Workplace Relations,

Employee Engagement

and Productivity

Professor Ray Markey

Centre for Workforce Futures

Macquarie University

overview

A discursive survey of key issues in today’s workplace impacting on Workplace Relations, Employee Engagement and Productivity, including:

• Problems with productivity

• The links between employee voice, engagement and productivity

• Ageing in the workforce

• Flexicurity for Australia?

• Climate change and the Australian workplace: a role for the IR system

Problems with productivity

Critical for economic growth and rising living standards,

but what is it ?

Defined as output quantity / input quantity

Macro productivity = GDP / total hours worked (or

employees)

Firm level productivity = no. widgets produced/total hours

Different types: labour, capital, multifactor, but confusion

Differs between sectors: some capital intensive, some labour

intensive

Problems with productivity 2

Implications:

Confusion with labour force participation, working harder or

longer

Can be low productivity + high profit

More with less, working smarter

How to define productivity in service sector?

Needs to encompass quality, environmental protection, health

& safety, employee well-being

Organisations need to measure something relevant

Problems with productivity 3

Australia’s record

• Hasn’t declined as some commentators suggest

• But historically low growth rate:

Av. 1.8% p.a. 1973/4 - 1993/4;

3.1% p.a. 1993/4 - 2003/4; 1.4% p.a. 2003/4 - 2010/11

2012/3: 2.2%, higher than recent av.

• Recent impact of mining sector

• Little evidence that changes to IR system have impacted

• Lowest ebb during WorkChoices era; fluctuated before & after

• Overseas evidence associates centralised IR & high productivity

• Historically low wages growth: 2.7% to Sept. (3.6-3.7% 2011-12)

• Impact on consumer demand?

• Has public policy been too successful in deregulation?

linking employee voice, engagement

and productivity

Environment Organisations Outcomes

Market Productivity

Institutions Employeewell-being &

engagement

International research confirms

Employee Participation

different forms

The Importance of

participation

Employees ‘having a say’: any process that ‘allows employees to exert some influence over their work & the conditions under which they work’ (Strauss 1998)

Different types and levels

Direct (efficiency oriented): job or task oriented, discretion –teamwork, autonomous groups, staff meetings

Representative: trade unions, joint consultative councils (JCCs), works councils, employee representatives on boards

Research suggests: Representative forms associated with more job satisfaction, quality of work environment and well-being

Direct forms can be associated with work intensity & stress in high performance workplaces

Combinations work best

Ageing in the

workforce

• Life expectancy increasing & population & workforce are aging

• Australians are spending more of their lifetimes in employment

Expected years in employment for new-born males increased from 35 to 37 from 2001-2011; & for females 29 to 32;

Increases in numbers working post standard retirement ages

Pension age increasing from 65 to 67 & 70 by 2035

Number of employed females aged 60-69 rose 170% 2001-11; males 124%

Percentage of employed 45+ to increase from 40-43% for males 2011-21, & females from 39 to 43%

Median age 2001-11 for males rose from 39 to 41, for females 38-41

Ageing in the workforce

IR implications

• Skills, experience of older workers

• Difficulty in maintaining employment

• HR issues: health & safety, recruitment & retention,

opportunities for younger employees?

• Public policy contradictions:

Australia’s extent of ageing far less than many other countries

Pause in superannuation increases for employer contributions

means greater dependence on pension

NSW 2012 workers compensation legislation restricts medical

benefits to 12 months after 65

Flexicurity for Australia?

Flexicurity: European policy to simultaneously increase:

• Flexibility of labour markets, employment, work organisation, &

• Employee security especially for vulnerable groups

Flexibility through:

• contractual arrangements – labour law, collective agreements, work organisation

• Comprehensive lifelong learning policies for adaptability & employability

• Effective labour market policy to help cope with rapid change, reduce unemployment duration, ease job transitions

• Social security systems - income support, facilitate mobility

Security: job, employment, income & combination security to allow combination of work, family & other responsibilities through flexible arrangements & facilitate workforce transitions

Flexicurity for Australia?

