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Research and Information
Key themes - Partnership - The history of partnershipWhen John Monks argued in The Times in May 1999 that partnership represents "the highest form of industrial relations - an idea whose time has come", he seemed to be implying that the new arrangements constituted the ultimate culmination of decades of painful development in British industrial relations. Partnership was a distillation of the finest elements, a happy medium between conflict and consensus, between economic efficiency and social justice. Colin Thomas, from Welsh Water, summarised this view of the historic pattern of relations succinctly: "Confrontation was a phase that I think we had to go through. There was an irresponsible use of power on the part of the unions, and then the overreaction came. We are now in a position that most people would recognise as common sense."
Partnership is not a new conceptIn fact, the notion of partnership at work has always been with us. By way of an illustration, the ILO's 1996 75th anniversary retrospective reprinted an exhortation from 1921 by, of all people, John D Rockefeller for the "four parties of industry" to subscribe to an Industrial Creed, the first statement of which began, "I believe that labour and capital are partners, not enemies...and that neither can attain the fullest measure of prosperity at the expense of the other, but only in association with the other". Even earlier, the IPA in its first guise was formed in 1884 as The Labour Association for Promoting Cooperative Production Amongst the Workforce. This was set up as "a propagandist committee to arouse working men, and public opinion generally, to the importance of the movement for making workers everywhere partners in their workshops."
The 1990s versionBut partnership has been perennially restricted to short-lived bursts of resonance among a narrow band of enthusiasts, struggling against widespread ignorance, indifference or hostility. The 1990s version is the latest incarnation of the British attempt to resolve "pluralism's problems". The new enthusiasm is a product of our times, in that it coincides with several complementary trends. Combined, these trends suggest that the new partnership model for workplace relations may indeed have the potential to become a broader movement in British employee relations. These trends include:
- the emergence of a global marketplace, a comparatively new phenomenon
- the simultaneous decline in power of the British trade unions and their search for a strategy for renewal
- the "social partnership" models developed in continental Europe, and promoted and even imposed by the EC
- the influence of HRM and "people-centred" policies on management thinking, and
- contemporary programmes to restore social democracy such as the "Third Way" (Blair, Giddens et al) and "stakeholding", with implications for managing the workplace.
Traditional industrial relationsPrior to the emergence of HRM, it was accepted that management and employees (whether the latter were represented by trade unions or not), have separate and parochial agendas at work. Management's role was to elicit as much productive effort from employees as possible; it was the expected, even the desired, role of the employees and their representatives (especially if from a trade union) to ensure that these processes did not impinge unfairly or unreasonably on their general welfare. Dunlop conceived the institutional purpose of trade unions and the process of collective bargaining for this role; Kahn-Freund, writing in the 1950s, had high hopes for this sophisticated model of checks and balances.
In practice, for the most part, relations were characterised by "a mix of conflict and accommodation" in Blyton & Turnbull's phrase, assuming the different shades of conflict and co-operation as circumstances and wills dictated. It depended upon local conditions, especially the willingness of key participants from both sides (unions and management alike) to conceive of, and implement, relations based on collaboration. The British state's voluntarist tradition whereby the incumbent government largely eschewed rigid frameworks and regulations - allowed managers and trade unions to forge agreements on how work was to be organised and rewarded, with minimal external interference. However, the British attitude toward industrial democracy and employee participation - which partnership may be said to resemble - has been predominantly suspicious.
Mondism and joint productivity committeesThere have been precedents for the current enthusiasm for partnership. In 1927 a national call for joint collaboration from Alfred Mond briefly promised a national programme of partnership, of a sort. Mond, the founder of ICI, even highlighted an approximation of the classic partnership conundrum: "economic efficiency in exchange for increases in workers' standard of living". But the ICI model of joint consultation was not taken up widely, and it did not last long outside that company.
During World War Two, several thousand Joint Production Committees were established for the common war effort, based on collaborative structures and processes, in part as a result of the Mondist initiatives. But these were quickly disbanded. A small number of far-sighted managers harnessed the workplace creativity of these joint arrangements, but elsewhere a lack of trust regarding workers' capacity for autonomy and creativity - from both sides - stifled these prototype partnership structures.
