Journal of Management Development

Productivity improvement: a working person’s view

Lawson K. Savery
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Lawson K. Savery, (1996),"Productivity improvement: a working person’s view", Journal of Management Development, Vol.
15 Iss 7 pp. 16 - 26
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 Journal of
Management Productivity improvement:
Development
15,7
a working person’s view
Lawson K. Savery
16 Curtin University of Technology, Perth, Western Australia

Introduction
“Increase your productivity” has been the “catchcry” of the 1980s and 1990s
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and appears certain to continue into the twenty-first century. Leaders in

Journal of Management
Development, Vol. 15 No. 7, 1996,
pp. 16-26. © MCB University Press,
0262-1711
business[1, p. 12], unions[2, p. iv] and government[3, p. 33] have all urged the
Australian workforce to become more efficient and increase productivity.
Indeed, the Western Australian State Government created the Western
Australian Productivity Council in October 1989, which was chaired by the
Minister for Productivity and included leaders in business, labour, government
and academia. Such initiatives are intended to raise the overall level of
productivity within the workforce and increase the community’s economic well-
being. Indeed, 77 per cent of respondents in a Western Australian sample
thought that improving productivity was very important while only 3 per cent
considered it was unimportant[4, p. 3]. It would seem, therefore, that there is
considerable interest in productivity improvement in all sectors of the
community and leaders of the community should be interested in
understanding if there are perceived problems in the community, possibly
preventing it happening.
Moves to raise the community’s awareness have also been supported by the
formal industrial relations systems in Australia. For example, the Industrial
Relations Commission (formerly known as the Conciliation and Arbitration
Commission) has tried to create a climate for increased productivity at least
since 1987 when it introduced the “restructuring and efficiency principle”.
“Increases in pay or improvement in conditions of employment were to be
negotiated by the parties in exchange for measures designed to increase
efficiency or promote restructuring”[5, p. 156]. The restructuring and efficiency
principle was aimed at achieving a number of objectives, one of which was
improving productivity. However, as Dawkins et al.[6, p. 38] have argued, some
of the objectives are in conflict, especially if productivity growth is slow.
Chances of improvements in productivity were given a significant boost in
the August 1988 National Wage Case by the introduction of “structural
efficiency principle”[7, p. 111]. The emphasis in this wage case was to improve
productivity by attempting to remove obstacles that existed in awards, whether
shopfloor or management practices. Indeed the process of wage determination,
since at least 1987, has led to some forms of decentralization in the wage and
working conditions determination processes.
However, there has been little attempt to understand a community’s,
particularly workers’, views about issues and how people are likely to react to
 suggested changes. It would seem that some understanding would be essential, Productivity
because without the support of the workers, the idea of productivity improvement
enhancement would remain just that – an idea. Further, without this
understanding, the leaders of business or government will have a difficulty
selling the concept to the workforce.
The present study attempts to provide such information by reporting the
results of a gainfully employed workers’ survey which, among other things, 17
measured respondents’ views about productivity. The following sections deal
with the sample selection, questionnaire design, analysis undertaken, results
obtained and some tentative conclusions.
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Sample
The sample was drawn randomly from the population of metropolitan Perth,
Western Australian, using a random area cluster sampling technique initially to
select dwelling units. Only one person chosen randomly and aged 18 or over,
was interviewed in each household. If no one, or the person chosen, was not at
home, a re-call was made and, if after this, there was still no response, or there
was a refusal to answer, a new household was chosen by taking the nearest
house to the right of the non-response house. Because of Western Australia’s
size a postal survey could have been used. However, because of the range and
sensitivity of some of the issues raised and the need to obtain a random sample
of adults in a household, a structured personal interview was felt to be the only
practical approach to data collection. The structured interview was personally
conducted by trained field interviewers who had attended a seminar on the
purposes of the questionnaire before undertaking the data collection. The
number of contacts made was 536, with 402 usable questionnaires being
obtained, resulting in a response rate of 75 per cent, which is acceptable for the
type of data collection method used. Of these responses, only those people who
were gainfully employed (i.e. those not presently in the workforce – e.g. home
duties – were excluded) were considered.

