Investing in people

It is important to consider restructuring methods of paying employees in order to attain maximum financial efficiency. A study examined the relationship between piece-work and hourly pay, operating the two schemes in parallel. Initially, piece work and time-related pay schemes were operated in parallel. A survey revealed that the efficiency level for piece work was equal to the prescribed 'sound barrier', in this case 135 %. Hourly paid workers achieved between 40 and 100, and an average 70 %. So contrary to many people's expectations, the hourly-paid workers were by far the 'most expensive'. In the units, a veritable 'performance explosion' was observed amongst this group; the comparative figure is now 120 %. Lead times have fallen by 30 to 40 %. There is no longer any stockpiling of work in progress; raw material is available on call from stock, as determined by the unit concerned and not by a central administration!

The workforce is now paid according to productivity, in the form of bonuses, divided as a matter of principle equally amongst the whole group, taking both shifts together. The group has an elected speaker who has a full work load and receives no financial reward. This prevents the position of foreman from being secretly re-established, an effect which can be observed in many other examples of group working. The large reserve of potential speakers is in itself amazing; the figure is over 50 %. The fear which is occasionally expressed that the pay scheme in such a group must result in a harsh social climate, is not borne out here. The performance differentials which inevitably arise do not result in individuals being ostracised, which must be due at least in part to the attention paid to human factors.

Meetings of all unit employees take place at regular intervals, as a rule weekly, and notes of these meetings are taken as a matter of principle. They deal mainly with efficiency improvements, since these are in the natural interest of the employees. Work is currently under way to establish a corporate model in which each employee's self-image and that of the company are expressed to the customers.

It should be clear by now that the solutions of the future can not be 'bought off the shelf, but must be pioneered. A process of change in awareness and behaviour must be given priority over the use of technical aids. In many cases we are still at square one. Only if corporate management works unequivocally towards this goal will it be possible to mobilise middle management and staff. This requires a reappraisal on the part of all concerned, a process which will be wearisome and in part painful, but which is absolutely essential. History teaches us that structures and organisations which are only concerned with hanging onto power and which no longer offer new ideas and solutions, will sooner or later disappear and be replaced by new ones; it this that industry, through innovation, must endeavour to avoid.

The skilled trades in bavaria

The skilled trades together make up Bavaria's most diverse and – after industry – its second largest economic sector. In 1992, Bavaria's 140,000 craft businesses and their 1 million employees achieved an annual turnover of approx. DM 165 billion, this representing approx. 12,5 % of Bavaria's gross domestic product. These efficient and modern businesses which cover 127 different skilled trades make a major contribution to the success of the Bavarian economy. After all, one of the main reasons for Bavaria's (unprecedented leap from a primarily agricultural land to one of Germany's leaders in both economic and technological terms is the fact that Bavarian business is made up not only of large corporations operating on an international scale but also of numerous modern and highly dynamic small and medium-sized businesses.

Thanks to their diversity, the skilled trades are both active in and vital to virtually every branch of industry: In building and finishing, metalworking, woodworking, textiles and the clothing industry, the food industry, health and body care, industrial cleaning and in glass, paper and ceramics. The skilled trades perform countless important functions in both the economy and in society at large.

The skilled trades and economic pro­gress: The skilled trades are flexible, creative and innovative. They both generate and act upon new ideas, putting these into practice fast without any bureaucratic delays. That's why so many new business develop­ments start life in the skilled trades.

The skilled trades and new technologies: It goes without saying that craftsmen avail themselves of state-of-the-art technologies in addition to their traditional tools and methods.

The skilled trades and environmental protection: The skilled trades are helping to put into practice a professional and effective attitude to environmental pro­tection. Take car mechanics, for example, who have an important role to play in the reduction of car exhaust fumes or the construction industry and related trades for whom energy conservation in building and heating systems has become a watchword.

The skilled trades and the division of labor: The skilled trades perform numerous important supply, service and finishing functions for other branches of industry. These range from the supply of quality precision parts to the maintenance and repair of machines and the cleaning of buildings.

The skilled trades and customer proxi­mity: Thanks to their decentralized and demand-oriented structure, the skilled trades are able to respond particularly well to individual requirements and thus to ensure a wide range of highly differentiated, quality products and services geared to the demand.

The skilled trades and tradition: Craftsmen have always been both the creators and preservers of Bavaria's very rich and multifaceted traditions. This applies not only to the builders of Bavaria's churches and royal residences but also to gold and silversmiths, wood carvers and the brewers of Bavaria's world-famous beer.

The skilled trades and society: The characteristics typical of craftsmen, such as accountability for one's own actions, industriousness and a sense of one's responsibility to society, are indis­pensable if our social market economy and free and democratic society are to work. Bavaria's self-employed craftsmen, therefore, are a kind of compensatory force of the center, and that not only in economic and political spheres but also in society at large.

At first glance, the skilled trades in Bavaria do not appear to have profited from the export opportunities opened up by the European Single Market and the new markets in what used to be Bavaria's Eastern Bloc neighbors. This is because traditionally, they cater above all to local and regional requirements. At present, exports account for only 3 % of the skilled trades' collective turnover. As a recent survey indicated that over 50 % of Bavaria's craft businesses believe their products stand a good to fair chance on the European market, however, it looks as if this state of affairs will change very soon.

For the skilled trades, increased inter­national cooperation means above all an expansion of their sales and supply mar­kets for both goods and services, additional demand for quality products, increased supply work as a result of the industry's continued policy of contracting out whenever possible, increased opportunities to bid for public contracts and the possibility of obtaining additional manpower and a new generation of workers. An increase in inter­national joint ventures on the part of small and medium-sized craft businesses would also strengthen this sector of the economy, this being a positive development for all countries concerned. After all, the health and efficiency of this sector are ultimately essential to the unification of Europe in freedom and prosperity.