Tag Archives: Germany

When did you last ask for a pay rise?

shaking_figure_for_money_anim_500_wht_12913It appears that 50% of UK workers have never asked for a pay rise.

54% of working adults feel that they are not paid enough and half of these know other companies in their industry pay  more – but that doesn’t mean they will necessarily be asking for a pay rise.

It seems that we Brits are uncomfortable talking about money. Some people they don’t ask because they don’t want to appear ungrateful and others say they don’t want to spoil the relationship they have with their boss.

About 1 in 5 say they would be worried about losing their job if they asked for more and another 1 in 5 said they were too nervous to ask.

Even though 1 in 3 knew their colleagues were paid more for doing the same job only 1 in 3 of this group felt confident enough to ask for more money.

The data comes from a survey by Slater & Gordon, an employment law company, which asked 2,000 working Brits about how fairly they thought their employers treated them.

Not very fairly overall it would seem!

The newly appointed  “wellbeing Czar“, Lord O’Donnell, said that saying “thank you” and giving staff more autonomy could make them happier than giving them a pay rise.

Which is probably true but it doesn’t pay the rent for employees who have suffered from static pay since the start of the recession in 2008.

And it’s not only employees in the UK. One in six Germans is at risk of poverty because they earn so little. And this in the powerhouse of the EU. Although unemployment is among the lowest in the EU the economy is run by part-time workers in “Mini jobs” created by the previous chancellor.

About 13 million Germans earn less than €12,000, 60% of the national average. The chairman of Germany’s Welfare Equality Association blames the “Americanisation” of jobs i.e. low-paid and often temporary.

In the UK the voluntary “living wage” has just been increased to £7.85 an hour (£9.15 in London). This is the amount considered necessary to meet basic living costs and is supported by about 1,000 employers.

Even so about a quarter of the working population still earn less than the living wage and organisations like the IoD and the FSB aren’t particularly positive about the idea of helping people earn a decent income.

NB The current statutory minimum wage is £6.50 an hour for adults.


Erotic capital revisited

P1020328Dr Catherine Hakim was the closing keynote speaker at the 4th international Delta Intercultural Academy Conference on Global Leadership Competence: Personal Qualities, Culture, Language held in Konstanz, Germany.

She was a sociologist at the LSE when she achieved a degree of notoriety with her book “Money Honey: The Power of Erotic Capital” which was published in 2011. I blogged about it at the time and that  blog has been one of my most popular so obviously of interest in the wider world.

She now works as Professorial Research Fellow at think tank Civitas Institute for the Study of Civil Society but still holds the same views.

She believes that just as we have Human Capital and Social Capital we also have Erotic Capital. This is a mixture of things including appearance, and charisma.

She quoted economist Daniel Hamermesh who  found that better looking managers earned more money and CEOs of large companies were more attractive than CEOs of smaller companies.

And companies that employed attractive people were more profitable. (Beauty Pays: Why Attractive People are More Successful by Daniel Hamermesh. Princeton University Press)

She pointed out that despite a world-wide recession people were still spending money on luxury items and in particular things which made people look good.

In a competitive job market appearance is important and people work hard at impression management because the social benefits of attractiveness are worth about 15% more pay.

Excluding the effect of IQ attractiveness is as good as having qualifications in many jobs.

She took some criticism from certain participants but stood her ground. “I’m a social scientist and just telling you how it is” she responded at one point.

And she’s not the only person to have researched in this area and found similar outcomes.

I liked her quote from Aristotle: “Beauty is the best letter of introduction”.

And she made her presentation without a Powerpoint in sight – a welcome change.

I first attended one of these conferences – dedicated to intercultural issues – with my colleague two years ago and we enjoyed it so much we resolved to return to this beautiful resort on the Bodensee (or Lake Constance).

It was another excellent conference – thank you Peter Franklin for organising it.

Global Leadership Conference – Konstanz, Germany 13 – 14 June 2014

Kindadukish's Blog - I am not a number, I am a free man (The Prisoner)

Along with my business colleague Mike Guttridge I attended the conference with high expectations as we had attended the previous one two years ago. The setting for the conference was the lovely Villa Rheinburg on the banks of the River Rheine and a few minutes walk from Lake Konstanz.


