Checks and Balances

We can design and implement structures, systems and cultures and guide leadership behaviour, but nothing absolutely guarantees that there will not be mistakes. Central to encouraging people to express their capability is the existence of safeguards that operate to correct and redress error or arbitrary judgement. If we proscribe the judgement of people, we lose one of the major advantages of human organisation: human judgement. In attempting to proscribe judgement, we create authorised, counter-productive systems and behaviour that stifles discretion and creativity. There must, however, be checks and balances.

These checks and balances can be provided in many different ways. First, there is the law. Paradoxically, in Western industrialised society, the union movement has been a victim of its own success. Many core, essential issues fought for over many years by the union movement are now actually part of the law. Laws about health and safety, equal opportunity, minimum pay and working conditions have improved workers’ lives dramatically in the last century. This does not make unions redundant but means their focus must change if they are to remain relevant. The recent cases concerning ‘zero hour contracts’ and questionable ‘self-employment’ are continuing evidence of the need for unions.

The right to belong to a union must remain a fundamental right as a safeguard for employees if they choose to exercise it. Indeed, we regard the freedom to engage in unionised activity as an essential component of a free society and the level of that activity within an organisation as a measure of the trust that employees have in the leadership of the organisation. It is a good indicator of where the employees place leadership behaviour, symbols and the systems of the organisation on the values continua. The more activity and support for a union, in general terms, the more mistrust there is in the leadership and the state of the organisational structure, symbols and systems. The source of the mythologies supporting this behaviour may lie in past leadership behaviour, but an unhelpful mythology may live on if sources of the mythology are not addressed by the current leadership.

We do not regard it inherently sound or advisable that an organisation rely upon third party intervention, actual or threatened, in order that it run well. It does rely upon internal systems that monitor the use of managerial judgement. It is possible to implement systems in such a way that people choose to work in an employment relationship unmediated by a third party. In evidence to the Australian Industrial Relations Commission, Macdonald’s statement refers to the key elements of the relationship that have been explained in this book, viz:

The essential component of a staff relationship is individual judgement. That is, a person enters a working relationship where he or she is judged on the basis of his or her personal work contribution. This judgement is made by a manager. This relationship carries particular accountabilities for the manager and is personally very significant.

Thus, this is a relationship where another individual is accorded the authority (within the law and the policy of the company) to make judgements about another person’s work performance and act on those judgements. These acts include a range of forms of recognition from individual feedback in words to salary changes. Work performance has a very specific meaning in this context. It is the pathway that a person builds in order to complete his or her tasks. It is the decision making along the way to achieving a goal. Measuring this by reference only to outputs is to miss what is essentially human, namely, the ‘how’ of achievement, or as will be described later, the equivalent of a person’s signature. Thus work performance is different for each one of us even if our outputs appear the same. If the building of this pathway is ignored by the manager, the person will look elsewhere for recognition.

A staff relationship is central to a meritocracy. A meritocracy is based upon the assumption that any role in a company is filled by the person most capable of doing the work. It is commonly referred to but not very often enacted in its full sense, that is, in relation to all roles. It is the staff relationship in the context of a meritocracy which can allow younger people or new employees to be promoted ahead of longer serving colleagues, or people in apparently the same role to receive different amounts of pay because of judged differences in work performance in that role.

The continuation of a productive staff relationship is dependent on the quality of those judgements. The credibility of a meritocracy and staff relationships rests upon the demonstration of fairness by the manager in these judgements. And in addition, that promotion is based on demonstrated ability not favouritism or nepotism, and that discipline is based on actual negative behaviour not merely victimisation of a person who asks difficult questions.

Given that we are human, it is reasonable to suggest that sometimes mistakes will be made, so it is also essential that there is an avenue of appeal. This avenue must be internal to demonstrate that the company can be fair and just, even if individual managers at times are not. This does not preclude access to the law or external tribunals, but demonstrates that the company does not require that a person appeals outside of the company if they have a concern.

Thus, the staff relationship is founded four-square on trust. Trust in the leadership of the company and its ability to act fairly and with courage. The fear or anxiety aroused by such relationships is that this trust might be betrayed or is dependent on the goodwill or fairness of a particular manager/leader. Thus a person may be quite happy to enter into that relationship with the current manager, but is very concerned as to what might happen when he, or she leaves. In effect the person does not trust the company to replace the manager effectively.

Therefore, this relationship must be underpinned by well designed ‘people’ systems such as recruitment, selection, task setting and review, performance appraisal, salary review, career assessment, promotions and fair treatment systems. This range of systems must be open and public. It is important to note that such systems do not make the decisions but are the boundaries or limits within which decisions are made and, if necessary, appealed. These systems, and how they are implemented, have a fundamental importance in terms of their effect on employees’ feelings of trust and fairness. If a person chooses to enter a staff relationship that person is making a statement of trust. People will make this decision on the basis of:

a.The personal behaviour of leaders/managers;

b.The quality of the people systems in operation. Money alone does not buy trust.

