Boosting workplace productivity – working smarter

The Labour Minister Paul Swain has announced the establishment of a Workplace Productivity Working Group (WPWG) to advise the government. "I am keen for this new group to find ways for individuals and companies to work smarter," says Mr Swain.

The group aims to raise awareness and debate on workplace productivity. It will look at successful methods already developed by businesses, and find ways to promote the issue to government and the community.

Mr Swain says, "In essence, labour productivity means the value of what employees produce for each hour worked."

"Improving labour productivity comes from smarter ways of working, selling higher value products, more investment and technology (e.g. computers) per worker, reorganising work and firms, and gaining more skills."

"A highly skilled workforce will enable New Zealand to be more productive and competitive in the global economy, and contribute to economic growth."

"The Growth and Innovation Framework recognises that innovation is a key driver of growth, and that the government has a role to play by promoting innovation and productivity improvements. This can be through support for firms to develop a highly skilled workforce, an efficient infrastructure, assistance with research and development, and a competitive business environment," says Mr Swain.

"While economic growth rates have improved over the past 15 years, this has largely been driven by stronger employment growth rather than improved productivity. Current economic conditions, such as skill shortages and relatively high labour participation rates, suggest that improvements in productivity will be the key to lifting economic growth even further."

"In the past, productivity growth has mainly been achieved by cutting costs and shedding workers. However a number of New Zealand firms are now achieving productivity gains with business practices that improve timeliness and quality, minimise costs and waste, and enable employee participation in setting and reviewing company goals."

"There is not one single best workplace practice, but the initiatives of successful local and international companies will be considered by the WPWG as it looks at possible future policy options."

"International benchmarking of our productivity growth will also help us measure our success."

"The size and skills of the workforce will increase if we can improve the skills of individuals and attract skilled migrants to meet skill gaps. The bringing together of the Labour and Immigration portfolios recognises the opportunities for improving the skills and talent of the workforce."

The members of the group have a wide range of backgrounds, and will bring diverse and practical perspectives. They will work closely with the Small Business Advisory Group.

Dr James Buwalda, Chief Executive of the Department of Labour, will sponsor the working group. The members are:

A representative from Business New Zealand Peter Conway, NZ Council of Trade Unions Owen Harvey, Director, Innovation and Systems Limited George Lafferty, Professor of Human Resource Management and Industrial Relations, Victoria University Jan Mottram, HR Director, Vodafone Katherine Percy, Chief Executive, Workbase Craig Ellison, Deputy Chair, Treaty of Waitangi Fisheries Commission Greg Miller, Chief Executive, TranzLink.

Officials from the Department of Labour, Treasury, Ministry of Economic Development, and NZ Trade and Enterprise will also be included.

The Workplace Productivity Working Group will report to a Ministerial Reference Group of the Ministers of Labour, Finance and Economic Development by the end of July 2004.

The working group’s terms of reference are attached.

Terms of Reference - Workplace Productivity Working Group (WPWG)

Workplace productivity

To create a more innovative economy, New Zealand needs more than good social and physical infrastructure and a competitive business environment. We need to provide further support for innovation and growth, by encouraging:

firms, managers and a workforce that have strategies oriented towards innovation and the production of high value added goods and services

corporate investment in innovative capacity, skills, modern production technology, and IT to support sustainable (and continually upgrading) competitive advantages.

The areas of workplace practice that are likely to be most relevant to lifting productivity are:

managerial capability and human resource development: managerial capability refers to skills that managers need to create value within organisations ; human resource development refers to formal learning and on-the-job learning that support efficient and sustainable production and innovative high value added products

the ways that ideas and technology are adapted and adopted by firms: this area includes whether firms are using practices that enable them to identify and make the most of the information and ideas that are available from their employees, suppliers, customers and other networks

workplace and employment relations and practices: this area covers employee – employer dialogue aimed at identifying and implementing more productive work-place practices, building on the principles of partnership and participation in recent legislation, such as the Employment Relations Act 2000 and the Health and Safety in Employment Amendment Act 2002.

The Government has instituted an Employment Relations framework (including the Holidays Act, Employment Relations Act, and Health and Safety in Employment Act), which includes the key principles of good faith and employee participation. The WPWG should be focussed on building on the principles of this framework. The main focus of the WPWG is to consider non-regulatory instruments to promote productivity at the firm level.

Purpose of the Workplace Productivity Working Group

The Working Group will advise the Government on the current situation (including how New Zealand is doing in terms of workplace productivity and practice, what practices have been successful / unsuccessful, and how New Zealand's policy settings and processes are promoting workplace productivity), and possible future policy options for lifting workplace productivity, by providing advice on:

ways to improve policy (such as the development of policies to promote economic growth) to better take account of workplace productivity issues

new initiatives to lift workplace productivity and promote high performing practices

methods of lifting awareness of best practices key information and research gaps to be filled.

Process and Deliverables

In March 2004 the Working Group will meet to:

confirm its area of main focus and its work programme

develop details of a workshop

establish a programme of monthly reports to Ministers of Labour and Finance and the Minister for Economic Development on progress.

The Working Group will meet on a fortnightly to monthly basis from March 2004 to August 2004 to discuss issues and develop options for report back.

The Working Group will organise a workshop in April 2004 on workplace productivity to test and develop ideas.

The Working Group will consider ways to communicate the findings of its work to the wider community.

The Working Group will report to Cabinet in July 2004 regarding policy options for lifting workplace productivity (see paragraph 4 for a description of what will be involved in the report back).

Officials group support for the Working Group

(10) The Working Group will be supported by officials from the Departments of Labour and Prime Minister and Cabinet; the Treasury, New Zealand Trade and Enterprise and the Ministries of Economic Development and Social Development. Officials will both support the working group and take a focus on how to improve policy processes to better take account of workplace issues.

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