The first stage I call extreme exploitation, one in which the worker, perhaps more of a slave to his feudal lord, worked only for his keep. He was treated like dirt, in spite of which he was grateful for small mercies (of which there were few). He was subservient and was the victim of his master’s whims.
The second stage came into being with the industrial revolution, which gave birth to a large number of opportunistic and ruthless factory owners who were not above exploiting child labor and working their employees into an early grave. The evolution of the third stage was a direct reaction to the merciless exploitation of people in the past and resulted in the emergence of unions, formed to protect workers and to see that they got a fair wage.
One of the characteristics of this stage has been the often violent clashes between union and management. The emergence of unions further widened the gulf between worker and manager, in spite of their both working for the same company. This gulf was again widened by the fact that, by natural processes, the union usurped the role of management with regard to the people/management part.
Management found that to communicate with its workforce it had to go through a local union representative and, where larger issues were involved, through the leaders of an international union far removed from the actual workplace and the economic realities of the business. To a large extent, this situation was brought about because management did a poor job of managing people.
In many instances, the local union leaders and the top brass of the international union were not in tune with management’s objectives. They naturally had their own game plan, which had little to do with the objectives or success of the company. Management, on the other hand, was to a large extent relieved to give up the tiresome task of truly managing its workforce and left it up to a bunch of often poorly selected and poorly trained front-line supervisors and union officials.
Management was also content to meet head on with the unions each time a contract renewal was being negotiated, or in an occasional dispute over working conditions or so-called unfair treatment of the worker. If the company was financially sound and prices were good, management was content to give away many costly concessions in order to keep production rolling. These concessions were not so much in wages but in fringes, which in many instances added greatly to the cost of production — not a concern while prices and business were good, but items that would really hurt in future downturn s.
The arrangement was tantamount to having a football team with two quarterbacks on the field at the same time, each calling their own plays. The team is divided and trying to move in two or perhaps even more directions at once.
From this third stage, we have been gradually moving to the new era. The fourth stage is already upon us, and some companies are already in tune with it, others not. Some unions have recognized the change, others have not.
Companies that are not unionized have been fortunate, as it is easier for them to gear up to the new game rules and conditions. Where enlightened unions and management work together, there is no reason why they should not achieve similar results, but it will mean considerable adjustment on the part of both parties and, therefore, will take longer to achieve.
The new environment can be described as follows: Any entity producing a marketable product is in competition with every other producer of the same product. This has perhaps always been true, but due to today’s markets and current supply and demand situations which dictate the price of any commodity, it is more essential today than ever before to be highly competitive. This means that one has to produce at as low a cost as possible, which means intelligent and efficient use of one’s resources. The most valuable, but also the most expensive, resources are the employees of the company.
This also means that, in mining, everyone at a particular mine or in a particular company has to be acting as a team player. In order for the company to remain as competitive as possible and to succeed in a highly competitive business environment, all employees — from the highest paid to the lowest paid — have to be working with the same game plan. In short, all members of the workforce should be wearing the same sweater and working to a game plan that they all had a part in developing.
As I’m going to be talking about people policy and philosophy of Corona Corp., I will begin with a short corporate history. Corona has grown tremendously in the past few years. Not much more than three years ago, the company was accountable for about 15,000 oz of gold annually. In the past year, the company accounted for more than 500,000 oz of gold and gold equivalents and, for 1989, it is on target to produce more than 635,000 oz of gold.
Three years ago, the head office staff consisted of fewer than a dozen individuals. These people were and still are highly motivated, flexible and general “jacks and jills of all trades.” This small group has grown to about 70 people as the company expanded. But the employees of Corona remain motivated, flexible, innovative and ready to pitch in when needed to do whatever job is asked of them.
From my perspective, as president and chief executive, it is an absolute treat being a part of such a group. We have been fortunate at Corona that we have been able to start from scratch, having learned (we hope) from past mistakes in other companies, and we think we have developed an effective way of dealing with people. We have had the advantage of not having to eliminate antiquated traditions and practices.
