Effect of Social Responsibility on Organisation Productivity
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Can social responsibilities effect the productivity of organisations in the Hospitality and catering
Public thinking and opinion are the contents of the crucible from which the social fabric of a community, town, region, nation and international community are borne. The very nature of this arena (social consciousness), is an on-going evolutionary process which is reflective of the era one chooses to examine. Within the European Union legislation in varied areas has been enacted to improve the overall quality of services delivered to the public at large as well as for the benefit of workers. And while the United Kingdom is not a member of this body, the reforms, legislation and policies enacted become known and thus places the government under social pressure to enact changes in response to the overall public welfare.
The progressive foundation of the United Kingdom's social policies provides a climate whereby the public expects that government stay abreast of new socially oriented developments as they develop and with such progress comes cost. The cost of enacting and overseeing same is borne by either the government, which translates is its people, and or by business.
Sometimes referred to as the 'welfare state' the United Kingdom has demonstrated historically demonstrated sensitivity to social issues and reform and this underlying foundation is comprised of three key elements which;
- Guarantees a set of minimum standards which includes a minimum income
- Provides for social protection
- And that services will be carried out in the best possible manner.
The social welfare consciousness in the United Kingdom is extensive in terms of its embracing a broad spectrum of initiatives, thus private enterprises are bound by regulations and laws in keeping with this responsibility as established by the public trust. Those organizations that engage in extensive contact or service to the public and are particularly scrutinized and susceptible to implementation of both required (meaning legalized or regulated social policy mandates) and generally accepted norms of behaviour as well as conduct, and rightly so.
Such public mandates carry with them implementation as well as ongoing maintenance costs which can manifest themselves in wage, compliance, training as well as standards in delivering and providing services. Such is the cost to the government, its populace and businesses to live in an environment which is in keeping with and reflects our modern society. These standards are particularly important when industry directly services the public as the impact of said services is immediate and on a mass scale.
Given the relatively high content of labour intensity in the hospitality and catering industries, regulated or legislated changes can result in additional costs and thus reduce productivity as a result. New legislation which has been enacted for the hospitality and catering sector as 'â€¦essential regulatory guidanceâ€¦' with such having an effect that it encompasses 'some 1,500 pages ' of information. The sheer volume of this data can be overwhelming to an industry sector which is primarily composed (80%) of small sized firms (SME's) employing 10 or fewer people.
The new legislation sets standards in wages, the workplace, food preparation mandates, equipment and facility requirements which are in the public's interest as well as its employees which is the social responsibility of both the government and the industry sector (hospitality and catering), with the cost in time, expense, upgrades, modifications and compliance resulting in net expenditures that affect bottom line performance.
Chapter 1 - Introduction
1.1 Historical Social Climate
The centralized governmental structure that is utilized in the United Kingdom nationalizes a social implementation process that can be traced back to the 'Poor Laws'. These reforms, the first of which was enacted in 1598 and which drew to an end in 1958, started with;
1. the establishment of a poor rate foundation (meaning the level which established this as a social phenomenon),
2. utilization of 'overseers' to administer relief,
3. and provisions designed to put the poor to work
The 'Poor Laws' were replaced by the passage of the;
1. 1946 National Insurance Act, which ushered in the foundations for social security
2. 1946 National Health Service Act
3. 1948 National Assistance Act that eliminated the 'Poor Law'
4. and the 1948 Children Act
The preceding developments effectively placed the country's social policy on the path that defines its present day terms. The manner in which social policy is viewed in Europe, and its influence on the United Kingdom is an important variable in understanding why consistent changes and modifications to existing regulations, legislation and laws is necessary to keep pace with progressive developments that are in the interest of all concerned (government, citizens and the business community).
This mood and historical climate help to shape the psychological parameters that act upon this area. Anderson (1983) has postulated that the 'social bond of deep horizontal comradeship' is a key foundational element in nationalism and the corresponding socio-psychological ideology. Connor (1993) adds that 'the idea of nation' is an emotional process and in global terms it forms an aspect of an individual's identity.
The devastation in Europe that was a result of World War II created the social climate for 'welfares' which was adopted as foundation for social policy in many European countries, including the United Kingdom. The mass scale of fragmentation as a result of refugees, displaced persons, the destruction of towns - cities and the breach of national security created what leaders termed a lack of 'social cohesion' which needed to be reinforced to provide the populace with the belief that circumstances would indeed improve as a result of policies and programs being put into place.
