AMERICAN WORKPLACE Volume 3 Issue 1 January 1995 ______________________________________________________________ POINT OF VIEW Training: What's in It for Me? [by] Russell Maier, President and CEO Republic Engineered Steels, Inc. You don't get to be the largest domestic producers of specialty steel products, in a competitive industry like steel, without learning how to cut costs. Virtually every dollar spent affects the bottom line. And yet, when it comes to Republic's 5,000 employees, money spent on training represents an investment that has paid for itself many times over. Even during an industry downturn in 1991, when Republic experienced a 30-percent reduction in sales, the company continued to meet its training commitment. It stands to reason that Republic's shareholders are strong supporters of training workers--the employees own the company. But I challenge you to show me any CEO who doesn't need a culture of employee ownership to succeed? At Republic, we've always trained our employees. "When the little red light comes on, push this button." But the nature of that training has changed. Instead of just training for specific jobs, we now give employees the tools to make process and product improvements: statistical process control, problem-solving skills, measurement tools. Monthly, hour-long sessions I call "Economics 101" provide every employee with the ability to decipher corporate balance sheets and income statements and to absorb data on the state of the steel industry. Employees learn about the value of the customer, business planning, capital planning, and the firm's ownership structure. These sessions are led by a core group of Republic employee/trainers--crane operators, clerks, foremen, and secretaries. And I personally can vouch for the quality of these sessions; I've taken every one of them. And now to the bottom line. By anyone's measure, Republic's training investment has been substantial--about $4 million a year, which is approximately 2 percent of payroll. Yet, within the first 5 years of undertaking this effort, Republic's employee/owners reduced the internal product cost by $50 per ton; we reduced rejects by more than 1.3 to .5 as a percent of sales. We've cut inventory and cut waste. And in the process, employee grievances have gone down and employee communication has gone up. A labor-management relationship that used to be defined by a form of civilized all-out war has been replaced by positive employee involvement. Most importantly, we've gained workers with the knowledge, skills, and abilities to think and act like owners. But don't just take my word for it. Republic has earned recognition and quality awards from no less than GM, Ford, Caterpillar, and Honda of America. The Department of Labor presented Republic with its LIFT award (Labor Investing for Tomorrow). The power of Republic's training is best experienced. One hourly worker, a machine operator who teaches one of the classes, said to me, "Sometimes, an entire class can go by and I won't get a single question. But after it's over, and I'm back at my job, I get bombarded with questions. Because now [the employees] know I know the answer, and if I don't, I'll know how to get it." Editor's note. Republic is featured in NAM's The Smart Workplace: Developing High-Performance Work Systems. _____________________________________________________________ UNIONS ACTIVE IN JOINT TRAINING PROGRAMS Henry P. Guzda Early in the 19th century, new forms of technology displaced many workers in the dark and dismal towns that had given birth to England's industrial revolution. Organized bands of the unemployed marched across a Dickensian landscape destroying the objects of their lament: power machinery. These Luddites. as they were called, may have reacted differently had there been alternatives to their dilemma. Today, both technologically displaced workers and new entrants to the work force have access to job training programs that offer the chance to obtain the skills to succeed in an increasingly tight job market. Advanced technology and the attendant need for job training and worker education is nothing new to the American labor movement. The New American Workplace: A Labor Perspective, a 1994 AFL-CIO report, concludes that unions have played and will continue to play an important role in surfacing the experiences and insights of their members involved in restructuring work systems. Trade unions, particularly in the building and construction trades, have a well-established history of working to upgrade the skills of their members. They began with Joint [union and employer] Apprenticeship Training Committees (JATCs) well before World War II. Since then, building and construction trades unions have complemented JATCs with national joint trusts, funded by nickel-an-hour provisions in collective bargaining agreements. Today's economic portrait of job loss in mass production industries and wholesale changes in the organization of work demand more brain and less brawn. Secretary of Labor Robert B. Reich reaffirmed recently the need for worker training when he appeared before the House Committee on Education and Labor. "Traditional paths to the middle class for workers without college degrees appear to be narrowing," Reich noted. "[But] new routes are opening--sometimes even in the same industries." The automobile industry provides a good example. While downsizing is still a problem, some plants have begun rehiring. The emphasis on new hires, unlike the past, is on those individuals with better educational credentials. At Ford Motor Company, for example, about one-third of recent production-line workers had some training beyond high school. In their recent publication, Labor's Key Role in Workplace Training, authors Markley Roberts and Robert Wozniak of the