What if there were some easy answers to lifting New Zealand’s productivity

This was going to be an indignant rant, but after a little research I realised that perhaps I was onto something. What if NZ’s employment law is ONE of the major reasons for our lack of GDP growth? What if we made it easier to dismiss underperforming staff? What if instead of making the HR function less about the process and more about the outcome, we’d be better off as a nation….

Now before I get burnt at the stake, let me explain and support my statement with some real life examples. I should also say that as an employee i have experienced the good and bad of employment law and HR policy … (aka i’ve been ripped off).

But I still think my thoughts below have some potential First up let me describe first hand some examples we have to (by law) go through to dismiss someone.

Item one. It should be noted that in NZ it is just as important to follow the exacting process. That is its not just having proof or cause for dismissal. You have to follow the correct process, in the correct order, and in some cases say the correct things. If you don’t then you can end up in employment court.

Example. We Have a staff member who is continuing to under perform, wanted to take 5 weeks leave to go offshore, which we declined , who hasn’t resigned, but is now abandoned the job. Simple you say, fire them and move on! Nope sorry. Because we know they are off-shore we cannot assume abandonment, we cannot hire a replacement because that we pre-meditate their dismissal, and that’s illegal. So we have to wait for them to return (ie run short staffed and under productive) and then go through the process

That process is thus. Have evidence that they’ve done wrong. Invite them to a disciplinary meeting and ask them to bring a support person Explain to them that we are thinking of dismissing them. Ask them what they think of that, how do they feel about the decision. Take that feedback on-board and have a minimum 24 hr “thinking time” (cool down period). Then and only then can we dismiss them. I’ve shortcut this, but this is the process you have to abide by for any “automatic” dismissal according to the dept of labor.

Item two. Restrucutures. In big companies, they have the above issue multiple times. So they save them all up and deal with it through restructures. So instead of dealing with the problem people in a discrete, timely and targeted way, we save them up. Collectively living with the underperformance until such time as we then disrupt large sections of the company with restructures in order to get rid of a few errant performances (and potentially deal with organisations efficiencies, but i’m too cynical to believe that is actually the case)

What if we created processes that meant we as employers could continually cull out underperforming staff? What then? How about better performing business because you have good staff, capably doing the tasks required of them. I think you’d have more motivated staff too. We all know who the dead wood is, and those who create more problems than they solve. In a small business they are poison.  I think most people would cheer the thought of not having to carry them. We’d also benefit from significantly less HR cost, perhaps they could focus more on organisational development then instead?

Good theory, is there evidence? Well yes (more)… “These results suggest that adoption of dismissal protections altered short-run production choices and caused employers to retain unproductive workers, leading to a reduction in technical efficiency”

My own experience of working in the UK and Australia supports this. Those nations rapidly address underperformance in their companies. The result was you don’t have to carry the dead weight, live with the consequence of their often poor decisions and delivery, and a better work environment and bottom line..

Now i’m not proposing Chinese style work environment. The causality of high growth and a lack of workforce regulation and unions is evident, but that to me is exploitative. However I am challenging the need for too much regulation.

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