To make this work, leaders believed that the establishment of a base level of political and economic provisions for citizens would provide assurances of the foregoing. In order to implement such policies they had to be introduced on a national level through institutions and agencies that needed to be created to administer a uniform code of social and financial services. The preceding was a major factor in why social policy in Europe is more liberalized and generous than in the United States.
World War II also resulted in an elimination and or erosion of historical European monarchies and the formation of constitutional frameworks reflective of20th century thinking. The foregoing historical, political, economic and social variables are the key components blended into the European term which is the called 'the welfare state'. The British Labour Party platform after winning the election in 1945 stated 'Jobs for all' along with 'Social insurance against the rainy dayâ€¦' and included plans to attain said goals. The victory by the Labour Party was unforeseen and helped to establish a tone not only in Great Britain, but the rest of Europe as the public's vote heralded the beginnings of heightened social consciousness.
1.2 Sector Ramifications - Hospitality and Catering
The preceding understanding of the United Kingdom's social fabric is important in equating the recent legislation affecting the hospitality and catering sector. Both sectors are highly dependent on labor and as a result any new regulations or legislation have a deeper impact due to the labour dependant composition that characterizes its makeup. Said changes must not only be communicated, but overseen as well and these changes cannot be simply written into a software program or changes in assembly line methods, they are by and large done by individuals.
Additionally the general low wage composition of this sector for a good percentage of its employees means that additional compliance slows productivity as it is primarily manual in nature. The new legislation is estimated to affect and estimated 81% of the business in this sector
Economically the increase of compliance and legislative changes in the service sector as a factor of a country's GDP decreases the economic growth rate with a corresponding decline in productivity rates due tithe costs involved. The hospitality and catering sectors are within the broader classification termed 'Travel and Tourism' and this industry is projected to become the largest classification globally during 2005.
As such the major issue facing the hospitality and catering sector is increasing productivity so that it will affect the profitability of operations. With this industry sector (hospitality and catering)representing an estimated 1 out of 12.4 jobs throughout all industry classifications the implications of increased productivity represents sizeable gain in economic strength and the corresponding effect upend (Gross Domestic Product).
The composition of the companies within this industry (hospitality and catering) forms a critical component in equating the influence of social responsibility and the resultant impact on productivity as a result of expenditures to comply. It is important to understand that fully 94% of the 2.7 SME's within the travel and tourism sector are comprised of what is termed 'micro-enterprises' that employ less than ten (10) individuals, and 94% of this total represents approximately fifty present (50%) of the labour force.
The newly enacted legislation encompasses social responsibility in that it seeks to standardize not only the delivery of services within this sector, it also benefits the individuals employed therein as well. An examination of the varied factors comprising productivity in the hospitality and catering sector to correlate the effect of social responsibilities requires an understanding of the structural as well as staffing variables within each sector along with any new regulations, laws and or legislation which might act upon bottom line performance.
Chapter 2 - Methodology
2.1 Gaining a Perspective
As the subject of this paper asks the complex question of how social responsibilities act upon productivity, the logical point to first understand is the nature and breathe of where social responsibility emanates from and what it indeed means. The preceding broad context was undertaken to permit the gathering of information on an ad hoc basis rather than utilizing the blinders of preconceived notions or understandings which might not reflect actual circumstances or conditions as they transpired. Research methodology, regardless of personal knowledge, demands that one look at the subject with a clean mental slate in order to maintain objectivity. This means exploring the process from all conceivable angles.
As understanding the implications of the foregoing formed the starting point, delving into searches via the internet was determined to be the point of origin from which to gain a perspective. The subject of social responsibility is a fluid rather than static subject. It is based upon the point in time one is looking at as social changes reflect human consciousness and awareness which is consistently evolving.
However, it also based upon what preceded it in the past. The area of social responsibility has its roots in the temper and climate of the society it is borne into and how that idea was/is expounded upon. The 'social bond of deep horizontal comradeship' as put forth by Anderson (1983) forms an important base element in the formation of nationalism as well as the corresponding socio-psychological ideology. As the historical significance of all the component parts required background information, secondary research was conducted utilizing Internet search engines to gather data from journals and articles as well as to determine what literature sources (books) to be explored.
The nature of the subject is well suited to secondary research ahistorical events held the factual records of the evolution of the social policy process. Secondary research provides the benefit of obtaining detailed facts, dates and information which can be analyzed against the subject matter at hand.
