Building productive public sector workplaces August 2010
RT THREE PART THREE PART THREE PART THREE P
develOPing POsitive emPlOyee relatiOns
CONTENTS
Introduction
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The seeds of discontent
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Building employee engagement is key
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What are the policy options open to the Government?
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Conclusion
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INTRODUCTION Major reform is taking place in the way public services are managed and in the structure of service delivery. The state of the public finances means that unprecedented savings are being made in public spending, and much of these will have to come from cuts in running costs – three-quarters of which is made up of the pay and benefits of public servants. Levels of service to the public are under threat, at a time when public expectations of continuing improvements in service levels have never been higher. Against this backdrop, industrial relations could be a real obstacle to progress. Despite some well-publicised examples of disputes in the private sector, the public sector has for some years accounted for more than nine out of ten working days lost to industrial action in the UK. However, although industrial action is much more prevalent in the public sector, strikes have had only a limited impact on public service delivery in recent years as a result of the very significant reduction in the overall number of working days lost to strike action. Last year a total of 455,000 working days were lost to strike action across the economy as a whole, compared with the 27 million lost during the 1984 miners’ strikes and the 29 million lost in 1979, during and after the ‘winter of discontent’.
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This situation could, however, be about to change. Following the June 2010 Emergency Budget, the extent of potential job losses in the public sector as well as likely reductions in pension benefits has become increasingly clear. In response, public sector union leaders have begun to warn of major campaigns of industrial unrest in defence of their members’ pay and benefits. The leader of public service union UNISON, Dave Prentis, warned that the Government ‘won’t know what hit them’ when members protest at the prospect of a pay freeze and pension cuts. This type of union rhetoric has become increasingly common as the implications of the Government’s reform agenda become clearer. In response, the Government needs to ensure it has a clear strategy for building positive employee relations as part of its change agenda. It should also consider the policy options open to it for protecting public service delivery if there is an upsurge in industrial unrest in essential services. The CIPD has already set out its proposals (in earlier reports in this series) for improving public sector leadership and management and dealing with the issue of pay and pension reform. This paper looks at what needs to be done to manage the employment relationship in the public sector in the months ahead to support employee engagement and prevent industrial unrest during a time of unprecedented change and economic turbulence.
THE SEEDS OF DISCONTENT The outlook for industrial relations in the public sector remains uncertain. The Chancellor’s Emergency Budget in June announced a two-year freeze on public sector pay from 2011–12, with the exception of those earning £21,000 a year or less or working for departments that have agreed long-term pay deals with their final stage in 2010. Civil servants who are yet to agree a legally binding pay deal for 2010–11 will start their two-year pay freeze this year. With CPI inflation currently over 3%, the Prime Minister has confirmed that this will mean real-terms cuts.
action, the coalition has made clear it intends to reform the compensation scheme to bring it into line with practice in the private sector. Union leaders have repeatedly claimed that public sector cuts will result in wide-scale protests, disruptions and strikes, suggesting that it is ‘not on to make nurses, social workers, dinner ladies, cleaners and hospital porters pay the price for the folly of the bankers’. The TUC General Secretary has warned that, ‘if there are serious cuts in public spending and in vital public services, then there are very real risks of some very difficult disputes.’
The prospects for public sector jobs are equally unpromising. The Office for Budget Responsibility (OBR) has forecast that general government employment will fall by 600,000 between 2010–11 and 2015–16. CIPD Chief Economic Adviser John Philpott believes the job losses could be even more severe, estimating that 725,000 public sector jobs will be lost as a result of the planned cuts by the coalition Government.
How severe will the impact be?
