enhancing employee productivity at nalco

8/3/2019 Enhancing Employee Productivity at Nalco

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INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

NEW DELHI

SUBJECT

ENHANCING EMPLOYEE PRODUCTIVITY AT NALCO

SUBMITTED BY: IMAD REHMAN

BATCH: SS 9/11

PHONE NO.: 9650696328

E-MAIL: [email protected]

SECTION: SP3



ABSTRACT

Increasing productivity is one of the most critical goals in business. Unfortunately, it’s an

activity seldom accepted by HR professionals as a legitimate mandate. While most HR

professionals acknowledge that their job entails establishing policy, procedures, and

programs governing people management, few attempt to connect such elements to

increasing employee output (volume, speed, and quality) per each dollar spent on labor

costs (or as an easier to measure alternative, revenue per employee).

Bonus programs are typically enacted that keep total compensation in line with market

trends, regardless of the value of work warranting incentive comp. Training tools are

often secured via the lowest-cost provider method with minimal consideration given to

which provider would be most effective. Recruiting practices too are more oftenmanaged with the primary goal of minimizing cost, not enabling business

capability/capacity. Regardless of the function you look at, in the typical organization,

HR is more concerned with executing transactions instead of delivering productivity

solutions.

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ACKNOWLEDGEMENT

Through this acknowledgement I express my sincere gratitude towards all those people

who helped me in this project, which has been a learning experience.

I appreciate the co-ordination extended by my friends and also express my sincere

thankfulness to the entire faculty members of Indian Institute of Planning &

Management, Delhi, giving me the opportunity to do this project/study and also assisting

me for the same.

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TABLE OF CONTENTS

S.No. Topic Page No.

1. Abstract 1

2. Acknowledgment 2

3. Introduction 4

4. Research Objective & Methodology 5

5. Literature Review 19

6. Finding & Analysis 34

7. Recommendations 36

8. Conclusion 38

9. Bibliography 40

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INTRODUCTION TO THE TOPIC

The rate of knowledge worker productivity gains will separate enterprise winners from

losers throughout the 21st century.

Under the best of circumstances, however, HR can only serve as a “facilitator” of the

processes by which enterprise leaders and managers underwrite success.

The points of maximum focus and leverage lie with the reporting relationships of

individual people managers and team leaders. In a five-span, six-tier organization 96% of

the employees and 80% of the leaders, managers and supervisors reside in tiers five and

six. Flatter organizations, with larger spans and fewer tiers, nevertheless present very

similar challenges.

In most organizations people managers outnumber HR professionals (i.e. excluding

transactional HR), by a wide margin (e.g. typically >>10:1). So the highest and best use

of HR Professionals, in the quest for productivity gains, is by serving as enablers of

people managers.

Leaders and senior executives must do their part, which starts with defining and

communicating the clear and compelling enterprise purpose. Productivity gains must

accelerate purposeful value creation in that enterprise context. Other necessary leadership

conditions include a stable and secure growth platform, authentic leadership, pervasive

bidirectional trust and deep caring for employee wellbeing.

Upper middle managers must work with HR to connect with people managers and

provide mission-specific (i.e. time management, knowledge management and talent

management) mentoring.

People managers must orchestrate progress with clear lines of sight from their teams’

contributions to serving the enterprise purpose.

Every employee must “manage oneself”, paying particular attention to managing time,

knowledge and thinking ability.

The best thing HR can do is show leaders, senior executives, upper middle managers and

other people managers the ways to accomplish essential knowledge worker productivity

gains with simplicity, transparency and accountability. The biggest part of that challenge

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involves developing and sharing understandings of how to inform people processes and

people decisions, as well as how to motivate and reward knowledge worker performance.

A critical part of the recipe for success, and a place where HR should exert considerable

influence, is in the use of pre- and post-hire assessments and surveys to provide leaders

and managers with actionable information about the individuals and teams who must

consolidate the productivity gains. Applying the latest research contributions to

motivation and rewards will add measurably too.

Finally, those businesses that adopt a rigorous, robust and unambiguous framework for

formulating, validating, aligning, communicating, executing and monitoring enterprise

strategy that best serves their enterprise purpose will add turbo boost to their knowledge

worker productivity gains.

Businesses have all the necessary tools at their disposal, but organizations will have to

make systematic changes for the better to thrive (or survive). In the first decade of the

21st century, we didn’t get off to a very good start. Productivity gains lagged those

necessary to maintain standards of living, let alone build sustainable advantage.

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Research Objectives & Methodology

RESEARCH OBJECTIVES

b. To Study the factors influential in Job Satisfaction at the Company..

c. To Study the causes of dissatisfaction of the employee Company.

d. To study factors affecting employee morale with respect to Company.

RESEARCH METHODOLOGY

SECONDARY DATA –

I SECONDARY DATA –

I will collect the Secondary data from following sources:-

• Newspaper – HT, TOI

• Magazine - Harvard Business Review, Xlri Journal

• Book – Course book/ Philip Kotler

• Notes- Professors Notes

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LITERATURE REVIEW

Recent research suggests that high-involvement work practices can develop the positive

beliefs and attitudes associated with employee engagement, and that these practices can

generate the kinds of discretionary behaviors that lead to enhanced performance. Simply

put, employees who conceive, design and implement workplace and process changes are

engaged employees. This article focuses on what managers can do to achieve a high level

of employee engagement.

Employee engagement and firm performance

Employee engagement can be critically important to competitiveness in the

contemporary business environment. The Gallop Organization, which studied employee

engagement in 7,939 business units in 36 companies, found that employee engagement

was positively associated with performance in a variety of areas, including increased

customer satisfaction, profitability and productivity, and reduced employee turnover. The

breadth of employee engagement was substantial. About 2/3 of the business units scoring

above the median on employee engagement also scored above the median on

performance, while only about 1/3 of companies below the median on employee

engagement scored above the median on performance (Harter, Schmidt & Hayes, 2002).

Employee engagement has three related components: a cognitive, an emotional, and a behavioral aspect. The cognitive aspect of employee engagement concerns employees’

beliefs about the organization, its leaders, and working conditions. The emotional aspect

concerns how employees feel about each of those three factors and whether they have

positive or negative attitudes toward the organization and its leaders. The behavioral

aspect of employee engagement is the value-added component for the organization and

consists of the discretionary effort engaged employees bring to their work in the form of

extra time, brainpower and energy devoted to the task and the firm.

This article focuses on what managers can do to achieve a high level of employee

engagement. Recent research suggests that high-involvement work practices can develop

the positive beliefs and attitudes associated with employee engagement, and that these

practices can generate the kinds of discretionary behaviors that lead to enhanced

performance. The section immediately below describes high- involvement work practices

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and how they are utilized in both manufacturing and service settings. The next section

outlines the evidence for the effectiveness of these practices. The final section discusses

the implementation process and argues for the importance of embracing a participatory

philosophy in order to align the process with the concept of high involvement.

What are high-involvement work practices?

Numerous authors have developed a long list of management practices for generating

high involvement and high performance among employees. These range from selecting

the right people for the organization to a commitment to training and skill development,

teambased work organization, job security, and incentive-based pay. In each of these

general categories, a variety of specific practices have been developed. For example,

incentive-based pay can take the form of a gain-sharing program, performance-

contingent pay to individuals, team-based pay, or employee ownership. Training

programs can be developed for current and future skills, technical and interpersonal

skills, new hires and experienced employees. With all of the choices, developing a

coherent set of high-involvement work practices that are consistent across the

organization and reinforce each other is a nontrivial challenge for all managers.