And while primary research gathers opinion, viewpoints and information first hand, it is a structured process that requires prior experience with the subject to formulate the basis for questions, interviews and information which form the prevailing view but not necessarily the answer. Following the historical timeline of events in society, the industry sector, government and labour provided the inputs that revealed the sources and underpinnings which contained the answers.
While there are varied voluntary aspects and areas that a firm can undertake which qualify as 'social responsibility' said measures would be difficult to equate in terms of their application, use and affect unproductivity. Therefore, the 'source' of any social responsibly issues needed to consist of something that applied on a broad basis and was identifiable as well as fit the parameters. In this instance the 'source' is the legislation adopted by the United Kingdom from the European Union such as the Employment Rights Act 1996) which set forth a broad spectrum of regulations, compliance and rules as well as catering legislation and regulations that have been enacted.
Chapter 3 - Literature Review
3.1 A Broad Spectrum of Inputs
As the United Kingdom is connected by history and geographic location to the European Union, even though it has not become a member, it recognizes the broader implications of keeping in step with the developments, rules and regulations this body enacts. Within this context the United Kingdom's recent legislation affecting the hospitality and catering sectors finds its roots in said organization. Organizations such as:
1. The European Federation of Trade Unions in the Food, Agriculture and Tourism
2. HOTREC (Hotels, Restaurant and Cafes in Europe,
were two contributors to the EU Commission from which the broad compendium of laws, rules, regulations and policy was adopted. The following summarizes those organizations:
1. The European Federation of Trade Unions in the Food, Agriculture and Tourism (EFFAT)
This organization is a federation that represents 120 trade unions throughout Europe in 35 countries (European Union and non-European Union nations). With a membership roster in excess of 2,600,000 it utilizes their input and consensus to investigate and formulate policies in a multitude of areas. EFFAT's policy statement mentions that the organization is committed to sustainable development in areas such as pollution, drinking water quality and availability as well as ecological problems through dialogue and cooperation and recommendations.
The organization is also cognizant of migration and immigration issues in the industries it represents and how these types of individuals form a good portion of the labour pool for the sectors it represents, thus indicating the need for effective training techniques and the associated laws and regulations to protect the interests of these groups as well as turning them into productive workers.
2. HOTREC (Hotels, Restaurant and Cafes in Europe)
As one would assume the hotel, restaurant, and cafÃ© sectors are governed by strong social laws, externally (for the protection of the public), and internally (for the protection of employees). The extensive numbers of measures (in excess of fifty ), has been identified as a source of concern by this organization as these industries are labour intensive that compliance will increase the operating costs and potentially affect employment as well as growth.
Milton Friedman explains that since individuals run businesses, the social responsibility of these firms is an outgrowth of the management culture and their understanding as well as identification with the notion of social precepts. Friedman poses the question that the 'â€¦first step toward clarity..' entails understanding the context of social responsibility in terms of what it '..implies for whom.' Friedman explained the fit of social consciousness in business should not become lost in the complexity as the process is simple, people run enterprises and as individuals they are influenced by society as well as being a part of it.
Thus as one's influence and responsibilities increase, so does the need to expand their vision in terms of the effects of that influence and act accordingly. The requirement that individuals thinking terms of the implications and ramifications of the sphere of influence exerted by a company as well as the generation of profits. The reminder and assertion being put forward is that regardless of the profit motive, business has an obligation to other individuals as a result of the humanity of our global community.
The acts of labour, government and the industry has shown that the concept of social responsibility is an active component of the hospitality and catering sector as evidenced by the following organizational meetings which included or focused on social responsibility issues as an important part of their agendas;
A. World Summit for Social Development, International Labour Organization's Sectorial Activities Programme
B. Convention for the Protection of Human Rights and Fundamental Freedoms
C. Ministerial Conference on Human Rights of the European Social Charter
D. International Labour Organization's Sectorial Activities Programme
E. Tripartite Meeting on Human Resources Development, Employment and Globalization in the Hotel, Catering and Tourism Sector
The following organizations helped to set the framework for the European Commission and are examples of governmental, industry, jaborandi social consciousness which provided the specifics concerning social responsibility and its effects upon productivity, as well as means to harness this in a method which is positive for employers and employees;
A. World Summit for Social Development, International Labour Organization's Sectorial Activities Programme
The World Summit for Social Development meeting of March 1995 in Copenhagen pledged to reduce poverty, work toward the objective of full employment, and to foster social integration. As a United Nations organization the importance of the influence of this program is obvious, making the issues a global concern via utilization of a formal stage under the aegis of the U. N. The conference convened in Geneva in2000 to review the commitments made in Copenhagen in 1995. The importance of this initiative has moved the sphere of social policy tithe forefront of global attention.
