Aubyn Hill
ONE OF the good results of the persistent and broad debate on globalisation is the highlighting of the need for increased productivity on the part of workers in companies if nations are to remain competitive.
Another equally important and naggingly true product of that ongoing debate is the realisation that commodity-linked jobs in developing countries tend to be poor-paying and are perpetrators of poverty. The truth is, jobs that are poor-paying over a long period of time may help holders of those jobs to eke out a very basic standard of living, but can never help them to lift themselves from poverty into the middle class and most certainly never be a source of real wealth.
MANAGERS AND OWNERS ARE RESPONSIBLE
Generally, managers get paid well and business owners invariably provide excellent compensation for themselves. A big part of the salaries and benefits to managers and owners has to be the obligation to continue to grow the profitability of their companies and correspondingly to improve the pay and benefits of their employees. It has to be managers' and owners' responsibility to find new markets for their products and services, identify and develop more efficient distribution networks -or outsource this activity to efficient providers and identify new and related market needs in order to broaden and deepen the product mix to customers. Managers and owners must use this process to secure a larger share of each customer's wallet and greater sales and profits for their companies and employees. They must also provide the technology and training for their workers to ensure that they are at their capable best to deliver goods and services to customers while creating competitive niches to encourage clients to pay better margins for the products and services that their companies sell in the marketplace.
Managers have a clear professional (and even moral) responsibility to find ways constantly to increase the pay and benefits of their employees in line with the marketplace and normal competitive forces. These days the marketplace is increasingly a global one because employees do have the option - with some difficulty in some cases - to move from one geographic market to the next. As a CEO, I have used, over the years, a principle that Jack Welch enshrined at General Electric in the U.S.A.
MAKING HIS WORKERS BETTER
Simply put, as a manager, Mr. Welch committed to make all those who work with him better in terms of their management skills, their personal growth as individuals and their financial growth and success. More managers in Jamaica need to adopt that philosophy and think about and work with their colleague executives to find innovative ways to move their employees from poor or mediocre pay to well-paying jobs. This will mean that they will have to manage their companies with a lot more discipline and a tighter and more consistent 'hands-on' approach. They will also have to insist on spending more to train and cross-train their employees with the critical technical and practical skills that their com-panies need - and not just plain academic training that leads to a degree that does not enhance employees' on-the-job technical skills.
A good example exists at Guardian Life Insurance Company (GLIC). The CEO, Earl Moore, tells me that his actuaries have taken on the task of teaching mathematics and actuarial skills to the GLIC staff - on company's time and at the company's expense. This in-house skills training helps employees to perform better on the job. At NCB, all university graduates had to follow a structured classroom training programme followed by a rotational hands-on training programme in various divisions. Existing employees would follow similar periodic rotations. More work needs to be done in this area by many more companies to improve worker efficiency and productivity - and pay.
UNIONS WANT ACCOUNTABILITY
One of the better sentences in Lambert Brown's response in last Sunday's Gleaner to my article on redundancy in last Wednesday's paper is this one: "It is a weak manager who maintains the employment of underperformers." Managers, you should heed Mr. Brown's exhortation and do the fair and right thing by underperformers in your company with enhanced training and proper documentation so that if improvement is not recorded you can move them along.
The issue of redundancy invariably forces every union leader into a defensive position as well as the knee-jerk response about executive pay. In spite of Mr. Brown's 'computer literate' and 'astute' use of Google to find 915,000 results for "Redundancy Laws", he missed the point of the article. Basically, Mr. Brown needs to address the question as to whether redundancy payment is earned by a worker. He also needs to recognise that because, as he rightly claims, it is written in our laws, it therefore takes away the negotiating power of management and is not comparable to executive pay which has to be agreed by both sides and cannot be invoked by any executive under any law.
THE REDUNDANCY LAW
Boards of directors have to make those individual decisions on executive pay. Unionists tend to see the redundancy law as a God-given right and one that must never be open to discussion or questioned. Given his position, Mr. Brown is either not talking to managers who have gone through the painful and very costly redundancy exercise, or he is not listening to them.
As we seek to improve the pay that ordinary workers get at their jobs and put that responsibility for that improvement squarely onto the shoulders of managers and owners, unionists are going to have to recognise that the redundancy arrangement as it exists is a serious burden and disincentive to investors and managers. The conversation has just begun.
Aubyn Hill is the CEO of Corporate Strategies Ltd., a restructuring and financial advisory firm. Respond to: writerhill@gmail.com.