Organizational effectiveness scholar Edward Lawler and his colleagues identified four

interlocking principles for building a high-involvement work system that help to ensure

that the system will be effective and that the various practices will work together to havea positive impact on employee engagement. These principles can be summed up as

providing employees with power, information, knowledge and rewards. (See article by

Edward Lawler elsewhere in this issue of IBJ — Ed.)

Power means that employees have the power to make decisions that are important to

their performance and to the quality of their working lives. Power can mean a relatively

low level of influence, as in providing input into decisions made by others or it can mean

having final authority and accountability for decisions and their outcomes. Involvement

is maximized when the highest possible level of power is pushed down to the employees

that have to carry out the decisions.

Creating forums for employees to develop and share ideas for improving firm

performance can be effective, but only when good ideas from employees actually get

used. For example, Arthur and Aiman-Smith describe an employee suggestion system in

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a large manufacturing plant in the Midwestern U.S. with a unionized workforce of 1,500.

The system was successful in generating large numbers of useful suggestions from the

employees that saved the company US$9M in its first four years. Implementation was

facilitated by a joint unionmanagement review board that assessed each suggestion and

either accepted, declined, or asked for further investigation.

Information means data, including information on the quantity and quality of business

unit output, costs, revenues, profitability, and customer reactions. A major challenge for

managers developing a high-involvement work system is to create an information system

that provides employees with data that is timely and relevant to their particular work

process, that they can influence personally by either expending or withholding effort, and

that they can understand.

The more transparent managers can make the firm’s operations, the more effectively

employees can contribute to the firm’s success. Transparency is important because it

helps employees see the link between their actions and the performance of the firm,

thereby enhancing the cognitive aspect of engagement. Hence, transparency is essential

for employees to see what they are doing that is working and what isn’t. As CEO Ricardo

Semler says about his 800-person high- involvement manufacturing firm in Brazil,

“nothing matters more than those vital statistics – short, frank, frequent reports on how

the company is doing”.Knowledge, or employee skills and abilities, can be distinguished from information,

which is the data employees use to make decisions and take action. Improving

employees’ knowledge means a commitment to training and development. The training

investments are essential in a high- involvement organization because when employees

are making important workplace decisions, it is important that they have the skills and

abilities to make the right decisions.

New employees at General Motors’ Saturn plant initially receive between 350 and 700

hours of initial training; Saturn sets an organization-wide goal that all employees receive

at least 92 hours of additional training each year. On average, Saturn employees have

received 148 hours of training each year since 1991. The reason Saturn relies so heavily

on training is the fact that the work process design relies heavily on the use of employee

skills and knowledge, “to build a small car competitively in the United States, either

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costs (wages) had to be lowered or organizational productivity raised to make up the

difference…The only way to make up this difference would be to mobilize the

knowledge, skills, and commitment of the workforce, and to design the work systems and

organization in ways that achieved higher quality and productivity”.

The rewards component of the high-involvement equation means rewarding employees

for expending discretionary effort to enhance organizational performance. A key element

in the high-involvement equation, rewards for performance ensure that employees use

their power, information and knowledge for the good of the firm.

In each of the three cases mentioned in the previous discussion of power, information and

knowledge, rewards were in place for employee contributions to the firm, and that link

was critical to the success of the firm’s high involvement work practices. For example, a

gainsharing program in one plant was in place so that each employee earned a bonus of

$4,442 over the 4-year period for suggestions that saved the plant US$9 million. The

bonuses inspired considerably more effort on the part of employees than was evident in

the suggestion program. Plant supervisors and managers indicated that many plant

improvements were being made outside of the suggestion system, where employees

initiated changes in order to reap the bonuses generated by the subsequent cost savings.

In Semler’s Brazilian manufacturing firm, 23% of aftertax profit on each division income

statement was distributed to employees in the division. Because employees gain asubstantial reward for business unit performance, they put in extra effort to learn multiple

tasks and meet targets, and they eagerly await the monthly financial statements to see the

results of these efforts.

At Saturn, base compensation is tied to between 88 and 95% of the industry average;

employees can make up the difference by achieving the target of at least 92 hours of

training each year for each employee. In addition, workers receive bonuses for achieving

negotiated goals for quality, cost, schedule, profitability, and volume. The bonuses have

ranged from $2,017 per employee in 1997 to $10,000 per employee in 1995 and 1996.

How effective are high-involvement work practices?

Evidence of the effectiveness of high-involvement work practices has been documented

in several research studies. The multivariate statistical analyses conducted on the

research data introduce statistical controls for a variety of factors extant in the

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environment in order to rule them out as plausible alternative explanations for the

findings. As a result, fairly strong inferences can be drawn regarding the impact of the

high-involvement management system.

The results of this research are impressive. The early research examined the impact of

high- involvement work systems in manufacturing organizations. The development of the

Saturn Corporation within General Motors constituted a demonstration project for, “a

radically new organizational form in which work would be organized into teams, work

rules would be drastically simplified, and the union would be a full partner in decision

making from the bottom to the top of the organization.” The project has been largely

considered a success. For instance, the J. D. Power and Associates statistics on customer

satisfaction showed that in 1992 and every year since, Saturn has led all U.S. car lines

and all brands worldwide except for Lexus and Infiniti (Acura and Mercedes in 1997

only) in ratings of vehicle quality, reliability and satisfaction.

Researchers and academics have examined the implementation of the Modern Operating

Agreement (MOA) between the Chrysler Corporation and the United Automobile

Workers (UAW), which was signed and ratified in six Chrysler plants by 1987. The

MOA reduced job classifications, tied pay to skills within those classifications,

established joint consultation committees, and reorganized work into shop-floor teams. A

survey company contacted 782 unionized production workers at their homes 5-6 yearsafter the signing of the MOA contracts. Sixty-four percent of those contacted stated they

were satisfied or very satisfied with the MOA, 68% agreed or strongly agreed that they

preferred the MOA to the previous system, and 76% agreed or strongly agreed that they

preferred the team system to the old system.

In another study, Eileen Appelbaum and her colleagues (2000) studied 15 steel mills, 17

apparel manufacturers, and 10 electronic instrument and imaging equipment producers.

Their purpose was to compare traditional production systems with flexible high

performance production systems involving teams, training, and incentive pay systems. In

all three industries, the plants utilizing highinvolvement practices showed superior

performance. In addition, workers in the high-involvement plants showed more positive

attitudes, including trust, organizational commitment and intrinsic enjoyment of the

work.

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Larger studies have confirmed the positive effects of high-involvement work practices in

manufacturing. Jeffrey Arthur’s 1994 study of 30 steel mini mills in the U.S. in 1988-89

showed that the mills with commitment systems involving more employee training and

more employee participation in solving production problems had higher productivity,

lower scrap rates, and lower employee turnover. John Paul MacDuffie’s 1995 study of an

international database examining 62 automobile assembly plants in 1989-90 found that

flexible production plants with high-involvement practices such as team-based work

systems, contingent compensation, and extensive employee training consistently

outperformed traditional plants in terms of both productivity (labor hours per vehicle)

and

quality. In 2005, Deepak Datta and his colleagues analyzed survey responses from 132

U.S. manufacturing firms and found that firms utilizing high-performance work systems

showed significantly higher labor productivity than their competitors.