AFL-CIO Economic Research Department state: "The United Auto Workers union (UAW) has joined forces with Chrysler, Ford, and General Motors to develop an impressive set of programs that allow workers to upgrade skills, further their education, and seek assistance in practically all personal and work-related matters." The authors cite the UAW-Ford Education Development and Training Program (EDTP), the UAW-GM Human Resources Center, and the Chrysler-National Training Center (NTC) programs as pioneering efforts, conceived in the 1970s and implemented via the respective collective bargaining contracts in the 1980s. One part of the industry's training package is the Paid Educational Leave Program (PEL), which provides leadership training to both production workers and managers and equips them to take an active and conscious part in rapid and drastic economic transformations. Walter DiMontova of Eastern Michigan University's Centers of Corporate Training and coordinator of Chrysler's PEL, describes his program as "a very productive approach to labor-management relations. In a way it's about working together to create a shared history." And Bryna Shore Fraser, Deputy Director of the National Institute for Work and Learning and coordinator of the GM-UAW program, summed up the program's importance when she noted that all participants are in the same economic boat. Neither one can afford to say to the other, "Pardon me, but your end of the boat is sinking." There is hardly any sector of the economy or segment of organized labor that is not actively engaged in cooperative training efforts. The Roberts-Wozniak report admits that the many examples provided "barely scratch the surface." Assistance for some unions comes from the AFL-CIO's own Human Resources Development Institute (HRDI), which serves as a central resource for data and literature on joint education and training initiatives. In the [several words illegible] groundbreaking agreement between labor and management spreads cooperation to the service sector. Almost 4,000 members of Local 2 of the Hotel Employees and Restaurant Employees Union (HERE)--many of them ethnic minorities, and a considerable portion of them women--will benefit from a 5-year contract with a multi-employer group consisting of 12 major San Francisco hotels. It creates a $3 million training program, with each hotel contributing $15 per month/per employee, combined with surplus funds from the HERE health and welfare plan. Training efforts will be directed toward empowering workers in consensus decision making and upward skill development, including the use of new technology. Training programs can take on a variety of directions, such as basic educational enhancement, specific job-related tasks, empowerment, and consensus decision making. Four unions [auto workers (UAW), steel workers (USWA), communications workers (CWA), and clothing workers (ACTWU)] in conjunction with the U.S. Department of Labor and the AFL-CIO's George Meany Center for Labor Studies, have taken a bold step into the future with the Labor Leadership Institute (LLI). Beginning early in 1995, the LLI will start training 40 labor union members, 10 from each of the four participating unions, in a core curriculum designed to impart basic skills for co-management in their respective industries. "There is no book on this [initiative]," commented United Steelworkers' representative Harry Lazorchak of the training, which basically offers a mini-MBA degree to its graduates. Well-planned, innovative, and carefully designed joint education and employee development strategies can improve labor-management relations, raise productivity, and strengthen employment security and mobility for workers. Luddites of the 19th century did not have opportunities to improve job skills. Today, enlightened unions and their members have new alternatives. Modern Luddites--employers and unions who cling to confrontation rather than embrace collaboration--may well want to reassess their positions on union-management training partnerships in light of current experiences and competitive demands. _______________________________________________________________ WHEN CEOS TALK ... OTHER CEOS LISTEN In 1992 the Department of Labor and the National Association of Manufacturers (NAM) joined in an ambitious 2-year project to solicit the views of CEOs engaged in high-performance work systems. The project was based on the premise that, within the corporate structure, CEOs are the primary channel through which fundamental changes can be made--changes that would enhance worker skills, streamline work systems, and ultimately, create better products and better bottom-line results. The Smart Workplace: Developing High-Performance Work Systems outlines their answers. No one cookie-cutter approach works, said the 500 executives and employees interviewed. High performance means changes in virtually every area of corporate life, right down to the culture in which workers, managers, and CEOs operate. One factor that motivates CEOs is talking to others like themselves. To help their peers achieve the same success these NAM members did, they defined the following key components of change: The Management of Change Without a strong commitment from CEOs, no sustainable change is possible. Massive downsizings, failing companies, and the redefining of jobs are nudging CEOs onward, however. Their biggest problems: Change is an infinite process and doesn't stop; getting managers deeply involved; and grappling with how to create incentives that move employee attitudes from one of "job-entitlement" to that of "company stakeholder." Everyone's asking: "What's in it for me?" The Role of Unions Local unions are most aware of the needs in their respective companies and are seen as the primary vehicle to help