20 Jan Wage talks work better if worker input is valued
Working together to foster and share business gains beats the winter-takes-all approach in the long run, Alan Cooper is told.
MORE than R1.03 billion was lost in employee income in 2011 through strikes. The figures for last year have not yet been finalised, but even greater losses are expected thanks to the rapid spread of strikes in many sectors of the economy.
Chris Jacobs, a conflict resolution expert at OIM International, says many of the violent strikes were a direct result of failed wage negotiations.
“If a dramatic change in the mindsets of those involved in labour relations does not take place, we are in for a tough 2013,” he says, a timely warning given the tension in the Western Cape agricultural sector and the controversy over the looming closure of several mines.
“Strikes are a lose-lose situation for employees and employers, as businesses lose income and often teeter on the edge of closure while staff face retrenchments and lower wage increases than originally offered.
“Strikes, especially if unprotected and unlawful, are simply a cost that no affected party can afford,” says Jacobs.
“In the short term, one party might feel it’s won the round, but in the long run these situations simply perpetuate the poverty cycle in our country as companies will have to recover income lost during the strike in some way – including retrenching more workers to manage costs.
“You will probably never reach a point where everyone is completely satisfied with the outcome, but you should have relative buy-in. The traditional notion of ‘winner-takes-all’ is no longer relevant and parties should rather seek innovative solutions that can address ongoing fluctuations in our economy.”
Jacobs says successful wage negotiation is a process that should result in employers and employees benefiting and is largely determined by the maturity of the relationship between the parties – management, employees and unions.
“Success relies on the maturity of all parties to engage in collective problem-solving of the company’s competitiveness and other problems, while taking the economic climate, business realities and socioeconomic factors into consideration to create a win-win situation for everyone involved.
“Besides a willingness to participate, the key to this mature relationship is stakeholders who are well-informed about company performance, familiar with key economic principles and understand the criteria that govern wage negotiations.”
To this end, Jacobs argues, constructive engagement is crucial as it prepares the company climate for wage negotiations long before they take place.
“In essence, constructive engagement entails that management keeps unions and staff in general informed of the company’s financial performance, as well as global and sectorspecific developments, throughout the year.
“If this is done successfully and inclusively, everyone is conscious of the factors that could influence wage negotiations and it helps to ensure no one comes to the table with unrealistic expectations such as increases far beyond the inflation rate when the company is under pressure.
“Facilitation of this constructive engagement process is complex, requires skill and involves numerous aspects such as setting up team forums to evaluate performance regularly. Everyone must be involved to set goals, solve problems and ensure continuous improvement.
“The ultimate aim is performance and productivity improvement, and for every staff member to be an active participant in value creation.
“Then, once the company is succeeding, employees should share in the value,” says Jacobs.
A second important factor is for management to invest in its people by empowering them with knowledge and business understanding in a regular and structured manner.
“When people have context to interpret financial results, grasp certain key business and economic principles, and are up to date with company developments, it encourages a climate of realistic wage negotiations.
“Working with facts and informed participants helps to take the emotion out of the process and promote a give-andtake approach to negotiation.”
Jacobs says the preparation phase is an important part of a constructive process. In the period leading up to negotiations, all parties involved should openly and honestly share their expectations in view of the company’s performance already communicated.
The challenge is to find a winwin outcome when the company is under financial pressure, says Jacobs.
“These situations, in particular, require maturity when looking for solutions to ensure all parties still benefit. This could include exploring other options such as lower annual increases with performance bonuses once the company can afford it.
“This kind of shared solution serves the interest of business by keeping doors open and the interest of employees through better job security in the long run.”