More recent researchers have asked the question of whether high-involvement work

practices can be generalized to the service industry sector. Once again, impressive results

have been documented. Two studies of employees in the life insurance industry

examined the impact of employee perceptions that they had the power to make decisions,

sufficient knowledge and information to do the job effectively, and rewards for high

performance. Both studies included large samples of employees (3,570 employees in 49organizations and 4,828 employees in 92 organizations). In both studies, high-

involvement management practices were positively associated with employee morale,

employee retention, and firm financial performance.

Another recent study has tested high-involvement work practices in a call center

environment. In a field experiment, 149 call center employees were randomly assigned to

either high involvement work practices, autonomous teams, aligned job design

(essentially new performance metrics aligned with the business strategy), or the

traditional management system. Findings comparing pre- and posttest scores showed

substantial improvement in organizational commitment and intrinsic job satisfaction in

the high-involvement work practices group compared to no change for the control group

or the autonomous work team group, and impact on organizational commitment only for

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the aligned job design group. The high-involvement work practice group also showed the

most improvement in performance on a variety of measures.

Canadian firms using high-involvement work practices

To assess the utilization of high-involvement work practices in Canada, medium- to

large-sized Canadian companies were surveyed about their HR practices in 2004- 05. Of

the 896 companies receiving the survey, 155 responded (17.3%, which is about average

for surveys)..

Three questions assessed incentive pay at the individual, group and firm level (i.e., profit-

sharing). Two questions asked about team structures, specifically, self-managing teams

and problem-solving or quality groups. Findings are shown in Figure 1.

The findings indicate a rather high level of penetration of high-involvement work

practices in Canadian firms in 2004-05, even though many firms did not utilize these

practices. Individual incentive pay was the most common practice, with 55% of

employers providing individual incentive pay to 21-100% of their employees. Only 14%of firms indicated that none of their employees received individual incentive pay.

Group incentives and profit-sharing were utilized less, with 33% of firms indicating the

use of group incentives and 34% indicating the use of profit-sharing for 21-100% of

employees. Fifty-six percent of firms indicated that none of their employees received

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group incentive pay, and 50% indicated that none of their employees received profit-

sharing incentives.

About 20% of firms indicated the involvement of 21- 100% of their employees in

problem-solving or quality groups, while 40% indicated that none of their employees

were involved in such groups. About 21% of firms indicated that 21-100% of their

employees worked in self-managing teams, while 49% indicated that none of their

employees worked in self-managing teams.

Figure 2 compares the utilization of incentives and group structures among the 42

manufacturing firms and 104 service firms in the sample.

Findings show that there is greater penetration of incentive pay and team structures in the

manufacturing sector than in the service sector. Specifically, 33% of manufacturing firms

indicated that 21-100% of their employees were involved in problem-solving or quality

groups compared to 15% of service firms. Seventy-one percent of manufacturing

compared to 28% of service firms indicated the use of individual incentives for 21- 100%of their employees. Profit-sharing was more prevalent in manufacturing firms, with 38%

of these firms indicating that 21-100% of their employees participated in profit-sharing

plans compared to 31% of service firms. Self-managing work teams and group incentives

showed about the same level of penetration in manufacturing and ser vice firms. About

21% of both service and manufacturing firms indicated that 21-100% of their employees

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were organized in self-managing work teams. Forty-nine percent of service firms and

50% of manufacturing firms indicated that 21-100% of their employees received group

or team incentive pay.

Implementing high-involvement work practices: The importance of alignment

Edward Lawler suggests that to implement high involvement management, “virtually

every major feature of the organization needs to be designed differently.” Faced with

such a monumental task, managers may well wonder where to start.

Providing an insightful answer to this question, researchers Ledford and Mohrman

developed the method of “self-design” in 1993. The selfdesign change strategy requires

managers to develop a vision of the new organization and state it in broad terms, “leaving

the more specific designing to be done by the members of the units that have to make the

design work locally.” Change proceeds in a decentralized manner, with different business

units creating changes at their own pace. Competition between managers and the need for

coordination press slower-moving units to catch up with the leaders as the entire

organization evolves from a traditional to a high involvement system.

Self-design is effective because the movement to a high-involvement system requires an

extremely high amount of learning among managers and front-line employees. By

participating in the process of investigation and development of system changes,

employees and managers gain the opportunity to both absorb the information needed tomake the change and develop the knowledge and skills needed to change successfully. In

self-design, changes are developed and implemented iteratively as business units identify

an appropriate starting point for change, design and pilot the new system, and make

adjustments. Over time, participants in the process re-design more and more systems and

build their change management and system design skills. Ledford and Morhman argue

that, “This strategy for change is appropriate in guiding large-scale change where all

contingencies and relationships cannot be known in advance, and where organizations

and their members are required to learn substantially new behavior patterns in order to

support the desired change” to the high-involvement work system.

CEO Ralph Stayer, of Johnsonville Sausages, recommends starting with a highly visible

activity, in his case, the daily tasting of the sausage. Previously done by managers, Stayer

delegated the responsibility for tasting to the production employees, who then were

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responsible for detecting and fixing problems and making improvements. The

employees’ investigation of issues arising at the daily tasting naturally resulted in

cascading the involvement process down the production line.

There are several reasons why a participatory change process is superior for

implementing high- involvement management. Beyond the knowledge, skills, and

information employees gain through the participative process, participation generates

engagement on all three levels by affecting beliefs, attitudes, and behaviors. Participating

in the change process changes people’s beliefs about the change by giving them

information about the limitations of the current work system and by exposing them to

new ideas that raise awareness about alternative ways of conducting the work.

Information about the limitations of the existing system and possibilities inherent in other

methods help employees understand the need for the change and the benefits of the new

system.

Participation also generates more positive attitudes toward the change to high

involvement. When people participate in the design of the new system, they become

personally invested in making the system succeed. By comparison, when outsiders design

the new system, people sometimes react negatively, the result of a perception that they

are being forced to change. Studies of the Chrysler MOA showed that employees had

more positive attitudes toward the new work system if they perceived that managementlistened to their input and that their suggestions for improving the work process were

used. These findings support the notion that employees have more positive attitudes

toward changes that incorporate their own ideas than to changes that are designed by

others.

Finally, participation in the design process produces the behaviors indicative of highly

engaged employees. By participating in the design process, employees begin to act in

ways that go beyond their narrow job descriptions in order to contribute to organizational

effectiveness. They begin to apply a wider range of ability, knowledge and expertise to

organizational problems. Hence, employees gain experience in devoting more effort,

knowledge and time to the organization. Over time, the self-design process normalizes

these behaviors, generating a climate of high employee engagement.

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High-involvement work practices that provide employees with the power to make

workplace decisions, training to build their knowledge and skills in order to make and

implement decisions effectively, information about how their actions affect business unit

performance, and rewards for their efforts to improve performance, can result in a win-

win situation for employees and managers. Employees seem to enjoy working in

highinvolvement workplaces, and managers reap enhanced performance from these

systems.

Designing and implementing a high-involvement system is not a trivial task, however.

Although the four principles of power, knowledge, information and rewards can be

generalized to both manufacturing and service environments, their application to any

particular workplace requires fitting these principles to specific and somewhat unique

situations.

Converting to a high-involvement work system requires that managers and employees

work together to virtually remake the entire organization through the process of self-

design. Self-design can start with small pilot projects almost anywhere in the

organization, and handing responsibility for a piece of an interdependent system over to

employees can naturally result in the cascading of employee involvement throughout the

work flow process. Hence, high involvement is a rigorous, long-term process, but the

result can be a uniquely structured organization with highly engaged employees and astrategic advantage over competitors.

