13 Jul Communicate before negotiations
Strikes can be averted if employers and workers have a good relationship – expert
It’s wage negotiation and strike season and already there are signs that there will be violence and disruption.
The current protracted wage negotiations in the mining, manufacturing, steel and engineering and public sectors highlight the need for companies to implement constructive communication channels to prevent damaging effects on productivity and profitability levels, says Chris Jacobs, a director at OIM, an international business consultancy.
Jacobs says it is critically important to establish a conducive working culture and environment long before negotiations start through effective communication channels.
“If you create the right climate of mutual understanding then wage negotiations will take on a completely different tone,” he says.
Jacobs believes it is important to regularly communicate common goals, values, responsibilities and the company’s performance, so all parties are informed and have realistic expectations by the time it comes to the negotiating table.
“Establishing open feedback channels allows for management to address issues as they are raised, creating a constructive negotiating climate that will help avert protracted negotiations and possible strikes. This open climate creates a level of trust which is necessary to conduct proper negotiations.”
Socio-economic development in South Africa has raised employee wage expectations. At the same time, however, many companies are under pressure from rising costs and an economy which is still not firing on all cylinders.
“There has to be a realistic and responsible way of sharing success. A company’s finances are easily affected by unpredictable changes in the world market and it is critical that employees are made aware of these as and when they occur,” he says.
“Therefore, it is vital to create a culture of commonality so that employees understand the business’s objectives and performances and are in sync with a common future,” says Jacobs.
“This shifts employee attitudes in favour of their responsibilities, causing them to strive towards the values that are communicated to them and become more passionate about the business and its success.”
This type of environment is conducive to higher productivity levels.
Trevor Manuel recently commented on the low productivity levels in public services, and highlighted unemployment and poor education as South Africa’s key priorities.
Jacobs echoes this sentiment, saying that, in order to combat poverty and unemployment, it is crucial to address the current culture of low productivity levels coupled with high wages.
“Lower than benchmark levels of productivity and comparatively high wages make our products uncompetitive in the global market. This is contributing to a cycle of more job losses and therefore greater poverty,” he says.
In the same vein, Jacobs pointsto poor education as a key contributor to a general lack of understanding in and about the business environment. He says this leads to dissatisfaction among workers and makes increasing efficiency a particular challenge.
“By creating a business culture of mutual understanding, you keep people informed and engaged regardless of education level and job title,” he explains.
“This culture of understanding establishes an environment where employees know where and how to address grievances or concerns, are up to date and more likely to be motivated to perform at their best levels of productivity.”
Jacobs recommends the following steps that companies should take to create a culture of mutual understanding:
- Instil a culture of responsibility based on a common understanding that is created throughout and communicated to every employee.
- Define the employee’s wants and needs and communicate the company’s stance on these issues through formalised long-term agreements.
- Open communication channels between management and unions and provide regular updates on the company’s performance in relation to the markets on a monthly or quarterly basis.
- Establish a track record of the issues that arise at the site and develop long-term counter-strategies.
- Illustrate transparency in order to alleviate unrealistic demands that are not congruent with the economy, the global market and commodity prices.
- All parties should look at the broader perspective and the total economy and discuss their perspectives based on long-term analysis and address the reality of profitability versus high costs.
- Implement long-term wage increase agreements that can be adapted if the economic situation changes.
- Don’t allow lawlessness to develop.