Closing the UK's productivity gap - the role of mediation

Productivity is a term HR professionals are talking about a lot these days. And unfortunately we’re talking about it because productivity in the UK is lagging well behind economies like the United States and Germany.

But how can HR professionals improve it? One key driver of productivity is innovation. Innovation is the lifeblood of any successful organisation or economy. What is often overlooked, though, is the link between innovation and workplace relations. Relationships on the ‘shop floor’ are the building blocks of any organisation and if those relationships are on shaky ground, the structure as a whole is seriously compromised.

In the UK we have come to rely heavily on procedural, quasi-judicial ways of handling workplace conflict.  There is a strong focus on right and wrong, on winners and losers. This makes people terribly risk-averse. Employees fear grievance procedures and the threat of a formal complaint hangs over the office. It stifles innovation and holds back productivity.

Mediation does the opposite. It encourages people to work out their issues together, with specially trained mediators, to reach their own agreements. It tells people that problems and obstacles are a normal part of working life and can be worked through and overcome.

An ACAS report into the impact of workplace mediation at Northumbria Healthcare NHS Foundation Trust found that under the traditional grievance procedure 36% of managers thought their most recent experience of conflict had affected productivity. The report found that with the implementation of mediation, staff survey scores in relation to stress, bullying and harassment – all problems which damage productivity - moved from above to well below the national average.

And look at two companies traditionally associated with difficult industrial relations: Royal Mail and Transport for London.

Transport for London is still very much in that situation. Tube strikes, key players refusing to negotiate, productivity in freefall.

Meanwhile Royal Mail is an organisation transformed with very little industrial unrest and greatly increased productivity.

That change has been brought about by fundamental reform to the company’s dispute resolution process. By involving the triumvirate of stakeholders – HR, management and the unions – a radical change to the way conflict is handled and resolved was introduced with widespread support. Specialist internal mediators now help staff and union officials reach their own agreements.

The results are extraordinary. An organisation with 137,000 employees which used to be an example of how difficult things could be is now an example of how quickly things can improve.

And although it has been privatised, the changes at Royal Mail are by no means contingent on leaving the public sector. The driving factor was the desire to reduce disputes and increase productivity.

If we’re really going to close the productivity gap in this country, our motto should be - as another former public sector company once put it – “it’s good to talk”.

David Liddle Founder & Chief Executive

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