B. Convention for the Protection of Human Rights and Fundamental Freedoms
Organized under the Council of Europe, the name of the Convention explains its origins as well as purpose. As a natural outgrowth, social policies were tabled and have helped to shape the social responsibility concerns which business needs to embrace as part of the broader human community.
C. Ministerial Conference on Human Rights of the European Social Charter
This Conference put forth an extensive list of employment related social and legal accords which were agreed to by the countries comprising Europeans a foundation for commercial regulations ensuring fundamental as well as progressive social rights. This list forms the underpinning of all social responsibility areas in the public arena and thus sets a standard for social corporate behaviour. The extensive list shall be elaborated on in Chapter 4.
D. International Labour Organization's Sectorial Activities Programme
As a separate organization devoted to labour issues the International Labour Organization segments its 'Sectorial Activities Programme' into industrial classifications. This organization brings together business, government and people, Tripartite, so that initiatives undertaken have balance due to all entities being represented. The policies implemented by this organization have a binding effect as a result of this tripartite mixture. It actualizes discussion at other levels (meaning organizations and programs), into working realities.
E. Tripartite Meeting on Human Resources Development, Employment and Globalization in the Hotel, Catering and Tourism Sector
This is the industry 'Programme' specifically devoted to the Tourism classification.
The policies and areas identified by these organizations helped to form parts of the European Union enactments which was then adopted by the United Kingdom and subsequently resulted in the 1,500 pages of legislation for the Hospitality and Catering sectors which covers:
1. The Employment Rights Act of 1996
2. Working Time Regulations of 1998
3. Employment Relations Act of 1999
4. Part-Time Workers Regulations of 2000
5. 1990 Food Safety Act and subsequent amendments
a. General Product Safety Regulations
b. Hygiene Legislation
c. Food Control Regulations
d. Food Law Guide
The extent of the foregoing is so extensive that they shall be discussed under the following section.
Chapter 4 - Analysis of Data
4.1 Social Responsibility in Modern Society
In order to understand the aspect(s) of 'social responsibilities 'with regard to their effect on the productivity of firms within the hospitality and catering sector of the travel and tourism industry classification, one must first be cognizant of the broader spectrum from which this emanates, social policies which evolve from public opinion. This is also termed as a 'social contract' which is a term that has been derived from political science and sociology to signify both real as well as hypothetical understandings or agreements within country concerning the rights and responsibilities of citizens as well as the nation.
Jean Rousseau (1762) stated that the 'social contract 'is an understanding that in order for individuals to live in a society they must agree that in exchange for this society (nation) giving them certain rights such as the right to live, they also must give up certain aspects such as harming others, and that as a result the society (nation) is obligated to administer laws and rights equally as well as fairly.
This social contract is a living entity that is modified, amended and adjusted by public opinion that changes the context of laws and regulations as the social consciousness of the society (nation) evolves. The implication of the foregoing is that if individuals demand and require more rights these rights carry with them the caveat that the individuals within said society (nation) also must agree to and take on more responsibilities and the nature and weight of these responsibilities increase with more rights. Simply stated, more rights mean more responsibilities and less responsibility mean fewer rights.
The prior statement has been utilized to provide a foundational point of understanding to illustrate that social responsibility factors are an outgrowth of said social contract and the process is evolutionary in nature. Individuals within a society become familiar with the implications of this 'contract' through the educational process, media, elections, voting and other communication forms. Most of the contents of this 'contract' are understood by high percentage of the population which know that voicing said opinions through activist groups and contacting elected officials is the process by which newer theories and or applications of social practice and behaviour are updated to contemporary terms.
As companies and corporations are an inherent part of the societal fabric they are bound by social codes of conduct and behaviour both legislated as well as those that are considered part of progressive thinking and behaviour. Governmental reforms and acceptance on an official basis of new theories, understandings and precepts of social conduct and responsibility is necessarily a slow process because it must weigh and consider the ramifications of each aspect and how this affects existing and accepted social norms, as well as the negative impacts and how such affect all aspects of the social fabric.
This simplified summary explanation is neither in defence of or a comment on government reaction to new inputs. Not all forms or aspects of this social contract(understandings) are formalized, meaning being a part of laws or regulations, they can tend to be rules of accepted conduct or progressive thinking (and living) which become an expected part of these progressive circles.