Bullock and DonovanA handful of initiatives in the 1960s and 1970s - the Bullock report, the Donovan Commission, In Place Of Strife - sought to set loose pluralist parameters around the processes of collective bargaining. The Bullock report proposed worker representatives on the Board of major companies, but with the sole channel of representation remaining confined to the trade unions. The proposals were buried by all concerned, including the unions themselves (a "great, missed opportunity" according to John Monks, reflecting with the hindsight of 18 years of Conservative anti-union legislation).
The Donovan recommendations sought to "formalise the informal", to cement the strategic role of negotiations between managers and trade unions. Tight rules and regulations governing bargaining was considered the optimum system. Alan Fox, commenting on the Donovan report, felt that restricting behaviours by edict in this manner resembled an "economic exchange" more than a "social exchange", highlighting a key issue for partnership-style industrial relations. He felt that management style was the key: certain forms of employee relations systems and management styles produced either high-trust relations or low-trust relations.
Thus, a series of initiatives failed to produce widespread collaboration across the UK economy, and between the 1920s and 1980s British industrial relations as a whole followed a cyclical pattern of conflict and consensus. Stephen Dunn memorably characterised British industrial relations as following the general principle of "live and let live". Overall, the combination of the voluntarist principle, and British companies' fire-fighting pragmatism/incompetence, served for six decades. The dearth of competitive pressures meant that it didn't especially matter.
At the end of the 1970s came the rise to prominence of neo-liberal economists such as Hayek and Friedman. Both men blamed state interference and powerful unions for Britain's poor international competitiveness. Business devoid of trade unions was advanced as not only a viable, but a positively desirable alternative.
The "winter of discontent"The "social contract" between the Labour government, powerful unions and, to a lesser extent, employers lasted until 1978, when militant trade unionists in key companies, notably Ford, defied the national policy of wage restraint. Unofficial strikes, mass picketing and then the public sector strikes during the 'winter of discontent' eventually destroyed the tri-partite experiment. At the following General election the country returned the Conservative party under Margaret Thatcher.
The Conservative party, 1979-97Thatcher set out to introduce laissez-faire market economics with a two-pronged attack: restrictive legislation on the power of trade unions, and the uncompromising encouragement of market forces. From the 1980 Employment Act, a series of seven explicitly hostile Acts curbed union powers. These had a "drip-drip corrosive effect" and unions were unable to respond to the assault on collectivism. They were unable or unwilling to countenance illegal strike activity to pursue workers' aims. They were unable or unwilling to follow the EEPTU's controversial "no-strike" deals. They were unable or unwilling to mount costly recruitment drives in the developing service sectors to off-set the collapse among their manufacturing strongholds. The TUC saw its membership plummet.
Thatcherism pitched companies into a ferociously competitive "free market". The government declined to rescue struggling companies with protectionist subsidies. Privatisation, the de-regulation of the service sectors and compulsory competitive tendering, meant that complacent organisations faced previously unthinkable market demands, to which many were ill-prepared to respond.
Manufacturing in particular collapsed, with many companies and individuals unable to change strategies and behaviours in response. At one Birmingham engineering works, if one had asked any of the shopfloor employees in the 1980s who their customers were and what they needed, according to the senior shop steward, the reply would have been paraphrased - "I couldn't care less."
Japanese methods and HRMWith their managerial perogative restored, managers were emboldened to find and implement "the solution". Japanese methods seemed to promise success. The future was lean production, total quality, exceptional customer service, and an employment relationship based on deeply-held values and convictions to elicit individual employee commitment to the goals of the organisation. There was in the Japanese model a place for one in-house trade union, but its influence tended to be peripheral. HRM - Human Resource Management - emerged around this time (the mid-1980s) from the US, with its strong unitarist emphasis on individual employee commitment, and the gains in productivity and performance held to stem from it. There was no role for third parties, such as unions. More broadly, there was a complementary sea-change in the focus of academic research, again driven from the US. Attention shifted toward investigating methods for enhancing employees' performance: kaizen/continuous improvement, business process re-engineering, total quality management, and individual performance-related pay. The social welfare elements of work became sidelined, even attacked for their "irrelevance".