Reports suggest that the NHS has set aside a £2 billion fund to cover the cost of payouts for redundancies, following publication of a report by consultants suggesting that 137,000 jobs could be cut to make savings in this sector alone. Public sector pensions have attracted increasing criticism in recent years as the value of private sector schemes has declined. The previous government had indicated that by 2012 contributions by the state to public service pensions for teachers, local government, NHS and the civil service would be capped and that public sector workers would make a greater contribution to their pensions. The coalition has recently appointed an independent Public Service Pensions Commission to undertake a fundamental structural review of public service pension provision by the time of the 2011 Budget. The Confederation for British Industry (CBI) has suggested that taxpayers face a £1 trillion bill to fund public sector pensions and the gap in pension provision between public and private sectors has become unsustainable. These tensions have already sparked significant industrial unrest over the last 12 months. A motion at the Trades Union Congress (TUC) last September called for co-ordinated industrial action by public sector unions. Members of the Public and Commercial Services Union (PCS) voted to strike over the previous government’s plans to cut redundancy payments. Although those plans were obstructed by court
The recession was slow in impacting the public sector in the UK. Private sector employers were first in line to be faced with rapidly shrinking budgets and underfunded pension schemes, but were surprisingly successful in avoiding the worst outcomes anticipated by many. By adopting more flexible working practices, including short-time working and pay freezes, the number of redundancies was scaled back and with it the impact on unemployment. Fewer than half-a million days were lost due to industrial action in the year to December 2009, compared with three-quarters of a million the year before. Although overall employee job satisfaction fell and stress levels increased, according to the CIPD’s quarterly Employee Outlook survey reports during 2009, other measures of employee engagement held up quite well. Can the public sector pull off the same trick? Other EU countries, including Greece and Ireland, have experienced serious disruption in the public sector following action to reduce spending on pay and benefits. Since the financial position of the UK is amongst the worst in the EU, it is not unreasonable to assume that we may encounter similar turbulence. The combination of reduced pay, jobs and pensions on a hitherto unprecedented scale seem likely to represent the ‘perfect storm’. Trade union leaders may be required by their own rhetoric to test the Government’s determination to push forward in areas where the unions believe they have the support of members and public opinion. CIPD research suggests that levels of trust between management and employees across much of the public sector have for many years been relatively low compared with colleagues in the private sector. Recent evidence from CIPD Employee Outlook surveys confirms that fewer public sector employees feel they are consulted or treated with respect, have a clear sense of where the organisation is
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going, or trust senior management. Union membership across the public sector remains much higher than in the private sector: some 57% compared with 15%. However, the risk that industrial action will drive the Government off course should not be exaggerated. Talk of another ‘winter of discontent’ is unhelpful. In addition there is limited appetite by employees for taking industrial action, particularly since it means losing pay (the postal dispute last year was organised so as to limit the numbers involved at any particular time). Nearly half of respondents to the CIPD’s winter 2010 Employee Outlook survey agreed most people today are not willing to lose pay by going on strike, with 54% of public sector workers agreeing compared with 47% in the private sector. In the recent BA dispute, Unite upped strike pay from £30 a day to £45 a day to insulate members from the impact of lost wages. However, this level of strike pay would still leave many people unable able to pay the rent or meet mortgage payments during prolonged disputes.
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It is not just individuals that would struggle financially in the event of a drawn-out strike – some unions could come under financial pressure if there was a prolonged and widespread strike among their public sector members. Industrial action over pay by civil servants against the Thatcher government in 1981 was unsuccessful after the Civil and Public Services Association (CPSA) was forced to surrender following 21 weeks of strike action with its strike fund exhausted. That being said, we are now in uncharted waters. For example, it is conceivable that recommendations for radical reform of public sector pensions could ignite widespread public sector strike action at a time when the country can least afford it. The stakes could hardly be higher. An outbreak of industrial action across the public sector could significantly affect the UK’s ability to bring down its levels of debt within a realistic timeframe and retain its AAA rating with the credit rating agencies. Despite trade union threats, the outcome will be significantly influenced by how the Government and public sector employers manage the changes required and the extent to which they are able to communicate and consult on the case for change.
