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The Problems of the Industrial Workplace - The Managerial Relationship

Why the Workplace?

In the next 10 years, shifting demographic, technology and cultural trends[1] will pose significant problems for organizations. These issues are so complex, so outside our past experience, that it is unlikely that any CEO, or senior management team acting alone, will be able to plan or predict either the new situation or the correct response. Leaders will have to draw on the full intelligence of all the people inside the organization in order to work their way through these issues.


In this context of change, the leadership imperative in the next decade will be to create a responsive organization that can read the environmental signals, create new meaning and be able to adapt in ever shorter periods of time. Only a high trust organization will be able to do this.


The barrier that faces most organizations today is that trust is weak and there are signs that trust is getting weaker. We label this aspect of the broader issue today “Workplace Health”.


This proposal is based on the premise that using Step by Step will position the PEI Health and Social Services System (HSS) to restore trust and to begin the journey to become the type of highly responsive organization that can navigate through the perils of the next decade. At the same time as moving the HSS along this important structural path, SBS will also have a significantly positive impact on the current costs of absence, overtime and illness.

What is going on in the workplace

Trend of increasing stress and loss of trust - Most traditional workplaces have evidence that they are experiencing a growing trend of stress, absence, illness and brittleness. Trust is falling and cynicism is building.


Absence and Illness - Arguably your largest direct and indirect “controllable” cost - Increasing internal friction appears to be wearing down the parts and reducing the operational capability of the whole organization. Total direct costs of casual absence and workplace illness have risen by 27% since 1997 and now average at about 17% of payroll[2]. Workplace health, absence and replacement costs have become one of the largest direct costs in most organizations. Labour relations in the health sector are becoming more bitter.


Healthcare systems amongst the most vulnerable - Healthcare systems are part of this trend. Recent conversations with the HR leadership of the Capital Health Region in Halifax confirm that their acute/community care organization tracks this national trend. PEI’s data, is less easily accessible and reliable but also indicates that worker health, unplanned absence and replacement are significant direct costs and are also indicators of organizational friction.


What you cannot measure you cannot manage - Most organizations can only sense this malaise and consider these costs anecdotally.


While they may have excellent measurement systems that follow, predict and manage customers, money and inventory, most organizations cannot empirically and easily follow, predict and manage the human aspects of organizational life. They usually only have access to general survey data and are not able to pinpoint specific “hot spots” or to see patterns across the organization. Without such a picture, it is hard to make effective decisions about fixing the problems or in making progress toward a high performance and collaborative workplace.


Easy access to inexpensive and empirical workplace data will be essential for any organization that is serious about creating a competitive workplace.


Having the correct perspective that will enable you to decide what to measure and manage is the starting point.

Measurement and Action - The Need for a Systemic Approach

Lots of action but little progress – Having the right people in the right jobs feeling good about what they do and sharing their observations and knowledge with each other will be the essential ingredient for coping with all the change that is bearing down upon us.


Survey after survey shows that the quality of the workplace is becoming a key issue in the attraction and retention of professional staff.. In response, many leaders have introduced workplace flex programs. As workplace absence grows and drives more overtime many leaders have introduced attendance management programs. As workplace illness has increased many leaders have responded by increasing access to more medical staff.  In spite of all this effort, the situation is not improving for most organizations.


Have we asked the right questions and do we measure the right things in the right way?


Focus on the Individual – Most approaches to the “workplace issue” focus on the individual. This type of individualistic perspective implies that attendance is mainly a personal discipline issue. It implies that an individual’s poor health can be remedied by offering them better access to health information and to exercise. It implies that we can find for each person an ideal balance point between work and home. It implies that management can make use of general survey information to offer better programming to meet these individual needs.


The need for a systems approach - What is emerging, is that the workplace health issue cannot be improved by working at the individual level but only by working at the system level. What do we mean by this statement? We need to shift our perspective from the individual alone to the individual in the context of  a social environment. We know now social environments send signals that drive collective behaviour[5]


What is now clear is that how managers behave and how the hierarchy is organized are the two most powerful social environmental signals in the workplace. Success in transforming the workplace will have to focus on what this new insight means.


