TUC attacks poor management

September 1 2002 - British management is plagued by mediocrity and short-termism, according to a TUC report which says that Britain's management culture is holding back the Government's drive to boost productivity.

TUC General Secretary John Monks said:

'High performance workplaces aren't created overnight. Managers who want to create them have to invest simultaneously in a bundle of reforms of training, employee participation and work re-organisation. Then they have to wait for results - making all these changes takes time, and there's often a gap between the changes being made and the response of the people they're aimed at. These are long term reforms, and managers can rarely demonstrate to shareholders that they will pay off in the shorter timescale used for investment decisions.'

The report draws on published research including a study of 200 British manufacturing firms which showed that what is described as 'low road' work practices - short-term contracts, no employer commitment to job security and low levels of training - had a significant association with poor performance. Companies with high levels of staff turnover were particularly bad at product and process innovation, and low labour productivity was linked with all the 'low road' practices (high turnover, temporary contracts and fixed term contracts).

A survey of Asian business executives published in Australia asked them to rank managers from other countries' on a series of attributes. UK managers scored worse on leadership US and Japanese managers - and even worse on adaptability, entrepreneurship and technical skills.

A productivity study by the Engineering Employers' Federation found that foreign-owned firms were more likely to introduce workplace innovations than UK-owned firms. 12 types of initiative were more likely to be used by US-owned firms than British companies - usually substantially more likely. Differences between UK-owned and EU-owned firms were less clear-cut but, overall, EU-owned firms were more likely to innovate.

According to the report, companies in English-speaking countries:

* Are more likely to have their shares traded on stock markets,

* The shares of these companies are more diffusely owned,

*Shares are held for a shorter time, and

* The main mechanism for holding managers accountable is the hostile takeover.

The typical management response is:

* Maximising short-term shareholder returns, rather than long-term value, and

* Releasing a higher proportion of profits as dividends, instead of being re-investing them in the firm.

The Institute of Management recently found that more than a third of all managers rated the quality of leadership in their organisations as poor. Even CEOs are unimpressed, often describing the quality of leadership as 'mediocre.'

Government figures from the 1998 WERS survey show what workers think of their managers' skills:

* 24% thought their managers were poor at 'dealing with work problems',

* 30% at 'keeping everyone up to date about proposed changes',

* 34% at 'responding to suggestions from employees', and

* 38.5% at 'providing everyone with a chance to comment on proposals.'

TUC General Secretary John Monks said:

'There is an alternative to the slash-and-burn 'low road' to productivity. The 'high road' is not easy but it does make good business sense. Unfortunately, too many British managers take the lazy route: slashing pay, cutting jobs and lengthening hours. There is a golden opportunity for the Government to encourage UK companies instead of leaving them to their own disappointing devices. Good employers know there is nothing to fear from minimum standards and sharing best practice.'

TUC research quoted in the report indicates support from employees for a collective approach to workplace disputes. Workers prefer an individual approach only when it comes to issues such as promotion. The TUC survey asked:

How would you prefer to deal with each of the following problems?

Negotiating working hours and conditions

With colleagues or a group of fellow workers - 69.8%

On your own - 28.9%

Sexual or racial discrimination at work

With colleagues or a group of fellow workers - 69.6%

On your own - 27.5%

Bullying at the workplace

With colleagues or a group of fellow workers - 67.9%

On your own - 29.6%

Training and skill development

With colleagues or a group of fellow workers - 66.5%

On your own - 31.8%

Negotiating salary

With colleagues or a group of fellow workers - 63.3%

On your own - 34.3%

Promotion issues

With colleagues or a group of fellow workers - 44.3%

On your own - 52.0%

The report says delegation is one of the most powerful tools for increasing productivity. Of workplaces that introduce 'group delegation':

* 94% claimed an improvement in quality,

* 58% in output,

* 37% experienced a reduction in absenteeism, and

* 32% in sickness.

Of those with 'individual delegation':

* 69% claimed a reduction in throughput time, and

* 53% an increase in output.