Questionnaire and analysis

The questions were formulated and the content validity of the instrument was
determined, using a method recommended by Sax[8, p. 168]. A group of eight
specialists examined each item of the instrument to see that no item contained
vocabulary above the level of difficulty for grade seven schoolchildren and that
the items were focused on the influences of productivity enhancement in general
and not on a specific industry.
A total of 22 questions, which are outlined in Table I, were obtained from this
process and respondents were asked to agree or disagree with each statement
using a five-point Likert scale, ranging from (1) strongly disagree to (5) strongly
agree. Three questions about respondents’ perceptions of the workforce’s
capacity to improve productivity, outlined in Table II, were also collected as was a
series of traditionally collected background data (e.g. age, gender and education)
and information on respondents’ workforce and union experience. The results
obtained from analysing the data collected are outlined in the next section.
 Journal of Item 1 2 3 4 5 Mean
Management
Development Workers will have to work more efficiently 5 10 24 34 27 3.68
15,7 Workers will have to work more flexible hours 6 11 25 37 21 3.56
Workers and management will have to
co-operate more 1 2 10 34 53 4.36
18 Workers will have to work harder 12 20 33 23 11 3.01
Firms need more up-to-date plant and equipment 1 4 27 39 29 3.91
Workers need to be better trained – 2 16 39 44 4.24
Better management would improve productivity 1 3 7 36 54 4.41
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Workers will have to work smarter 1 6 24 40 29 3.90

Most Western Australian organizations could
easily increase their productivity 1 7 35 33 25 3.76
Workers will bear most of the cost of improved
productivity 13 29 29 20 10 2.84
Increases in productivity will lead to job losses 17 34 25 17 8 2.66
Increases in productivity will lead to lower prices
to customers 7 22 34 30 7 3.08
Increases in productivity will lead to higher
wages for the shopfloor workers 4 18 39 33 7 3.20
Increases in productivity will lead to better
dividends for the shareholders 1 1 16 56 26 4.07
Increases in productivity will lead to better
compensation packages for the management 3 3 29 46 19 3.73
Increases in productivity will lead to shorter
hours for the shopfloor workers 17 32 29 19 3 2.59
Giving workers a say in how the organization
is run will help increase productivity 1 4 11 42 42 4.21
Increase in productivity will lead to poorer
occupational health and safety 31 40 21 5 3 2.11
Increase in productivity will lead to fewer
industrial disputes 10 23 37 22 9 2.98
Increase in productivity will lead to better
quality goods/services for customers 6 10 28 39 17 3.52
Increase in productivity will create more
problems for older than younger workers 10 19 32 27 12 3.11
Increases in productivity will be achieved more
Table I. by changing shopfloor workers’ activities
Attitudes to productivity than management activities 21 30 30 15 3 2.50

Statement Yes No Do not know

Do you think you could improve your productivity? 71 24 5

Table II. Do you think your colleagues could improve their productivity? 79 16 5
Ability to improve Do you think the workforce as a whole in Western Australia can
productivity improve its productivity? 89 2 9
 Results Productivity
Demographic data improvement
The sample consisted of 65 per cent males with an average age between 35-39
years. Just under 40 per cent of the sample (39 per cent) were under 34 years of
age and 2 per cent were aged 65 or more. A majority of the sample (70 per cent)
were either married or living in a de facto relationship and 30 per cent were
single. Two-thirds of the sample were Australian born with UK and Ireland 19
birthplaces being the next highest (13 per cent) followed by New Zealand (3 per
cent) and Malaysia (2 per cent). When Australian citizenship was considered 92
per cent claimed such citizenship. Nearly all of the respondents (96 per cent)
claimed English as the major language in the household. As can be seen in
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Table III, just over one-quarter of the sample had, at best, completed high
school, while 42 per cent had graduated from a tertiary institution. Further,
approximately one in eight of the respondents had graduated with some form of
trade certificate from the technical and further education (TAFE) section of the
education industry.

Type of education Percentage

Primary school 1
Completed three years high school 14
Completed five years high school 13
Attended a TAFE college 3
Graduated from TAFE 12
Attended a university 10
Table III.
Graduated from university 42 The highest level of
Still at school 5 education