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FINDINGS & ANALYSIS

COMPANY DETAIL

Aluminum which is the most abundant crust in earth’s crust is having the properties like,

good conductor of heat and electricity, nonmagnetic, nontoxic and durable. It can also be

alloyed with copper, magnesium, zinc, silicon, etc to form various kinds of rolled

products; it is also called as “GREEN METAL”.

In 20 years of history, there have been substantial rational changes in primary

aluminum. U.S.A. is the largest aluminum producer followed by Russia. But most of the

recent growth in aluminum industries has come from the developing countries. As

aluminum is widely used metal and each country need it for different purposes. The

industry’s growth has been rapid in countries like Canada, UK, USA, Japan, Germany,

Italy and Australia. Other developed and developing countries also manifest a large

demand for aluminum; although India is yet to catch up with the trend.

Country Annual per capita consumption in kg

INDIA 0.7

CHINA 2.8

BRAZIL 4.2

UK 13.0

AUSTRALIA 19.2

FRANCE 22.3

ITALY 26.5

GERMANY 27.7

JAPAN 28.4

USA 29.0

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CANADA 30.9

Aluminum represents the second largest metals market in the world. Growing demand for the

lightweight metal is fuelled largely by the booming Chinese economy which already consumes a quarter

of the world’s aluminum Production. Analysts predict an annual growth rate of 7 to 14% in the Chinese

automotive industry up to 2011, a 12% increase in construction expenditure in 2007 and a minimum

of plus 16 million annual growths in urban population during the next 8 years. According to analysts

these factors will combine to see China consume 36% of world’s aluminum production as early as 2010.

In addition, the EU is discussing the possibility of introducing stricter CO2 emission requirements

for automobiles which will inevitably boost demand for aluminum. Aluminum is lighter than steel, so its

wider use in the automotive industry will make cars much more efficient. A kilo of aluminum, used as a

substitute for heavier metals in car industry, reduces gas consumption by 8.5 litres and produces 20 kg

less CO2 emissions. A 10% reduction of car weight results in a 9% increase of fuel consumption

efficiency.

Finally, rising prices for substitute metals, such as zinc and copper, stimulate a direct increase

of demand for aluminum in the power, transportation and construction sectors in particular.

Demand is enormous, consumers are wealthy, and profitability is evident: it seems a lot of companies

should be rushing to enter the aluminum sector, yet, the situation is not as simple as it may seem. Only

those who can establish and manage the full production cycle (from the extraction of raw materials,

the production of alumina, and the reduction of aluminum) in a highly efficient way can become leaders

in the aluminum industry.

Whoever owns resources owns the world Resources of bauxites, the raw material for aluminum, are not

widespread throughout the world. There are only seven bauxite-rich areas: Western and Central Africa

(mostly, Guinea), South America (Brazil, Venezuela, and Suriname), the Caribbean (Jamaica), Oceania

and Southern Asia (Australia, India), China, the Mediterranean (Greece, Turkey) and the Urals (Russia).

The main deposits of high-quality bauxites with high aluminum content (not less than 50%), are already

20



divided by the main players. Other companies have to either buy alumina on the free-market —

or wholly depend on price movements — or join forces with deposit owners.

The richest sources of bauxite belong to the United Company RUSAL (UC RUSAL), which

was established in 2007 as a result of a merger between RUSAL, SUAL and the alumina assets

of Glencore (3.3 bln m.t. of bauxites), and to the mining and metallurgical giants: Rio Tinto (3.29 bln.

m.t.), and CVRD (2.73 bln. m.t.). Chalco of China comes fourth with its 1.92 bln. m.t. Alcoa and Alcan,

which are among the three largest producers, control deposits worth 1.89 and 0.38 bln. m.t. respectively.

These same companies make up the ten largest manufacturers of alumina. Analysts estimate that Alcoa

World Alumina and Chemicals (Alcoa’s alumina business, with 60% belonging to the American

company and 40% to the Australian Alumina Limited) will produce 19% of the world’s total alumina

production in 2007, UC RUSAL will produce slightly over 14%, Chalco will produce 12%, Alcan will

produce 8%, Rio Tinto will produce 4% and CVRD 3%. BHP Billiton (2007 estimate is 6%)

and Norwegian Hydro Aluminum (3%) are also among the leaders of alumina production.

The limited supply of raw materials is a factor behind the major consolidation trend of world aluminum

industry. In 2007 the merger of RUSAL, SUAL and alumina assets of Glencore was completed.

Rio Tinto proposed to take over Alcan, which, in turn, has already taken over the French aluminum

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manufacturer Pechiney in 2004. The US-based Alcoa is also named by the press as a potential merger

and takeover participant. According to analysts, the Chinese aluminum industry is on the verge

of changes: small manufacturers (amounting to more than a hundred in China), will either merger with

each other, or join Chalco.

THE BIG TEN

Today the Big Ten aluminum manufactures are:

United Company RUSAL is the leader of the world’s aluminum industry. Its products are exported

to clients in 70 countries of the world. The Company incorporates bauxite and nepheline ore producers,

manufacturers of alumina, aluminum, alloys, foil and packaging materials, as well as power assets.

The United Company holds 12.5% of the world’s aluminum market and 16% of the world’s alumina

market, which allows the company to produce 3.9 mln m.t. of aluminum and 10.6 mln m.t. of alumina

per annum. The company was established in March 2007, as a result of merger of RUSAL, SUALand alumina assets of Glencore. UC RUSAL provides employment for 100,000 individuals and is

operating in 17 countries on 5 continents.

Alcoa is one of the world’s leading manufacturers of primary aluminum, aluminum products

and alumina. The company is involved in aerospace, automotive, packing and construction industries,

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http://www.rusal.ru/

http://www.alcoa.com/russia/ru/home.asp



http://www.rusal.ru/



as well as in the field of commercial transportation and engineering solutions. Alcoa

has 129,000 employees in 44 countries of the world. In 2006 the company has produced 3.55 mln m.t.

of primary aluminum. In Russia, Alcoa owns OJSC Samara Metallurgical Plant and OJSC Belaya

Kalitva Metallurgical Industrial Amalgamation.

Аlcan is the Canadian aluminum manufacturer, which is over 100 years old. Today, the company is one

of the leaders in the world’s aluminum industry, producing bauxites, alumina and aluminum. It is one of

the three largest manufacturers of structural and packaging materials. Its production volume for primary

aluminum in 2006 was 3.4 mln m.t. The company has 68,000 employees, including joint ventures.

Alcan operates in 61 countries. In Russia, Alcan sells aluminum packaging materials, including products

for the tobacco and cosmetics industries. It has representative offices in Moscow and Leningrad regions.

At present, Alcan’s shareholders are studying a takeover proposal from the Australian-based Rio Tinto.

If the deal is approved, the new company will become the absolute leader in terms of volume.

Chalco or Aluminum Corporation of China Limited is the largest manufacturer of aluminum and the

only manufacturer of alumina in China. The company was founded in 2001 during the privatization

of Chinese aluminum industry. In 2006 Chalco has produced 9.2 mln m.t. of alumina and 1.6 mln. m.t.

of aluminum. All the assets of the company — 4 plants, manufacturing alumina and aluminum,

one purely aluminum and two purely alumina plants, plus, an R&D Institute — are located in China.

Chalco does not have representation in Russia.

Hydro Aluminum is one of the two main business units of Norsk Hydro. Its second line of business

is the oil and power industry. Hydro Aluminum is a downstream-integrated company with major

alumina assets in Brazil and Jamaica, and aluminum smelters in Australia, Canada, Germany, Norway

and Slovakia. The company has also announced its intention to build an aluminum smelter in Russia.

