Communication channels key to resolving wage negotiations
The current series of protracted wage negotiations that were underway in the country’s mining, manufacturing, steel and engineering and public sectors highlight the need for companies to implement constructive communication channels to prevent damaging effects on their productivity and profitability levels.
It is critically important to establish a conducive working culture and environment long before negotiations start through effective communication channels. If you create the right climate of mutual understanding then wage negotiations will take on a completely different tone.
It is important to regularly communicate common goals, values, personal responsibilities and the company’s performance, so all parties are informed and have realistic expectations by the time it comes to the negotiating table. Establishing open feedback channels allows for management to address issues as they are raised, creating a constructive negotiating climate that will help avert protracted negotiations and possible strikes. This open climate creates a greater level of trust which is necessary to conduct proper negotiations.
The socio-economic development in South Africa has raised employee wage expectations. At the same time, however, many companies are under pressure from rising costs and an economy which is still not firing on all cylinders. As such, there has to be a realistic and responsible way of sharing success. A company’s finances are easily affected by unpredictable changes in the world market and it is critical that employees are made aware of these as and when they occur.
Therefore, it is vital to create a culture of commonality so that employees understand the business’ objectives and performances and are in-sync with a common future. This shifts employee attitudes in favour of their responsibilities, causing them to strive towards the values that are communicated to them and become more passionate about the business and its success. This type of environment is conducive to higher productivity levels, which South Africa is in dire need of. At a media briefing, Trevor Manual commented on the low productivity levels in public services, and highlighted unemployment and poor education as South Africa’s key priorities.
In order to combat poverty and unemployment in South Africa, it is crucial to address the current culture of low productivity levels coupled with high wages. Lower than benchmark levels of productivity and comparatively high wages makes our products uncompetitive in the global market. This is contributing to a cycle of more job losses and therefore greater poverty.
In the same vein, poor education can be pointed to as a key contributor to a general lack of understanding in and about the business environment. This leads to dissatisfaction among workers and makes increasing efficiency a particular challenge. By creating a business culture of mutual understanding, you keep people informed and engaged regardless of education level and job title. This culture of understanding establishes an environment where employees know where and how to address grievances or concerns, are up to date and more likely to be motivated to perform at their best levels of productivity.
The following steps are recommended that companies should take to create a culture of mutual understanding:
· Instil a culture of responsibility based on a common understanding that is created throughout and communicated to every employee.
· Define the employee’s wants and needs and communicate the company’s stance on these issues through formalised long-term agreements.
· Open communication channels between management and unions and provide regular updates on the company’s performance in relation to the markets on a monthly or quarterly basis so employees are in-tune with their employer.
· Establish a track record of the issues that arise at the site and develop long-term counter-strategies.
· Illustrate transparency in order to alleviate unrealistic demands that are not incongruent with the economy, the global market and commodity prices.
· All parties should look at the broader perspective and the total economy and discuss their perspectives based on long-term analysis and address the reality of profitability versus high costs.
· Implement long-term wage increase agreements that can be adapted if the economic situation changes.
· Do not allow a situation where lawlessness can develop.
Chris Jacobs is Director at OIM.