Research based - We offer two important pieces of research to substantiate this systemic viewpoint. The work of Dr Linda Duxbury in Ottawa and the work of Dr Sir Michael Marmot in England.


The Supportive Manager - Dr Linda Duxbury has recently completed a blockbuster survey with 31,000 respondents in the public service and the private sector.[6] Her conclusion is that individual worker’s health, attitude and satisfaction are directly linked to the attitude and behaviour of the manager. Her research makes a clear connection between the manager’s behaviour, or style, and everything that happens to the employees for good or for bad. In effect, she comes to the same conclusions as Doug Wilms’s research on Parenting Styles and Family Functioning[7]. She shows how managerial behaviour affects commitment, learning, attendance, performance, health and even healthcare spending. Importantly, for those now running and operating traditional workplace flex programs, she establishes why this type of programming does not work.


Programming on its own is not working - In particular she shows that, when the workplace has a traditional managerial culture, that 84% of workers do not use workplace family friendly programs and 74% do not use flex programs. Her bottom line was that 86% of those surveyed coped by reducing the quality of what they did. This insight has significant implications for how we think about performance and how to get it.


The conclusion is that we have to look more deeply at the managerial system, or the hierarchy.


The Nature of the Managerial Hierarchy - Dr Sir Michael Marmot is the world’s leading authority on the influence of the workplace hierarchy on employee health. He goes further than Dr Duxbury in showing that the issue is the system itself. He shows conclusively that workplace illness is not driven by the individual but by the type of hierarchy that the individual finds herself in.


The two Whitehall Studies[8] show that health is found on a gradient in the workplace. Those at the top have 4 times better health than those at the bottom. Every aspect of health fits this gradient even accidents! All other personal factors, such as smoking, poor diet etc., pale into relative significance when compared with the hierarchy effect.


Sir Michael’s response is not to advocate some Utopian attempt to do away with the hierarchy. He acknowledges that all animal societies have them. His recommendation is to work to understand the nature of the hierarchy and to work to make it more collegial. He summarizes his views as follows.


The question is what is it about position in the hierarchy that determines different rates of disease?


And given that, the hierarchy in disease does change. All societies may have hierarchies but we know that the social gradient in disease is not fixed. It’s bigger in some places than others and it can change over time. This could be that the magnitude of the hierarchies change, but there are always hierarchies. But more importantly, it suggests that it is about where you are in the hierarchy that’s related to disease and can we do something about that?


So you ask is it money? Is it prestige, self esteem? And in fact what I think it is has much more to do with how much control you have over life circumstances and the degree to which you’re able to participate fully in society..”

How can Step by Step help you measure and improve our workplace?

Leading Indicators of Problems - If we can accept this systemic view of the root cause of illness and dysfunction in the workplace, what would be the best indicators of the expression of the problem? What would we have to measure and where would we work to make improvements? How will Step by Step (SBS) make a difference?


If you feel trapped in a painful relationship where you have little control or if you are doing something that does not fit, then you have 3 options. You can run away – unplanned absence. You can get away - by becoming ill. You can shut down – become helpless and unproductive. You attend the workplace but you are energetically “absent”.  Or, of course, you can do all three.


Unplanned Absence - The leading indicator for there being a problem in the workplace, and the first option that can be measured empirically by SBS, is unplanned absence.


It is important to see unplanned absence less as a discipline issue and more as an indicator of there being a “fit” or relationship issue. Either the employee does not fit with the job, with their colleagues or with the manager. The average casual absence for most employees is about 4 times a year. It is important to know what is “normal” and what should be tracked as unusual. Our experience tells us to extend the interval out to those who are  away for between 8-10 times. SBS can be customized easily to the most appropriate setting for your stage of organizational development. This setting enables you to see the smoke before the fire catches but does not overburden the organizational norms.


An evidence-based HR measurement and management system - SBS enables you to see where the unplanned absence is occurring over time and space. The simple IVR absence-capture system bolts onto your own HR system as a linked stand alone. If all you install is the absence monitoring system, you will at least be able to see where your hot spots are and you will be able to compare unit to unit over time. If you join the Hightrees Network you will be able to compare your organization to similar organizations in other areas of the country.


