Consultation could be the key to productivity

The Information and Consultation Directive will ensure greater staff
involvement in business operations – which, according to research, is a key
driver of productivity

Productivity is a hot topic at the moment, and driving the debate is the
clear need for companies to improve competitiveness in today’s difficult

The EU Information and Consultation Directive (ICD) could encourage UK
productivity improvement. It will oblige employers to communicate and consult
with workers on plans and material changes to their business, including
structure, technology and working practices. Its objective is to ensure greater
staff involvement in business operations, and according to established models
of business excellence, this is a key driver of productivity.

Will the legislation lead to improved productivity and competitiveness? The
answer depends on how businesses choose to implement it. Companies will have to
decide how often and to what extent they will inform and consult, and will
agree the channels with the workforce. Relationships and understanding will
only improve if consultation is a continuous process.

A decision yet to be made, is when employers will be required to inform and
consult. If you want your workforce to be involved in the operation of the business,
you must tell them how the business is doing on a regular basis. Investment in
education and training will be needed on how to use this information, but
should pay dividends in the longer term. If staff are only consulted when there
is a crisis or major decision, it is unlikely they will have the knowledge to
contribute effectively to the debate, and the situation risks being more

Communication is generally regarded as a key management responsibility, and
there may well be a need to invest in management skills in this area. However,
a structure that sends critical information through a separate route, such as
specially elected representatives (whether trade union or not), could result in
staff receiving different and conflicting information, especially if managers
are not included in the communication.

So another key decision will be which channels are used for communication
and at which level consultation takes place. Businesses should consider
obligations in the light of their current communications strategy. If new
collective channels are set up, employers must think about how they will fit
with communication already delivered through the management line, and directly
from senior management to individuals. Companies used to sharing information
via e-mails, the intranet, team briefings or videos, will want to keep these
existing systems, but will still have to develop robust, two-way consultation

There is no immediate hurry to make critical decisions, as the legislation
does not take effect until 2005. But if businesses leave it too late, they risk
having a standard solution imposed that could undermine the existing culture
and demotivate staff, when current communication works effectively.

Now is the time to review communication strategies to ensure employers
remain in control, and that results are beneficial both to employers and staff.

By Kate Jopson, Principle consultant, People Services, KPMG

Need to know

– Research shows investment in a culture of communication, knowledge-sharing
and consultation can pay dividends

– Firms that communicate directly with their staff may wish to
agree to keeping existing systems rather than have a standard process imposed
by the legislation

– Consider how any new communication channels will fit within
the overall strategy and day-to-day management

– Action now should be seen as an investment in a culture of
learning and knowledge-sharing

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