Best Practice Consultation An outline of the IPA's best practice Option Based approach to consultation with employee representatives Expand In today’s fast moving economy it can seem as if there is little time to involve the workforce particularly when facing pressures from shareholders, regulators and media to take quick decisions. However, those tasked with implementing change will understand the benefits of undertaking a process that means that decisions are understood by the workforce and have some legitimacy. Time taken in consultation can often save time during the implementation phase by removing resistance and gaining valuable feedback on the problems that may arise. The IPA’s recent research report, “ICE and Voice 10 years” illustrated that discussions at consultative forums seem to be increasingly focused on the management’s chosen option, rather than providing for an open discussion on potential options. To support organisations to carry out effective consultation the IPA developed option-based consultation. Its relevance has become more acute as concerns about the sharing of sensitive information, who makes the decisions, how much influence employees really have, and how much time all this will take begin to develop amongst organisations. Option-based consultation does exactly what it says. When the need for business change is identified, it is good sense for the managers of an organisation to consider a number of options to meet that need. It is extremely rare that a decision is taken without looking at a number of ways to achieve an objective but, in all cases, there are two: do something or do nothing. Option-based consultation allows employee representatives to influence decision making from the earliest stages, but should this opportunity be missed for some reason, they are still able to influence the implementation. Even in some partnership organisations, consultation takes place, at best, once a decision to implement business change has been reached. This is not true consultation but it can still be an effective way of improving communication and, therefore, of implementing change. The Options Based Consultation model is focused unreservedly on the business case. It is about getting the best outcomes when managing change and critically, it is about making sure that decisions, sometimes unpalatable, have legitimacy in the eyes of the staff. It is rare for employees to be fully informed of the range of options managers have considered before making a decision, and often they feel that managers do not give sufficient thought to how employees will be affected. In a redundancy situation, for example, employees might believe that the redundancies are the business objective itself rather than a consequence of it. Buy-in to any change process is difficult to achieve in such circumstances. Because it is rare for employees to be involved at an early stage of the decision making process, there can be the feeling that it is too late to influence the outcome by the time the discussions about implementation start. Principles of Option-Based Consultation As soon as a business objective is identified and options to meet that objective have been looked at, consultation with representatives should, ideally, begin before one option is selected as the way forward. This, of course, has implications for managers in sharing potentially sensitive information but this establishes everybody’s responsibilities right at the beginning of the process. Representatives have to be aware that a single breach of this confidence will lead to trust being undermined. For managers, it is a good opportunity to develop their skills in both the consideration of an issue and their ability to communicate their thought process. Since all this happens before a final decision is made, the representatives’ opportunity to influence the outcome can be a real one. The discipline of stating the business objectives and the thought process involved in developing them is a good one for managers and, if the representatives are concerned by the current options on the table, they can always suggest alternatives. This, in turn, presents the representatives with a greater challenge than merely saying “no” and it is important that they think carefully about any further options that may be more palatable to employees but will still meet the business objective. At this point in the process there will be a shared understanding of the need for change and the various ways available to make the change. There may not yet be agreement and nor is that necessary, but a clear understanding of why something has to change is fundamental to the success of the process. The representatives should challenge the business case if they do not understand it or agree with it. They should challenge the options presented to them but management should also challenge the representatives to come up with alternatives. It should produce a healthy, mature and courteous discussion aimed at producing the best decision for the organisation’s needs while taking into account the general views and concerns of its employees. With all of the information about the options and the representatives’ accurate temperature check in front of them, management now have the responsibility to make the decision. This process is not about removing the right of managers to make decisions; in fact it firmly establishes this right and responsibility where there may have previously been some ambiguity. More importantly, it extends the right of the representatives to having a clear and full understanding of why a decision has been made and why other options were rejected. This is important for the representatives because, although they will not like every decision that has been taken, they will be able to explain the reasons for them with authority to their constituents or members. This authority must never be underestimated in its contribution to achieving a more open, transparent and trusting culture. In the vast majority of cases, employees will see that an unpopular decision is a last resort. Communication between representatives and their constituents or members is an integral part of the consultation process. These representatives will need to establish the “hot topics” amongst the staff on a regular basis in order to provide that accurate temperature check. On very rare occasions this communication might take place very early by means of a genuine canvassing of views and reporting them back. This is more likely to happen at an operational rather than strategic level. More usually, the consultation process will require total confidentiality until an announcement or a joint-announcement is made. Best practice strongly suggests that the options under consideration should always be confidential at a strategic level until the final decision is communicated, as premature discussion with employees can lead to a great deal of confusion and disengagement. For example, employees may get the impression they are voting on strategic decisions – cynicism can develop if the option they thought they were voting for was not the one that was finally implemented. All parties have a shared interest in making sure communication is delivered well. Discussing the communication process as part of the consultation will achieve this and it is particularly helpful in ensuring that neither party surprises the other with what they say and when they say it. Benefits of Option-Based Consultation Option-based consultation will also achieve real business benefits in terms of better decision making and removing the gap between decision makers and those affected by their actions. It can work equally well in a unionised or non-unionised environment provided the representatives and managers are fully trained in the skills and behaviours necessary to make the process work properly. Option-based consultation will give representatives greater ability to influence by intellect and reason than they might have by simply using power. It should also make managers more comfortable in engaging in the consultation process earlier. A key benefit of option-based consultation is greater awareness among employees of the thorough process of management decision making which leads to greater acceptance of the quality of the decision being implemented even if the change is unpopular. Moreover, the development of a consultative culture and improved communication of the organisation’s strategic agenda can support better employee engagement through the development of employee voice and a line of sight between organisational strategy and employees’ day to day work. Perhaps the key benefit of option-based consultation is the removal of residual issues, complaints and general disengagement of staff when change is implemented. Research has shown that the UK economy has been losing around £26 billion per annum as a result of employee disengagement. Much of this occurs when employees do not understand why change has happened or how well the decisions have been thought through. In these circumstances, employees tend to default to negative thinking. Option-based consultation will fill the knowledge gaps and create an informed workforce more likely to embrace change. This can happen when the model is used prospectively or retrospectively allowing greater flexibility for managers than the standard definitions of consultation suggest.