How SBS reduces absence by working on the manager/employee relationship - The absence management system that extends from the Monitoring system, works by inserting a facilitator between the employee and the manager to explore the fit issues. It only becomes a discipline issue when all interaction between the employee and the manager has broken down. In most cases the issue is resolved. In most cases the issue is about fit with job, fit with the group or fit with the manager. In all these cases the system documents the transaction so that the lessons learned are available. In all these cases an effective response is available. The job needs a redesign. There is something missing in the team. Or there is a management problem. Or this is an employee who will not fit no matter what we do.


With SBS, Senior management has an empirical management performance tool at hand. For absence rates track the fit and the climate. They show the manager’s ability to create climate and they show the employee’s coping skills. Unplanned absence is especially damaging in a healthcare system where the shifts have to be staffed. Large scale absence drives not only more overtime but a sense of not being in control of time for Nurses and staff who are called back. In the end it all leads to more stress and hence more illness and lower trust.


Measuring and Managing the Hierarchy to Reduce Illness, Sick Leave and LTD – Marmot’s work tells us that the most powerful influences on illness are not exclusively personal but are primarily socially based on the employee’s perception of control and participation in the group[9]. Duxbury shows us that the attitude of the manager is key to the outlook of the employee. Looking at absence and health data in this context across your organization will give you the empirical information that you need to act appropriately to alter your hierarchy and to assess the capability and performance of your managers.


So, beyond a reduction in related costs, measuring and evaluating employee illness will yield information about the nature of the hierarchy in your organization. What area of the enterprise is most exposed? Is this a social or an ergonomic issue? How does this department compare with another in your organization and with another organization that is separate from your own organization? What is a remedy that will work? These are all questions that you can ask and answer with SBS.


As with Absence, the IVR reporting system gives you an immediate organization-wide view of rates and categories of illness. The intervention system, using a facilitated series of meetings with both the employee and the manager not only drives rich data about the workplace and fit but has a high return to work success rate. Why does this facilitated conversation between the manager and the employee yield such good results?[10]


SBS, Illness and the Managerial Relationship - The SBS approach focuses on creating an effective dialogue between the employee and the manager. It works to shift the relationship from Authoritarian or Permissive to Collegial or Authoritative[11].


As with Absence, the issue of “fit” is the centerpiece of the conversation. The facilitated conversation focuses on what the employee can do and how the manager can help the employee return to work. Facilitation means that the “Power of Position” issues which can get in the way of a frank discussion are removed. The medical aspects of the case are kept out of this conversation as well. This is an important point. Currently, most sick employees rely on a sick note from the doctor to govern when and how they return to work. The Doctor usually has no deep knowledge of the workplace, the job or the manager. The manager, the employee and the workplace/job issues are separated from each other and resolution become a challenge as the issue tends to focus only on the illness. SBS keeps the focus on the relationships and the job and keeps the two people who have the power to reach an agreement, the employee and the manager, fully engaged. This is not to say that the technical health issues are ignored. The SBS program offers, offline, a wide range of coordinated health and other assistance to the sick employee. The usual result is that the sick employee is brought back into the group and into relationship with the manager.


Empirical Measurement and Management Information that you can act on - SBS Health module offers the leadership an empirical measurement tool that shows you the types, the incidents and the extent of illness in your workplace. It offers a remedy that is centered on where the health driver is located – the managerial relationship and the workplace. It acts as a system inoculator to improve the overall health of the managerial relationship and the workplace and hence acts to improve the overall health of the enterprise. Leaders can now “see” the hierarchical and environmental forces that affect the Health of the Workplace by unit, unit manager, by division and can act appropriately. Leaders can compare their entire organization to other clients of the Hightrees Network and obtain a relative performance assessment for their entire organization.


As a by product, SBS also reduces your short term and long term illness and all their related expenses.


Performance Measurement and Management  - More importantly using SBS sets you up to measure and value empirically the important performance issue of creating the optimal workplace for the 21st centuries turbulent operating environment. 

What is Step by Step

SBS has four interconnecting components that, like DNA, can be expressed in an almost infinite manner allowing for exceptional customization to the unique circumstances of any organization.