BUILDING EMPLOYEE ENGAGEMENT IS KEY A significant impact of industrial confrontation would be to reduce drastically levels of employee engagement and trust in management – already at a relatively low ebb – across the public sector. Rather than legislating, the Government should concentrate on building better relations with public sector employees. Research shows that employee attitudes to senior management across the public sector are generally more negative than those of their private sector counterparts. Public sector employees are less likely to feel they are treated with respect by senior managers, and they have less trust and confidence in them. This is partly because, despite the fact they get more opportunities to express their opinions, they feel less able to influence decisions affecting their work (CIPD Employee Outlook survey 2009). These negative attitudes towards senior management will not be easy to change. Senior public sector managers spend a great deal of their time seeking to meet political objectives. When these appear to clash with the needs of managing the workforce, management may have to take a back seat. This may help explain why trade union membership remains higher in the public than in the private sector. Survey evidence shows that trust, a sense that employees will be treated fairly, and confidence that management will deliver on its promises – the three key constituents of a positive psychological contract – have for some time been in short supply in the public sector. This in turn reduces the credibility of management communications, leading to a vicious circle in which it is hard for management to turn the situation round.
Communications As government departments are required to come up with proposals for making cuts of 25%, or even 40%, in their budgets, crunch-time on the industrial front comes nearer. The scale of change implied in service and employment levels is hard for most to imagine. Public servants are being invited to help design and deliver reforms that may remove their own jobs: all this against a background of downward pressure on pay and pensions. The psychological contract between employer and employee is in many cases being torn up and it is not clear what is to be put in its place. Against this background, an ongoing effort will be needed to win hearts and minds. Ministers need to give at least as much attention to the messages they give public sector employees as to those aimed at the electorate. But senior
managers also need to get across unpalatable messages. The problem for managers in individual NHS trusts or local authorities is of course that their discretion on key issues, including resources and direction of travel, is heavily constrained by the broader political context and decisions taken by government. The Government can help public sector employers get across their messages by resisting the temptation to outline the issues in ideological terms – for example as an assault on ‘big government’. On a personal level, managers need to establish and maintain relationships based on mutual trust and respect as enablers of effective communication. Top management needs to create a culture in which communications are credible and believed. This is about openness and consistency and sorting out relationships across the organisation. It may also mean doing more to increase the visibility of senior managers across the organisation: it has to be their vision and their story that is being communicated within the context of the wider picture. Constructing the message is too important to be left to the communications team, and getting it right has to be the responsibility of top management, however much help they require in crafting it. Credibility and authenticity go hand in hand. Some private sector employers, who have cut thousands of jobs in the recession, have urged public sector leaders to talk to workers at an early stage about what planned changes will mean for them. It is not always easy to get the timing right, particularly when – as is often the case in the public sector – important decisions taken away from the workplace have to be translated into local plans. However, the lesson from private sector experience is that communication is critical to the change management process; management (including middle management) needs to speak with one voice; managers have to be able to explain convincingly why changes are required; and staff need to be involved in the change management process in order to secure their buy-in. In one sense, however, time is on the Government’s side. The timeframe required to manage the fiscal deficit has been set at the life of a Parliament or, in other words, five years. Across the public sector, employers have been taking opportunities for the last year or more to make savings wherever possible. By creating an expectation of savage reductions but postponing detailed announcements and keeping control of the timing, the Government has retained an essential element of flexibility. Moreover, the wider Developing positive employee relations
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political environment at this early stage in the life of the coalition remains relatively benign, as both public and media have shown a degree of goodwill and understanding of the scale of the challenges facing ministers.
