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Improving job quality and organisational performance

simultaneously: Workplace innovation to achieve the EU2020 Strategy

Frank Pot

‘Addressing Quality of Work in Europe’, BAS, Sofia, 18-19 Oct 2012

Is job quality a luxury in times of crisis?

• Many countries focus on employment, e.g. Bulgaria (First Job National Agreement 6 June 2012)

• Many countries focus on fair wages and a fair tax system as well, e.g. Bulgaria (KNSB-CITUB congress May 2012)

• However, new jobs and higher wages can only be attained if the economic sectors are competitive and innovative.

• Competitiveness and innovativeness cannot be achieved by new technology and capital alone.

• Even more important is the optimal utilisation of the potential workforce.

• ‘Workplace innovation’ offers such an approach and includes high quality jobs and higher productivity.

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Definitions 1

• Workplace innovations are new and combined interventions in work organisation, human resource management and supportive technologies.

• Workplace innovation • is a process of productive reflection as part of everyday

working life,• derives from interaction between stakeholders within and

outside the organisation,• builds bridges between the strategic knowledge of the

leadership, the professional and tacit knowledge of frontline employees and the design knowledge of experts,

• Works towards win-win outcomes as a creative convergence rather than a trade-off

Definitions 2

• Performance: productivity, innovation capability• QWL: learning opportunities, wellbeing at work• Related concepts:• Non technological innovation including business models,

marketing practices, collaboration in chain; no QWL• New World of Work refers in particular to mobile work,

independent of location and time, supported by ICT.• Working smarter, as opposed to working harder• High performance/involvement workplaces • OSH management refers to health protection and health

promotion

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‘National’ ‘programmes’

• Finland: workplace development; ‘innovative, creative and participatory workplace of the future’(2012 – 2018)

• Germany: Initiative neue Qualität der Arbeit; innovative Arbeitsgestaltung; Arbeit und Lernen…Innovationsfähigkeit; Potentialberatung NRW

• Belgium: sociale innovatie (Flanders Synergy)• Netherlands: sociale innovatie• Norway: value creation• UK: workplace innovation• Ireland: workplace innovation• Sweden: management and work organisation renewal• Governance roles of govt, soc partners and research differ

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Urgency workplace innovation

• Decreasing workforce – increasing labour productivity• Global competition and knowledge based economy –

development of competences and skills• Making new technology work through innovative work

organisation• Workplace innovation explains a larger part of innovation

success than technological innovation

Urgency New World of Work

• Cost saving real estate (fewer buildings)• Adjusting to the WEB-generation (ways of learning,

communicating, work-life-balance, work relations etc.)• Reduction of CO2- emission (less travelling)

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Connection with EU2020 Smart, Sustainable and Inclusive Growth

• Smart, by: ‘Flagship initiative Innovation Union’• Sustainable, by: ‘Industrial policy for the globalisation era’• Inclusive, by: ‘Flagship initiative for new skills and jobs’• Wellbeing on societal and individual levels, by: ‘Social

Innovation Europe’• Workplace innovation integrates these objectives on the

level of organisations: working smarter with less CO2-emission, developing skills and competences and improving organisational performance and job quality, creating wellbeing.

• This opportunity was recently recognized by the Commission but co-ordination between DG’s is still difficult.

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Best and poorest performers in Finland(409 self assessments)

Poorest group31 projectstop-down

interventions

Best group152 projectsparticipation

internal collaboration

Per

form

ance

+

-

Source: Ramstad, 2009

Quality of working life+ -

Performance effects of better working conditions and work organisation as assessed by management (DE)Source: Bonitz et al. 2007: 23 (n = 212)

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Better position on the labor market

Quality and innovation

Reduced failure rate

Increased customer satisfaction

Reduced absenteeism

Process optimisation

Productivity increase

Consultation relevant for practice

Less compensation for sick people

Optimised health protection

0% 10% 20% 30% 40% 50% 60% 70% 80%

33.7%

41.1%

43.2%

62.1%

37.9%

50.5%

48.4%

60.0%

51.6%

56.8%

27.4%

24.8%

29.9%

27.4%

50.4%

41.0%

53.0%

59.8%

66.7%

70.9%

Production companies Trade and services

11Source: BISAM 2011/07, G.I.B.

Other

Higher product/service quality

Improved work organisation

Preserving employment

New technologies

Higher market share

New products/services

Higher profitability

Lower costs

Increased turnover

Increased productivity

Increased employability

0% 25% 50% 75% 100%

5.7%

37.4%

65.7%

58.1%

12.1%

17.4%

17.8%

13.5%

20.9%

19.1%

31.5%

43.7%

Answers to the question about improvements as a result of the potential-consultations

(consultations in NRW, Germany, started in 2010, n = 1.197)

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Ireland – High Performance Work Systems have positive effects on

performance outcomes, including labour productivity, and innovation levels

– Diversity and equality systems have positive effects as well– Reduced employee turnover (considered to be an indicator for

employee wellbeing)– No ‘quality of work’ measurement

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Working Smarter and Performance (NL)

Performance criterionSMEs without

working smarterSMEs with

working smarter

Company results 2 18

Company turnover 7 15

Productivity 5 14

Employment 6 11

Economic Institute for SMEs. Source: Hauw et al., 2009; n = 650

% change in performance last 2 years

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Social innovation and performance (NL)

Performance criterionPerformance social innovative versus

not social innovative organisations

Increase in turnover 16% higher

Increase in profits 13% higher

Innovation 31% higher

Productivity 21% higher

New clients 17% higher

ReputationContented employees

12% higher12% higher

Erasmus Competition and Innovation Monitor (n = 932). Source: Volberda et al., 2010

Characteristic Number organisations

Not social innovative

Social innovative

Total Sign.