Essentially if there is a relationship where one person has the authority to judge another whether that be at work or in any relationship, there is a universal concern as to what reviews, limits, appeals are there to that judgement. One of the features of democratic societies is the separation of the executive and legislature from the judiciary and further the opportunity of appeal within the judiciary. In contrast totalitarian states are characterised by a lack of distinction between the executive and judiciary and rarely offer the opportunity for appeal.

So we could caricature the organisation, especially large multinationals, as having so much more power (and authority) than the individual (employee) so as to be a totalitarian ‘judge, jury and executioner’. Indeed, many third parties including trade unions and pressure groups would argue this way.

In our model there are explicit principles and safeguards. As mentioned previously, the controls on executive power are to be found inside the organisation in various forms:

1.There is the role of the M+1. This not only includes the opportunity for access from the person in a reporting role one removed but an active review of the managerial judgements of the intermediate manager.

2.There are also the policies of the company.

3.There are proper and effective ‘people systems’, as mentioned above, which should mitigate against capricious and arbitrary managerial judgement and decisions. That is a person’s health and well-being should not be dependent on the character of any particular manager. Whilst some people will inevitably relate better or personally prefer one manager to another, this should not extend to an option of basic fair and reasonable treatment.

4.In addition as has also been discussed, every organisation should implement a fair treatment system which by its nature should expose decisions and behaviour to a wider examination and opportunity for appeal.

5.In addition it must be remembered that organisations exist within the context of the law. They are not free to outline policies and design systems which do not take into account the law of the land. What constitutes unfair dismissal is not solely for the organisation to determine, and the same applies to equal opportunities, racial or sexual discrimination.

Unions

Given all of this, is there a place for unions? If all these safeguards are in place, why would anyone need the protection of an outside organisation? The answer to these questions is quite simple: if the person feels the need for this extra safeguard it is their right to have it and not for anyone else to refuse it. A further feature of open, democratic societies is the right of association. People should be free to form unions and be members if they want to. Again it is a feature of totalitarian regimes that trade unions are banned or severely restricted in their operation …

…Are the unions still needed? The answer depends upon the members and potential members. If they think so then unions are needed. The key element is coercive power. If people are not free to join or leave, the whole picture is distorted. The drop in the membership of unions over the last 20–30 years has been influenced by union leadership and counter-productive systems such as ‘closed shop’, ‘compulsory deduction of union dues’ and a distancing of the leadership, in terms of full time officials, from the membership. In this way the union organisation and its effectiveness is no different from any other organisation we have discussed. Its continuance has been and will be significantly influenced by its structure, the quality of its leadership and the design and implementation of its systems. It is consequently as difficult to generalise about union organisations as it is with commercial organisations. We have worked in many organisations with active unions both well run and not so well run. We have also worked in situations where employees have either not felt the need for third party representation or have chosen to reject it. Whatever the situation, the key issue is that employees have the right to choose and it is recognised that unions have a potentially significant contribution to make in society. Thus, in a democratic society union membership is and should be another control operated according to the free choice of organisational members and not properly subject to external imposition or denial.

(Macdonald, 1995)

Given all these safeguards, is this now enough? Our answer would be no, not quite. It was argued earlier (Chapter 10) that the organisation as a social entity also expresses an ethic. That is, through its policies and the work of the board, whether intentionally or not, it creates a social environment which encourages certain behaviours and discourages others. We would argue that as part of that ethic and as a matter of policy there should be an ‘employment charter’, which states the mutual expectations of the leadership and membership of the organisation.

This is consistent with the continuing need for clarity in other areas such as role descriptions, task assignments, and work performance review and authority. Clarity of expectation is a significant constraint on the use of power since most power is exercised in the context of ambiguity. When a situation is ambiguous it offers the opportunity for exploitation. For example, if you are stopped by the police while driving your car, is there a clear understanding of authority and rights? Are the parties clear about under what circumstances you can be legitimately stopped? What are you required to do and what can you refuse to do?

The Employment Charter

We spend a significant part of our lives in organisations. If we are not clear about expectations and what the boundaries are with regard to authority, then relationships are open to abuse and exploitation. Throughout this book we have argued for clarity in these areas. The final piece is a sample charter that describes what is expected (see Box 22.1).

Box 22.2 shows an example. It may be varied according to the nature of the business but the purpose remains constant.

The principles upon which this charter is based are founded on some basic assumptions:

•That people are essentially creative and constructive; that they want to work and achieve results.

•That the creation of a productive relationship cannot be coerced but is experienced as a free choice.

•That productive working relationships are critical to a person’s sense of self-worth and identity.

•That there must be a demonstrable linkage between intention, action and results whether they are positive or negative.

•That people have a right to work in an environment that is safe and free from harassment and negative discrimination.

Foundations for This Charter