A case for portable long service leave

Long service leave (LSL) uniquely Australian, to:

1. Rest half way through career

2. Reward long service with employer

3. Reduce labour turnover

• State/Territory legislation since 1950s & industrial instruments

• Standard provisions: 2-3 months after 10 years, but variations

• Fair Work Commission Review calls for national standard in NES

• 1st rationale most important due to longer working lives, 2 & 3 less

• But only 25% workforce now eligible

• Portable LSL schemes exist in coal mining, building/construction, security, community work, & work well based on funds & levies

A national portable LSL scheme would encourage mobility, & provide employees with income security in job transitions, paid leave for training/education, work/family needs

Climate change & the workplace:

a role for the IR system?

• Climate change & measures to mitigate its affect likely to lead to:

significant shifts in labour market (expansion/decline of skills, jobs & industries)

impact on IR and job quality

• Workplaces one of greatest sources of carbon emissions

• ILO emphasises ‘just transition’, also ACTU

• Role for employee voice/participation:

German works councils (2001),

UK TUC’s ‘green workplaces’ campaign – green delegates & collective bargaining

Initiatives in Belgium, France, Italy

Climate change & the workplace:

Australia1. IR organisations:

Concern with costs of public policy (employers) & jobs (unions)

Unions more optimistic re overall job creation, especially with government action, but mixed approaches – e.g. CFMEU Mining (Tony Maher) & AMWU positive, AWU cautious

2. Workplaces

94% undertaking behaviours to reduce emissions -energy consumption (77%), recycling (78%), waste reduction (71%)

Only 63% acted consciously to reduce carbon emissions: large firms, government (73%) & education (92%) sectors especially

New equipment (40%), work practices (39%), technology (28%), skills (24%)

80% since 2008

Triggers: costs (82%), CSR (69%), carbon price (27%), employee requests (20%, especially government & education sectors)

Climate change & the workplace:

The Australian IR story

Enterprise bargaining

Legislative restrictions: can’t impose environmental obligations on employers - must ‘pertain to the employment relationship’

Consultation clauses acceptable, especially if linked to efficiency

Environmental clauses:

2009/10, 1.7% all agreements (322) covering 8.7% employees with agreements (184,590)

2011/2: 6.7% agreements (1,007) covering 11.3% employees

Highest incidence: education/university & government sectors

Most very vague, general commitments to policy

Training/skills: 20%, often linked to OHS; some incentives

25% provide for employee consultation

Education/university & government sectors most substantive

Climate change & the workplace:

The Australian IR story 2

Other common forms of employee voice

• Employee team meetings 84%

• Joint consultative committees 30% including 9% dedicated

• JCCs most common in Wholesale (79%) & Education/Training

(66%) sectors; Education also had most dedicated JCCs (29%)

• Clear message: education (especially universities) & to some

extent government sector show that most substantive measures to

reduce carbon emissions associated with greatest depth of

employee voice, union & non-union

• Lost opportunity for public policy?

Summary & conclusions

Common themes

• Productivity debate needs opening up from narrow focus

• Strong links with employee voice, including trade unions (the

largest membership based civil society organisations in Australia)

• Potential contribution from flexicurity through national portable

long service leave scheme

• Huge impacts on productivity from climate change emerging or

coming: employee voice is a critical means to drive measures to

address this challenge

employee participation as win-win

bibliography

• Climate Change & the Australian Workplace: www.businessandeconomics.mq.edu.au/__data/assets/pdf_file/0014/336101/Climate_Change_and_The_Australian_Workplace_2014.pdf

• The Case for a National Portable Long Service Leave Scheme:http://www.businessandeconomics.mq.edu.au/faculty_docs/research2/McKell_Portable_LongService_1.pdf

• Workers Compensation Report: www.businessandeconomics.mq.edu.au/faculty_docs/workforce_futures/1_Dec_The_Impact_on_Injured_Workers_of_Changes_to_NSW_Workers_.pdf

• P. Gollan, R. Markey, and I. Ross, Works Councils in

Australia. Future Prospects and Possibilities,

Federation Press, Sydney, 2002.