Yet research indicates that in Britain HRM was typically only implemented in an ad hoc and piecemeal fashion, managers favouring those simple practices that yielded modest short-term productivity gains (team briefings and performance-related pay were popular) while disregarding the more complex features, such as fundamental job re-design, self-managing teams and employment security guarantees. Thus, while a few initiatives could be forced through or partially implemented, still employee commitment and mutual collaboration remained elusive.It is little wonder then that when managers and trade union officials alike are asked to describe the 1980s, phrases such as "us and them", "confrontational", and "low trust" are invoked incessantly.
European social partnershipAs managers were attracted to the individualist HRM model, so British trade unionists (and a few managers) were dazzled by the alternatives from continental Europe. The successful "social partnership" systems of, among others, the Dutch, Scandinavians and the Germans had created a pluralist tri-partite approach to economic management and industrial relations. What is more, the prospect of closer European integration teased some trade unionists with the lure of influence and power, such that when Jacques Delors came to speak at the TUC Conference in 1988 of "social Europe" he was greeted by many almost as a Messiah. Yet the incumbent administrations of successive Conservative governments displayed an openly contemptuous attitude toward European integration. With the opt-out of the Social Chapter negotiated by Thatcher and later strengthened by Major, the EC would not yet provide opportunities for closer formal collaboration. In 1996 the EC green paper, Partnership for a new organisation of work, outlined a pluralist model for managing employee relations very similar to the IPA's.
The "modernisation of the working life based on partnership" would fulfil both "the wishes of employees and the requirements of competition", with the policy challenges encapsulated "in one question: how to reconcile security for workers with the flexibility which firms need?" The 1996 EC Directive on European Works Councils (EWCs) is, thus far, the only piece of EC legislation on consultation that has had an impact on British firms.
Partnership revivedThe first public appearance in Britain of "Partnership - the 1990s version" is widely traced back to 1990, with the dissemination of a joint GMB/UCW document, A new agenda: bargaining for prosperity in the 1990s. The authors proposed a European-style tri-partite approach "to create successful industry, a strong economy and a caring, sharing society". In this, partnership emerged as a distinct theme and aspiration, but not as a fully-formed model: "By working together in partnership both sides of industry can create a highly flexible, highly efficient and highly paid economy". However, the Conservative government and the business community were implacably opposed, and amid the welter of criticism, its other core theme, of management and unions working in partnership, was overlooked. Yet a new agenda served as a catalyst for debate within the trade union movement. A few senior trade unionists found in these deals and in the GMB/UCW report a reassessment of traditional tactics and a potentially viable alternative. Partnership offered an opportunity for the "reinvention of trade unionism".
The IPAA new agenda also sparked a supplementary initiative at the IPA, a small, not-for-profit lobbying organisation. In September 1992 the IPA concluded a two-year consultative process involving leading industry figures and union leaders in an attempt to define a new agenda for British industrial relations. The resulting publication, Towards industrial partnership, sought to move British industrial relations away from the traditional adversarial atmosphere of conflict and strife toward a more collaborative relationship between management and employee groups. The project sought to articulate a concept of partnership complete with rationale, principles and practices.
At the same time, ACAS, which had been established in 1974 expressly to promote good employee relations practice and to defuse conflict at work through specialist mediation, reinvigorated its proactive encouragement of joint working. In 1993 it commissioned Larry Adams, from the US Department of Labor, to write a paper on partnership issues. Called Time for a change, Adams posited an interest-based model of partnership, recognising the need to manage skilfully the separate interests of both parties in the employment relationship. Indeed, to a large extent, work at ACAS preceded the IPA's Toward industrial partnership report, and the IPA still cites Adams' conceptualisation in consultancy work. In 1999 ACAS celebrated 25 years of valuable work in this field.
