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Mallard: Centre for High Performance Work

Hon Trevor Mallard
Minister of Labour

25 June 2008 Speech Notes

Embargoed until:8.30am

Worker – employer collaboration to lift productivity


Labour Minister Trevor Mallard's speech to the launch of the Centre for High Performance Work, St James Theatre, Wellington

Good morning and welcome to the launch of the Centre for High Performance Work. Many thanks to the organisers for inviting me to share this occasion with you.

Raising our productivity to help raise wages and our living standards is an issue that is of huge interest to me as Minister of Labour and to our government.

I am sure that the Centre for High Performance Work will be an important contributor to the work programme we have in place as part of our drive to build productive and highly skilled workplaces.

Creating high performance workplaces is partly about recognising the important role workers can play in making organisations successful.

Involving workers is just common sense. These are the people who know the job, and how it could be improved and they know what customers want.

High performance workplaces generate higher productivity gains because they enable workers to contribute their knowledge and experience to the business.

The good news is that in these times of skills shortages, there are other upsides to this approach – on top of lifting productivity.

High performance workplaces are actually better places to work and we all know that a positive work environment motivates people and creates greater commitment to an organisation.

People feel encouraged to 'go the extra mile' when job satisfaction is high and they are looped in and listened to. They are also more inclined to remain working for the business and to develop and use their skills and expertise.

Large organisations tend to have high levels of organisational support and relatively well developed workplace practices but these are less well developed in small-to-medium sized businesses which dominate the New Zealand economy.

The predominance of these firms in New Zealand means many employers and managers may lack the skills or the resources to effectively manage workplace change.

That is why centres like the one we are launching today can play a constructive role - by using best practice to show employers the ways to improve workplace culture and implement a range of techniques to enhance the firm's competitiveness.

Raising business competitiveness is one of the many factors that influence our productivity, along with high quality and necessary infrastructure, investment in education, training and health and a range of other government policies.

However, it is in the workplace that these investments and policies come together.

The highest productivity gains are found when complementary changes are made in skills, innovation, workplace organisation, capital investment, management capability and employee engagement and motivation.

It is the way that these things are brought together that matters combined with a high value business objective.

A one size fits all approach to improving productivity does not work. What works for one business may not work for another. Productivity needs to be worked at by the people who best understand the business they operate in.

This government has put a lot of emphasis on creating the conditions for high quality relationships between workers and employers. The Employment Relations Act framework underpins this approach as it provides the foundation to promote and support productive employment relationships.

Just as it is important to build trust between workers and management in a workplace, so too it is important to build trust between government, business and union organisations.

To help individual workplaces improve their productivity, the Department of Labour, and the government’s social partners, Business New Zealand and the Council of Trade Unions, have set up the Workplace Productivity Agenda.

We have focused on raising awareness about productivity issues with businesses and with workers and providing resources to businesses to diagnose the areas in the workplace that most need change. The productivity tool kit is designed to assist businesses to identify areas where productivity gains are most likely to come from.

We cannot, however, rely on awareness-raising alone. While productivity is desired, many small-to-medium businesses don’t know where to begin.

The next stage of the Workplace Productivity Agenda is implementing five projects that involve working with specific industries and in partnership with unions and employer groups.

We need to avoid blanket solutions in building better workplaces. Because of this, specific and targeted assistance is needed that builds upon the networks within which firms already operate.

The Department of Labour is working with a range of partners in these projects, covering niche manufacturing, printing and packaging, horticulture and viticulture sectors. One project with the EPMU (Engineering, Printing & Manufacturing Union) and the Dairy Workers Union aims to build employer-worker-union partnerships at the workplace level in order to better manage change by putting in place practical and effective high performance tools.

It involves 12 manufacturing and maintenance workplaces. The participants will initially identify issues facing their respective workplaces, and then implement necessary changes.

The idea is to make the most of workers’ untapped knowledge, skills and experience. I am encouraged by early indications that there is a lot of interest in the project, from workers, business and different arms of government.

This project will of course also support and complement the work of the new Centre for High Performance Work.

Most sensible and thinking New Zealanders realise there is no "silver bullet" to increasing workplace productivity. It must be tackled on several fronts - contrary to one and only "tax cut" solution that is trotted out by National every time it attempts to talk about productivity and every other challenge facing New Zealand. That approach is simply naïve, and short-sighted and reveals a serious lack of insight, experience, and knowledge of the most up-to-date thinking in this area.

Our government is looking at the big picture. We are investing in skills training, in research and development support for business via tax credits, and we are tackling the issue of developing our capital markets via vehicles such as the Superannuation Fund. And remember, New Zealand is second in the World Bank survey for ease of doing business.

On the ground, every workplace needs to find out what works best for them. Workers and managers need to work together to solve their productivity problems. Collaborative engagement is important and unions can and do play a constructive role.

The government is working hard through the Workplace Productivity Agenda to make sure we are all on the same page and moving towards the same destination - high wage, high skilled and high performance workplaces.

I strongly support the efforts made by both the EPMU and the Dairy Workers Union in establishing this centre and look forward to seeing its future results.


ENDS

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