developing partnerships with trade unions Alongside redoubling efforts to build employee trust and engagement, a number of public sector employers have made serious efforts to develop the relationship with their trade unions. Within many NHS trusts, for example, ‘partnership’ is a living reality and has been the basis for achieving some outstanding successes in delivering financial savings. For example, Blackpool, Fylde and Wyre NHS Trust removed costs to meet a projected budget deficit of nearly £21 million, losing more than 500 posts, through a process of communicating with and consulting its trade unions. There is no downside for employers in seeking to put union relationships onto a partnership basis. But what is management to do when faced with seemingly implacable opposition by one or more unions to policies to which management is heavily committed? Obviously the advice about seeking to win the hearts and minds of employees by engaging and communicating with them directly remains highly relevant. But in the process public sector employers may need to address some of the key union arguments offered as a basis for opposing cost reductions. The PCS has suggested that its members should resist the appeal by David Cameron and Nick Clegg for public sector workers to come forward with ideas about getting more for less. Many public sector employees have already demonstrated their willingness to help in the search for cost savings and this is a message that employers will no doubt be happy to put across. On the other hand, employers may prefer to leave ministers to answer on more overtly political issues such as the union’s suggestion that the Government should put more energy into tackling tax avoidance and evasion, rather than making cuts in public services.
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The political framework can make the job of managing employee relations in the public sector much tougher than in the private sector. However, the Government has so far shown some skill in not going for the option of blaming opposition to their proposed cuts on the unions. Instead, they have emphasised their wish to avoid unnecessary confrontation. Before the election, George Osborne and others were making conciliatory remarks suggesting that a Conservative government would be hoping to establish some kind of modus vivendi with public sector professionals. The ‘trust the professionals’ mantra developed by the Conservatives in opposition in relation to health and education represents an investment in goodwill that the coalition might well be reluctant to squander. The coalition has also been careful to get across useful messages to public sector workers in its early policy announcements on issues liable to influence their attitudes towards public spending cuts. For example, they have announced moves to stop public sector bosses being paid more than 20 times the salary of their lowest paid employee. The appointment of a former Labour Cabinet Minister, John Hutton, to look at the whole issue of public sector pensions, also suggests that they are anxious to claim the moral high ground for whatever action they subsequently take to limit their cost. Across the public sector as a whole, the battle for increased effectiveness and efficiency will be won through maintaining the trust and confidence of employees. The MacLeod review underlines the real performance benefits of employee engagement, and nowhere is this more necessary or urgent than in the public sector. Many senior managers need little convincing that engaged employees deliver superior performance, but translating that into effective action will be the hard part. A renewed focus on developing leadership and management skills at all levels will be required.
WHAT ARE THE POLICY OPTIONS OPEN TO THE GOVERNMENT? No matter how persuasively the Government and public sector employers set out the case for change and attempt to win employees’ hearts and minds, there is a possibility of widespread public sector industrial action as a result of the austerity measures to cut the deficit. Neither public sector employers nor the Government can afford to ignore the risks inherent in the present situation. For the Conservatives, Jonathan Djanogly made clear before the election that ‘despite the speculation, [it’s] not the case’ that the party had plans to introduce new industrial relations legislation. However, the pressures to ‘do something’, in the event of determined resistance to action to cut the deficit by public sector unions, should not be underestimated. The CBI has suggested that the test for a legitimate strike should mirror the statutory union recognition rules, requiring 40% of balloted members to support it as well as a simple majority of those voting. This would help ensure it is the voice of all union members that is heard, and that major disruption cannot be triggered by a relatively small but active group. While this could make it harder to take effective industrial action in some cases, it cannot take into account the views of employees who do not belong to a trade union and are less likely to support industrial action. The CIPD believes this would be a positive legislative change but would be unlikely to make any significant contribution to facilitating public spending cuts. Nevertheless, if the Government is to be able to implement a strategy for cutting public spending, some form of targeted action may need to be considered at some stage. A number of alternative responses are possible: • legislate to outlaw strikes in essential services • legislate to require the parties in public service disputes to accept arbitration • change the balloting requirements for industrial action so as to require votes to be counted separately for each employer
