Productivity is one of those terms that crops up in almost every book or article that has ever been written about business transformation. In some ways it is the Holy Grail of corporate life, for increasing productivity – getting more out of your workforce without putting in more resources – usually means higher profits. However, good managers know that there is no magic wand to wave to achieve the desired gains in productivity.
Mark Beatson, chief economist at the Chartered Institute of Personnel and Development (CIPD), says that creating a culture of innovation in an organisation, so that workers can come up with their own ways of being more productive, can be a difficult trick to pull off.
“There’s no simple formula for an organisation that wants to be innovative – it tends to grow a bit organically. Often the more management decrees that this must happen, the less likely it becomes,” says Mr Beatson. However, he says that if employees feel committed to the organisation they work for, they are more likely to want to participate in the process.
Mr Beatson believes that if a business wants its workers to participate in the process of innovation, and thus improve productivity, it cannot expect them to have their nose to the grindstone for every second of the day. That is because productivity is more than simply a question of how many hours employees spend at their desks or on the shopfloor.
“It’s a tricky one for leaders because you want to emphasise short-term productivity in terms of driving sales, but at the same time plan for the future,” he says. While two workers chatting by the coffee machine might appear to be skiving, they could also be discussing the kernel of an idea that might one day revolutionise the way the company does business.
Research conducted by the CIPD has found that if business leaders want to ensure workers are motivated, it helps if their own personal values are in some way aligned with those of their employer – and that the organisation acts on those values. “There can’t be one set of rules for senior management and another for everyone else – transgressions must be dealt with in the same way,” Mr Beatson says.
Workers need to feel they have a manager they can trust and confide in, and who implements policies, such as flexible working, rather than simply paying lip service to them. Unfortunately, the CIPD thinks that only about a third actually do so.
Similarly, it is important to give workers an opportunity to communicate ideas, as well as grievances, to senior management. “There is a huge variety of ways that businesses can do this, but the important point is that they respond and do take employees’ views into consideration,” Mr Beatson says. It also helps to explain why a decision has been taken, he adds.
Productivity is more than simply a question of how many hours employees spend at their desks or on the shopfloor
The design of roles and ensuring that employees feel that they have some level of autonomy is crucial, he argues, so that workers do not feel they are in a straitjacket.
That is a view shared by Andre Spicer, professor of organisational behaviour at City University’s Cass Business School. When workers are given some level of autonomy, productivity increases because they are carried along by their colleagues. “It’s like being in a sports team – your peers can push you along, rather than the coach bearing down on you,” he says.
According to Professor Spicer, the automotive industry provides a good example in the experience of US car makers that teamed up with Japanese rivals in the 1980s. “The Japanese had more self-directed work teams, while the American model had a more top-down, very controlling management,” he says. “When GM and others entered into joint ventures with Japanese companies or introduced Japanese techniques, their productivity went up significantly.”
The good news for employers, Mr Beatson says, is that there is little evidence that most workers are very unhappy with their jobs, even as pay has failed to keep pace with inflation during the recession. The proportion who intend to try to change jobs in the next 12 months has been about 20 per cent during the downturn and risen slightly to 24 per cent more recently. “Employee motivation seems to have held up reasonably well. Maybe they are simply being realistic, given how tough the job market is,” he says.
Similarly, CIPD surveys suggest that about two thirds of workers are happy with their line managers in both the public and private sector. A surprisingly high number – between 30 per cent and 40 per cent – have some sort of management responsibility themselves. That means effective training and support is essential, Mr Beatson says, particularly for middle managers, who can often find themselves facing conflicting pressure from those under them, as well as from their own superiors.
A good middle manager can make a real difference to employee productivity, according to a 2012 working paper by Kathryn Shaw and Edward Lazear of Stanford University’s Graduate School of Business, and Christopher Stanton of the University of Utah. Their research, titled The Value of Bosses, focused on a technology-based service company and concludes that replacing a poorly performing boss with a first-rate middle manager had roughly the same effect as adding one worker to a nine-member team of employees.
The academics found that good middle managers have a positive influence on workers by teaching them good work skills or habits, which accounts for two thirds of the gains they add. And the effect of good bosses on good workers was more pronounced than their effect on poorer-performing employees. Ms Shaw says: “These bosses do matter and they earn their pay.”
One way that companies can help their middle managers to improve in a cost-effective way is by running on-site coaching clinics, says Mark Hodgson, talent management practice leader at Right Management, part of ManpowerGroup. The consultancy also points out that managers need to provide rounded support to employees because working long hours, higher levels of stress, family demands, and personal issues can all have a very clear effect on productivity and engagement.
“Organisations need to acknowledge the multi-dimensional nature of this issue, and the ripple effect is creates on individual and organisational performance. Look for opportunities to provide support, which includes initiatives to promote wellbeing as well as support employees’ professional development,” Right Management says.
Another way that workers can be supported is by offering flexible working patterns, such as job sharing, flexi-time and remote working. While management, particularly those in the middle tier, can sometimes oppose such moves, for some jobs it can make no difference whether a worker is logging on from her office PC or a laptop sat on the dining-room table.
There is evidence to suggest that employees who work remotely are more productive, perhaps because there are fewer distractions than in the office, not to mention less noise. Technology also makes it simple to measure productivity for remote workers and quickly identify those who are taking advantage of the arrangement.
However, increasing employee productivity and ensuring that workers are part of that process is not simple. To work, it requires the commitment of everyone in an organisation, from the boardroom to the shopfloor, but those who get the process right will be well rewarded.