Hydro Aluminum has 26,000 employees. In 2006 they have produced 1.8 mln m.t. of primary

aluminum. At present, Hydro has offices in Moscow and Saint Petersburg.

BHP Billiton is the largest mining company in the world. The company acquired its present

configuration in 2001, when it was created through the merger of the Australian Broken Hill Proprietary

Company (BHP) and the British listed Billiton. Aluminum production is just one of ten businesses

run by this Australian giant. As of today, overall production capacities of the company are over 1 mln

23

http://www.alcan.com/


http://www.chalco.com.cn/chalco.3w/english/index.jsp?siteid=0002

http://www.hydro.com/en/our_business/aluminium/index.html

http://www.bhpbilliton.com/bb/home.jsp


http://www.chalco.com.cn/chalco.3w/english/index.jsp?siteid=0002

http://www.hydro.com/en/our_business/aluminium/index.html

http://www.bhpbilliton.com/bb/home.jsp



m.t. of aluminum and over 4 mln m.t. of alumina per annum. BHP Billiton owns industrial sites in South

Africa, Australia and South America. BHP Billiton does not have a representation in Russia.

Dubal or Dubai Aluminum is the largest aluminum manufacturer in the UAE. Starting in 1979 with

a single pot line, producing only 136,000 m.t. p.a., Dubal today is one of the leaders of world aluminum

industry, having production capacity of 900,000 m.t. p.a. of aluminum. 3240 people work for the

company. The main markets for Dubal are: the Far East, Europe, Asia, the Middle East,

the Mediterranean and North America. Dubal does not have representation in Russia.

Rio Tinto Group — is another diversified mining company among the top ten aluminum producers

in the world. It got its present configuration in 1997 after a series of takeovers and mergers. Aluminum

production is one of the group’s seven lines of business. Rio Tinto Aluminum mines bauxites, produces

alumina and primary aluminum, accounting for 26% of all aluminum, manufactured in Australia.

The head-office of its aluminum operation is located in Brisbane, Australia, with representations in New

Zealand, Australia and Great Britain. Rio Tinto Aluminum employs 5,000 people. There is no

representative office in Russia yet.

Aluminum Bahrain B.S.C. or Alba is one of the largest aluminum smelters in the world. Since it was

built in 1971 in the Knaff District of Bahrain, the smelter has increased its production capacity from

144K to 850K m.t. p.a. of aluminum, thus entering the Big Ten aluminum manufacturers and becoming

the world’s third largest aluminum smelter. In 2006 Alba has produced 2.3% of the world’s aluminum.

Century Aluminum was founded by the Swiss company Glencore International, as a holding for its

aluminum assets, in 1995. A year later Glencore completed an IPO of Century Aluminum stock, leaving

a 30% package. The company employs 1,750 people. It controls or holds shares of several aluminum

smelters in the US and Iceland, as well as a number of mining assets in Jamaica and in the US. Last

year, Century Aluminum produced 660K m.t. of aluminum, which accounts for 1.9% of the world’s

production. Its head-office is located in Monterey CA. Century Aluminum has no representation

in Russia.

The Power of Success The reduction of aluminum from alumina by means of electrolysis is a power-

consuming process, hence most vertically integrated companies are generating their own power.

Accessibility and the price of power drive the second trend of aluminum industry development.

24

http://www.dubal.ae/

http://www.riotinto.com/index.asp


http://aluminiumbahrain.com/en/default.asp

http://centuryca.com/index.html

http://www.dubal.ae/


http://aluminiumbahrain.com/en/default.asp

http://centuryca.com/index.html



Aluminum production leaves industrially developed countries and shifts to countries that are reach

in resources and able to produce their own cheap energy.

Thus, in the last 18 months, growing power rates, lack of local resources and a tightening of ecological

regulations have resulted in the shut-down or closing of European production facilities manufacturing

a total of 354,000 m.t. p.a of aluminum. In the next year and a half, 3 more plants will be closed

in Europe, with a total production capacity of 206,000 m.t. p.a. At the same time, countries like India,

Iceland, China, Russia, and UAE enjoy growth and development of aluminum production. Analysts

believe that in the next four years each of these countries will increase overall production capacity by at

least 500K m.t. p.a. China will be the absolute champion, adding a total of 7.6 mln. m.t. p.a.

of aluminum production capacities by 2011.

Aluminum has been used for for just over 150 years, yet it has already gone from being purely

decorative, used by jewelers alone, to being a material which allows us to travel faster, live more

comfortably, use all the advantages of progress and study the worlds around us. The corporate history

of aluminum production is an interesting story. Companies which were considered world leaders merely

five years ago have become divisions of larger competitors, while plants that started as pilot shops

for manufacturing aluminum have become the largest manufacturers of the «flying metal». And this

is just the beginning!

25



The Background:

National Aluminum Company Ltd.(NALCO) is considered to be a turning point in the history of

Indian Aluminum Industry. In a major leap forward, Nalco has not only addressed the need for

self-sufficient in aluminum, but also given the country a technological edge in producing this

strategic metal to the best of world standards. Nalco was incorporated in1981 in the public sector,

to exploit a part of the large deposits of bauxite discovered in the East Coast. Incorporated in

1981,as a public sector enterprise of the Govt. of India, National Aluminum Company

Limited(Nalco) is Asia’s largest integrated aluminum complex, encompassing bauxite mining,

alumina refinaring, aluminum smelting and casting, power gene3ration,rail and port operation.

Commissioned during 1985-87, Nalco has emerged to be a star performer in production and export

of alumina and aluminum, and more significantly, in propelling a self-sustained growth.

Following the discovery of large reserves of bauxite ore in the east coast and the preliminary

project work done by Bharat Aluminum Co. Ltd. The company was setup by the Govt. of India

in1981 top implement one of the largest multi-location integrated aluminum projects of the world

with its own captive power-plant and port facilities. Different segments of the company went into

production in a phased manner starting Nov. 1985. Within a short span of time, the company has

emerged as a leader in the field of aluminum production in the company and also had made

significant impact abroad. The company has helped the country to make a quantum jump in the

production of aluminum and has also been earning substantial foreign exchange through creditable

export performances year after year. The company serves the national interest and enjoys trust and

confidence of the market and of the general public on account of its products excellence,

productivity, and profitability and good industrial relations. The inherent trust on customer service

is another hallmark of the company. Energy and environment are the subjects of prime importance

to the company. Right from the design stage, the company has adopted antipollution and energy

technologies. There is constant monitoring to ensure that there is no pollution of water and air and

that there is no disturbance to environment or ecological balance. Plans are on the avail to expand

basic capacities of the plants and create downstream capabilities to meet the demands of the future

Vision:-

To be a company of global repute in Aluminum.

26



Mission:-

To achieve growth in business with global competitive edge providing satisfaction to the

customers, employees, share holders and community at large.

OBJECTIVES:-

• To maximize capacity utilization.

• To optimize operational efficiency and productivity.

• To maintain highest international standards of excellence in product quality, cost

efficiency, customer service.

• To provide a steady growth in business by technology upgradation, expansion and

diversification.

• To have global presence and earn foreign exchange.

• To have large distribution channels.

• To overcome the obstacles in the distribution process.

• To have international levels of distribution channels for the supply of raw materials and

products.

