Social Conscience Begins with Your Employees
Businesses can engage themselves in philanthropic causes and stewardship principles to unleash shared value for business and toward society.
—Mark Anthony Camilleri (2016)
As an OD practitioner, I work in a number of different sized businesses, across a plethora of different industries, and in each organization I hear the same refrain “People are our most important asset.” As an OD practitioner, I am only ever invited into a business as a last resort. When all else has failed and someone has had the foresight (or hindsight) to consider that maybe the answer lies in “fixing the people problem.” The issue of course is that people are only a problem if the organization fails to act in a way that nurtures them or creates a hostile environment. Change managers very often talk about the need to capture the hearts and minds of the people, as if a fancy bit of marketing is enough to get people behaving the way leaders want them to behave. OD is slightly different to traditional change management because it is about harnessing the people, making them be the driver of change the organization is looking for. It is often difficult for managers to understand that it is the organization’s systematic treatment of employees that has created the dysfunction. Although it is true some individuals are dysfunctional and can be disruptive, an individual cannot infect an entire organization unless the whole is already in trouble, in much the same way that the straw breaks the camel’s back. What is also true is that what is happening in the organization also happens with its impact on the wider environment. The internal organization is reflected in the external actions.
At the end of the last millennium, there was an intense interest in how looking after your employees improved customer service. Perhaps some of the advice dispensed then, the proposition to focus on employees at the expense of customers, was taking the idea too far, but the foundational idea is important to Temperatism. How an organization treats its people is reflective of its social conscience. If an organization cares about society, its employees are part of that. Treating people badly while professing to care about society is a misnomer. The organization and its employees should have shared interest, but how often do employees feel separate from the organizational community, invisible and mistreated? Often enough for robust processes to exist and laws to be passed to protect employment rights. Employment law is stronger in Europe than in the United States, but the principles exist and the introduction of social sharing of employment experiences on platforms such as Glassdoor is a salutary reminder that people share bad experiences and wish to tell their stories.
In the human resource (HR) profession, there has been, for some time, a move from Personnel, which is deemed to be the tea and tissues profession to HR Management, or more specifically Strategic HR Management. With the shift toward managerialism, there has been a shift in attitude toward people. The HR profession has moved from being the bridge between managers and employees, being the voice of conscience, to pursuing the seat at the board table and directing itself to a managerialist mindset. This is important to remember, to explain some of the shifts that have taken place in regard to how people are seen within the organizational setting. The focus on human capital, that is, people as a capital resource for the organization to exploit, is an indication of how commoditized the human condition has become in the organizational setting and the loss of social connection or conscience in the organization setting. This isn’t simply alarmist statements from a bleeding hearted HR professional, this is an observation of the dehumanizing effect of managing people in the same way that an organization managers capital resources such as equipment, machinery, and business. People are not a resource in the same way as a machine. They are so much more, and capable of being more than simply a butt on a seat in the office or hands to operate equipment in production. Humans are the essence of being, and instead of following the trend toward the disposability of human life, which is present in many organizations, however much we like to shut our eyes to it, organizations and HR professionals should be standing up to defend human beings as individuals and promote a human society that focuses on enlightenment and enhancement. Degradation and destruction prevails, and it’s time to revisit how employees are treated to get the best from people, not because the law says, but because we should be humane in the way we treat other people. Organizations can and should have a sense of responsibility toward their employees, there should be a concern for their welfare, and a decision to fight injustice and help solve problems that the employee is facing. If we can’t care for our employees, then we can’t care for the wider society and the agenda remains the same, leading nowhere fast. Bammens (2016) describes the intention of an organization to “protect and improve its employees’ satisfaction and well-being” as organizational care. Osterman (2018) introduces the concept of the high road model, which seeks to deliver high-performance working and job quality focused on employment practices in the organization. Just as there is an expectation that employees will choose to go the extra mile for their organization, the concept of organization care suggests that the organization will in turn go the extra mile for their employees. It seems absurd that this expectation is somehow radical or considered socialist. Is it not simply a quid pro quo? Positive actions that demonstrate high levels of appreciation of employees, through generous compensation levels and supportive services such as child care, should be the exception rather than the rule . . . shouldn’t they? The skepticism with which employees receive organizational care is epitomized by instances such as the “backdated” pay rise of NHS nurses in 2018, which delivered pennies of extra pay on nurses’ monthly salary pay. Organizations generally don’t care, or if they profess to, then their actions rarely bare out that proclamation in reality.