The format of the conference was a combination of lectures, workshops and a tremendous amount of networking and informal discussions over coffee in the beautiful garden at the rear of the villa.

The theme of this years conference was “Global Leadership Competence: Personal Qualities, Culture, Language” and it was simply a matter of choosing the particular sessions that appealed to me.

DSC_0267 The start of the conference was done by a “performance artist / mime group” (my heart sank when I saw this on the programme!) but I have to say that it is the funniest and liveliest start to any conference…

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Germany – industrial & industrious

germany_flag_flying_500_wht_513Having just got back from Munster in Germany I read with interest the Sunday Times In Focus piece this week “So how did Germany become the new champion of Europe?

The reporter was based in Bestwig, about an hour from Munster in Westphalia, a region where, according to the strap line, firms thrived because of innovation and good labour relations.

Citing VW as the world’s most profitable car company, German football teams dominating the Champions League whilst being mainly supporter-owned (and with the lowest ticket prices but largest attendances in Europe), and workers enjoying pay rises, Germany clearly stands out in the EU.

The essence of the report was that when the UK was creating wealth through super-banks and light touch financial regulation and the US was into dot.coms, Germany stuck with its industrial roots and engineering excellence. At the Max Planck Institute for the Study of Societies they put it down to Germany’s history and culture as much as the way the economy is managed.

Old- fashioned it might have seemed sticking with its industrial heritage, employers having obligations to the workforce and the community (imagine that!) and unions and employees having the right to influence decisions and sit on the board. But it’s turned round Germany’s fortunes since the 1990s when it was called the “sick man of Europe” and was dealing with re-unification.

There is also the tradition of Mittelstand companies, similar to our SMEs but with up to 500 employees, often family owned, and specialising in high quality products. In fact across all companies competing on quality seems to have been a more important consideration than price.

Sennheiser the audio company is a good example of these type of businesses which employ 70% of the workforce and over 80% of apprenticeships with strong links to the communities. They typically give grants to send apprentices to university so they can go back to the company when they graduate and also provide in-house education.

Competition from cheap labour has put a premium on quality and innovation and it seems to have paid off. There is also the respect for craftsmanship and engineers which we have largely lost in the UK. And our relationship with Trades Unions is different from what happens in Germany.

When I was in Munster I visited the BASF coatings factory nearby in Munster-Hiltrup with a group of Work and Organisational psychologists (I remember buying BASF audio-tapes back in the day, now they produce high quality paint finishes for cars).

P1010013There we learnt about the way workers are employed in teams of 10-16 like autonomous working groups. They have a group coach appointed by management and a group speaker (Gruppesprecher) selected by the employees. Twice a year they all sit round together and agree which targets and objectives they have achieved and these are presented to management. The workers are awarded bonuses as a team so they rely on the group process and peer pressure to motivate all members of the team to contribute.

They also use IDEA management to produce innovatory ideas. At the plant I visited they had 40,000 suggestions a year from the 4,000 plus staff of which 20,000 were acted upon. All the teams are given an hour each week to discuss these ideas.

In addition there are spaces for meetings in the now disused parts of the plant  which have been renovated for this purpose including an outside In Forum area for meetings where this photograph was taken.

I wrote previously about how German company BMW had dealt with an ageing workforce. It’s just another example that shows that collaboration between management, unions, and employees can work in effective and positive ways.

Working with an Ageing Workforce

Many companies with an ageing workforce worry about declining productivity.

3 years ago BMW did something about it. They set up a programme which has been so successful it is now being rolled out in Germany, Austria, and the USA.

BMW realised that the average age of workers would rise from 39 to 47 by 2017 (that doesn’t seem that old to me but then I like the definition of middle age being someone older than me). Because older workers tend to have longer periods of sickness and need to work harder to maintain their output, BMW worried that this would undermine their strategy of enhancing competitiveness through technological leadership and productivity improvements.