Outlaw strikes in essential services? It would not make sense to focus legislation limiting the right to strike only on the public sector. Industries such as the supply of electricity, gas and water would clearly qualify as ‘essential services’ but are no longer in the public sector. Moreover, it is not at all clear where the public sector begins and ends, bearing in mind for example the increased reliance on private sector contractors to deliver public services and the injection of public funds into a number of major banks. Industrial action in the public sector could infect the private sector too, as the same unions may have members doing similar jobs in both sectors. Although the private sector is much less affected by industrial action, transport and utilities such as gas, electricity and water are particularly vulnerable to disruption because: • competitive pressures in these sectors are weak • threatened by industrial action, the public may look to the Government for help • there is a history of public ownership, and the Government may be seen as ‘banker’. Together with many parts of the public sector, these public services are often classified as ‘essential services’ – a concept which, although lacking in clear definition, is significantly wider than the police, fire and ambulance ‘emergency services’. Existing restrictions on the right to strike are strictly limited: for example, police officers are forbidden from striking by the Police Act 1964, though this has been challenged in recent years by the Police Federation. In 1996, the then Conservative Government issued a green paper proposing to make unlawful industrial action that had ‘excessive or disproportionate effects’. This wording was chosen partly because of the difficulty in defining ‘essential services’, but was itself criticised as unworkable. In any case the scope of any such legislation would potentially be very wide. In recent years, trains, London Underground and air transport have all been significantly affected by industrial action.
• replace national machinery with local pay determination.
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Of all the options facing the incoming government, making industrial action in essential services unlawful would carry probably the highest risk of confrontation. The CIPD’s Employee Outlook survey for winter 2009 found that more than four in ten respondents were in favour of banning public sector workers involved in the delivery of essential services from striking. Action to limit the right to strike, particularly when workers face severe constraints on pay and jobs are under threat, would however be highly controversial. Enforcement against large numbers of angry public sector workers – not just trade unions – could present real problems of policing. Public opinion would be critical to determining the outcome. What are the chances of co-ordinated industrial action breaking out across the public sector? PCS General Secretary Mark Serwotka has said the union is committed to ‘working with other trades unions and campaign groups... to help organise the widest possible opposition’ to a programme of public spending cuts. RMT General Secretary Bob Crow has said, ‘I have no hesitation in saying that [the trade union movement] will take general and co-ordinated action across the public and private sectors’ to resist spending cuts. Some industrial action seems unavoidable. Even in the absence of more widespread action, selective strikes in key areas (for example in HMRC, which is responsible for tax collection) could put significant pressure on the Government. The wider political context will be an important influence on employee attitudes and behaviour. The Government might be in a weak position if it appeared to be strong-arming public sector workers, including large numbers who are not well paid and have modest pension expectations. Unions will also look to make common cause with other groups likely to be affected by a reduction in service levels, and their success in this is likely to have at least as big an impact on the Government as that of industrial action.
legislate to require parties to public service disputes to accept arbitration before taking industrial action? Legislation could be introduced to allow the Government to refer a dispute to the Central Arbitration Committee (CAC); official industrial action pending a ruling by the Committee would be unlawful. The CAC is a permanent independent body with statutory powers whose current role is to resolve disputes under legislation on union recognition, disclosure of information for collective bargaining and employee information and consultation. Though its resources are currently somewhat underutilised, it can call on the services 8
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of people with wide experience of industrial relations, and particularly dispute resolution. It would be the obvious body to take on the role of sorting out conflict in the public sector. Would workers and unions respect the law? Unions would take big risks by flouting the law, since their legal immunities and finances would be at risk. In the absence of union support, workers might be reluctant to take unofficial action. An important benefit of arbitration would be to explore the facts and arguments and help to inform public opinion. Might public sector employers get better results by simply driving through necessary changes, without agreement if necessary? It could be argued that the best way of securing outcomes needed to protect the UK’s economic future is for the Government and other public employers to take a tough line and stand firm on it, rather than submit to arbitration. However, it would be crucially important for the Government to make every effort to explain why such action was necessary, if this course was not to do serious damage to the Government’s relations with public sector employees for an indefinite future period, with a corresponding effect on recruitment, retention and performance. The CIPD supports the use of mediation or arbitration as a means of settling collective disputes. The substantial argument against introducing compulsory arbitration in present circumstances is, however, that it would amount to handing over responsibility for getting the country out of its current financial crisis to an unelected body whose primary objective would be that of identifying short-term solutions and maintaining or restoring industrial peace. There is too much at stake for the Government to abdicate its responsibilities in this way, unless as a last resort when all else had failed.