People Matter
There are few individuals, when asked whether people matter who would express that they do not. However, their attitudes and actions in the workplace contradict the sentiment. As business pressures grow, and the workplace changes, it seems there is little room for humanity and putting people first. According to the UK Government’s Thriving at work report, 300,000 workers lose their jobs each year due to mental health issues and lost productivity and performance costs £42bn a year for UK employers. With facts and figures such as these, it is difficult to contemplate how people thrive at work. Although there are other factors that lead to mental health issues aside from the workplace, it is clear that the amount of time that is spent in the workplace and the importance of work to self-identity, personal financial security, and even social networks to the individuals make organizations a central pillar in the well-being of individuals in society. It is not enough for organizations to simply provide work and assume that it should be enough, it is the realization that Doing Good begins with employees who rely on the organization as a central feature in their life.
People should matter to organizations, not just from a moral and ethical perspective, but because it is people that provide organizations with the competitive advantage; they need to be successful in the marketplace and achieve organizational objectives. Reiter (2016) quoting Freeman (2002) says that “we must reconceptualise the firm around the following questions: For whose benefit and at whose expense should the firm be managed.” If the answer to that question isn’t people, if people don’t matter, why are we here? I know this seems such a pedantic question, possibly a little too philosophical; however, the why question is important. If our reasons for being, our purpose is not to contribute positively to the world, then I would argue that we have lost our way. The progress made over centuries of human development, despite the missteps and mistakes, can’t possibly have been without purpose. The good and the great, the scoundrels and those deemed evil have all acted with an intention to make things better, even if it was for a subsection of humanity, or those that they thought were deserving, at the expense of others. The flaw of course is very often the improvement it is for “us” regardless of the consequences on “them.” From this perspective, not matter how heinous, it could be argued that slavery was progressive, as was the holocaust. Which, of course, is not what I am advocating. Therefore, the premise that people should matter needs the qualifier that ALL people matter, even those we disagree with. Progress should be aimed at progress for everyone, not just the few. In 2018, there is a rising level of “us” and “them” across the world, words are used to denote that someone does not belong, and some of that language is beginning to become worrying with terms such as “infestation” and “invasion” being used, especially in regard to asylum seekers and immigrants.
Rosling et al. (2018) point out that there is a mistaken perception that the world is divided into two, either as “them and us” or “the developing world and the developed world” labels that are used continually but are more akin to the way the world was in 1965. The world has completely changed, for almost every aspect of human lives, including education, health care, and technological advancement. Rosling et al. (2018) summarized this by stating that, “low-income countries are much more developed than most people think. And vastly fewer people live in them.” The world is a better place than our cognitive categorization allows, as most of the world is more like “us” and we are closer to “them.” The world is not divided into two, and therefore there is not a gap between the deserving and the not deserving, other than that in our head.
The same is true in organizational life. There is a perception that title and bestowed hierarchical power make someone more deserving of receiving better perks, pay which exceeds proportionality and respect purely because of their position. More disturbingly, there is a perception that the way someone is treated as a person differs according to their position. The “them and us” divides the workplace into two distinct camps. From an employee’s perspective “them” is usually directed at the decision makers, the management team and the senior leaders within the organization, and “us” is everyone else who has to follow their foolhardy strategy. Employees get lumped together by the management teams as those who don’t follow orders, disrupt things, or cause people problems. Sometimes the divide is physical in regard to managers having offices and everyone else working in an open-plan office; the geographic location of the building; head office versus regional offices; or even floors in a particular building with the management offices often occupying a floor in a multifloored building. In an attempt to reduce the divide many managers will adopt an open-door policy, which is fine as long as the door is really open more than it is closed, and if the open door applies to everyone and not just the select few. National culture plays a big role in terms of the hierarchical divide, with some nations, such as those in Northern Europe, having more open cultures to those in, say, Asia, which are more rigid in their hierarchy. However, it is the leaders of the organization who determine the choice of how people are treated in the organization and by the organization. In multinational companies very often the home country culture will pervade, and therefore though there may be cultural shades the driving philosophy should be that people matter.