At Corona, we have a 7-point policy that covers human resources. First, we believe that every employee is a member of our team and should be treated as such. As an employee, no matter what job you do, if you do it well, you are contributing to the overall objectives and success of the company. You therefore have a right to be treated courteously and with dignity and respect, and you should expect to see some recognition and appreciation for any extraordinary performance on your part. Wise managers listen to what their employees have to tell them. In fact, they are even wiser if they encourage their employees to communicate with them. Managers have to react to what is being communicated, not just by the spoken word but by attitude and actions as well. If what is being communicated does not make sense, managers should say so politely, but also take pains to explain why the idea, thought or attitude is incorrect. They should also ensure that the explanation is understood and accepted.
If what is being communicated makes sense, the matter has to be acted upon by implementing an idea or correcting a problem. The contributor should then be given credit and recognition for his or her contribution. Very often the only recognition required is a congratulatory remark made not too ostentatiously in public. When such a contribution results in a substantial benefit to the operation or company, some more tangible reward can be made.
Along with this should go the acknowledgement and understanding that the contribution possibly enhances the career path of the individual contributor or contributors.
Second, we believe that each operation or division must operate on its own, but within the broad guidelines set out by the company, and that all team members must contribute to the devel
opment of the company objectives contained in the guidelines. Individuals at each operation or division can only be held accountable for those items that they control and are responsible for. For instance, an individual mine cannot be loaded with head office charges and then be criticized for high costs as a direct result of head office charges.
This last point leads to our next belief, namely that one way or another every employee should participate in the fortunes of their operation, division or company. This participation can take the form of a bonus based on operating profitability and productivity at individual operations. All our operating mines now have some form of incentive plan for employees. As I said before, this should be based on items for which they are directly responsible.
In the field of exploration, we are implementing a plan which will set aside a percentage of future profitability that may result from a project or a mine find, for distribution among those responsible for the project’s becoming a viable entity. This payment to individuals becomes an add-on to their annual earnings as long as the project generates a profit.
In other areas, we encourage our employees to become shareholders of the company through an option plan or share bonus plan or a share purchase plan. Any plan based on shares in the company has to be viewed as long term, as occasions do arise when options granted to one group may be granted at a better price than options to others granted either before or after the current grant. Providing in the long run the company achieves its objectives, one of which is to enhance shareholders’ value, share price should appreciate. I like to see people hang on to their shares after they have exercised their options, but understand that everyone has different financial demands.
The overall effect of this participa– tion in the fortunes of the company has been excellent, and our employees cheerfully and willingly make the extra effort to ensure that things are well done. After all, they are interested shareholders of the company.
Fourth, we believe that, on an effective team, all the players should be aware of the objectives and game plan of the company and then, by way of achieving their individual ambitions, contribute to the overall success of the company. Individual ambition in employees is a desirable quality and provides tremendous drive and impetus if it is married to, and in tune with, the objectives of the company. It is management’s job to ensure that this valuable force is not misdirected or allowed to be derailed.
Ambition in an individual can become a negative force if it becomes obsessively selfish and disregards the company and other employees. It can, under these circumstances, create company and office politics which in turn tend to destroy team work and morale in the company. When people have to spend a good deal of their time playing the insidious game of company politics, it detracts from what they really should be doing, and the company begins to suffer.
How does one control the formidable forces contained in personal ambition? I believe that senior management must make it absolutely clear they will not tolerate internal politics, and if anyone, regardless of their ability, indulges in that game, then they must go, and go quickly.
I believe that the onus is on management to be aware of individual expectations and ambitions. Once these are known, management can direct the career path of the individual. Employees soon realize their ambitions are being matched with their human abilities and that an honest and sincere attempt is being made by managers to provide a career path that will satisfy the individual and, at the same time, serve the company’s interest.
Two simple but time-consuming tools are available to management which, if used correctly and honestly, will help keep personal ambition on track and, at the same time, direct individual career paths to the satisfaction of the employee as well as the company. Many companies use these tools but, unfortunately, there is often little or no genuine commitment to their application by senior management, and they become meaningless charades. I said at the outset that one of management’s most important functions is to manage people. It takes a lot of time, and can be frustrating, but it is necessary and most important. Tool No. 1 is the annual or semi- annual employee appraisal. If used honestly and objectively, this is a valuable tool that gives managers a better understanding of their employees and generates good morale within the team.