4.2. UK Legislation
As stated by Bob Cotton, Chief Executive of the British Hospitality Association, the number of the regulations enacted by the United Kingdom covering the hospitality and catering sectors, some 1,500pages, represents a compliance maze has become a time, cost and administrative burden for an industry primarily comprised of smaller firms. He indicated that even with amendments to reduce the total number it would still 'â€¦impose new cost burdens which are just as onerous.'
The European Laws introduced since 1997 under this and other legislations has increased the compliance and administrative cost to businesses by 46% (currently Â£30 billion), in what the Derby Council calls 'â€¦red tapeâ€¦'
A survey by the British Chambers of Commerce has stated that the laws covering the protection of data, maternity as well as paternity leaves and other areas are costing businesses billions of pounds, and in a study conducted by the Burdens Barometers this figure was calculated as being in excess of Â£10 billion since being put into effect in 1999. In all the total bill for areas indicated as 'red tape' have been estimated as adding Â£9 billion in costs just in 2003.The following will summarize the extensive nature of the preceding:
1. The Employment Rights Act of 1996
Consisting of 245 segments under Chapter 18 the 'Act' sets forth 'Employment Particulars 'which are the foundation for a broad number of areas affecting the hospitality and catering sectors within the context of this paper. This Act also forms the framework for the 'Working Time Regulations of 1998which contains a number of amendments that represent part of the new legislation. Some highlights of this Act are:
a. Employment Particulars
b. Protection of Wages
c. Guarantee Payments
d. Sunday Working for Shop and Betting Workers
e. Protection from Suffering Detriment in Employment
f. Time Off Work
g. Suspension from Work
h. Maternity Rights
I. Termination of Employment
j. Right not to be Unfairly Dismissed
k. Remedies for Unfair Dismissal
2. Working Time Directive
The additional paperwork, regulations, new benefits and associated measures comprising the amendment to the Working Time Directive which specifies minimums for health and safety under Article 2 of Directive89/391/EEC and Article 17. The Directive amendment sets forth provisions for the following in the private and public sectors:
a. rest period minimums for a days, weeks and annual vacation as well as break periods, maximum weekly hours
b. aspects covering certain areas concerning night shifts, shifts and work patterns.
The following sets forth provisions under the preceding sections:
a. Minimum Rest Periods:
1). Article 3 - Daily rest
Specified as a minimum daily period of rest between working periods of 11 hours
2). Article 4 - Breaks
Specifies that when the shift exceeds six hours each employee is entitled to a rest break as specified and laid out in collective agreements
3). Article 5 - Weekly rest period
During a seven-day period each worker is entitled to the indicated11-hour daily rest and a minimum 24-hour rest period which is specified as Sunday
4). Maximum weekly working time
This is subject to the prevailing country law and the total working time for the seven day period shall not exceed 48 hours (in the United Kingdom), which includes overtime
b. Night Work Shifts and Patterns of Work
1). Workers on the night shift are to receive a health assessment free of charge prior to being assigned and any worker who is determined to have a health problem that is diagnosed as connected to night work shall be transferred as soon as possible to day work shifts
2). The indicated health assessment must conform to medical terms of confidentiality
3). Employers compliance with the indicated health assessment can be performed via the national health system
c. Night work guarantees
Certain night worker categories shall receive guarantees as specified by legislation of that country concerning risks at work to their health and or safety
1). Article 11 - Notification concerning the regular utilization of night employees health and safety protection
If so requested by authorized agencies and or individuals information concerning night workers shall be provided by the company
2). Article 12 - Pattern of work
Countries shall see that regulations are in place to guide employers in setting procedures for night employees that minimize repetitive patterns and set a rate that provides safety and health specifications
3). Article 13 - Safety and health protection
Countries shall see that night employees as well as shift employees have the appropriate safety and health protection applicable to the work being performed
The preceding are provisions that are applicable in this instance for the hospitality and catering sector concerning social responsibility aspects whereby costs are incurred as a result of their enactment.
The Employment Relations Act of 1999 sets forth those provisions that are cost additives for businesses under social responsibility:
a. Maternity and Parental Leave 1999
Maternity leave is granted to employees who meet certain criteria and conditions:
1).That said employee notify the employer of the maternity leave period 21days prior to the date said leave shall commence as long as she has notified the employer of said pregnancy, the expected day of delivery and the date of maternity leave commencement.