Change balloting requirements for industrial action? Tim Leunig, Reader in Economic History at the London School of Economics, has proposed that when a union ballots all its members simultaneously about a strike, ballots should be counted separately for each employer. He argues that this would be less likely to lead to national strikes, and partial strikes affecting some employers but not others would be less likely to attract public support. He also asserts that this would bring the public sector into line with the private sector. Under existing legislation, entitlement to vote in a ballot must be extended to all members who it is reasonable for the union to believe will be induced to take part in the
industrial action. So where members are covered by national bargaining but employed by several employers (as in local government, education or the civil service), ballots will generally apply to all employees affected and a positive result will therefore lead to industrial action at national level. Would it work? Leunig proposes no solution but hints that the right to strike in the public sector needs amending. Protected industrial action must be between workers and their employer, whether in the public or private sector: Leunig suggests no change on this. The problem lies not with the law on industrial action, but with the arrangements for determining pay and conditions in the public sector. So long as the pay and conditions of school teachers, senior civil servants and others are set at national level, a strike ballot must by law relate to all employees likely to be affected across the sector.
so is local bargaining the answer? Pay across a large part of the public sector, including health and education (but not local government), is currently set by ministers in the light of advice by pay review bodies. This arrangement is intended to remove the issue from the political arena and has reduced the scope for conflict. However, the Government could change these arrangements at short notice, without the need for legislation, so as to give local employers responsibility for determining their own pay and conditions. The CIPD believes that the public sector should reconsider its centralised systems of employment relations and pay determination, including the pay review bodies, to allow local managers more discretion in managing performance. The main arguments for local pay are that: • it would support the emerging consensus in favour of delegating more responsibility to local level • setting terms and conditions for the employees of each employer separately would make it more difficult for unions to ballot on, and undertake, national industrial action • employers under severe cost constraints would be free to adopt low or zero pay increases, or actually reduce pay.
The main arguments against are that: • savings are not guaranteed: local authorities that have opted to set their own pay adopt pay levels higher than those agreed nationally and substantial additional costs would be involved in the process of local bargaining and determination of pay and conditions • flexible movement of employees between employers would be inhibited if pay and conditions varied widely (this problem already exists to some extent) • local pay would meet strong opposition from unions and many employers. Giving local managers increased responsibility for meeting broadly defined delivery targets would lead to increased pressure for local pay determination, and this issue may need to be considered over the months ahead. By placing more responsibility for delivery on local professionals, localisation might reduce the need for detailed targets and provide a wider – possibly less politicised – framework for decisions on pay and conditions. However, in the current critical situation for the country, the national pay determination machinery, including the pay review bodies for teachers, nurses, doctors and senior civil servants, provides a useful vehicle for helping to steer the debate and agree ways forward. And the timescales for transferring effective responsibility for service delivery to local level mean it could make only a limited contribution to dealing with the current fiscal issue.
in summary The CIPD believes that there is currently no case for the Government to introduce legislation aimed at reducing the risk, or the impact, of industrial action in the public sector. This does not mean that the Government should not be considering the policy options open to it should the circumstances demand. Equally it should be prepared to resist any watering down of the existing constraints on industrial action. For example, the Scottish National Party (SNP) appears to support restoring the statutory right to take secondary action in Scotland. There can surely be no place in today’s workplaces for secondary action, including picketing, which by leading to violence and intimidation can do immense long-term damage to relationships and make disputes harder to resolve.