The Changing Workplace
There is part of me that is slightly bemused that I have to write a chapter on businesses acting with a social conscience toward their employees. Surely, my inner voice says, that goes without saying. But, business is changing, has changed and not for the better. The exploitation of workers isn’t new, in fact exploitation full stop isn’t new. Slavery is as much a part of the modern economy as it is a historical artifact. Human trafficking, often placed in the category of criminal activity such as prostitution, is not something that you would normally associate with modern business. However, whether working in agricultural jobs, sweatshops, construction, or mine there are estimated to be around 40.3 million people in modern slavery, the biggest proportion of whom, 24.9 m, are in some form of forced or bonded labor. The UK government estimates that tens of thousands of people in the UK are subject to modern slavery and it is thought around 1.5 million victims are exploited in developed economies. If we ponder this number for a minute, consider that Canada has a population of 36.9 m people. If people in modern slavery were a country it would be the 34th most populous country in the world and those in forced labor is the same-sized population as the 53rd most populous country in the world, more than the Netherlands, Sweden, or Portugal. Imagine the whole entire population of Argentina (population 44 m) in slavery, that’s the extent of exploitation taking place across the world.
You may be thinking, well, no organization I have ever worked for is as bad as that. Which is true, until you start considering the 100,000 increase in Zero Hours contracts in 2017, taking the number of employment contracts without guaranteed hours to 1.8 m in UK (Partington 2018). Also, 350 employers were named and shamed by the UK government in 2017 for underpaying the workers the national minimum wage, affecting nearly 16,000 of the UK’s lowest paid and most vulnerable workers. Crossing sectors across the economy organizations docked employee wages to pay for Christmas parties and uniforms or used tips from customers to top up employee pay. The biggest offender is a well-known retailer on the high street of nearly every big city in the UK, Debenhams Retail plc, which failed to pay £134,894 to 11,858 workers (James 2017). Consider also the defence of large pay settlements and bonuses for CEOs: the chair of industrial strategy committee into fair pay, Rachel Reeves, in speaking to the chair of the house builder Persimmon homes, “you would have thought that an organisation that can pay £45m to its CEO might be able to afford to pay the living wage to everybody in the organisation” (Jeffery 2018).
Despite there being strong employment laws in the UK and Europe, exploitation of employees has increased, as focus on short-term delivery of profits and shareholder value has increased. A tighter labor market helps, but the recession that followed the 2008 credit crunch contributed to a lowering of standards in regard to pursuing a socially conscious employment relationship with employees. On the one hand, the rhetoric from HR and management has been about the importance of employee contribution to the bottom line, on the other hand there has be a plethora of forces that has been pushing the dial in the other direction. Whether it is the need to have a fluid workforce to cope with variations in business demand, the loss of the job for life model, shorter employee tenures, and the proliferation of technology, business are facing unprecedented pressures to ignore the well-being of their people.
But just like continually cutting costs is not sustainable in the long term, neither is treating people badly. Productivity may improve in the short terms but if you cut the heart and soul out of an organization, it will have a negative impact in the long term. Motivation and engagement will be lost, and it is easier to destroy employee commitment than build it back again, because trust has to be rebuilt.
These issues are not limited to the organization which has treated people poorly, these issues reverberate across the economy with the World Health Organization reports that work-related health problems cost equivalent of 4 to 6 percent of GDP in most countries. With high levels of sovereign debt, the cost of poor management to a nation’s health should perhaps fall on organizations. In the United States, this is the case, but many workers are not covered by health insurance. In the European Union, many governments subsidize health care, and perhaps a case for making employers responsible for the health of their people has a certain logic. Work can contribute to positive health outcomes, but it can also make employees ill; therefore, attempts to get organizations to pay for employees who have work-related health issues may rebound if organizations discriminate against people who have had previous health issues. Such a reaction would be typical in the current paradigm, but in adopting a Doing Good agenda, it should be obsolete.
