WorkChoices killing loyalty

by 26 Jun 2007

THE FEDERAL Government’s WorkChoices system is fuelling dwindling employee engagement and loyalty, according to an employee retention expert.

As Australian companies increasingly move to WorkChoices and issue AWAs, the industrial relations regime is severely undermining trust and severing the emotional bond that employees feel towards their employer, Colin Walter, director at BSI Consulting told Human Resources magazine.

“There has rarely been a policy that is more counterintuitive and in opposition to demographic and social trends than WorkChoices,” he said.

“What message do they send their valuable employees if they strip them of penalty rates, sick leave entitlements or overtime pay? If they become expendables and commodities in the eyes of their HR managers, why should they treat the company any differently?”

A shift in employee needs from intrinsic factors such as remuneration and career opportunities to a sense of purpose, personal fulfilment, autonomy, participation and work-life balance has been underway for some time, he added.

Minister for Employment and Workplace Relations, Joe Hockey, told Human Resources magazine that the majority of businesses value employee commitment and direct engagement with employees is one of the top benefits of the government’s WorkChoices system.

However, recent research from BSI revealed that while the majority of Australians are highly motivated to do whatever necessary to get their jobs done (91 per cent), this does not correlate with levels of emotional engagement.

More than 26 per cent of respondents claimed they were not emotionally involved with the problems or strategic choices of their company, while 23 per cent said the company had no personal meaning for them.

Australian companies are also in danger of losing their employees with low levels of commitment and loyalty, as almost half (46 per cent) felt they did not owe their company anything and would leave for a better offer.

According to Hockey, the findings of the Australian Bureau of Statistics (ABS) publication Forms of Employment, November 2006, released in April, refuted the idea that that employee engagement and loyalty was at an all time low because of WorkChoices.

“Job stability has remained broadly unchanged and in some areas strengthened,” he said.

The ABS found that almost 90 per cent of employed persons said they expected to be with their employer/business in 12 months time.

In order to recover from what he called “retention deficit disorder”, Walter said companies should change the underlying vision, beliefs and values that are held by senior and HR management about their employees.

Trust and mutual commitment must be restored to undo the damage created by WorkChoices, he said.

“It will take time to recreate trust that a short-sighted focus on profitability at the expense of well-being and fairness has destroyed.”

However, with performance review season kicking off, the need to focus on the individual as well as the organisation and overall strategy is essential, according to Katherine McLennan, leadership and team practice leader at Mettle Group.

She warned against the recent hype associated with mere ‘climate’ measures, highlighting that the culture of an organisation has become the all-important retention indicator.

Employees’ happiness is an important but not sufficient ingredient for executing the organisation’s strategy. As opposed to climate measures, culture indicators measure whether employees are receiving clear messages about how they are expected to behave,” she said.

“These behavioural expectations should be the behaviours that support the strategy and its execution, not so much how ‘happy’ employees are with their boss, their job or whether they are thinking of leaving.”

One of the factors that has a strong impact on employee commitment is the amount of autonomy and participation that is allowed to the employee. More than half (60 per cent) of the 1,950 employees surveyed for the BSI study said decisions would be made in their company that would affect their work without them being informed or consulted, with almost a quarter feeling they could not influence important decisions in their company.

“There must be alignment between the individual and the culture. You will only know how this alignment will work once you know what culture you have,” McLennan said.

However, culture is not merely something that is to be identified through employee engagement surveys.

“Just because an employee is happy, it does not mean that they are accountable, for example. When an employee actually understands the brand and value proposition of the organisation and is passionately aligned to it, they will not only buy into the company’s objectives, they will also perpetuate the culture and perform well,” said Ian Basser, chief executive officer of the Mettle Group.


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