Union membership
Just under 30 per cent of the sample (27 per cent) were presently trade unionists
and this compares favourably with the West Australian figure of 34 per cent for
June 1994[9], considering that the percentage of the workforce who are members
of trade unions has decreased regularly over the last few years (it being 44 per
cent of the workforce in June 1993). Another 38 per cent of the sample had been
union members at some time during their working lives. Consequently a
majority of the sample had first hand experience with at least one union. The
average length of time that present trade union members had belonged to a
union was approximately 12.5 years. Of those who were or had been members,
and were still gainfully employed, approximately one in three (36 per cent)
joined because they believed that they were required to while 11 per cent felt
they were required to join but would have joined in any case. Over half of the
people who had been or were union members (53 per cent), could be classified
as “volunteers”. It seems from this study, at least, that there has been a change
 Journal of in the motivation for joining a union and people who join are much more
Management enthusiastic about joining a union than previous studies[10, pp. 41-3; 11] which
Development indicated that most Australian unionists were, at best, reluctant members. It
may be that the apparent freeing up of the demand to belong to a union has led
15,7 to less people being members of a union and consequently those that do belong
are more enthusiastic and supportive of the union movement. Although people
20 who were not members of trade unions were not asked if they would like to be
trade unionists it seems unlikely that the number would be large considering
the option to join an employee association is available in most occupations.

Ability to improve productivity

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There has been a discussion concerning the influence of unions on productivity

of workplaces. Some people have suggested that union membership has a
positive influence[12,13] while others suggest the influence is negative[14, pp.
206-21]. It would be interesting to see if the membership of a union influences a
person’s view of his/her productivity level; productivity of his/her immediate
work colleagues; and productivity of the workforce in general. The analysis of
the data suggests that there is no significant difference between unionists and
non-unionists concerning their view of the ability of the respondent to increase
his/her productivity or that of the local or general workforce. There is some
evidence, however, which indicates that the more remote a group seems to be by
an individual the more likely that the group would be perceived more easily to
improve its productivity[15]. This feeling also appears to be true for the present
study as can be seen from Table II.
As can be seen from Table II, just over 70 per cent of the people who were
currently gainfully employed in a randomly chosen community sample felt that
they could improve their own productivity. Such a large figure would imply that
there is a large reservoir of productivity improvement available which is
currently untapped. Further, those parts of the workforce which were more
remote from the respondent were perceived to be able to improve their
productivity more than those closer to individual. This suggests that some
people may well believe they were working relatively well but others might not
be. This view is one which leaders of business, government and unions must
overcome if they are to make productivity enhancement programmes effective
and relevant to individuals so that the untapped productivity can be harnessed.

People responsible for increasing productivity in an organization

It appears from Table IV, that people directly involved in the enterprise,
particularly owners and managers, are perceived to be responsible for increasing
the productivity of an organization. It can be seen that nearly 60 per cent of the
sample believed that the owners and managers were the most responsible group
for improving organizational productivity. It is interesting that shareholders
were not perceived to be responsible for productivity enhancement within
organizations since they own the organization. This is a surprising outcome
because one would expect that they would be perceived to be ultimately
 responsible for the improvement in productivity to protect their investment. One Productivity
reason for the findings could be that shareholders are perceived to be the ones improvement
with a small number of shares and/or little influence on the organization and,
therefore, have little effective control over the organization. This conclusion may
well explain the finding that the most important group responsible were
owners/managers who could have more at stake than small shareholders.
Nevertheless, any increase in productivity must be divided between the three 21
stakeholders, namely the managers/shareholders, workers and customers. When
consideration was given to the percentage of the saving due to productivity
enhancement that each of these stakeholders within the organization should get,
the average percentage for management/shareholders was 29.5 per cent. It is
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interesting (see Table V) that 17 per cent of the sample suggested that this group
should get nothing while less than 1 per cent suggested they get everything.
Concerning workers, the average percentage to be received was similar to the
management/worker group (28.9 per cent). However, 15 per cent thought that
workers should get nothing and 1 per cent thought they should get everything.
The customer average percentage was 25.5 per cent with 18 per cent believing
that the customers should receive nothing from the productivity enhancement
and nobody believed they should receive all of the savings. It can be seen from
Table V that 19 per cent of the sample believed that management/shareholders
should get 50 per cent or more of the rewards, while 12.1 per cent thought that
workers should receive such a split and only 8.4 per cent thought that customers
should receive such a margin of the rewards.