2). Said employee shall provide the employer with documentation on said pregnancy from a licensed medical practitioner, or midwife and that such be in writing if so directed. That the employer shall allow foresaid maternity leave be at least 18 weeks. The cost additive under 'social responsibility' in this instance is that said provision applies to all workers. In the past part time workers were not entitled and thus their return to their positions was subject to the discretion of the employer and not a right.
3). Parental Leave
If an employee has been with the firm on a continual basis for a period of not less than 1 year and has direct legal responsibility for amino, then said employee shall be entitled to 13 weeks parental leave(not consecutive) and shall not lose their job as a result.
a. Time off for domestic incidents
Employees are entitled to paid time off for domestic incidents as set forth in collective agreements.
b. Part-Time Worker Regulations of 2000
Under this provision part-time workers shall be paid at the same rates full time employees for comparable work and shall also be paid for overtime under the same understanding. The seasonal as well as temporary workers within the hospitality and catering sectors are benefited by the Act, however employers who formerly utilized this category as a justification to pay lower wages now have this as a cost additive. Part-time workers are entitled to the same coverage and other provisions of full time workers on a pro-rata basis.
c. 1990 Food Safety Act and subsequent amendments
The importance of regulating and ensuring the public safety is a function of government and the Food Safety Act of 1990 was enacted for this purpose as it strengthens prior legislation. It sets standards, regulations and compliance measures under the law. The Act seeks to:
1). strengthen measures so that all food sold is safe for consumption, meets quality standards and is presented without misleading information or means,
2). provides for appropriate legal measures of enforcement and penalties
3). meets European Community standards
4). maintains and meets all technological changes
Officers representing the Agency can:
1). secure samples and compare against ingredients
2). investigate all premises associated with the production and preparation
3). perform inspections
4). delay delivery or seize supplies or shipments and if warranted, have them condemned
1. Food Labelling Regulations
The cost areas that accompany the Act entail the following in order for firms to meet with compliance:
1). labelling is not as applicable for the catering sector unless they are servicing packaged portions, then the same rules apply which consists of
a. aspects such as low-fat, reduced sodium, high fibre, etc.
b. pictures must be representative and not misleading and when
c. artificial ingredient are used the actual representation cannot be used
d. descriptions must be true to their points of origin as well as contents
d. date instructions - use by and best before, along with recommended cooking time and storage / preparation instructions
2. Hygiene Legislation
A survey conducted by the Food Standards Agency in 2002 encompassed over 1,000 employees and managers and uncovered that:
a. 39% did not wash their hands after lavatory utilization,
b. 53% did not wash their hands before the preparation of food
c. 59% had a certificate indicating they have taken and completed the
basic food hygiene certificate
d. 3% of the managers stated that trained staff was important to them meeting business needs
e. and just 32% indicated that they thought food hygiene was an
important component to their business as opposed to 64% that indicated that good food as the key to the success of their enterprise.
The preceding points to increased requirements and inspections as well as enforcement and compliance measures that firms in the industry will have to submit representing additional costs.
3. Food Control Regulations
The Food Standards Agency has issued extensive food preparation guidelines on the preparation and cooking times of varied foods as well as specific regulations on the materials to be utilized in the preparation such was wall coverings, stainless steel and other requirements which firms must adhere to.
4. Food Law Guide
The 'Guide' is a summary of the comprehensive Regulation Code of Practice which details each aspect of compliance that catering firms must undertake. As the larger firms have the resources to undertake any modifications to their operations, or suffer the public disclosure, the weight of compliance primarily falls upon the small firms who must bear the costs or risk penalties and potential closure.
Each area indicated falls under the 'responsibility' of government to see to and ensure the safety and wellbeing of its populace(social), and as is the case with any new regulations or legislation there are costs involved in meeting the standards indicated. These costs are paid for out of profits and since a reduction in profits affects productivity the sector is burdened by the costs of compliance in keeping with the public good.
The preceding areas had some of their roots in contemporary social responsibility areas selected from the Ministerial Conference on Human Rights, of the European Social Charter, held in Turin and the Tripartite Meeting on Human Resources Development, Employment and Globalization in the Hotel, Catering and Tourism Sector which was held in Geneva, Switzerland April 2nd through 4th in 2001.
The latter event, which was held by the industry, dealt with a broad spectrum of issues and represents findings researched by the industry and the International Labour Office. One of the more important foundational points the 'Report' emphasized was the seasonality of the industry as well as its vulnerability to economic swings. These factors cause these two sectors, hospitality and catering, to utilize a high quotient of temporary labour which has the effect of making retention of permanent staffs difficult.
