APPENDIX 1
Client Overview
Implementing Annual Hours at Colman's
of Norwich
BACKGROUND
Colman's of Norwich is a household name and
a long-established and well-respected manufacturer of mustard,
sauces and condiments. Since the early 90s, a range of working-time
measures have been introduced with great success, moving the company
away from a high overtime, traditional working environment to
one which now demonstrates real employee commitment, flexibility
and cohesive team working. Colman's became Factory of the Year
in 1998.
KEY ISSUES
The appointment of a new Managing Director became
the original catalyst for change. The new MD sought a move away
from traditional working by the introduction of a system based
on Annual Hours. The concept presented itself as the most appropriate
vehicle to carry forward the necessary changes to the working
time environment and to established cultures and practices.
OBJECTIVES
Specifically, the old working culture was one
in which employees were incentivised to work at less than capacity
in order to generate maximum overtime. The principal objective
of change at Colman's became the creation of a culture, which
provided the incentive for employees to get the job done as quickly
and efficiently as possible in order to sustain high productivity,
motivation among the workforce and commitment to the team and
the workplace.
METHODOLOGY
Rosters were set annually, and time off was
"rostered in" rather than conventional holidays taken
on a first-come, first-served basis. The shift pattern chosen
offered 1,900 contracted hours and 1,732 rostered hours, leaving
168 reserve hours which served to provide cover in times of increased
demand or labour shortage: they are paid whether or not they are
worked but the aim is to complete the job without having to dip
into the individual's pool of reserve hours. Thus the culture
which sought to generate overtime was defeated.
Implementation began with one of the five units
as a pilot. At all stages a variety of options were discussed
with the workforce, and their preferred patterns identified. The
radical changes in terms and conditions, the setting of the pay
scale at the midpoint of the old hourly scale, and a 5 per cent
performance-related bonus package were closely negotiated with
workers and with the unions concerned.
The scheme presented an initial cost disadvantage
since it consisted of a 4-5 per cent increment in salary plus
the 5 per cent increase in performance bonus paid quarterly. This
Bonus element was based, however, in team objectives, which in
turn were rooted in broader company objectives related to safety
and quality, such as use of appropriate clothing, productivity,
hygiene, etc.
RESULTS
Effects of implementation included abolition
of clocking on/off, and the complex payroll system needed to service
the old hourly-paid system became redundant: payroll staff, and
the management time hitherto devoted to administering payroll
and overtime, were no longer required. A saving of 25 per cent
on the time spent by management in the day-to-day organisation
of labour was realised.
Absence fell from 5 per cent to 2.5 per cent,
and waste, from 4 per cent to 2 per cent. Efficiency rose from
55 per cent to 85 per cent. Four years on, teams were setting
their own roster patterns and calling their own reserve hours.
Teams also liaised directly with Planning.
Whilst not formally recognised in contracts
of employment job and finish is allowed so long as the weekly
plan, and all other duties, have been completed to the correct
quality standards. Workers are highly focused on line improvement
to ensure increased performance efficiencies, and they value their
time away from work rather than the overtime they might previously
have been motivated towards in hourly pay conditions.
Peer pressure now operates to control and enhance
performance, and with greater autonomy comes improved team spirit
and a greater sense of commitment to the Unit, to the team, and
to the workplace. Because motivation is high, machinery is maintained
more effectively, and runs more smoothly. Desire to be included
in the project planning and improvements means that people often
come in voluntarily on their week off.
The introduction of an Annual Hours working-time
system has carried this organisation through an enormous amount
of change in both culture and performance. Because of the high
level of skill and care used to implement, the workforce now shows
a high level of trust and self-motivation, and anticipates the
introduction of future changes with a positive and interested
attitude.
Throughout the process Colman's were supported
by consultancy services provided by Jim Whittam, a Director of
Working Time Solutions Limited. "Jim enabled us to lift the
fog from annual hours rostering by providing quick and accurate
information. He helped to clarify the key issues and emphasised
the importance of working equally with all those who were party
to the change."
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