April
2001 - Employee efficiency
Somewhere on the computer system
our office has a holiday request form. We fill
in the form when we want to take some time off
and the days are logged in the system. No one
says so, but the idea is to keep tabs on how much
holiday we take.
I don't have a big problem with
this but the system is geared to chalking off
days and doesn't want to take them back. Since
I'm writing this on a bank holiday I want to claw
back a day off in lieu but the computer doesn't
want to know. The system is designed to be an
efficient solution to human resources administration.
Why is efficiency so prized at
work? Before work study, people would work at
their own pace. Efficiency experts ended all that.
If I were more efficient I would clear my desk
every day instead of accumulating piles of papers,
reports and press releases. But then I would have
missed this statistic from the winter issue of
Employment Relations Today, still just about current,
due to the late spring. In 1850, it says, people
used 13 per cent of their energy at work. Today
this figure is less than one per cent.
The figures are quoted in the
magazine by David Macarov, a professor at the
Paul Baerwald School of Social Work, Hebrew University,
Jerusalem, who expects our work contribution to
decline further: "As technology continues
to progress, fewer human workers and higher levels
of productivity can be anticipated."
Then why are we so concerned
about efficiency? Of course, we don't talk too
much about efficiency. The "in" word
is performance. For many, part of our pay is performance-related.
Individual performance may be assessed during
an appraisal but much of our variable pay, such
as profit-sharing and share options, is attached
to company performance.
But what happens in a downturn?
Everyone works as hard, perhaps harder, but when
profits begin to fall the idea of performance
pay wears thin. We may be performing to the best
of our abilities but business falls away. What
can we do?
The answer may be to earn more
money for doing less. The idea is not to pay the
top earners more. Top earners, in economic terms,
create not so much as a splash in the power of
their spending, according to Joseph Coates, president
of Coates and Jarratt, a Washington-based policy
research organisation. Writing in the same magazine,
he argues: "If you give a person who earns
$100,000 a year another $1,000, he or she will
probably salt it away. If you give that $1,000
to a person making $20,000 a year, the chances
are he or she will spend it.
"As the rich get richer,
they will tend to slow down the economy, depress
wages, and in fact end up killing the goose that
lays the golden eggs for them."
Consider Henry Ford. He shook
US industry in 1914 when he announced $5 day for
shop floor employees. The average industrial wage
in the US at that time was $11 a week. Ford was
more than doubling it. He reduced the working
day to eight hours by switching from two nine-hour
shifts daily to a round-the-clock three-shift
system.
Why did Ford raise wages so much?
Because he could. Economies achieved by moving
assembly were so great that he could afford to
return some $10m of profits to employees. Thousands
flocked to the company gates. The deal for the
workers looked too good to be true and it was.
The basic rate was less than half the $5 headline
figure. The rest comprised a profit-sharing bonus.
To qualify for the bonus an employee had to have
worked at the company for six months and be classed
as clean, sober and industrious.
Exactly how industrious became
clear after workers joined the line. They were
timed by stopwatch while mastering a rigorous
production schedule. Then they were urged to speed
up. Labour turnover was so high that Ford needed
to recruit 4,000 people in the first year simply
in order to maintain 1,000 jobs.
But the rise in Ford earnings
had a strong impact on the US economy. Ford and
other mass producers had created disposable income
to spend on ever-cheaper products of manufacturing
industry. Mass industrialisation had served to
create a mass market.
Mass production also created
jobs until the depression years when Keynesian
economics demanded large scale public works programmes
to restore employment, earnings, buying power
and, thus, demand. President Franklin D.Rooseveldt
instigated such a programme under his New Deal.
But another plan to legislate for a 30-hour working
week was scrapped after resistance from employers.
Mr Coates argues that technology
is enabling a restructuring of the employment
market, taking many jobs out of the system while
increasing gross domestic product. Efficiencies
- such as direct data entry - created by technology
are, he says, leading to "irreversible structural
unemployment". He and Prof Macarov agree
that there is a diminishing need for work. If
the political imperative is to maintain spending
power to keep the economy going "the role
of human resources will be to look at strategies
that would shorten work days, shorten work-weeks,
provide sabbaticals and do this, in part, against
the rising profit base of the economy".
One problem with these ideas
is the psychological hurdle of paying people for
working less. Another is to produce an equitable
system for distributing wealth that engages wealth-creating
businesses. The third problem is the source of
the structural change in employment.
Technology is not only changing
the way we work, it is changing the consumer society.
Mass industrialisation is waning. Society is fragmenting
into special interest groups. The mass market
is splintering.
The idea of a diminishing need
for work is based on demand in the conventional
labour market. What about the other work that
we do - housework, gardening, do-it-yourself?
If this kind of work is increasingly important,
perhaps governments may pay more attention to
our domestic "subsistence" economy -
the work we do outside the workplace. And we might
try to lose the more irritating efficiencies like
computer-based holiday organisers.
Employment Relations Today,
Special Millennium Issue: The Future of Work ,
Winter 2000, Volume 26, Number 4. John Wiley &
Sons.
© 2001 The Financial Times
Ltd. All rights reserved
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