change along. National unions should support with technical information. CEOs know that better labor-management relationships are the way to go, but building them isn't quick or easy. Barriers to Building Trust What stifles growth? Leaders who don't "walk the talk," communicate the "big picture" clearly, treat workers equitably and fairly, and rationally justify and explain management perks. Turmoil at the top stops trust building, CEOs add. So do employees who don't understand the business (i.e., balance sheets), and unions, workers, and mid-level managers who see their status or power threatened. Incentive Systems Criteria for success: Incentives must encourage, not contradict, working toward common company goals. They must be objective, justifiable, measurable, and universally applied. Money works best as an incentive when coupled with a chance for advancement, more responsibility, a chance to work in teams, and involvement in decision making. External Resources NAM employers turn to affiliated associations in the National Industrial Council, to community and junior colleges, and to area employer associations. And they turn to each other. Peer-to-peer advice is the most popular way CEOs learn about workplace change. Return on Investment CEOs still have trouble linking to bottom-line returns the benefits derived from education, training, and work reorganization. By and large, training and education are viewed as "soft" human resource issues, and CEOs feel pressured to respond to the short-term profits required by financial markets. To obtain ordering and pricing information for The Smart Workplace: Developing High-Performance Work Systems, contact: Publications Coordinator, NAM 1331 Pennsylvania Ave., NW Suite 1500, North Tower Washington, DC 200041790 Phone: 1-800-637-3005 Fax. 202-637-3182 _____________________________________________________________ CHANGE YOUR LIFE ... G O TO SCHOOL Stephanie Kearns spent 3 years helping her husband through school while both worked and shared responsibility for their two children. With her husband's studies finished, Kearns declared, "Now it's my turn," and announced her plans to go to college. Two-and-one-half years later, Kearns graduated from North Essex Community College in Haverill, MA, with an Associate Degree in Commercial Art, a world apart from her 9-year job as an employment interviewer with AT&T Network Systems. What was gratifying about Kearns' experience, aside from earning a degree, was that the $2,700 tuition needed for college came from her employer and her union rather than from Kearns. Thanks to the Alliance for Employee Growth and Development, a joint effort between AT&T and the two unions represented in the company--the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW)--Kearns and 95,000 other unionized workers have acquired new skills to fulfill personal goals and make themselves more marketable. The Alliance was established during the 1986 negotiations between the company and CWA and IBEW in response to the dramatic changes occurring in the telecommunications industry. Run by local committees across the country and funded by an $18.50 per month contribution for each union worker, the Alliance's mission is to support individual growth through career development and to promote workers' prospects for better jobs through continuous learning. "It was definitely a positive experience," Kearns says of college. "I thought my cynicism [about work] was the result of my current job." But really, she says, it was dissatisfaction with her career choice. "I enjoy a more creative type of work. It [graphic arts] was something I had always wanted to do but never had the opportunity." Kearns took art courses, computer training, and acquired desk-top publishing skills--all the requirements for today's high-tech graphic designers. She has used those skills to produce posters, vu-graphs and to publicize events for the Andover AT&T facility where she works. While she has not yet realized her dream of transferring to the plant's public relations department, going back to school provided her with "a focal point to help me decide what I want to do with my life." Kearns has started her own business printing resumes and designing ads and brochures for local businesses. Since 1986 the Alliance has helped AT&T employees train for new jobs. Employees laid off in the '80s used Alliance training to acquire new skills before entering the job market. Today, Kearns says, people still see the Alliance as an opportunity to better their skills but they also look at it as a way to enter entirely new fields of work. "I have not been affected by layoffs," says Kearns. But, "if something did happen, I would look at it as an opportunity now. I am more marketable." _______________________________________________________________ IRRA 10TH WORLD CONGRESS SLATED FOR WASHINGTON, DC Secretary of Labor Robert B. Reich heads a list of distinguished speakers at the 10th World Congress of the International Industrial Relations Association (IRRA), to be held in Washington, DC, from May 31 to June 4, 1995. This will be the first time an IRRA World Congress has been held in the United States. The Congress theme of Learning from Each Other: Transferring Knowledge and Innovations Across Cultures emphasizes the global perspective needed to promote mutual learning. Among the subjects to be addressed by U.S. professionals and their counterparts from other countries: Managing Diversity in International Settings, Emerging Models of Worker Participation, and The Challenge to Government: Promoting Competitive Advantage with Full Employment and High Labor Standards. To receive registration information, please contact: IRRA 10th World Congress 19528 Amaranth Dr. Germantown, MD 20874, USA Phone: 301-353-1807 FAX 301-353-1808