The Employee Link – The IVR System – In SBS the employee’s link with the total system is an IVR subsystem. When an employee is going to be absent or is feeling ill, she simply calls a 1-800 number and provides her name and employee number. If she is ill, she has a number of options depending on how you customize the system. In some organizations, she only has to say that she is ill. In others, she will have a menu of categories of illness that she is asked to answer. This might be as simple as “Back Pain” GYN etc. When she returns either from an absence or an illness, she simply makes a closing call.


The manager automatically receives an email telling her that the employee is not going be at work today enabling them to work immediately on a replacement if that is required. The larger system is alerted that Mary MacDonald is absent that day and tracks both her time away and the frequency of her absences over time and can compare this to others in the unit or across the organization


For managing events of absence the SBS tool can be customized to track your “absence norm”. We recommend that the norm be set out at about 8-10 times a year. Such a setting captures the real problems and not the day to day realities we all face of a child being sick or the plumber is coming. SBS enables you to alter your “absence norm” as you and the organization learn. The variance in costs and returns of moving the norm are significant and you will set your norm in the design phase of the project.


You can not only set the system to a norm for events of absence but to intervals. A day off is different from 4 consecutive days. Thursday off is different from being off continually on a Friday or a Monday. You can set an interval norm as well. Mary reporting that she is ill and has flue suggests that she will be back at work in 4-5 days. If she is still away 7 days later there may be a problem. The SBS system allows you to set your norms to where you feel is best and it will alert the Coordinator, and the manager or in fact any designate in the design when these norms are breached.


The IVR system is easy to use by the employee, keeps the manager informed and keeps the organization informed simply about who is away, why and when.


Importantly being stand alone, the IVR subsystem can be set up alongside your own HR systems without significant integration issues.


Coordination and Facilitation – When a norm for absence or for illness is breached, a Coordinator in a call centre, is flagged and accesses the complete file. She would place a call to the manager of record and ask what is going on. There may have been a simple failure to close the file. If the issue is absence and the norm has been breached, she will assess the case with the manager, and if warranted, will call the employee and arrange a meeting with the manager and a neutral facilitator. The same process will occur for an illness that appears outside of the norm.


The Facilitator is a critical part of the SBS remedial process. By inserting a neutral party between the manager and the employee, it is possible to alter the managerial relationship, which is the systemic core of the workplace. The communication barrier is “Power Distance”. We are conditioned to interact according to the power distance between each other in organizational life. Just as parent child conversations can be awkward and maybe  laden on both sides by “historic baggage” so are discussions up and down the hierarchy in the workplace. The Facilitator’s job is to set the environmental conditions in the meeting where both sides can tell their own truth and get at what is really going on. The result is that both sides learn by experience that it is possible to talk as colleagues. Working on the relationship is why SBS has the results that it does in improving absence, illness and morale. It is why SBS fits into the Duxbury/Marmot view of where the problems lie. It works in the problem areas to shift the nature of the managerial style to a more Authoritative approach.


In the case of illness, the illness itself is kept out of the meeting as a private matter between the employee and her doctor. The issue at hand is to discuss the fit to the job and the unit and to agree on a plan for a return to work. What parts of the job can you do now and in the future? Are there other fit issues that we need to explore – maybe you don’t like this job or you can’t do it? Do you need more training? Maybe there are relational issues with your colleagues or personal issues at home that are overwhelming? It will also become clear to the Facilitator if the “Fit” issue is driven by the manager. In that case the Coordinator will make the appropriate call up the line. All issues are transparent making litigation unlikely and providing unions with the assurance that every step is being taken to consider the employee’s position.


The Facilitator ends each meeting with a report, or an agreement, that is signed by both the manager and the employee. This information goes back into the database and the results are discussed with the Coordinator. The paper trail is built organically and automatically. Should absence issues not be ultimately resolvable, the paper trail makes it unlikely that their will be friction, or litigation, at the time of exit.


The Coordinator oversees each case. She has access to a wide range of additional supports for the employee or for the manager such as additional medical help, employee relations etc. While much of what occurs in SBS is automatic and computer driven. There is always an experienced human being in the oversight position.


The Database – At the heart of the SBS system is a Lotus Notes driven database. The database is almost infinitely customizable in terms of fields, reports and access. An important part of the Design Phase of the project will define for you the level and hence investment/return that you need.