In 1994, contrasting with its previous, often well-founded scepticism regarding certain HRM practices, the TUC quoted approvingly direct from the IPA's work, then over two years old. Conflict could be "worked out in an atmosphere of through mutual respect, trust and goodwill". John Monks, at a fringe Labour Party conference meeting that year, sought to set partnership within the best of old union traditions, searching for "new forms of community". He later expressed the options available thus: "There is no alternative to global capitalism that I can see. But are we to have the US model with few rights for workers, the authoritarianism of the East Asian 'tigers', or the European model of social partnership?"
The support for partnership marked a decisive shift in perspective among senior TUC players and certain key unions, and the specific IPA model was reflected and often directly cited in TUC strategy from 1995 onward. The IPA's 1997 follow-up report, also called Toward industrial partnership, presented the three commitments and four building blocks which have been widely cited as the definitive model for social partnership. Endorsed by a wide range of commentators and from both a pluralist and even a Marxist standpoint, Robert Taylor, of the Financial Times, described it as "the best example of the new consensual approach".
Partnership and social democratic renewalThe emergence of the notion of partnership at work coincided with several related ideas entering the political and social reformist debates: Fukuyama's "social capital" (ie: capacity to build trusting relations), Etzioni's "communitarianism", Hutton and Kay's "stakeholding", and of course the Blair/ Giddens "Third Way". Tony Blair, elected the new leader of the Labour Party in 1995, briefly adopted stakeholding as his "Big Idea" during 1996, sparked by the phenomenal public enthusiasm for Will Hutton's manifesto The State We're In. Stakeholding at work would require attention not only to the interests of the shareholders (omnipotent in the British economic system), but to those of the company's employees, and the community at large.
Blair jettisoned the clumsy, suspiciously European, multi-partite term within weeks, in favour of the "Third Way" and then more frequently, partnership. The latter eventually found official sanction as the central theme of employee relations policy for the 1997 General Election. The TUC followed suit: "[Social partnership] means employers and trade unions working together to achieve common goals such as fairness and competitiveness. It is a recognition that although they have different constituencies, and at times different interests, they can serve these best by making common cause wherever possible". In June 1998, the TUC commissioned Alan Cave to conduct a feasibility study into the costs and benefits of partnership. He returned from 20 or so partnership companies with a ringing endorsement of its potential. From Cave's research emerged the six TUC principles of partnership.
The CBI and CIPD's veiled enthusiasmDuring this debate the CBI has maintained a "good-cop-bad-cop" tactic toward the trade unions and the concept of partnership. While the Director-General Adair Turner, speaking to the IPD in 1996, lamented the effect of job insecurity in dampening economic growth and even hinted at cautious support for stakeholding, the following year the anti-union President, Sir Clive Thompson of Rentokil, retorted that "individuals achieve a lot more than groups do collectively", and that "third parties only interfere and harm drives for quality". He compared dealing with trade unions to "pest control". In 1998 the IPD (now CIPD) issued its cautious approval, while simultaneously striking a sceptical note on the need for a trade union for true partnership, arguing that partnership is "essentially about particular processes of management rather than about structures". Its tone has however softened as indicated by a report published in 2003. It concluded that while direct (employee) information sharing and consultation are more common than representative (though not strictly union) forms, in combination they are associated with improved performance and higher levels of employee involvement.
DissentPartnership has not been universally welcomed, of course, and there are several dissenting voices urging caution and even counter-insurgency. Militant commentators such as Professor John Kelly of the London School of Economics believe that the assault on collective action, and the conciliatory stances of union leaders, have so lowered workers' aspirations that partnership is considered an advance, and not a capitulation. At its worst, the moderate stance of partnership sub-ordinates trade union ideology to the needs of capital, and Kelly warns trade unionists against a "policy-neutral contingency approach" (ie: one that co-opts union ideology to the cause of the organisation's goals). He seeks instead to retain an antagonistic stance informed by a policy-based contingency. The modest advantages of moderation are inferior compared to the gains available through increased "militancy", he argues. Carolyn Jones of the Institute of Employment Rights reminds us that, "partnership is simply not on the agenda of most workplaces in Britain, and this is shown in the rise of inequality and insecurity." Her organisation suspects that partnership is an abstract distraction, and lobbies instead for improved employee rights.