Labour productivity average or lower 2936 62% 33% 59%  

(much) above average 2045 38% 67% 41% **

           No, little autonomy 3632 79% 49% 76%  

Much autonomy 1167 21% 51% 24% **

           Talents not used 1212 27% 4% 24%  

Optimal use of talents 3777 73% 96% 76% **

           Time pressure 2756 56% 53% 55%  

No time pressure 2230 44% 47% 45%  

Source: Netherlands Employers Work Survey 2010 in Oeij et al. 2012; ** = p≤0,01; n = 4989

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Conclusions evidence

• Urgency to increase labour productivity by working smarter• Difficult to draw general conclusions• Simultaneous improvement of performance and quality of

working life is possible but not always achieved• National programmes are supportive• Involvement of government differs between countries• Key role social partners

• Conditions:– Commitment of management– Participation of employees and their supervisors

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Overlap of OSH and workplace innovation

OSH Workplaceinnovation

Health Wellbeing Performance

Work organisation

HRM Employment

relationship Ergonomics Working

times

Job autonomyEmployability

InvolvementComfort

Work-life-balance

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Workplace innovation and OSH: goals and theories

• Workplace innovation and OSH are different policies with different objectives and instruments. Do not mix up.

• Workplace innovation is not directed at fewer occupational diseases or accidents or less absenteeism but it might help

• OSH policies refer to healthy and productive jobs (EC current policy, Agency project, PEROSH priority). Health is a value in itself. Additionally healthy people are expected to contribute more to productivity and innovation. Absenteeism causes productivity loss

Ergonomics

• Workplace ergonomics serves not only as the objective of reduction of physical workload (allowing better postures and movements; reducing lifting) and health promotion (physical exercise) but also that of productivity (easier and faster handling and processing; better lay-out)

• Ergonomics is an important field of interventions both for OSH and for workplace innovation

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Stress risks: discrepancies in the work organisation

Job demands

Decisionlatitude

Supportsupervisorcolleagues

Timestaff

Skillscompetences

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Psychological demands/decision latitude model

High-strain

ActiveLow-strain

Passive

1

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4

A

B

Learningmotivation to developnew behaviorpatterns

Risks ofpsychological strainand physical illness

HIGH

LOW

Decisionlatitude(control)

LOW HIGHPsychological demands

Source: Karasek, 1979; 1990

Modern Sociotechnology

• From complex organisations with simple jobs to simple organisations with complex jobs

• Internal (job autonomy) and external control capacity (direct worker involvement/influence/consultation and formal co-determination)

• Simultaneous improvement of organisational performance, QWL/wellbeing and quality of work relations

• Sources: Ulbo de Sitter et al. 1981, 1994, 1997; Pot et al., 1994; Van Hootegem et al., 2008

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Work organisation and learning

• Concept ‘active jobs’ in job demands/control-model implies job autonomy (internal control capacity) related to single loop learning: are we doing things rightly

• Even more important is external control capacity (decisions about work organisation and targets) related to double loop learning: are we doing the right things. External control capacity has been measured in the latest (5th) European Working Conditions Survey of EUROFOUND, additionally to internal control capacity that was always part of the EWCS.

• Sources: modern sociotechnology, JDC-model, Argyris & Schön, 1978

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European policy not self-evident

• Workplace innovation not a matter of course in EU policies

• Because:– Regarded as the prerogative of employers– Focus on individual workplaces– Focus on technological innovation– Focus on formal education– Confusion about concepts– “Win-win is clear, no extra EU-support needed” ?

European policy: Opportunities

• Flagship on innovation: workplace innovation in industrial policy

• Social Innovation Europe (social innovation at the workplace)

• European learning network for workplace innovation• Draft new integrated guidelines for the employment policies• EESC own initiative opinion ‘innovative workplaces’• Flagship on new skills and jobs • Forthcoming ESF policy next period• ‘Healthy and productive jobs’ policies• Project workplace innovation and OSH, EU OSHA• Workplace innovation projects EUROFOUND• Research: FP7/SSH/NMP; HORIZON 2020?

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Call: European Learning Network for Workplace Innovation• DG Enterprise and Industry; Competitiveness and

Innovation Framework Programme (CIP)• 2013 – 2015/16• € 360.000/460.000; 50% for reimbursement• History: • Green paper 1997, high road, EWON, WIN, Social

Innovation Europe, Dortmund-Brussels Position Paper.

• Tender: EWIN, European Workplace Innovation Network, submitted 17 September 2012

• ISKS-Bulgarian Academy of Sciences is associate partner and national Ambassador

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Conclusions

• Workplace innovation important to achieve the EU2020 Strategy

• Concept ‘workplace innovation’ is gaining policy profile. Integrated policy not yet adopted. Lobbying is still needed.

• All countries can participate in ‘European learning network for workplace innovation’, established by the Commission.

• National programmes can be supportive and should start in more member states

• Do not mix up ‘workplace innovation’ with ‘OSH policy’ (health protection/promotion) and/or the ‘decent work’ agenda (minimum requirements). These policies can reinforce each other if they are purposefully combined

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