This endemic condition means that unlike sectors where the staff get the opportunity to hone their skills and develop an internal teamwork concept, the personnel pieces frequently change thus disrupting this process and therefore reduced productivity is a by-product. With this as a sector base, it has to achieve gains in other areas to aid in compensating for this built in downside.
The preceding means that Human Resource Departments will need to, if they are not presently doing so, plan for the indicated seasonality and unforeseen economic or related influences. More importantly employers operate within the fabric of society based upon the understanding that they are also governed by a defined series of social responsibilities which also lead to other responsibilities as a result of the fluid nature of how society is constantly evolving.
From a legislative point of view the European Social Charter, as amended by the Additional Protocol of 1988 clearly defines the rules of conduct under the law regarding the rights of individuals to be protected and safeguarded by governments;
- The right to earn a living in the job or occupation of their own choosing
- The right to fair conditions of employment
- The right to work in safe and healthy conditions
- The right to compensation in keeping with the norm to enable obtaining a decent standard of living
- The right to associate freely in organizations that aid or protect their social and or economic concerns or interests
- The right to bargain collectively
- The right to protection against physical and moral hazards for younger aged individuals and children
- The right to special protection for expectant mothers
- The right to facilities devoted to vocational guidance to aid employees in better performance in their positions
- The right to facilities for vocational training
- The right to conditions within the workplace that seeks to attain the highest health oriented environment possible
- The right to social security on an individual and family basis
- The right to social and medical assistance if that individual is without adequate coverage of financial resources
- The right to social welfare services
- The right to social integration and personal independence in the workplace for disabled employees
- The right to accepted levels of social, legal and economic levels and protections for employees and their families
- The right to the appropriate legal, social and economic levels and protections for younger aged individuals
- The right equal political protections regardless of party affiliations
- The right for migrant workers to political freedoms and expression in keeping with the mandates of society
- The right to equal treatment and opportunities in the workplace regardless of sex
- The right to be kept informed and consulted regarding the workplace
- The right to be included in planning and changes to the workplace
- The right for elderly employees to social protection
- The right of all employees to protection in instances of termination
- The right of all employees to the protection of claims in the instance of bankruptcy
- The right of all employees to dignity in the workplace
- The right of employees to engage in their employment without discrimination in terms of conflict or the creation of
- The right of representatives of employees to conduct work on behalf of employees with appropriate facilities provided for this purpose
- The right of employees to be kept informed as well as consulted regarding redundancy procedures
- The right to housing
This list as amended by the European Social Charter Additional Protocol of 1988 provides insight as to the breathe of the commitment to establish and ensure a level of social conduct that is contemporary and progressive. The foregoing also translates into companies having to elevate their interaction within society to include accepted norms as well as the implications.
The importance of productivity in the equation of social responsibility is that it is that increased costs per unit of work represent decreased profits and in this era of consolidation, public share scrutiny, and market capitalization increased bottom line results are paramount. Viewing this same process, productivity, from the aspect of the moderate and smaller sized firms it means a reduced profit margin that could delay or negate capital improvements, and or the replacement and upgrading of equipment, fixtures, technological additions, marketing expenditures and thus competitiveness.
The preceding summary of the importance of productivity might seem to be overly dramatic in terms of its impending effect on a firm's survivability however, the reality of companies either being acquired, sold or pushed out of business is the canvas upon which business is painted. Increased productivity enables a firm to exercise a number of operational and administrative variables in consideration of the highly competitive pool in which a company swims.
An increase in productivity, even in a small operation, yields an increase in profits which can be utilized to invest in better equipment, technological upgrades, wage increases to retain or secure qualified employees, reduce prices or offer a marketing concession to increase business volume or secure new clients. The manner and means in which an increased bottom line can be utilized are as numerous as the manner and ways productivity can be improved. The key component is to understand that an investment in increased productivity yields increased profits. This conclusion might seem obvious, however it's understanding and practice are not as commonplace as one would imagine.
More sales, expansion into new territories, cutting costs, trimming benefits, better allocation of resources. The list of ways in which profits can be enhanced are numerous, the problem is the more successful a company becomes at achieving growth, regardless of the means, the more important productivity becomes as a result. Success, expansion, growth, and increased sales all require the same underlying input - production! The catering and hospitality sector requires laboratory meet ends which are timetable intensive as the delivery of food, its preparation, ordering of raw materials, waste, room preparations, laundry, grounds maintenance, telephone answering and clerk room registrations all require that these and other tasks be conducted on time. The importance and ability of employees to meet and handle the assigned job functions can have immediate effects on bottom line performance.