THE MANAGEMENT

The company is a Government of India enterprise under the administrative control of the

Ministry of mines. The company is managed by a Board of Directors appointed by the president of

India. The board consists of maximum 18 directors including the CMD of the company. Apart

from CMD, there are 5 functional or full time Directors heading Project and Technical, Personneland Administration, Commercial, Finance and Production disciplines. There are 2 senior Govt.

officials nominated to the board as Directors by the Govt. of India. Besides, there are non-official

directors in the board. There are two part-time official directors and eight part-time non-official

directors.

27



Thus, the board of the company is a pool of highly experienced and outstanding professionals

drawn from various fields of specialization. The board enjoys max possible operational autonomy,

consistent with the overall corporate objectives, basic policies and programmes with a view to

achieve optimum utilization of its resources. Subject to the provisions of the Indian Companies

Act, Memorandum and Articles of Association, memorandum of Understanding signed with the

Govt. The CMD has full powers to sanction expenditure or to deal with other matters for effective

functioning of the company.

The management’s control system is based on delegation of authority and individual

accountability for results. The responsibility and authority to take decisions on various matters are

delegated by the CMD to different levels in the management hierarchy. For personnel matters

such as employment, confirmation, promotion, discipline, transfer, grant of

various benefits, leave, etc. powers have been delegated to different levels of

executives, in conformity with the principles and policies of the management .The schedule of

delegation of powers is a published document available for reference, which is subjected to review

from time to time to incorporate necessary changes.

SALIENT FEATURES:

1. Modern updated technology.

2. Captive resources in raw materials.

3. Integrated operations.

4. World class products.

5. International linkages in technology and markets.

6. Well trained manpower.

7. Sound financial management.

8. Pithead locations of the power plant.

9. 9th largest producer of alumina in the world.

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10. Efficient logistics in transportation.

11. Dedicated port facilities on the Bay of Bengal.

12. Environment friendly operations.

13. Self funded expansions.

14. Expertise in project management.

"It is as simple as this." Webb Edwards, president of Wells Fargo Service Company,

asserts, "When our people are in the right job, spending the right time on the right things,

feeling good about their contributions, fully using their skills, learning new ones and

having fun, they will do right for the company and the customer."

There's no question about it. Well-trained employees are the cornerstone of workforce

productivity and a clear-cut edge in the marketplace. As such, in a competitive business

environment it is especially important to develop a company's human capital strategy in

concert with its economic strategy. Just as businesses continually strive to improve

bottom line performance, they will also focus on employee performance with a

commitment to increase knowledge and enhance skill sets.

Accordingly, the deployment of effective training programs is essential. Although many

companies have extensive training programs that focus on content, they generally do not

take into account how people learn. Rather, the norm is for employees to be oriented andtrained in the style that is natural to the one doing the presenting. That is, trainers,

supervisors, leads or technical specialists unconsciously teach according to how they

learn. This phenomenon may result in a hit-and-miss training approach that is costly in

terms of time, money, frustration, mistakes and outcomes. More importantly, it does not

lead to enhanced and/or maximum performance levels.

29



Personalized learning approach gets employees up to speed

Everyone learns differently. If employers take the time to study how each employee takes

in and processes information, they can create the right environments to transfer

knowledge in a way that is best received by every individual. In order to accomplish this

goal, it is important to identify, understand and apply the four most common approaches

to learning. They are:

1. Experimenting/doing. The individuals most likely to use this approach are

generally tactical in nature. When they attempt to do a task, they wait to see what

happens. Using trial and error, they learn by doing, by putting their hands on

something and really trying it for themselves. Whether or not it works, they are

still learning. They want to know: "What can you do for me", and "how soon can

you do it?"

2. Observing/participating. These individuals learn by watching someone else do

the task, and then they will try to imitate what they have seen. Taking notice, they

strive to replicate the knowledge or skill worthy of attention. These learners have

a special ability to associate what is unknown with whatever is known and benefit

from positive reinforcement. They want to know answers to questions starting

with "who" or "what else."

3. Inquiring/consulting. Individuals with this type of personality have a strong need

to understand and use a thought process that features an "if-then" approach. The

intent is to foresee the outcome of potential choices. They assess various

scenarios, talk to others to see what they think, look for alternatives and value

feedback. Needing to know the context behind the task and the rationale of what

needs to be done and the big picture, they want answers to questions starting with

"why" and "what if."4. Analyzing/patterning. People with this style function best when things are well

defined and the patterns are visible. These individuals need to reduce risk and

establish a step-by-step sequential process needed to accomplish a task. A

documented methodology, something they can reference when needed, is

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required. Reinforcing methods that work, they eliminate faulty ones. They seek

answers to questions that begin with "how" and "how much."

Certainly, there is no one approach to learning that is any better than another. It is simply

a matter of personality and style. In fact, most individuals may use a combination of

approaches, even though one style is often dominant.

Appreciation of different learning approaches

Bygie Quigg, director of performance improvement at Wachovia Securities in Charlotte,

North Carolina, not only knows how to hire motivated people, but she also knows how to

get them up to speed. "We use the natural talents of employees," Ms Quigg explained.

"We don't focus as much on expectation or preference, but we draw on their natural

instinctive talents to get the group up to speed." By assessing employees and customizing

the method of learning, employers can save time and money. Employees not only begin

performing efficiently in less time, they are also much less frustrated.

When a department in the bank's Retail Services Group underwent a number of

significant changes, Ms Quigg drew on her special knowledge of learning and behavioral

styles. A total of 20 new people were hired into the department at about the same time

that the department manager left. To fill the vacancy, a manager from another department

was brought in, and suddenly there was a lot of negativity and blaming. Ms Quigg

profiled the members of the group and brought them together so they could learn about

one another and their individual differences.

One of her discoveries was that the training system in place did not satisfy the learning

approaches of the people involved. Only a few team members had an

experimenting/doing style, while the majority were observing/participating,inquiring/consulting and analyzing/patterning types.

Selection made by natural talent

31



"We picked people out according to their styles," said Ms Quigg, "and assigned them

tasks so we could use their natural talents. We picked those with an analyzing/patterning

style to do more of the detailed tasks that required repetition and documentation."

Ms Quigg adds that the each member of this team now has a better appreciation for one

another's learning approach and unique abilities, and the team has become a cohesive

unit. She asked her group, "You may hate detailed work, but aren't you glad there are

people in the world who thrive on that, so you don't have to do it?" The answer was a

resounding "Yes!"

Recognition of learning approaches helps employees understand their instinctive

personality differences, which can either assist or interfere with effective communication

in the workplace. It relates especially to what one needs to know in order to feel safe and

confident in accepting information and moving forward with it. In corporations today,

this means the emphasis on learning should stress its value for communication. It should

enable each employee to feel more effective personally and be able to work in a

synergistic fashion in the group.

Evaluation tools enhance learning

There are tools available to employers to improve training methods, improve productivity

and foster an environment of teamwork. They help companies analyze both personality

and learning approaches. Because of the impact on productivity, there are several key

features to look for when assessing and selecting learning support tools for use in a

corporate setting. Look for tools that are:

1. Easy to use. If a learning evaluation tool is not easy to use and administer, it may

be difficult to get an accurate assessment.2. Fast to administer. The ideal assessment takes only 15 to 20 minutes to complete.

If it takes longer, people may lose interest.

3. Devoid of technical jargon and psychobabble. Ideally, the results need to be

understood by everyone and should be presented in a logical, non-threatening

manner.

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4. Graphically presented. The results should be visually presented, making them

easy to understand and applicable to practical situations.

5. Useful in conjunction with other tools. A good learning evaluation tool can be

applied in conjunction with other tools and organizational activities.