The Labour government, 1997-Since Blair's triumph at the polls in May 1997, partnership has received enthusiastic endorsement from the New Labour government. The Prime Minister himself wrote the foreword to the Fairness at work white paper, endorsing partnership at work. The Dti's supplementary manifesto, Working for the future, in 1999, envisaged partnership as a means to create "a better organisation of work, to better manage change based on high skills, trust, and quality working together to develop solutions and achieve consensus, with decent minimum standards to prevent unreasonable demands on workers".
In May 1999, in the middle of crises in Kosovo and Northern Ireland Blair addressed the TUC, where he set partnership "firmly within the same intellectual paradigm and political framework [as his 'Third Way']" - his most public endorsement to date. Partnership was now an officially-sanctioned aspiration promoted by the government to both businesses and unions, but in the best British voluntarist tradition it was up to organisations to create the reality in their own workplaces.
At the same conference the Trade and Industry Secretary announced a £5m fund for the promotion of partnership initiatives, which was released in four rounds between March 2000 and June 2002. The initial £5 million available has now been distributed. In December 2001, the Secretary of State for Trade and Industry, Patricia Hewitt, announced a further £20 million funding for best practice initiatives encompassing the Partnership Fund and other DTI schemes. This has already funded a fifth and final call in September 2003, bringing the total number of projects funded to over 250, including, for the first time, support for a number of regional and sector level projects.
Announcing the winners, Gerry Sutcliffe MP, Employment Relations Minister, reconfirmed the government's commitment to workplace partnership. 'Working together makes good business sense and is essential for companies and industries committed to success. Good employers know that only by valuing people can you boost productivity and encourage innovation' he said.
Partnership - The only game in town?In February 2003, Michael Porter, a Harvard Professor sponsored by Patricia Hewitt to conduct an investigation into the effects of poor management on productivity concluded that inadequate transport infrastructure, low investment in research and development and inappropriate workforce skills were the main barriers to organisations improving the quality of their goods and services, and not specifically its management. Likewise, partnership has continued to fight for a place on the agenda of many trade unions, in some cases against mounting opposition. In particular, union organising, the campaign for trade union membership and recognition, spearheaded by the statutory trade union recognition procedures introduced by the Employment Relations Act 1999 is seen as a key source of innovation and growth for the union movement.
The definition of partnership remains a source of confusion, an obstacle to its greater dissemination and fuel for sceptics. However, driven in part by the forthcoming information and consultation regulations, the focus of partnership has become much more heterogeneous, reflecting the more inclusive agenda of the DTI Partnership at Work Fund and in particular a greater emphasis on the association between direct employee involvement and/or representative participation and organisational performance and competitiveness.
High performance workingIn the last few years, the concept of high performance working (also referred to as high commitment management and high involvement management) has begun to offer a real opportunity for convergence in thinking about the issues of performance and competitiveness within the context of a strategic approach to employee engagement, consultation and partnership.
Partnership working and behaviours can change the entire culture of an organisation. Effective consultation is the critical tool with which partnership at the top of organisations can be shared in a tangible way with the entire workforce. Trade unions, where they are present, have a key role to play as catalysts for change. The TUC also agues that firms are better able to adopt high performance working practices, such as team working and quality circles, if they inform and consult staff through an independent union or works council than if they attempt to consult directly with individual staff.
People want to work for successful organisations and contribute towards success, partnership between employers and unions presents tremendous opportunities for them both by developing effective information and consultation arrangements and working together to encourage managers to become more inclusive and less command and control, encourage the sharing of knowledge and learning, and engage employees.
As ever, there is a need for more research and case study examples into what works well. It is hoped that this website continues to help to move the debate forward.
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