Linked by the internet, the system again enables you to overcome the issue of integration. The database operates under the highest security and meets the Federal standards for security.


The database collects data from the IVR system and from interventions by the Facilitators. The IVR data comes into the database directly and the Facilitator data comes in by the internet. This means that there is not an integration issue for you.


On the reporting side, who has access and rights at whatever level are set by you in the design phase. Access again is by the internet making integration a minor issue.


[1]All health systems face a retirement bulge and a recruitment challenge in the next decade. PEI’s Nurses’ average age is in the high 40’s. 41% of PEI’s doctors will be eligible for retirement. Concurrent with this retirement bulge, there will be a demographic shortage of replacements. Young professionals today seek a much more flexible and autonomous work environment than their parents. The small size of the incoming cohort gives them the negotiating power to demand these changes. The other side of the demographic shift is a huge increase in seniors as healthcare consumers. The healthcare system will therefore  face a staff/load and design bifurcation. At the same time Technology Change is accelerating forcing a steep learning curve and opening up entirely unforeseen new practices. Computer speed (per unit cost) doubled every three years between 1910 and 1950, doubled every two years between 1950 and 1966, and is now doubling every year. The paradigm shift rate (i.e., the overall rate of technical progress) is currently doubling (approximately) every decade; that is, paradigm shift times are halving every decade (and the rate of acceleration is itself growing exponentially). So, the technological progress in the twenty-first century will be equivalent to what would require (in the linear view) on the order of 200 centuries.   Working our way through what all this means and finding a viable response is beyond the capability of any individual today.

[2] Clarke/Brown

[3] $1.0 million on sick leave and $800m on relief per month

[4]  We will have to add sick leave and LTD to add to this figure to provide a more accurate total cost

[5] In Malcolm Gladwell’s the Tipping Point, we recall that Chief Bratton turned around the crime wave in New York not by a crackdown on individual crime but by dealing with the social signals, the Graffiti and the Fare Dodging that told people that New York was not safe. Doug Wilms’s research on Families tells us the same story. Poor behaviour and poor coping skills in children are mainly a product of family functioning or the family behavioural environment..

[6] We attach a short summary of her conclusions in “The Duxbury Summary – a slide deck

[7] Wilms’ research tells us that the most destructive parenting style is Authoritarian which promotes not only destructive behaviour but severely limits learning. The next most ineffective parenting style is Permissive. The style that works is Authoritative which is a combination of rules setting and dialogue. As we learn more, it is likely that we will make the same connection to managerial style. See note 10 for more on Wilms

[8] We attach 2 abstracts detailing Whitehall I and II and an interview with Sir Michael that explains hi position very clearly

[9] Robin Dunbar’s research on the evolution of language shows how all primates have to take comfort in group settings in order to cope with organizational stress. Being an accepted member of a group is the key primate health regulator to threats from higher in the hierarchy.  (Grooming Gossip and the Evolution of Language, Robin Dunbar, Harvard University Press)

[10] We attach a comprehensive review of the CIBC story at the end of the proposal. At CIBC there was a 41% reduction in days lost in the first 6 months. Zero doctors notes. $8.0 million savings in the first year. By year 2 CIBC has the highest rate of return to work of all clients  of the carrier’s book returning 50% faster.

[11] Wilms’s research shows that it is Family Functioning, or the parental culture, that has the greatest effect on children’s development outcomes. He therefore tracks both Duxbury and Marmot in their work on the  workplace. Wilms defines Authoritative parents those that: “establish a warm and nurturing relationship with their children but set firm limits for their behaviour. Within those limits, they present options to them, discuss alternate ways of behaving and allow them to participate in family decisions.” The best outcomes are derived from this type of family culture. The worst are derived from the next two styles. Authoritarian parents are  “characterized as being highly controlling, requiring the children to meet an absolute set of standards. They are less flexible and lack responsiveness and warmth” Permissive Parents are “typified as overly nurturing: they set few standards for behaviour and are extremely tolerant of misbehaviour”  It is not much of a stretch to see these styles in managerial behaviour and it is likely that the outcomes are similar for employees as they are for children. (Vulnerable Children J Douglas Wilms Editor, University of Alberta Press and Health Canada)

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Last update: 24/05/2003; 8:47:53 AM.