People responsible for increasing productivity Percentage

Business owners/managers 58
Shareholders 1
State government 1
Workers/workforce 11
Table IV.
Government at all levels 1 People responsible for
All Australians 7 increasing productivity
Managers and workers 21 in an organization

There was no significant difference between current members of the trade union
movement and non-members when it came to the split of the benefits obtained
from productivity enhancement programmes between the three stakeholders.
When asked to rank the four groups who were most important for pushing
productivity enhancement programmes it appears from Table VI that the
management of the organization followed by the Governments, at both State
and Federal level, were considered the most important in pushing for increased
productivity.
 Journal of Managers/
Management Percentage shareholdersa Workersa Customersa
Development
15,7 0 16.6 15.0 17.8
10 19.4 16.8 22.8
20 27.5 23.8 34.2
22
30 45.5 51.4 54.0
40 81.0 87.9 91.6
50 95.3 93.5 98.0
60 95.7 97.7 99.0
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70 97.6 98.6 100.0

80 99.1 99.1 –
Table V. 90 99.5 99.1 –
Split of rewards
100 100.0 100.0 –
caused by productivity
enhancement Note: aThese percentages are cumulative

The findings (in Table VI) are interesting because they identify that the working
people in the community are of the opinion that it is the political leaders rather
than business and union leaders that are important in pushing for increased
productivity. However, the most important group was perceived to be
management at the organization level but this group does not seem to have
infused the importance of such an idea into their own workforce. This is a major
problem because if the workers are not supportive of the productivity
enhancement programmes, and they are certainly not seen as an important
group pushing the programmes, then the programmes are likely to fail because

Groups Rank Rank Rank Rank

1 2 3 4

State government 14 23 12 28
Federal government 22 11 12 17
Union leaders 2 4 3 7
State opposition – 2 1 1
Federal opposition 1 1 3 5
Shopfloor representatives 1 1 5 4
Workers in the organization 3 3 5 12
Management of the organization 27 20 18 12
Table VI. Shareholders of the organization 9 11 9 10
Percentage of respondents Employers association 8 6 12 9
who ranked the group
in the four most Industrial tribunals 1 1 4 3
important categories Note: 1 = most important
 it is this group which is directly involved in producing the improved Productivity
productivity and this may be one reason why such a large percentage of the improvement
sample said they could raise their own productivity.
Another reason may be the people’s attitudes to productivity. Respondents
were asked to respond to a set of 22 questions which tapped a variety of aspects
of productivity. The results obtained are outlined in Table I.
It is interesting to note that the respondents believed that an increase in 23
productivity will yield better returns to the shareholder (82 per cent agreeing
and 2 per cent disagreeing) and better compensation packages to management
of the organization (63 per cent agreeing and 6 per cent disagreeing) than yield
shopfloor workers higher pay (40 per cent agreeing and 22 per cent
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disagreeing). This finding, coupled with the belief that an increase in

productivity will create more problems for older workers than younger workers,
could be a major detractor from increasing productivity, particularly since
workers were ranked so low as one of the major pushers for productivity
enhancement (see Table VI). The negative affect of productivity increases on
workers is the view held by 58 per cent of the respondents who thought that
they would have to work flexible hours and one third of the respondents who
believed that workers would have to work harder. Many people who are
supportive of productivity enhancement are of the opinion that workers need
not have to work harder but, rather, can work smarter or more efficiently. A
majority of the sample (69 per cent and 61 per cent respectively) agreed with
this argument, but many of these also saw that workers would have to work
harder. There are some significant differences between current members of the
trade union movement and non-members. It appears that unionists are more
likely to perceive that productivity improvement will have a negative influence
on the working lives of workers than non-unionists. For instance, current union
members believe that workers will bear most of the costs of any productivity
improvement (t = 3.12, p = 0.003) while not receiving higher pay (t = –2.46, p =
0.016). The costs born by the workers for increasing productivity could include
job losses (t = 2.75, p = 0.007), no reduction in industrial disputation (t = –2.55,
p = 0.012), older workers facing more problems (t = 2.71, p = 0.007) and,
although not significant at an acceptable level, poorer occupational health and
safety (t = 1.92, p = 0.056). These findings suggest that unionists are less happy
with the productivity enhancement programmes than non-unionists. If
consideration is given to those people who believed that productivity increases
would mean that people would work harder they also perceive that people
would have to work smarter, more efficiently and be more flexible (χ2 significant
at p < 0.001). It is interesting to note that less respondents believed that people
will have to work harder than accepted that people would have to work smarter,
be more flexible and be more efficient (t-test significant, p < 0.001).
It seems that the higher a person is in an organizational hierarchy the greater
will the perception be that an increase in productivity will be due to workers
working harder (χ2 = 22.63, p < 0.001). There is, however, no difference between
hierarchical positions when considering if workers would have to work smarter,
 Journal of be more efficient or be more flexible. Further, the higher managerial hierarchy
Management seem to believe that increased productivity would lead to an increase in shop-
Development floor wages but this is not a view shared by the lower echelons of the
organization (χ2 = 14.82, p = 0.022). This suggests that the higher levels of
15,7 management are more likely to see an increase in productivity of an
organization to be related to increasing workloads for workers but workers are
24 less likely to see this converted in monetary rewards.
Workers and first-line supervisors, on the other hand, were more likely to
perceive that an increase in productivity would lead to job losses (χ2 = 12.96, p
= 0.044) and lower occupational health (χ2 = 14.47, p = 0.025). This view, that
workers are not going to benefit from productivity improvement is indicated,
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even if not at an acceptable statistical significant level, by the view that workers
will bear most of the costs of productivity (χ2 = 11.66, p = 0.069) and the view
that productivity improvement will produce shorter hours for the shopfloor
workers which is held more by higher management than respondents in lower
hierarchical positions (χ2 = 11.06, p = 0.086).
Over a third of the respondents (37 per cent) believed that increased
productivity would lead to lower prices for customers (29 per cent disagreed),
while over a half (56 per cent) suggested that productivity enhancement would
produce better quality products and/or services. These findings would suggest
that there was a group of respondents who perceived that the customers,
namely the third stakeholder, would receive some of the benefits of productivity
improvement but that the major beneficiaries would be shareholders and
managers.
The perception of who would be the major beneficiaries is interesting
because when the respondents were asked to identify the groups who were
responsible for increasing productivity in an organization nearly half of the
sample (49 per cent) named the business/owner managers followed by the
workers (9 per cent) while only 1 per cent of the respondents named the
shareholders. Therefore, while workers were considered to have a major
responsibility for improving productivity compared to shareholders the latter
group were expected to be major beneficiaries of improved productivity.
Nearly one-third of the respondents (30 per cent) believed that the workers
would bear most of the costs of improving productivity, one in four were of the
opinion that increase in productivity would lead to job losses and 33 per cent
considered that industrial disputes would not be decreased by productivity
improvements. These rather negative feelings towards productivity
enhancement by a sizeable minority indicate that some care should be taken in
explaining productivity enhancement programmes.