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CONCLUSION Leading the UK out of its current economic and financial situation calls for effective leadership by public sector employers. Difficult decisions will be needed and carrying them through to a successful conclusion will require determination and judgement. Private sector employers have demonstrated their ability to face up to the changes required by the recession and take action to reduce costs without sacrificing employee support or provoking confrontation with their unions. The challenge for the public sector is to show leadership and courage of the same order. The Government will need to show by its actions that it intends to be ‘firm but fair’. However, it is also incumbent on the Government to consider the policy options open to it for reducing the risk of disruptive and damaging industrial action by public services employees if the fiscal position facing the country requires more radical action. There are no universally popular or easy answers. Changing balloting requirements so that ballots for strike action should be counted for each employer would bring the public sector in line with the private sector. This also has the advantage of preventing nationwide strike action where there is limited local support for conflict, for example as a result of an effective partnership between employers, union representatives and members. Any effective move in this direction would, however, need to be accompanied by a change from national to local pay bargaining. The CIPD is in favour of a move to more localised pay arrangements as it would allow greater flexibility for public sector employers to base reward decisions on local labour market rates and conditions. However, while a move from national to local pay bargaining and changes to balloting arrangements may ultimately happen, any change would take time and would not be in place to respond to an industrial relations crisis in the next 6 to 18 months. It can also be argued that in the current critical situation the national pay determination machinery can help steer the debate and agree timely solutions. The policy option that may well face least opposition from the unions could be compulsory arbitration. This, though, has the disadvantage for government in that it would mean, in effect, handing over responsibility for getting the country out of its financial straits to an unelected third party.
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The nuclear option would be banning strike action among essential services. This appears to be the simplest legislative solution in principle, although this also carries with it the highest risk of confrontation. If the Government felt it was forced to go down this route it would also be a sign of failure to win the hearts and minds of public sector employees over the case for change. It may also signal that it has lost the public relations battle with the wider community, which currently appears finely balanced. The Government must strive to avoid this situation at all costs as it would mean any attempt at trying to lead through consensus had failed. In the CIPD’s view, the only constructive way forward has to be through reinforcing efforts to develop employee engagement across the public sector. The engagement agenda, encapsulated by the MacLeod review into employee engagement carried out for the Government and published last year, provides a positive template for change – if a challenging one for government. Political leaders must give public sector employers the autonomy to lead with integrity, unencumbered by interference from above, and create a sense of collective purpose that employees can buy in to. This will depend on effective communication so that employees understand why changes must be made and why cuts have to happen. The majority of employees understand that tough decisions have to be made if they are given the necessary information at the right time. Just as importantly it will depend on meaningful consultation so that employees feel they have a voice and have a stake in the changes being made to their jobs and organisation. It will ultimately also depend on the quality of leadership and people management skills of managers at all levels, but particularly those on the front line. Trade unions have the power to disrupt only if employees trust them more than they trust management. The fundamental need is not to ‘manage the trade unions’ – it is to manage the employment relationship and communicate the case for change. A sustained focus on improving customer service, combined with enhancing the leadership skills of public sector managers, will provide a sound basis for winning employees’ hearts and minds and building a more engaged workforce, while building more efficient and effective public services.
Nonetheless, the unions understand that the stakes are high for them too. If they overplay their hands, they run the very real risk of losing public sympathy. Under these circumstances, the Government may find irresistible the pressure to implement one or more of the measures outlined in this paper, aimed at blunting the threat of strike action. Both sides have heavy-duty weapons available to them, but neither has much to gain from deploying them. Unions, government, front-line workers and public alike have far more to gain from a strategy focused on building trust and avoiding conflict.
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Incorporated by Royal Charter Registered charity no.1079797
Issued: August 2010 Reference: 5307 © Chartered Institute of Personnel and Development 2010
Chartered Institute of Personnel and Development 151 The Broadway London SW19 1JQ Tel: 020 8612 6200 Fax: 020 8612 6201 Email:
[email protected] Website: cipd.co.uk