Investing in Employee Skills
Many organizations will laud their contribution to employee learning and development, and yet the first budget to be cut in a cost-effectiveness exercise is that of the training department. The level of investment in staff development is extremely low, if not laughably scant, especially for the general employee population who are not in the high-potential talent management programs targeting the top 10 percent. Garcia and Kliener (2016) suggest that “the traditional view is that maximizing a business’ return on investment requires minimizing costs, especially labor costs. Investing in employees thus tends to be an area that most businesses do not explore.” Considering management is supposed to be making the best decisions for the organization, it is bemusing that they would consistently reject what is clearly a win–win opportunity for business, policy makers, and society if they were to invest in nurturing human capital and ensuring that the business has an available flow of employees with the right knowledge, skills, and capabilities that the organization requires in order to achieve its strategic goals.
The fact that organizations balk at the costs of engaging in education programs and continuing professional development of their workers is hardly surprising since “human capital” is uniquely positioned as a cost rather than an input, which when transformed has the ability to add significant value to the organization’s bottom line. This same hesitation to invest millions in other forms of capital in the organization, such as plant and machinery, land and buildings, is perhaps attributable to a mistaken belief that these are more certain investments. This argument, of course, is based on the fact that production output is easy to measure, whereas human capability improvement is difficult to place a financial metric against. However, given that one of the main issues holding back organizations from achieving their objectives is skill gaps, mismatched availability of the right type of talent in the labor market, staff turnover, and stagnant productivity rates, it makes no sense that corporations rely on minimal corporate training to bridge the gap in employee knowledge and skills. As Garcia and Kliener (2016) point out “A happy and engaged employee can yield high sales and reduce other operational costs . . . an effective well-being program means healthier and more productive employees.” Investment in people, whether remuneration, training and development or a great work environment, delivers a return on investment, or as Garcia and Kliener (2016) point out, “no other investment strategy provides as many positive outcomes as investing in employees and corporate social responsibility.”
Most governments are struggling to match the capability needs of business through education, primarily because education is designed for yesterday’s and today’s skills and knowledge and is not future proof. In a fast-moving global economy, where technology and industry disruption is now the norm rather than a once in a lifetime occurrence, the political cycle and agenda is not fit for purpose when it comes to designing a suitable education agenda. Even if there is the political will to tamper with the notoriously entrenched education environment, it takes years for policies to make the statute books and longer still for the education system to implement the changes, by which time the “fit for purpose” syllabus and models of learning are behind what is happening in the business world. The children learning this already outdated content are in a system that takes at least 11 years to get the educated human being released in the job market, assuming that the individual has actually engaged in learning at all. As a model it is little wonder that our education system isn’t meeting the needs of business and there are problems with the new entrants into the job market. Add onto this the fact that the skills that employees have, who are already in the labor market, quickly become outdated; it becomes a no brainier that business should be part of the system of education and development. Organizations are at the coal face, they know what capability they need their employees to have, and they can make sure employees are equipped in a just in time cycle of education, learning and development, in the same way that production processes have been developed to ensure products and services change in line with the changing demands of the market.
Aligning organizational skills requirements with education and learning and development provision requires collaboration between education and business and industry. Attempts at such an alliance are already in existence in the world economy to greater and lesser degrees of success, with many organizations pursuing relationships with educators to fulfill their self-interested needs of alignment between the labor market and their workforce needs. The evidence demonstrates that the level of commitment of the organization to show leadership in the stewardship of their employees’ capability development impacts how much shared value is created and the level of return on investment enjoyed by both business and society. Sustainable businesses that take responsibility for training their staff as part of their employee value proposition do so knowing that their focus on employee development enhances employee well-being and contributes positively to the surrounding community.
