Steve Gibbons (Bendigo, Australian Labor Party) Share this | Hansard source

Globalisation and growth in the economic capacity of low-labour-cost countries are leading challenges for Australian businesses and their employees. Import competition for Australian products and services is increasing. According to the Productivity Commission, import penetration of domestic markets increased from 25 per cent to 36 per cent between 1989 and 2000. The number of local jobs targeted for outsourcing overseas, or offshoring, is also increasing. The Australian Industry Group believes that by 2008 our manufacturing sector may have lost 60,000 jobs overseas. A 2005 OECD report identified that up to 19 per cent of the Australian workforce were employed in occupations potentially affected by offshoring.

Our future prosperity depends upon Australia meeting the challenges of globalisation. This requires local businesses of all sizes to become world class in order to compete in international markets and retain domestic market share. Australian and international experts agree that Australian workplaces can do much more to improve our competitive advantage and increase productivity. There is a well-documented business case for leading and managing our workplaces better than we currently do. The reality is that just because something is fashionable or is based on conventional wisdom or established practice does not mean it is the best way or that it is in line with evidence based management practice. There is well-researched and well-documented evidence that a range of leadership and management practices associated with changes in organisational culture and climate can lead to significant improvements in productivity and standards. They are associated with what are commonly termed high-performance or higher involvement work practices and can result in increased competitiveness, profitability and improved workplace environments.

Numerous authors have studied and provided a considerable body of evidence about the factors which distinguish superior organisational performances and the relationship between organisational performance and outcomes. A draft research paper listing the names of several recognised experts is available on my website at www.stevegibbonsmp.com. Go to ‘Innovative Workplaces’ on the menu bar. The findings were that the most successful organisations had the following things in common: a strong culture underpinned by deeply held, shared common values which convey the behaviours expected by all staff; inclusiveness, where people feel strongly they are part of a team; an understanding of the culture and behaviours necessary to execute strategies at different levels of the organisation; a strong sense of vision and values, with leadership who recognise the need to strengthen and align them on a daily basis; and a focus on their people. In essence, ‘an organisation is nothing more than the collective capacity of its people’.

Edgar Schein, acknowledged as one of the world’s leading organisational psychologists, having studied and published work on organisational culture for 30 years, believes that ‘individual and organisational performance cannot be understood unless one takes into account the organisational culture’ and that ‘productivity is a cultural phenomenon, par excellence, both at the small work group level and at the total organisational level’.

The debate about the cost-benefits of managing people well has historically been dismissed by senior managers in both the public and private sectors as being based on ‘soft’ data. But there is substantial evidence, with the same sophisticated methodology, that provides a strong connection between how an organisation manages its people and the economic and productivity results achieved. Such evidence exists from a diverse range of industries and appears to be consistent across numerous countries.

Professor Jeffery Pfeffer, Professor of Organisational Behaviour at the Stanford Graduate School of Management, has published several books devoted to examining the research evidence linking the financial success of organisations to their people management practices, particularly the management practices used to create ‘high-performance/high-commitment’ organisations. For example, Pfeffer cites evidence from a five-year detailed study of companies from a diverse range of industries which indicates consistent productivity gains in the order of 40 per cent by implementing high-performance management practices. The research evidence shows that people work harder because of the increased involvement and commitment that comes from having more control over and say in their work; people work smarter because high-performance work practices encourage the building of skills and competencies and, just as importantly, facilitate the efforts of people in actually applying their wisdom and energy to enhance organisational performances; and high-commitment management practices, by placing more responsibility in the hands of people further down the organisation, save administrative overheads and other costs associated with having an alienated workforce in an adversarial relationship with management.

This private member’s motion calls for the establishment of a centre specifically for workplace innovation, concentrating on human resource management in our workplaces in both the private and government sectors. (Time expired)

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