The most important ingredient in human relations is that of trust. If managers are viewed by their employees as being trustworthy and having personal integrity, such managers will have a loyal and trustworthy bunch of employees in return. If this trust does not exist and cannot be established, the manager is useless, no matter how intelligent and capable he or she may be.
The annual appraisal has to be done face to face, and the failings and strengths of the individual addressed in a forthright manner. Being forthright about faults does not mean harsh or unthoughtful criticism, nor should the manager be pompous or sanctimonious. The comments, if they are to help the employee improve, should be delivered sympathetically and sincerely.
Nervousness on the part of the manager can be misinterpreted by the employee, so the discussion has to be held in a quiet, dignified manner, enabling the employee to accept the point or argue it if necessary. Both manager and employee should sign off on each point made without any degree of animosity on either side.
When employees recognize that the procedure is being conducted objectively and honestly, they not only accept the process but welcome it as a tool for themselves to achieve their aims and ambitions. Praise should be handled in the same fashion and, remember, if there is more criticism than praise, you have to wonder if the employee should still be employed.
Remember also that if the system is applied correctly, the appraisers are themselves being appraised when their estimations of others are reviewed by the people to whom they report.
The next tool that can be used effectively by management is the career development panel, which would include the employee and the individual’ s immediate supervisor and would be conducted by a small group of senior managers. The purpose of such a meeting is to discuss each employee’s career aspirations and provide guidance and direction as to how their aspirations might be achieved. I sit in on most of these panel discussions not only to discuss an employee’s career path, but to get to know the employee better and for them to get to know senior management better. At our company, a career development panel meeting with the receptionist or secretary is just as important as one with upper management.
I participate in these panels for several reasons. First, I have to know and understand our human resource assets because they are important to the current operations and, of course, the future operations of the company. I’m also trying to spot a comer, someone who shows obvious signs of desire, ability, integrity and potential. I also want employees to get to know me, and to know and understand the objectives of the company. I want also to help them achieve their own objectives if possible and to encourage them to strive for as much as they can possibly handle.
Once we know what their individual ambitions are, we as a company can direct their careers by arranging exposure in other areas of the company that will broaden their outlook. We also arrange for employees to attend special educational courses, which include selected self-help courses.
We cannot always give employees everything they want in terms of career development, but the effort we make, I do believe, indicates to our employees that we sincerely want to help them achieve their own goals and, in so doing, we have a stronger company by virtue of their increased capability.
Fifth, we are firm believers in procedures that are s
imple and can be clearly understood by everyone. It’s no good designing a salary administration and appraisal system that nobody can understand. Our appraisal system was designed by someone who worked with a well-known system but, like me, had difficulty in understanding the logic of it. This individual resigned from his job, designed his own system, and went into business himself marketing the system we use today.
Sixth, we believe that individual employees have a right to know what is going on in their company, and it is up to management to communicate effectively. This is done much better if it is done person to person, than by means of a newsletter or memo. I have frequent boardroom meetings to directly communicate with all 70 head office employees. We also do the same thing at our operations. We encourage our people to ask questions and to be critical if they feel it necessary.
Finally, we believe that everyone should enjoy coming to work every day in a congenial atmosphere without petty and unnecessary restraints and, most importantly, not have to battle the often vicious, hurtful and non-productive politics that exist in many organizations.
To sum up we want to:
* treat people as team players;
* make each operation responsible only for items that it controls;
* allow every employee to share in the profit of the company;
* satisfy individual ambition by harnessing it to the objectives of the company by an effective appraisal and development program;
* try to keep things simple and above all honest;
* communicate effectively and honestly; and
* create a friendly congenial atmosphere in our workplaces.
At Corona, we strongly believe these goals can provide a recipe for success. And we are working continuously to live by them. We remain convinced it is the way to go as we head into the 21st century. Peter Steen is president and chief executive officer of Corona Corp.
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