Competitiveness and workers: the invisible link

<a href="http://www.ie.edu/eng/sobreie/sobreie_expertos_detalle.asp?id_exp=314">Cristina Simón</a>. Professor. IE Business School

27 September 2007

Low productivity levels are the Achilles’ heel of the Spanish economy, the result of a paternalistic mentality that makes the Spanish business community reluctant to give more autonomy to its workers.

Lately it seems like everyone is Spain is talking about competitiveness, or, more specifically, our lack of productivity. Almost every day over the last few months there has been some kind of message of this type from the media. We are not competitive; we are not even productive enough. And to add insult to injury, it would appear that we are one of the countries that work the greatest number of hours if we measure time spent at the work place.

This evidence seems to point to a future that is not too bright in terms of prosperity and job opportunities for workers. While recognizing the seriousness of the situation and being aware of its implications for the future, I consider that it would be interesting to analyse it from another point of view and introduce new parameters into the debate.

First of all, the message "we are not competitive" sounds to workers´ like an accusation of direct responsibility, and in this case the question is: what is the link between a worker’s day-to-day activities and a country´s level of competitiveness and productivity? It is true that this economic debate runs parallel to our everyday life, but there can be an enormous distance between these two "realities". What happens is that citizens daily life is inevitably affected by the economic situation because as the country is not competitive and productivity needs to be increased, companies are forced to take stricter and stricter measures which generally focus on reducing their greatest expense: salaries.

Of course, this is a highly simplified view, but it enables us to draw on a set of fundamental aspects that would appear to be missing in this much-needed analysis of competitiveness in Spain. As its very name indicates, the macroeconomic plan is "macro". In other words, it uses parameters that go well beyond the scope of the daily influence of citizens. In the recent study Competitiveness and Labour Relations Models in the 21st Century: a European Comparison carried out at Instituto de Empresa under the sponsorship of Adecco, we tried to bring together both worlds and some of the conclusions have been surprising. Working with a base of 40,000 people from 20 European countries, we analysed what differentiates individuals in the more competitive countries (such as Sweden, Finland or Ireland) from those in the less competitive countries (Spain, Hungary and Portugal) in terms of personal values and attitudes towards work. The aim was to explore the truthfulness of certain myths about our lack of productivity, e.g. Do we like work less than other citizens? Is life so good in Spain that there is no need for improvement? Does our system of values prevent us from being more competitive?

The comparison with other countries showed that there is a certain amount of truth in the above, in that Spain appears to be "complacent" society as far as the valuation of its economic and public environment is concerned. In our case, the perception of personal well-being and happiness is on a level with countries that have greater economic and social development. This fact, which, on the one hand, is good news (who doesn’t want to live in a happier environment?) involves a lack of motivation for change, a skill that is becoming increasingly important in the changing world in which we live.

By focusing on the world of business and how it is seen by workers, we perceive a strong link between the level of competitiveness of countries and certain features of how organisations are managed, such as allowing flexibility to plan work times or giving workers greater autonomy in decisions concerning their daily activity. The employee in a society that supports competitiveness feels more independent, with more "room" from the company to organise himself and manage matters that fall within his area of influence. To a certain extent, we could say that enterprises manage productivity from an environment of greater "emancipation" of their professionals.

The term "empowerment" certainly makes the hair of many a manager stand on end (even more so than that of "flexible enterprise"), since they are aware of the risk involved in increasing decision margins and autonomy, especially among certain groups (one colleague recently commented, and rightly so, that in his sector at least the difference between flexibility and absenteeism is not at all clear). Accordingly, we have also found that the more competitive societies have a greater sense of personal discipline and autonomy than other values such as hedonism or following the rules, that are more typical in Spain. In addition, paternalistic environments end up strengthening (or generating) dependent, low-commitment behaviours. So, what is the cause and what is the effect?

The solution may lie in the balance between awarding autonomy and demanding professionalism. This requires the careful design of human resource policies that make strict evaluations of performance and business parameters far removed from the traditional paternalism that has characterised Spanish business for so long.

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