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Transforming Work

Lisa Goldberg, May 1998

Across the nation, workplaces are changing.

In order to increase efficiency, productivity, and quality, employers are moving away from the old hierarchical management systems to more decentralized, flatter ones that give workers more autonomy and include them in decision making. Although the private sector has been the source of most workplace innovations, many of them can be transferred to the public sector to help it achieve its goals of improving productivity and reducing costs while maintaining service quality.

Cooperation between management and labor is important to successful workplace change.

Unions must take on a new role, working with management to help achieve performance goals. In additional to representing traditional worker interests, they must focus on worker skills and participation in decision making as the key to competitive advantage. As local government struggles with fiscal pressures and the demand for more flexible services, it must look toward a new, more cooperative workplace to meet these challenges.

Why Transform Work in the Public Sector?

While efforts to transform the workplace may have started in the private sector, the public sector is also experiencing enormous pressure to change. Reductions in state and federal funding, tax revolts, and the advent of privatization are leading to reexaminations of how the local government can best meet the public's demand for services. The public sector is unique in that it provides a "public good"; it is removed from the market system and thus receives less feedback on its performance than does the private sector. Yet government agencies are accountable not only to their customers but also to the general public. In addition, the public and private sectors are interconnected, and improving productivity and quality in the public sector strengthens the private sector.

While models for organizational change originated in manufacturing settings, experts agree that they can be applied to all work settings. Evidence indicates that in the service sector, simply adding higher technology has not been effective in achieving long-term productivity. As primarily a service provider, government must examine new ways to meet the growing challenges of service provision in an age of shrinking budgets and increasing mandates. Many of the jobs we expect our local government to perform have become increasingly complex, and a strategy of automating and routinizing jobs to improve productivity is equally inadequate in today's public sector as it is in the private sector. Successful workplace change must focus not just on cutting costs but also on improving workforce skills and decision-making capabilities.

Moving from Hierarchical to Participatory Management

Worker participation and autonomy are key elements of workplace transformation leading to better performance. Creating a "healthy hierarchy" involves not just removing layers, but fundamentally changing how management operates. Not only should lower-level employees be given decision-making power, but they also need the training that will provide them with the ability to make good decisions. Employees should be rewarded for expanding their capabilities to contribute to the organization.

Practices that have been used in both the private and public sectors to transform the workplace include:

  • Increasing worker autonomy
  • Flattening hierarchies
  • Decentralizing authority
  • Creating labor-management committees to address workplace problems
  • Instituting quality programs, such as TQM
  • Upgrading workers' skills through training
  • Increasing flexibility in deployment of labor
  • Establishing work teams
  • Sharing rewards for increased productivity with workers

Local governments can adapt many of these same strategies to help improve service delivery and overall government functioning. Government agencies and labor need to work together to identify the programs that will help bring about positive change in the workplace and in government's performance.

More on the key elements of creating a high-performance organization

Models for Workplace Change

Drawn from previous experiences in the United States as well as those from abroad, two distinct but overlapping American models of workplace transformation have emerged. They draw on similar management tools and techniques, but their human resource and industrial relations policies differ, depending on the extent to which they focus on front-line workers as the source of continuous performance improvement.

The Lean Production Model:

 

  • uses a centralized approach
  • aims to align the goals of employees with those of the agency
  • focuses on quality through elements such as process management and performance measurements
  • limits worker participation in decision making to the immediate work process
  • involves selected employees in problem-solving committees under the direction of a supervisor or manager

The Collaborative Team Production Model:

 

  • relies on decentralized decision making through collaboration
  • allows worker representation in decision making at every level of the agency, through joint labor-management structures
  • emphasizes self-directed work
  • provides for extensive training of nonmanagerial workers
  • offers job security that encourages workers contribute to improving quality and efficiency

Both models seem to result in substantial performance improvements, and in both cases joint labor-management structures play a vital role. Worker participation, however, can have significant effects on productivity, depending on the form and content of the participation. Four features are important to increasing productivity:

  1. sharing of gains from productivity improvements with workers
  2. employment security
  3. measures to build group cohesiveness
  4. guaranteed rights for individual employees

 

More on international models of workplace transformation

Challenges for Management and Labor

Workplace transformation can be difficult for many reasons:

  • In the United States, little institutional support for change exists. Change is likely to occur in response to economic crises, leading to the piecemeal adoption of new strategies.
  • Most workplace change is highly dependent on the personalities and commitments of key individuals: directors, managers, and union officials. Those in charge often find it difficult to cede power.
  • Cooperative change requires both labor and management to give up their traditional adversarial stance. Entrenched ways of thinking and behaving will need to change.
  • The up-front costs of the training necessary to implement tangible change can also be prohibitive. In an era where the focus is on short-term gains, such investments are undervalued.
  • Alternative structures for employee involvement may have the effect of undermining or competing with the traditional union system.

Despite the inevitable hurdles, the relative stability of the public sector and its focus on service provision make it a highly appropriate environment for implementing workplace change.

Resources

Appelbaum, Eileen, and Rosemary Batt. 1994. The New American Workplace: Transforming Work Systems in the United States. Ithaca, NY: ILR Press.

This book offers an excellent overview of efforts to introduce change in workplaces, describing the major historical models of workplace organization and evaluating current efforts.

Ashekenas, Ron, et al. 1995. The Boundaryless Organization: Breaking the Chains of Organizational Structure.San Francisco: Jossey-Bass.

The authors detail the steps necessary to create effective organizations, stressing the need for information sharing, creating competence, decentralizing authority, and performance-based rewards.

Levine, David, and Laura D'Andrea Tyson. 1990. "Participation, Productivity, and the Firm's Environment." In Alan Blinder, ed. Paying for Productivity. Washington, D.C.: Brookings Institution.

This article looks at the relationship between different types of employee participation and a firm's productivity.

Marshall, Ray, et al. 1992. Restructuring the American Workplace: Implications for the Public Sector. LERC Monograph Series, University of Oregon, no. 11: 26-27.

The authors describe the changing roles of workers and managers in the new global economy, and how the dramatic changes seen in the private sector can be transferred to the public sector, with a focus on the need for greater employee involvement.