Conclusion
It appears from this study that people who are gainfully employed are more
likely to believe that those groups furthest away from them are the ones who
could best improve their productivity. This finding suggests that the leaders of
the community, be they politicians, union or industry must be aware of the factor
 that many people believe that other people will find it easier to improve their Productivity
productivity than they could do personally. Since productivity enhancement is improvement
going to involve active participation of an individual then the individual must
believe that productivity enhancement is a responsibility of each person.
Managers and owners were considered by the majority of the respondents to
be responsible for increasing the productivity of the organization while only one
in ten of the respondents thought workers were responsible and only 1 per cent 25
thought it was shareholders. These findings were supported by the view that
management of the organizations were ranked as the most important group for
pushing productivity improvement followed by governments at both State and
Federal level with shareholders ranked fourth. It can be seen that workers were
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considered not to be very important for pushing productivity but responsible

for productivity improvement.
The increase in productivity will have to be divided between the three
stakeholders, namely managers/shareholders, workers and customers. It
appears that the working people believe that managers/shareholders should
receive approximately 30 per cent of the savings, workers 29 per cent and
customers 26 per cent. There was no difference between union and non-union
members concerning the split of rewards, caused by productivity enhancement,
between the stakeholders. It can be seen from the results that customers were
considered to get only slightly less than the other two stakeholders.
Further, from the reported results, even though the people perceived a
similar split for the three stakeholders concerning the savings, in reality they
perceived that the rewards would favour management and shareholders. The
rewards were perceived to lead to better dividends for shareholders and
managers than for shopfloor workers in the organization. It seems unlikely that
workers will increase their productivity if there is a perception that there will be
very little immediate reward. This problem is further exacerbated because the
respondents believe, as said earlier, that workers have a larger responsibility for
increasing productivity in an organization than shareholders but are seen as
likely beneficiaries of productivity enhancement programmes.
Political, union and industrial leaders must make an effort to convince
workers of the benefits of increased productivity and offer rewards
commensurate with the increase achieved. They must also ensure that the
rewards are equitably distributed between the stakeholder groups. While there
is some support for productivity improvement it is far from universally
accepted and needs appropriate encouragement from the relevant authorities,
particularly the management/owners of the organizations.

References
1. Confederation of Australian Industry Industrial Council, Employee Participation: A Guide
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8. Sax, G., Empirical Foundations of Educational Research, Prentice-Hall, Englewood Cliffs,

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