This week’s letters

Looking towards one-track future

For the past 10 years, politicians, managers and employee relations experts
have believed the power of the trades unions has been broken. The break-up of
large, unmanageable nationalised industries into smaller operating units would
provide competition and ensure a realistic approach to business from employees
and trade unions alike.

There is some truth in this, but it is flawed in the case of railways. There
isn’t much competition between the main train operating companies – most are
not performing well and employees still turn to their union when there is a
grievance. If employers don’t react sensitively, industrial action will result.

Different salaries and terms and conditions in companies with similar jobs
and targets will lead to dissatisfaction and leapfrogging in salary growth
which will be difficult to contain.

It would be sensible for the basic terms and conditions in all train
operating companies to be similar. This would be the baseline settlement, and
companies would have freedom to establish performance-related elements, focused
on customer satisfaction. Arbitration should be accepted by both employers and
unions before industrial action.

ASLEF’s proposal to create a national bargaining arrangement appears to
recognise the realities of employee relations, but it must not be a return to
the past.

A modern, industry-wide approach could build on the accumulated experience
of industries such as chemicals and engineering. It would ensure the rail
industry is seen as a more unified and integrated transport service.

It is time Stephen Byers pressed senior management and union officials to
get together to create a better employee relations process so improvements in
the rail service can be made.

Reg Carr
Partner, Innovate-HR

High value of human capital

I agree with the basic premise of ‘More than just a number’ (Features, 8
January) – companies need to do more to demonstrate to stockmarket analysts the
importance of human capital and how it is managed. But there were two
significant omissions.

First, the increasing proportion of market capitalisation accounted for by
intangible assets in our largest companies shows stockmarkets are indeed
recognising the importance of human capital. The work of expert researchers
such as Baruch Lev demonstrates that analysts are becoming more skilled in
making these valuations.

Second, there is a wealth of evidence demonstrating the powerful
relationship between effective investment in our people and long-term economic

All the CIPD’s sponsored-research in this area, by Sheffield University and
the likes of David Guest and John Purcell, supports this powerful relationship.
Not to mention research in the US by Becker and Huselid, Collins and Porras,
and Kotter.

Research demonstrates answers do not lie in establishing spurious short-term
correlations and indexes trying to prove relationships between a particular HR
initiative and short-term financial results. Rather, it is about adopting a
long-term, investment-focused approach to people, supported by a broad base of
effect- ively implemented HR practices.

This is the research data and message we should bombard the analysts with.
And if their employers had adopted a similar approach, maybe fewer of them
would have been made redundant last year.

Duncan Brown
Principal Towers Perrin, Chair CIPD Rewards Forum

Outsourcing is inevitable

The outsourcing trend is inevitable and should deliver both qualitative and
quantitative improvement for organisations (News, 8 January).

One would hope any HR intervention worth its salt would be measured in the
value that accrues to the business.

Most companies want outsourcing both to add value and reduce costs. With the
investment in technology and best practice required to manage the
business-to-employee relationship it makes sense for companies to outsource
what is critical, but not core, and focus on added-value services.

HR professionals complain they get bogged down in the transactional part of
their business leaving no time for transformational issues. Outsourcing gives
them this opportunity.

Penny de Valk
Managing director, Ceridian Performance Partners

Comments are closed.