In Business

By: Graham Scott


Employing the right management tactics

In Business
In Business

Employment relations are a lot more diverse now than they were 25 years ago. Then, standardised employment conditions were the rule in a regime where most of the workforce enjoyed long-term stable positions covered by awards negotiated by a union they were obliged to join.

The then National Government (1975-1984) was both rather conservative and extremely interventionist in its approach to both economic management and the labour market. At that time our industrial relations accords were a composite collection of complex interwoven collective agreements. Sound complicated?

Well, it was, and unfortunately totally failed to take into account basic economic factors that had a hugely damaging effect on our economy.

The reformist Labour Government (1984-1990) introduced the Labour Relations Act 1987, using the government’s role as the key employer in the labour market to force labour flexibility and at a lesser cost.

This was achieved through the process of privatisation and corporatisation of government owned enterprises that at the same time opened New Zealand up for international competition and ownership.

If the Labour Government opened the door for reform then the extreme neo-liberals of the subsequent National Government (1990-1999) kicked it down and beat the stuffing out of the inhabitants.

They dramatically altered the labour market contracts and policies of mid-20th century New Zealand with the Employment Contracts Act 1991, which scrapped previous models and introduced into legislation the concepts of "freedom of contract" and "freedom of choice" for employment relations.

The Act gave unions no specific recognition and placed them in the same position as any other advocates or bargaining agents who wished to attract workers to use their services.

Our current industrial regime is controlled by The Employment Relations Act 2000 and The Employment Relations Amendment Act (No. 2) 2004, both introduced by the current Labour Government.

The first sets out to redress the perceived inequality of negotiating power within employment relationships by promoting collective bargaining through the means of unions, and the latter has one of its aims being to promote and strengthen collective bargaining further.

Other important amendments in The Employment Relations Amendment Act relate to the duty of good faith, collective bargaining, the test applied in assessing a claim for unjustified dismissal and protection for employees where business undertakings are sold, transferred or contracted out.

Obviously this is a brief outline, but what history shows us is that all governments change or meddle with legislation to cater for both their own ideological beliefs and their supporters best interests.

What business managers must do is suit their policies, structures and procedures to conform to the current laws and regulations. It’s not as bad as it first seems because good structure and policy will, in most cases, out perform whatever a politician can throw at us.

"As a manager you should at least read the Acts which are readily available online", says Murray Dixon, principal of DOMA Management Ltd, a South Island-based training and business consultancy that specialises in organisational development. "It’s both surprising and worrying that on many occasions when we are called in to sort out employment problems that many managers display little or no knowledge of the basic requirements of employment legalisation or statutory responsibilities."

According to Dixon, the Employment Relations Act should not be used in isolation as it is only one part of the process and should be studied in association with other relevant legalisation like the Health & Safety, Holidays, Human Rights, Privacy and Parental Leave and Employment Protection Acts.

"There is a lot of nonsense talked about the ramifications of the ERA and much of it borders on paranoia," Dixon points out. "The ideal situation is strong management coupled with a strong workforce: any other combination results in an imbalance that generally leads to inequity and unfulfilled expectations.

By strong, I mean being responsible and just, operating under sound policies and house rules backed up with real job descriptions that contain measurable performance expectations and appraisals. Not as we frequently see – some hashed together, cut and paste rubbish that’s the standard for many organisations out there today."

Management needs to be both competent and confident. This can be accomplished by well conceived management practices that recognise equity in the workplace and accommodate the expectation of the workforce to obtain a fair remuneration for fair effort.

Today’s workforce is looking for a balance between personal and work goals and the new generation (Y) has even higher expectations that no prudent manager should overlook.

The foundation for a smooth running enterprise and good industrial relationships is clear, continual communication at all levels between management and workers.

Good job descriptions and performance appraisals that link expectations with standards of performance as outcomes are essential. Alongside should be simple house rules that set out boundaries of responsibly and company policies.

These should naturally link into health and safety, company goals, staff development and statutory requirements, eg good faith principles, privacy, human rights, holidays and so forth.

"Good sound management practice is not just reaching for the ERA when things go wrong and will produce cost savings in long run," says Dixon. "All good management practice is rewarded with good performance and money invested – and it is an investment – in setting up basic sound structures, which saves spending much more on legal fees later on cleaning up avoidable problems.

"Most operations with less than 150 employees cannot afford in-house HR and many people in these roles have not got the skill either. The fundamental in establishing such policies is knowing when you’re out of your depth.

Not every manager can be expected to be an expert in organisational development, so if you haven’t got the skill for goodness sake, buy it in – it’s available generally a lot cheaper than lawyers."

Work through the accompanying checklist – the number of No’s will indicate areas where either personal development, ie training, or an outside consultant could help your organisation perform to a higher level of management.

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