Because each employee has a unique approach to learning, a business, armed with a

thorough understanding of each person's learning abilities and style, is better able to

equip its employees with the information they need to do their jobs well and enjoy long-

term success. Webb Edwards of Wells Fargo has first hand experience with these

learning tools. He notes:

"Fortunately, we have a learning tool that helped us fill a need. It enables us to look for

the kind of people who want to work together as a cohesive team and who are more

energized than our competitors. We want the best people from diverse backgrounds and

cultures."

By addressing the unique learning approach of each individual, a company can

significantly decrease the time required to integrate a new hire into a job and improve the

effectiveness of all employees. Effective, satisfied employees are more likely to stay with

a company over time, are more engaged and represent a tremendous asset to the bottomline.

Predicting success

Sara S. Fawcett, vice president of human resources at Edens and Avant, one of the

nation's premier retail real estate companies, headquartered in Columbia, SC, utilizes the

learning aspect of personality throughout all phases of employment, asking all applicants

under serious consideration to fill out a questionnaire. While Ms Fawcett is quick to pointout that Edens and Avant is not looking for a particular personality type for a job, using

an assessment tool helps not only with the initial training process but also with assigning

tasks throughout employment.

33



Ms Fawcett uses the example of an upcoming task she is spearheading: rewriting the

employee handbook. "It's going to be very tedious, detailed-oriented work," explains Ms

Fawcett. "I want to have input from managers and supervisors who are going to be the

ones that apply these policies to their employees. In order for my handbook team to be

effective, I'm going to try to pick people who have a personality profile that would

indicate that they are interested in that kind of tedious work.

Choosing employees for tasks based on their learning approaches and personality traits

sets the team up for success. Handpicking employees to utilize skills, which they like to

use allows them to thrive in the workplace, making them a more productive and valuable

member of the team.

34



Assessing differences in learning approaches

In order to accommodate the different approaches to learning, an employer must first

evaluate how each employee learns. This is done through what is known as a "forced

choice" personality inventory, where the respondent must chose either A or B answers to

questionnaire items. This type of assessment uncovers several dimensions of the

personality: rational, socialized and instinctive.

The rational personality dimension reveals the individual's preferred style in job roles and

activities chosen freely by the individual. When an employee is stimulated and enjoying

work, a "like-to" style is in evidence and represents positive personality strengths. In this

stress free mode, an individual experiences a sense of self-mastery.

The socialized dimension, created from responses to authority figures, represents learned

ways of interacting with others. It reveals expectations of self and others and how the

person expects to be treated to enlist support and to gather information. What does the

individual expect of the employer? How should the associate be managed? Does he or

she expect to be a team player?

The instinctive dimension reveals what a person needs to do. This aspect looks at core

survival needs and motivational forces. It identifies what an individual needs to really

feel self-confident and energized. These are needs, which must be met on a daily basis

and influence all activity in daily life. It provides the key to knowing why an individual

does what he or she does.

Learning style is revealed in instinctive assessment

An individual's approach to learning is revealed in the Instinctive aspect of the

personality assessment. The results of the questionnaire are given to both the employer

and employee in the form of colorful graphs and reports with detailed explanations. The

learning approaches are described in terms of colors so that there is no negative

connotation to any one learning mode. By depicting learning behaviors objectively and

35



graphically, the trainer or employer has a good idea of how to present information and

training materials to each employee and can eliminate the roadblocks that come from

style differences. In this way, both management and the employee are more likely to stay

focused and achieve results.

Create understanding to increase productivity

Nancy Rubin, chief human resource officer for Providence Health System in Southern

California, uses this learning analysis model in workshops geared especially for reducing

conflict. She notes: "It has bridged a lot of gaps between people, because their personal

styles are different from their co-workers." Ms Rubin adds: "There's been a real lack of

understanding of why somebody may react a certain way in a situation. Once other team

members realize that is the individual's personal style, they are not as put off as otherwise

they would be." She says that now when there is conflict, employees utilize their

newfound learning skills to solve problems.

"People really get why that's [conflict] happening," asserts Ms Rubin. "They are more

able to ask for help about how to deal with somebody who is more this type than that

type." She reports that units are working together more efficiently and with much less

conflict. Where there is less conflict, there is more productivity.

It is important to recognize the key to learning is emotional and nonverbal. The learning

analysis model provides a method of uncovering hidden needs and making them visible.

Once the employee is aware of his/her personal strengths, he/she is able to work at the

highest level of productivity, thus creating more job satisfaction.

By assessing employees and letting them know how they learn and process information,

they understand what they need in order to approach a learning task or orient themselvesto a new position in their organization. By knowing what associates need, employers are

able to structure a learning system for them, so employees can take more of the

responsibility for their own learning.

36



Benefits of adapting management styles to learning approaches

The notion that adapting training techniques to the four different learning approaches

requires more time and money is false. In fact, the opposite is true. Because learning is

structured toward the individual, employees learn more rapidly. The time and effort spent

preparing participants to do tasks is reduced and so is employee frustration.

Consequently, employers who use this technology quickly see new hires become

productive team members.

The upshot is that every employee has his/her own approach to learning, a style that can

be defined in terms of need. If that need is met, learning is more likely to be easy and

fun. When the need is not met, learning can be cumbersome. This, in turn, negatively

impacts job performance. On the other hand, quality training that takes into account

participants' learning approach will reduce staff turnover and assist in attracting more

skilled employees.

In addition, one of the most important benefits of adapting teaching styles to learning

approaches is that it boosts employee confidence. Using an approach that is different

from the trainee's style undermines the associate's self esteem and decreases confidence

in his/her abilities. Employees may know what their learning needs are at an instinctive

level but are often unable to verbalize those needs. An employee armed with information

about his/her learning needs will more likely take a proactive role.

Moreover, when using learning analysis model to train employees, there is a positive

impact on the whole team, department or class. Employees, now aware of each other's

strengths and weaknesses, work together more effectively with a deeper appreciation of

each other's individual approaches.

Work smarter

The use of personality and learning analysis tools leads to many positive solutions and a

competitive advantage in today's marketplace. They allow a company to work smarter,

37



save money, reduce turnover and maximize its human resource's abilities. As Joe Edens,

chairman of Edens and Avant explains:

"Our company has grown from $300 million in asset value to more than $2.2 billion in

value with the best people in place. After a quarter of a century of experience using a

personality analysis tool, we can say with certainty using this is one of the best

investments we have ever made."

The right investments in learning initiatives pay off. The more skilled and knowledgeable

a workforce is, the greater the asset to the business. Accordingly, companies that rethink

and adapt their training methods to take into account how people learn experience

significant rewards that benefit the employer, employees, customers and the bottom line.

Now, that is a winning strategy in any economy:

Teaching model using variations in learning approaches

Using the concept of teaching someone how to use new software, here is an example of

how a trainer might make minor adaptations in the way information is presented to

individuals who have different approaches to learning:

• Experiment/doing. A person with this learning approach needs a brief explanation

of what to do and a clear target of the work to be done and the time it will take.

Given all the materials and equipment (manuals and computer loaded with the

software), the trainee would be allowed to use trial and error to work on the

program for a short time. The work would be checked for accuracy, immediate

feedback given and questions answered. This process continues until the trainee

can do the job successfully. Someone with this learning approach will choose the

resources he or she needs and is eager to finish the work.• Observing/participating. A person who learns via the observing/participating

approach needs an overview of the process, to watch an experienced person use

the software and discuss the options available on how to work with the program.

Then the trainee needs the opportunity to use the software with someone

38



observing, discuss the work, receive positive feedback on work done correctly

and be coached for continued improvement.