This position provides a new conception that organizations are in fact key players in addressing education and training needs in the economy, providing opportunities for both national government and organizations to improve skill levels and in turn use resource and political influence to cultivate local talent. There is a shared benefit, governments ensure that the education system is delivering individuals that will become contributing members of society, and organizations get the skills and knowledge that they need to run the business successfully. The really stupid part of this proposal is that it is a return to old thinking, where organizations would engage apprenticeships to come into the organization and learn a trade. The difference is that in the case of a Doing Good agenda, this would be the case for all organizations and it would be lifelong learning not just for young people starting their first job. Studies show that investment in employee learning and development has wider benefits than simply delivering the skills needs of the organization. Improved employee engagement, increased motivation, higher morale and job satisfaction, lower turnover, and enhanced productivity are all outputs of such investment.
It is more than simply having the right skills in place when they need them. Organizational contribution to education does something greater than simply meeting private sector needs for particular skill sets. By actively participating in ensuring education maintains societal well-being, they cultivate human capital beyond a resource paradigm and enter the realm of truly releasing human potential. Having concern from a society is more than enjoying the business benefits and opportunities, which arise from cross-sector collaboration and operational efficiencies. It is concerned with nurturing employees, enhancing an individual’s ability to be more, and boosting the well-being of their staff beyond being “not stressed.” Posturing behavior will need to be challenged, since merely making the right noises regarding having the right talent in the organization misses the point. Instead being genuinely interested in helping people be the best that they can be, and being concerned for how the organization can contribute to that, makes the organization an active participant in individual purposeful endeavor. In this way organizations bring not only economic value but social value too, encouraging innovation, creativity, continuous personal and professional development, and sustainable and responsible talent management practices. Socially responsible investment in education and employee development will lead to greater dialogue, awareness, and constructive communication among all stakeholders.
Outcomes of Doing Good
Meyer (2015) states that “companies which create a beneficial situation for their employees, offering them the possibility to thrive, later reap the fruits of an enchanted economic functioning of their enterprise.” In Chapter 2 we explored how Doing Good led to better profits, but the output of Doing Good is greater than simply a bigger figure on the bottom line. Pinker (2018) says,
It is individuals, not groups, who are sentient—who feel pleasure and pain, fulfilment and anguish. Whether it is framed as the goal of providing the greatest happiness for the greatest number or a categorical imperative to treat people as ends rather than means, it is the universal capacity of a person to suffer and flourish . . . that call on our moral concern.
It is this that perhaps sums up the need for Doing Good through Business with a social conscience, look around the office that you work in and see people. Really see them. They have an amazing potential that just needs the right environment to be released, they have a contribution to make that when added together with the contributions of everyone else can make a difference, can make progress, progress of humanity, happen for the better.
Sometimes the consequences of the lack of Doing Good and social conscience can be seen in the physical health of employees; this may be exhibited in the levels of stress individuals feel, the number of people with diabetes, or in workplaces that are not safe, with accident levels or even death. However, we measure and monitor the negative side of not Doing Good, rather than focusing on measuring happiness or fulfillment, perhaps because they are harder to measure because what makes one person happy will be different for someone else. That said if an organization is focused on not having accidents we are not necessarily focused on safety. A better perspective, a socially conscious perspective would be Zero Harm. This not only uses systems to monitor safety performance but also works on the culture of the organization to change their attitude and behavior in the workplace to deliver a culture focused on Zero Harm.
By adopting a people matter mindset, organizational leaders are taking the same psychological approach as Zero Harm. They are focused not just on numbers, but on driving a culture that has social conscience at its center. For example, rather than simply offering a flexible working policy, the focus will be developing a workplace where individuals are encouraged to work sensible hours, take proper breaks, separate work from home, take annual leave, and focus on what helps deliver financial, emotional, physical, and mental well-being. This approach needs a revolution in workplace culture and thinking. A business adopting an attitude that people matter would not find themselves in the crosshairs for not paying the minimum wage, unequal pay practices, safety violations, or bullying claims, because these things would be abhorrent to the culture, to the way of doing things within the business. Helping people reach their potential is more than the profit output, it is the development of an organization which thrives and in which each individual thrives too.