• R. Markey, P. Gollan, A. Hodgkinson, A. Chouraqui

& U. Veersma, Models of Employee Participation in a

Changing Global Environment: Diversity and

Interaction, Ashgate, Aldershot, 2001.

• R. Markey, J. Monat, Innovation and Employee

Participation Through Works Councils. International

Case Studies, Avebury, Aldershot, 1997.

• R. Markey & H. Knudsen, ‘Employee Participation & Quality of Work Environment: Denmark & New Zealand’, International Journal of Comparative Labour Law & Industrial Relations, 30/1, 2014: 105-26.

• R. Markey, K. Ravenswood, D. J. Webber & H. Knudsen,‘Influence at work & the desire for more influence’, Journal of Industrial Relations, 55/4, 2013: 507-26.

• A. Barnes, R. Markey & C. MacMillan, ‘Maintaining Union Voice in the Australian University Sector: Union Strategy & Non-Union Forms of Employee Participation’, Journal of Industrial Relations, 55/4, 2013: 565-82.

• R. Markey & K. Townsend, ‘Contemporary Trends in Employee Involvement & Participation’, Journal of Industrial Relations, 55/4, 2013: 475-87.

• H. Knudsen, R. Markey & G. Simpkin, ‘Work Environment & Participation: the case of Public School Teachers in Denmark and New Zealand’, Industrial Relations Journal, vol. 44, no. 1, January 2013, pp. 38-56.

• K. Ravenswood & R. Markey, ‘The Role of Unions in Achieving a Family-Friendly Workplace’, Journal of Industrial Relations, 53/4, 2011:486-503.

• R. Markey & G. Patmore, ‘Employee Participation in Health & Safety in the Australian Steel Industry: Port Kembla, 1935-2006’, British Journal of Industrial Relations, vol. 49, no. 1, March 2011, pp. 144-67.

• R. Markey, C. Harris, J. Lind, O. Busck & H. Knudsen, ‘The Effect of Employee Participation on Work Environment in Food Processing Industry in Denmark and New Zealand’, Indian Journal of Industrial Relations, vol. 45, no. 4, 2010, pp. 622-34.

• R. Markey & G. Patmore, ‘Employee Participation & Labour Representation: ICI Works Councils in Australia, 1943-75’, Labour History, 97, 2009: 53-73.

• R. Markey & G. Patmore, ‘The Role of the State in Diffusion of Industrial Democracy: South Australia, 1972-9’, Economic & Industrial Democracy, 30/1, 2009: 37-66.

• T. Mylett & R. Markey, ‘Worker participation in OHS in NSW & New Zealand: methods & implications’, Employment Relations Record, 7/2 2007:15-30.

• R. Markey, ‘Non-Union Employee Representation in Australia: A Case Study of the Suncorp Metway Employee Council Inc. (SMEC)’, Journal of Industrial Relations, 49/1, 2007: 187-210.

• R. Markey, ‘The internationalisation of representative employee participation & its impact in the Asia Pacific’, Asia Pacific Jn’l of Human Resources 44/3, 2006: 342-63

• R. Markey, ‘Globalisation & Participation: the Global Reach of European Works Councils’, Employment Relations Record, 5, no. 2, 2005, pp. 61-80.

• R. Markey, ‘The State of Representative Employee Participation in Australia: Where Next?’, International Journal of Comparative Labour Law & Industrial Relations, 20/4, 2004.

• R. Markey, ‘The internationalisation of representative employee participation & its impact in the Asia Pacific’, Asia Pacific Journal of Human Resources, 44/3, 2006, pp. 342-63.

• R. Markey, ‘Globalisation & Participation: the Global Reach of European Works Councils’, Employment Relations Record, 5/2, 2005, pp. 61-80.

• R. Markey, ‘The State of Representative Employee Participation in Australia: Where to Next?’, International Journal of Comparative Labour Law and Industrial Relations, vol. 20, no. 4, December 2004.