• Inquiring/consulting. Someone who learns through the inquiring and consulting

mode needs to have all the information about the software technology, why the

new technology is being implemented, as well as how to utilize the program (past,

present and future uses and background information.) After understanding the

context for the task, the trainee would then begin using the new program and

expect detailed feedback.

• Analyzing/patterning. For an individual who learns by using this approach, the

employer needs to define precisely how the task is to be done. Information is best

received if presented in an organized, logical manner. This individual would then

organize the material in a step-by-step method, from start to finish that makes

sense to him or her. After completing some tasks with the new software, the

individual needs feedback about what is right and what is wrong.

39



RECOMMENDATIONS

We've heard that health can improve a worker's productivity by improving their physical

capacity. But to be more accurate, improved health can improve a worker's ability to be

more productive. Productivity is largely a factor of an employee's desire to work. Just

because they have the physical capacity to do more work doesn't necessarily mean they

will. Recent evidence has emerged to indicate that perhaps workplace health programs

do in fact play that pivotal role in enhancing an employee's desire to work.

The human factor is simultaneously an organization’s greatest asset, and its greatest

liability. High performing, healthy and productive employees are the gears that drive a

business whilst a dive in employee productivity applies brakes to those gears ultimately

slowing profits. All of a sudden it takes longer and costs more to produce the same

product or service it did when employees were at their peak.

Job engagement refers to higher levels of vigor, dedication and absorption in daily

activities. It's about an employee's desire and willingness to work hard as a member of

your team. Job engagement should not be confused with job satisfaction. Macy and

Schneider defined engagement to have both emotional and behavioral components, with

emotional relating to feelings of focus and enthusiasm while behaviors are displayed by

proactivity and persistence. In many instances, job satisfaction may contribute to a

willingness to give high effort, however satiation doesn't guarantee the energy and focus

defined by engagement.

Achieving optimal performance requires delicate management; hovering on the fine line

between enforcing key performance expectations and pushing past it to stress, burnout

and resentment. In the same way, reward systems need to elicit a desire to work, yet not

be too generous, nor completely beyond reach and subsequently encourage mediocre

attitudes.

There are many benefits at an organizational level of enhancing employee job

engagement, the obvious being productivity, however there are also significant rewards

at a personal level. Employees who are more engaged in their jobs are happier, have

better home lives and remain healthier than those who are not according to research from

Kansas State University. Therefore organizational kick-backs extend beyond productivity

40



and may include numerous health dividends, such as reduced absenteeism, improved

retention and reduced medical or injury costs.

41



CONCLUSION

What factors can we influence that can help sustain an employee's drive? Is it simply a

measure of how well we dangle carrots? Financial incentives and key performance

indicators obviously play a role, yet they are industry specific and dependant on aspects

such as job type and demographics. There are however, key environmental and employee

support mechanisms which do play a significant role in enhancing job engagement which

can benefit both your business, as well as your employees and their families.

A workplace health and wellness program represents an effective and potentially cost

efficient mechanism for improving employee job engagement. In addition to health cost

reductions for your organization, it also demonstrates a genuine commitment to your

people - a key motive for engagement. According to the Towers Perrin Global WorkforceStudy, senior management interest in employee wellbeing is the number one driver of

employee job engagement. This is in line with other research, such as Macy and

Schneider, who confirm that the most important factors include fair treatment, and

creating a sense of safety and trust , all demonstrated by a genuine and visible

commitment to employee health and wellbeing.

For workplace health and wellness programs to be most effective, they need to be

ongoing and integrated into the daily operations of your organization. It's not enough to

offer your employees an annual health screening or quarterly lunch and learn. Your

employees want a sincere demonstration of commitment to their wellbeing. Health needs

to be a shared long term vision with ongoing support, and in return for this commitment,

your people will show commitment to the organization.

Job engagement and workplace wellness programs are more intimately related than some

may assume. They work in tandem, helping each achieve their targeted outcomes.

Workplace health programs aim to improve the health, energy levels and resilience of

employees. When implemented effectively, they help educate and incorporate strategies

to empower employees to be more accountable for their health behaviors, and to

encourage work-life balance. In addition, according to the results shown by Towers

Perrin, they also play a huge role in providing employees the confidence and ability to

become engaged in their job. Working in reverse, the absorption in one's work pays back

42



into the health improvements and feelings of wellbeing - outcome targets of the wellness

program. Research shows that employees that are engaged in their jobs are happier, have

better home lives, enhanced work-life balance and are ultimately healthier. These

outcomes, driven by a successful workplace health program will produce significant

returns for an organization not only in productivity boosts, but also in health cost

reductions. There are estimates that high performing companies are expected to pay, on

average, around 12% less ($1,200 per employee) for health care in 2010 compared to

poor performing organizations.

We know that poor employee health becomes costly for companies. It also seems that

poor work culture and an employee's interest in their job can contribute to declining

health and performance. Noxious work environments, job insecurity, interpersonal

conflict and excessive pressure situations have all been linked to poor work-life balance.

All of these conditions have been shown to increase the rate at which employees will cite

work issues seeping into, and interfering with their home life. It's noted above that

enhanced work-life balance is associated with improved health, mood and job

engagement; it appears that the opposite is also true. Those with deleterious work

environments and lack of balance report higher rates of stress and are more likely to

exhibit risk factors for heart disease and diabetes. Even after adjusting for other health

damaging behaviors, chronic work stress made it twice as likely that men would developsymptoms of metabolic syndrome. Workplace wellness programs not only work to

address the poor health outcomes, but they help to improve the culture and work

environment.

There is somewhat of a sense of entitlement in modern society. Old school values of

working hard for a paycheck, forging a career path through a single employer thus

demonstrating commitment and loyalty towards that employer are fading. Employee job

engagement is not as organic as it once was, and finding new ways to entice a sense of

dedication from your workforce can have huge competitive value, particularly if it can

reduce your production costs and rate of turnover. If this solution concomitantly

addresses the declining health that plagues our generation then it can have many

immediate, and ongoing returns for your organization. Evidence continues to emerge in

the literature that suggests that a comprehensive workplace health and wellness program

43



may represent the best current solution. As the number one driver of improving

workplace culture and empowering employees to take responsibility for their health and

wellbeing it allows them the freedom and confidence to focus energy towards their work.

Job engagement and health are closely linked, and should remain as a foundation to

nurturing a productive, competitive and sustainable workforce moving forward.

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BIBLIOGRAPHY

1) Kansas State University (2009, August 25). Employees Who Are Engaged In Their Work Have Happier Home Life. ScienceDaily. Retrieved January 14, 2010, from

http://www.sciencedaily.com¬ /releases/2009/08/090824115911.htm

2) William H. Macey and Benjamin Schneider. "The Meaning of Employee

Engagement": Industrial and Organizational Psychology, 2008; 1 (1): 3-30

3) Towers Perrin. "2009 Health Care Costs Survey. The Health Dividend: Capturing the

Value of Employee Health", June 2009.

4) University of Toronto (2010, January 13). When work interferes with life.

ScienceDaily. Retrieved January 14, 2010, from http://www.sciencedaily.com¬

/releases/2010/01/100112135038.htm

5) T. Chandola, A. Britton, E. Brunner, H. Hemingway, M. Malik, M. Kumari, E.

Badrick, M. Kivimaki, M. Marmot: "Work Stress and Coronary Heart Disease: What are

the Mechanisms?"; European Heart Journal, Jan 2008 (doi:10.1093/eurheartj/ehm584)

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