Poor communication’s high cost

by 18 Sep 2007

MANY CEOs and managers who have taken a reactive ‘wait and see’ approach to WorkChoices are fostering a culture of management non-accountability and contributing to decreased morale and productivity, according to the Instituteof Public Affairs.

Workplace reform is about achieving direct, quality relationships between management and employees, and legislative frameworks that encompass these relationships are secondary to the relationships themselves, said Ken Phillips, director of the Institute of Public Affairs’ workplace reform unit.

“In competitive business environments, it’s the quality of relationships in companies that create the competitive edge,” he said.

While some CEOs and managers realise this, Phillips said they sometimes don’t know the steps to resolution and are often afraid of union militancy in the workplace if the industrial relations status quo changes within their firms.

“ACTU and senior union officials are pretty sophisticated people, and in working with CEOs and companies, they’re fairly sensible and open to working together and doing deals,” he said.

“At that very senior level of business, their approach is very business like. What tends to happen is that understandings and agreements fail in the implementation.”

This is where all levels of management, from the CEO down to frontline managers, play a key role in fostering relationships and communication, Phillips said.

Instead of having a union communicate to a workforce, he said it was better that management communicate directly. “It’s just an abrogation of their managerial responsibility and a desertion of basic human courtesy. It’s very, very common.”

This approach to management was particularly prevalent in manufacturing, he said. “It’s the primary reason for the underperformance of the manufacturing sector. It’s the big issue and everyone in the manufacturing sector runs away from it.”

As a result, many companies were losing money by avoiding taking responsibility for communication and fostering positive workplace relationships, he said.

“You can go through companies and count the profit that’s going down the drain, particularly in manufacturing,”he said.

“It’s not a situation where profits are being lost because you’re paying workers too much. It’s just that you’re completely stuffing up the way you manage your company. And the more we have an open economy, the more that sort of approach is the death knoll on an international competitive scale.”

HR has a significant role to play in nurturing a more proactive approach to management, according to Phillips. “HR should be assisting everyone in the workforce to engage directly,” he said.

HR can assist in facilitating the communication process between line managers and workers, rather than taking direct responsibility for the quality of these relationships themselves.

“It’s all the relationships between everyone in the business, that has to be focused on the business outcomes,”he said.

“It’s not like a family where you have a relationship for the sake of a relationship. You’re having the relationship for the sake of the business outcome that you all have to achieve.

“The nature of human relationships is that you can’t force anyone to do anything. You have to be much more sophisticated in what you do,” he said.

Where HR did not have the support of a CEO in fostering a positive workplace culture and effective communication, Phillips said it was better for HR practitioners to resign and find a company that was more supportive.

“Go and find yourself another job because you’re going to just live your life in frustration,” he said.

Phillips recommended HR professionals look at the business, list all the dysfunctions occurring within their firm and quantify the impact of these on the bottom line. “Go through the whole company, do a complete analysis and put a dollar figure on it,” he said.

“Somehow you’ve got to get the CEO to focus on this. If the top team is still not willing to pay attention after seeing the cost of this, I’d go and find a better job.”

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