‘Performance Management, Lean and Sickness Absence Management – Workers Paying for the Crisis’

1. ‘Performance Management, Lean and Sickness Absence Management – Workers Paying for the Crisis’ Professor Phil Taylor University of Strathclyde 24 May 2011 Communication Workers Union Bournemouth

2. Crisis and Recession • Two elephants in the room:- 1) Recession 2) ConDems • Catastrophic failure of the de-regulated neo-liberal economic hegemony that has dominated for decades • Pain inflicted from years of corporate greed and hubris • The ‘credit crunch’ trivialised the crisis • Spread beyond immediate origins in the financial services sector but FS crisis goes on – RBS catastrophic job losses • Economist – Great Recession to Great Stabilisation but to where? –debt overhang, double dip recession, US stats show a jobless recovery, British recovery fitful if not pitiful • The illegitimate ConDem government – 36% voted for the Tories on a 65% turnout means only 1 in 4 of eligible votes • BA ballots – 90%+ on 80% turnout, 81% x 79%, 79% x 75%

6. 64% of the electorate did NOT vote for…. • ...billions of cuts...NHS privatisation...attacks on the poorest • …on H&S regulation…on sickness absence…on students…on the destruction of the public university • New politics are the old politics of class rule and privilege • Making workers pay for a crisis not of their own making • Clear that nationalisation was no return to Keynsianism, no return to ‘statised’ controls, but nationalisation of last resort – until ‘normal service’ is resumed • Hester - £2.04m bonus for 2010, Eric Daniels – £1.45m • RBS’ ‘return to profitability’ - redundancies are unjustifiable when RBS de facto state owned • Guardian - £50bn in bank bonuses – service as normal • Cuts in public spending will deepen the recession • 26 March Demo– 500,000+ shows depth of discontent

8. Employers’ Cost Reduction StrategiesSTAR and Balkanisation

9. Domestic Outsourcing • Has expanded so that IT, F&A, HR are outsourced • Growth in domestic outsourcing in contact centres but signs mixed • Can be challenged on grounds of quality and cost • Balkanisation of companies – Capita and Santander • Growth of Capita as Financial Services company – Craigforth result • Overseas Offshoring • What is the post-recession evidence? • Increase in back-office and IT offshoring, mixed evidence on voice migration, some return of voice etc. called reshoring • Capita’s growth in India – Axa and Prudential centres • WNS running Aviva • Case against offshoring can be developed – cost and attrition

10. Automation • Co’s wish to move to self-service and automation - IVR • Reduce headcount in contact and service centres • Rhetoric that it would lead to up-skilling unproven • Performance Management, Lean and Work Intensification • Perhaps the most important from the perspective of the union and of the ‘survivors’ • Workers paying for the crisis is translating into an unprecedented intensification of work • Restructuring, re-engineering ,‘lean’ – creative synergies • Equivalent or larger volumes of work with the same or more likely smaller workforces • Sheer intensity of work during the working shift

11. What is ‘lean’ production? • A raft of management practices derived from manufacturing, particularly motor industry • Womack et al (1990) ‘The Machine that Changed the World’ • Core thesis – organisations which strip out wasteful (or non-value added) processes from production gain significant quality and efficiency advantages • IMVP concluded that the successful co.s corresponded most to Toyota Lean Production Model, where – • - tasks and responsibilities were transferred to added value teams • - shifting detection of quality defects to teams • Team became the organisation form most associated with lean – so-called multi-skilling, task enlargement, worker participation in kaizen

12. Lean counterposed to Taylorism would remove mind-numbing stress with ‘creative stress’, participation etc • Hence ‘work smarter, not harder’ mantra • But critics’ studies of workers’ experiences in autos and HMRC found systematic evidence of increased labour subordination • - tighter supervisory surveillance and control - narrow tasking • - greater job strain and stress - managerial bullying - lack of voice • - delayering and ‘management by stress’ • Womack and Jones (2003) argued that lean could be applied to service sector • Consultants and academics now applying efficiency savings to public sector, financial services, NHS etc. • Radnor report in HMRC etc.

13. A brutalised form of Taylorism in HMRC • After lean... - 95% say ‘very’ or ‘quite’ pressurised • Volume, pace and intensity of work – hugely increased • ‘Lean has created a mechanistic, impersonal, targets driven, stats obsessed, highly pressurised working environment which has resulted in a demoralised, demotivated workforce’. (HMRC Worker, East Kilbride) • ‘After 27 years in the Inland Revenue following the introduction of lean, I am now deskilled, de-motivated [and] stressed-out most days, afraid to be sick, feel unappreciated, provide a poor service for customers, am not allowed to voice my opinion, looking forward to the day I can leave for good’. (HMRC Worker, Cardiff)

14. Frequency of Symptoms/Complaints Pre- and Post-Lean

15. What is Performance Management? • The measurement of performance as in output, number of tasks completed is central to management • The current purposes of PM being put are new • Performance Appraisal has existed for a long time – the individualisation of pay and conditions • Questionable link between effort and reward • PAs typically annually, 6-monthly and always there was a subjectivity problem - who decides? • Performance Management distinct from Appraisal • PM not periodic and retrospective but continuous forward looking and shift to disciplinary purpose • Various names – Performance Improvement, PIPs, Managing Performance, PIMs

16. HRM textbooks urge PM to develop employees, Line Managers to be coaches, emphasise training etc. • Aligning individual objectives with organisation’s • In practice, increasingly the micro-measurement and micro-management of individual performance • Quantitative outputs and targets • Qualitative aspects – behaviours, attitudes, ‘delighting the customer’ etc – highly subjective • Often first identified in contact centres, targets now spreading beyond to diverse areas of work • Targets, KPIs, SLAs – determined at the top, ‘cascading down’ through tiers of managers, to Team Leaders and then to individual workers

17. Lean, understaffing, PM, management by stress • If war of attrition then time/effort is the battleground • ‘Time is money’ – porosity of the working day • Call centres – 1 sec off each call saved BT £2m • Engineers - new technologies, tracking, mobile phones etc leading to intensification – save minutes • Fundamental driver is reduction in labour costs • As much or more work done with the same or less resource • Continuous pressure on so-called underperformers • The Bell Curve

18. The Performance Management Bell Curve Meets expectations Below expectations Above expectations Excellent performance Serious under performance 10% 15% 50% 15% 10%

19. Illegitimacy of forced or a priori distribution • Evidence of ‘managed exit’ irrespective of ‘actual’ performance • Common in FS companies from being put on a PIP to exit could be 6 weeks • In another FS company 750 on facing disciplinary action for underperformance • Compounded by tough Sickness Absence Policies • Yet ‘Sicknote Britain’ is a myth – statistical analysis • Both new procedures and harsh implementation of existing policies and procedures • Presenteeism rather absenteeism is the problem • Effects on health – intensity, pressure and stress

20. The Vicious Circle

21. What Can Be Done? • Trade unions play an indispensable role in protecting the health of their members • Employees should not be punished for a crisis they did not cause but encouraged to perform effectively without undue pressure • Unions conducting H&S and stress audits at work • Employer strategies using punitive PM and SAPs are short-termist and counter-productive • The Bell curve should be rejected as inapplicable to employee performance • Public exposure of the worst cases of ‘new tyranny in the contemporary workplace’ • Opportunities to organise, recruit, represent and resist • From individual representation to collective organisation