchmarking’ under later national pay deals.

Are we now entering a phase where a more scientific approach to quantifying the monetary value of organisational change combined with more straightforward cost savings through staff reductions will become central mechanisms in public service pay bargaining?

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