Launch of the National Centre for Partnership and Performance Strategy, Irish Workplaces: A Strategy for Change, Innovation and Partnership, and new guidelines on Employee Financial Involvement, Improving Performance – Sharing the Gains in Government Buildings on Wednesday 10 January, 2007 at 6.00pm

Introduction

I am delighted to launch both the new Strategy for the National Centre for Partnership and Performance, Irish Workplaces: A Strategy for Change, Innovation and Partnership, and new guidelines on employee financial involvement, Improving Performance – Sharing the Gains.

The NCPP – Its Role in a Changing Ireland

Since its foundation in 2001, the NCPP has played a leading role in promoting and driving workplace change and innovation in Ireland. Indeed, its efforts have played no small part in positioning workplace transformation at the heart of our economic and social policies and as a platform for innovation.

As we face into 2007, three recent initiatives have combined to set the NCPP on course for a new phase in its development:

Firstly, its establishment on a statutory basis since 1 January as part of the new National Economic and Social Development Office;
Secondly, the adoption by the Government in March 2005 of the National Workplace Strategy - our blueprint to transform Irish workplaces into ‘workplaces of the future’, and
Thirdly, ratification of the current social partnership agreement, Towards 2016.

These developments create a new and dynamic context for the work of the NCPP in leading and supporting partnership-led transformation in our workplaces.

The NCPP Strategy and the Management of Change

Three priorities underpin the NCPP’s new Strategy for the period 2007 to 2010:

Supporting innovation at the workplace level and from the workplace perspective;
Improving the capacity for change, especially by facilitating the enhancement of skills in the area of change-management; and
Enhancing the quality of working life, particularly through workplace partnership and employee involvement.

These priorities will be addressed through five work programmes based around a series of inter-related areas such as partnership, innovation and research.

Most importantly, the new Strategy is focused on delivering concrete, practical solutions. A few of these are worthy of mention here this evening.

First, the NCPP is committed to developing a strategic, sector-based approach that will support and foster the deepening of workplace partnership within key sectors of the economy, such as the commercial sector, health, education and local government.

Second, in the health sector, the NCPP’s Hospital of the Future project is an ambitious initiative to examine the strategic HR practices within Ireland’s 55 acute hospitals. The objective is to identify how these practices impact on specific, measurable, performance outcomes like spend-per-patient, patient mortality rates, length of stay, job satisfaction and staff turnover. This will support a broader programme of engagement with the health sector.

Third, of course, we need to put our money where our mouth is. The Government has, accordingly, committed €9 million to a new, three year Workplace Innovation Fund which will come on stream shortly. It will have three elements.

It will provide support, through Enterprise Ireland, for Companies that are committed to introducing new ideas and best-practice models of innovation through high participation approaches. It will finance a major national awareness campaign aimed at mobilising Ireland's two million strong workforce in support of workplace transformation.

And it will help support the work of the social partners themselves in promoting innovation and improved performance in the workplace.

The real need for this Fund has been demonstrated by the excellent work in hand by my colleague, Tony Killeen T.D., Minister for Labour Affairs and his High Level implementation Group in driving forward our National Workplace Strategy.

Of course, the NCPP will not be able to implement this ambitious Strategy and Work Programme on its own. Of their very nature, they require the engagement and support of all bodies represented by you here in this room. I would like to take this opportunity to urge you all, Government Departments, State Agencies, employers, trade unions, managers and employees, to play your part to the full in this important national endeavour.

Need to Work Smarter – not Harder

The NCPP’s new Strategy challenges employers and employees alike to work smarter – not harder – over the years ahead. If we can improve organisational performance across all sectors, we will not only sustain and increase competitiveness - we will support the well-being of workers generally. We will also have done much to position Ireland at the forefront of the emerging global knowledge economy.

Incentives for Improved Performance

As I indicated at the outset, I am also launching here this evening a second NCPP publication, Improving Performance – Sharing the Gains.

This fulfills a commitment in Towards 2016 to bring to conclusion revised guidelines on Employee Financial Involvement (EFI). The commitment was achieved, on schedule, within 12 weeks of ratification of the agreement and, so, well done to all involved!

The report examines the five main types of EFI schemes that are currently in operation in Ireland – including Approved Profit-Sharing Schemes, Employee Share Ownership Plans, and Gainsharing. It highlights the key considerations in respect of each type, as well as their main advantages and disadvantages.

I understand that the study draws on national and international research and the direct practical experience of nine Irish companies. I would like to thank all concerned for contributing to this important project.

The purpose of these Guidelines is to make the whole area of employee financial involvement more accessible to a wider audience. In practical terms, they provide a “how-to” guide for companies, unions and employees to establish, maintain and develop an EFI scheme.

It is envisaged that the report will stimulate employers, management, unions and employees to consider the potential offered by EFI schemes. The report recognises, of course, that employee financial participation is not without its pitfalls and challenges. Nonetheless, it makes a strong business case for EFI, recognising that it has the potential to make a real difference to organisations and employees, creating a very dynamic role for employees, enhancing competitive advantage and delivering concrete financial gains.

Work carried out by the ESRI among a sample of 1,500 Irish employers found a very strong association between the use of EFI and levels of company profitability. In fact, it was discovered that a company making “substantial profits” is four times more likely to have an EFI scheme in place than a company making losses. A company's profitability is very much dependent on the motivation and performance of its workforce and, clearly, EFI has to play a part in this.

The report also summarises a large body of international research, which demonstrates the potential of EFI for employers and employees alike. For example, a US study of Gainsharing at 100 companies found that cumulative productivity gains averaged 17% per company by year three of each scheme.

In Ireland, less than 15% of companies have some form of employee financial involvement. Despite the potential benefits demonstrated by the research and evident in the practical experiences of nine Irish companies, the vast majority of Irish businesses have not yet woken up to the potential of EFI.

This NCPP report, Improving Performance - Sharing the Gains, is intended as a wake-up call. It represents a shared vision of the social partners on the importance of employee financial involvement and the basic steps required to implement EFI schemes in practice. The result of intensive co-operation and collaboration between ICTU, IBEC and the CIF, under the stewardship of the National Centre for Partnership and Performance, it is nothing less than a joint agreed approach to employee financial participation in the workplace.

Concluding Remarks

With the launch of its new Strategy and these EFI Guidelines, and of course its recent placement on a statutory footing, the NCPP is moving ambitiously and confidently into a new phase of its development.

I know that everyone here tonight will join with me in wishing Peter, Lucy and all of their colleagues on the Council and among the staff of the NCPP the very best for the future.

Thank you.

ENDS.