Of course this is a trend all across the developed world. Comparing over-65s now with 2020 shows that in the USA that group will grow from 12.5% to 16.6%, in Japan from 17.1% to 26.2%, and in Germany from 16.4% to 21.6%. In the UK the figures are 18% rising to just under 20%. Another  concern is that healthcare is three times as expensive for over 65s than for 30 – 50 year-olds.

In the past older workers were either dismissed or forced into early retirement but this was not an option for a company like BMW which prides itself on being a dependable employer – vital in a world where employee engagement is at an all-time low. This is also bad for the country. Past waves of early retirements has increased the numbers of retired workers leaving fewer people in the workforce supporting retirement costs.

Moving older employees to less physically demanding jobs is also not an option if there are no younger workers coming in to replace them, and in many countries this would also be seen as discriminatory.

So BMW chose a production line as a pilot and staffed it with a year 2017 mix of workers ie with an average age of 47. Then the foremen, supported by senior managers and technical experts, developed changes to improve productivity including managing health care, enhancing workers skills and the working environment, introducing part-time policies and change-management processes.

Initially there was resistance to the “pensioners’ line”: from the younger members of that team (42 people) who thought they would suffer a drop in productivity because of the older workers, and from older workers elsewhere in the factory who thought they might become less productive if they were moved from their comfort zone to the new line.

Even the foremen were worried that BMW might reduce work-speed rates and dumb down the IT systems to accommodate perceived deficiencies of older workers (See “Old doesn’t mean Stupid“). So they referred the project to the Workers Council who in turn referred them back to an earlier study that identified a basic framework for change on 5 dimensions. These were: health management, skills, the workplace environment, retirement policies, and change processes. (I’m not sure why they didn’t know this before they started the pilot programme).

They used a standardised questionnaire, the Work Ability Index (WAI), to assess the fit between a worker’s ability and the demands of the job. They found that whilst productivity  decreased on average there were wide variations with some workers suffering a steep decline whilst others remained fully productive. The foreman explained that the pilot line was not a soft option and also appealed to the workers’ pride, telling them that their experience was needed to secure the future of the plant and save jobs.

In the end 20 of the 42 workers stayed on the line and they recruited 22 more with a promise they could return to their old jobs after a year. So in 2007 the line was finally staffed with an age mix reflecting the projected 2017 demographics. They piggy-backed it onto a health initiative and introduced a self-diagnostic tool that awarded positive points for good habits like regular exercise and negative points for bad habits like smoking or being overweight. They also asked the workers about their aches and pains and what they could do to improve things.

To facilitate this they also simplified communications. Rather than using the old “continuous improvement” paperwork, people wrote ideas on postcards and stuck them on a notice board. These ideas were then allocated points by the team so they could be prioritised and the managers and foreman didn’t intervene in this process  – it was bottom up and this increased buy-in from the workers.

After the introduction of a wooden floor – which dramatically decreased aches and pains – sceptics were won over and the workers took charge assisted by an ergonomists, a safety officer, and process engineers. Most of the work however was done by the workers themselves, often in their own time. In addition to the wooden floor they introduced special footwear, seating, flexible magnifying lenses, and adjustable height tables which reduced back strain.

They also changed work practices. Work was categorised and, depending on how physically demanding it was, was time-limited for each worker and job rotation was also introduced to balance the load on the workers’ bodies. And a physiotherapist developed stretching and strengthening exercises for them to do each day.

The end results? £40,000 of investment including workshops and expert input produced a 7% productivity improvement in one year, the same as achieved by other lines with younger workers.The target output was increased from 440 gearboxes per shift in 2007 to 500 per shift in 2008 and to 530 in early 2009. 4 workers were re-assigned but no-one wanted to leave.

They achieved a 10 defects per million quality target within 3 months and currently the target is zero defects.

Sickness related absenteeism in 2008 was the highest in the plant at 7% but typical of that age range but has since dropped to 2% which is below the plant average.

BMW now promote this 2017 line as their model for productivity and quality. Perhaps management took a risk letting the production managers experiment and allowing line workers to create the solutions. But it paid off for them and may be the answer in a world where the demographic time bomb is really ticking.

Source: HBR March 2010