HR Group, founded in Edmonton Alberta in 1993, is a partnership of highly experienced management consultants who specialize in organizational effectiveness and human resource management, and promote participative, lean, and cost-effective management practices. All partners are Certified Human Resource Practitioners with extensive senior level experience in both the private and public sectors.

Productivity is Not a Dirty Word

Reprinted from “Productive Workplaces” (May, 2006), the HR Group newsletter.

A recent article by The Canadian Press reported the results of a public opinion analysis conducted by Decima Research for the federal Finance Department. This analysis showed that  Canadians get really annoyed by the word “productivity”, used in relation to our economic performance, as well as by the phrases “physical capital” and “human capital”. This analysis was done in light of the former Finance Minister’s pre-election mini-budget, which spoke about enhancing “growth and prosperity” or, in other words, our economic productivity. The article went on to say that, “…as the working population ages, Canadians will be drawing more from social programs while contributing less financially…The answer many economists say, is to boost productivity; that is, find ways to get more output from a smaller but more efficient workforce.”

The analysis showed that the concept of boosting our economic productivity, however, was not being well received by the general public and that many even doubted that Canada’s productivity was seriously slipping compared to other industrialized countries. Others suspected that “productivity’ was just a code word for layoffs and squeezing more work out of everyone. “For the most part, participants were ready and willing to challenge any claim that low productivity was a problem for Canada…” Decima said.

Shortly before this article appeared, there was a report from Statistics Canada on December 5, 2005, as reported in the Globe and Mail. This report found that “Canada’s productivity, defined as output as a percentage of hours, has been a source of embarrassment in recent years. On average, Canada’s productivity growth has hovered just above zero since 2000. The U.S., on the other hand, has seen productivity grow by an average of 3.8 per cent since the start of the decade.” Many are now sounding the alarm that the U.S. economy is in trouble and that they must seriously improve their productivity and competitiveness; even G.M. is reportedly close to having to declare bankruptcy. Where does that leave the Canadian economy in comparison?

“Foreign-controlled plants are more productive than domestic-controlled plants in general”, Statscan said. “This is because foreign-controlled plants and firms are also more innovative, more technologically advanced, and more likely to perform research and development.” During the 1990s, U.S.-controlled plants accounted for about 45 per cent of growth in labour productivity, other foreign-controlled plants accounted for about 22 per cent of productivity growth, and Canadian-controlled plants the remainder.

There have been countless other reports and articles that clearly document Canada’s falling productivity compared to other industrialized nations. Yet, according to the Decima poll, some participants said that they were not someone’s “human capital” and that they “chose to work”. Well it’s precisely that type of self-centered and spoiled attitude that is seriously harming our competitiveness on the world stage. If these same people value their ability to have a “choice” in the first place, then they better be concerned about how productive they are as well as the companies that they work for.

Contrary to the opinion that “productivity” is code for taking advantage of employees, most employers are only concerned with remaining competitive in today’s global economy so that they can remain in business. This means that they have learned to realize that their employees, a.k.a. “human capital”, are vitally important to them in maintaining or acquiring that competitive edge. From our perspective, this has led to far better treatment and recognition of employees than there ever has been in the past when the terms “human capital” or “human resources” did not even exist. Remember the days when it was “personnel”? We should all be very thankful that there has been this increased recognition of the immense contribution that employees can make to any business and understand the importance of ensuring that our businesses remain competitive. Without competitive businesses, we not only won’t have the ability to pay for our rapidly rising social costs, but we also won’t have the luxury of so many employment opportunities and “choosing” to work.

We hear so frequently from our clients, however, that they are finding it difficult to find employees with the right attitude and work ethic. It is certainly a welcome change that employees are now concerned, and able to have a choice, about the management style and organizational culture of the company that they elect to work for. Most wish to work in a highly participative workplace where their knowledge and skills are respected and where they receive constant feedback and are truly part of an overall team environment. There is a flip side to this, however, which some employees appear not to understand. If they expect their employer to treat them as a valuable resource, then it is also their responsibility to act like one. This means accepting the responsibility to assist the employer to be as competitive as possible and to seek continuous improvement wherever possible. This is the other side of the employment contract today. If an employee feels that he or she is being taken advantage of in this manner and that this is too much for any employer to expect and that they are being treated as “human capital”, then our advice to any of our clients is to find someone else to work for them who does have the right “productive” attitude.

We have no time for those organizations that pretend to provide a participative and respectful environment, yet try and squeeze every last ounce of work out of their employees with the least amount of reward. These organizations are not successful, anyway, as a direct result of such practices. But any organization has not only the right, but the responsibility, of demanding that their staff bring the right attitude to the workplace.

Both the private and the public sectors have had to undergo many systems changes in order to remain competitive and/or cost effective. Manufacturing companies have adopted “lean” production processes and increased teamwork and cross-training as opposed to the traditional assembly line process. Many have also increased their use of available technology wherever possible to reduce costs and increase efficiency. The public sector has, in many cases, realized the need for better customer service and cross-training and has trained their staff accordingly. They are also starting to understand that they can benefit as well from some of the production practices of the private sector. The recent reduction in waiting times for hip replacement surgery in this Province was a result of the adoption of commonly accepted manufacturing and other business practices and not the result of any new infusion of money.

It is certainly true, as pointed out in the Statscan report, that our organizations, both private and public, can be more productive by being more innovative, making better use of technology, and spending more on research and development. The biggest single contributor to productivity, however, is the employee. Innovation, technology, and research and development are all driven by and produced by employees. All technological and systemic advances are soon copied and bettered; the only real and sustainable competitive advantage is through the human resources of any organization. The bigger issue, therefore, is one of employee attitude and productivity. As shown by the Decima report, however, there are still too many in Canada’s workforce that do not, unfortunately, understand that they have a responsibility to contribute and to help their organization be productive.

We have over the years in this newsletter showcased those human resource management and organizational effectiveness practices that, we feel, help to create a truly productive workplace. We have covered such topics as effective performance management with ongoing feedback, providing appropriate rewards and truly recognizing employee performance, creating participative workplace cultures, providing appropriate orientation, training, coaching, and many other best practices. We believe passionately in these practices and advise our clients accordingly. If employees want to work in such a workplace, however, then they have to rid themselves of this pervasive sense of entitlement and being the victim, and stop viewing employers as purely selfish and greedy.

We note that a German businesswoman, who is head of an IT company, has recently put a clause into every employee’s contract. This clause states that “moaning and whining is forbidden … except when accompanied with a constructive suggestion as to how to improve the situation.” So far three employees have been dismissed after appropriate warnings. The company’s profits have doubled.

Productivity is not a dirty word. Productivity is what will secure our future and our standard of living. It is also the most rewarding approach to any work and life in general.