In its 2003 Budget Report the British government addresses productivity mentioning that it is a key variable in economic performance over the long term as well as a contributor in aiding the raising of living standards. This Report stated that the Government's objective is to increase productivity in the United Kingdom as a long-term goal. The concern being addressed on productivity in Great Britain is based upon how it ranks against contemporary economies.
Output (productivity), in the United States is 31% higher when compared against Britain, and in France and Germany that figure is 16%. Figures released by the Department of Trade and Industry in France showed that the growth of productivity in the service sector is less than that recorded in manufacturing and it cited that the high proportion of part-time employees is one of the largest factors contributing to this condition.
This Report also stated that because the major percentage of firms in the service sector are small enterprises engaged primarily in business conducted on a local level, they are by and large insulated from fierce international competition, which is not the case in manufacturing. It indicates that because of this broader competitive context manufacturing operations have been forced to conduct studies, make investment in plant, equipment, training and methodologies, with such not being the case in the hospitality and catering sectors except at the upper end of the spectrum which represent huge multi-national chains that account for less than 6% of the total establishments (in number), and employs approximately 50% of the labour.
Recognizing the preceding, the British government enacted the 'Competition Act' in March of 2000, a measure which was recommended by the International Labour Organization's Sectorial Activities Programme, to address this problem. The importance of the service sector in industrial classification is reflected by the fact that this segment accounts for approximately 70% of output in most industrial economies.
The preceding as well as the understanding that bringing about an improvement in productivity rates and certain structure modifications in their respective economies would be inherently more difficult without addressing the service sector and its ability to expand the job creation base, promoted the joint study and cooperation between the United Kingdom and France. As a result of the findings both countries have enacted reforms. The attention being focused upon the industry has been welcomed by the hospitality and catering sector that understands the 'tripartite approach' which identifies the three components -employees, employers and government - is the methodology to achieve meaningful long term change.
4.4 Seasonality and other Influences
As the areas impacting upon operations and bottom line performance, seasonality and other economic influences create scheduling high and low troughs in the staff necessary to service demands. To enable firms within the hospitality and catering sector to handle this variable they utilize a combination of part-time, temporary and seasonal or casual workers. The social responsibility aspects related to the foregoing reside in the benefits package and wage scales. Permanent employees are provided with varied combinations of benefits as well as salary increase structures and promotional opportunities which provide these employees with a means to advance their careers and incomes.
The challenge facing employers in this sector, hospitality and catering, is to structure Human Resource measures to provide part-time, temporary and casual workers with benefits such as insurance - dental -etc., and a proportional salary increase structure. At first glance the preceding might seem represent policies that are skewed in favour of these groups, however the pragmatic side of such an approach can yield benefits to the employers as well. Putting aside for the moment, any thoughts of social responsibility as a consideration and viewing this area strictly from the employer perspective another viewpoint emerges.
By designing and putting in place a structure whereby the indicated on-permanent worker categories, part-time - temporary and casual workers, accumulate either points or some other means of personnel scoring indicative of their individual work performance, aptitude, skill level, needed or recommended skill or vocational training, experience, etc. a format for compensation can develop. Owing to the less than secure nature of these positions such employee types are, or should be, seeking more permanent or dependable work during their employment or those periods when they are not working.
And while the employer benefits in the short term from the indicated hiring methodology for these employee groups, they actually lose significant costs from such practices. The time and resulting money lost from indoctrinating employees, whether they are new to the company or returning employees, in current procedures, location of tools and equipment as well as supervisory parameters means that during the first few days of work they are re-learning or learning for the first time how to perform and get the work done.
While the actual work lost to these aspects might be minimal there is a loss of productivity, thus the cost expenditure for these periods is higher in relationship to the output. Given that these categories of employees, part-time - temporary and casual workers, tend to be available for relatively short periods of time before they find other means of employment the challenge of training and retraining for even the simplest of job functions represents a daunting task facing Human Resource managers in that the system to position these employees with the proper supervisory, training and related measures is as important as the hiring of individuals to fill these openings.
Developing social responsibility trends in this area, with regard to temporary and or seasonal workers, has seen the stance in Switzerland whereby this category of employees are provided with the same legal rights as full or part time workers. The downside is of course the additional expense associated with providing these employees with the proportional benefits based upon the number of hours worked. The upside however, is that as a result of this practice these employee categories, part-time - temporary and casual workers, are provided with additional motivation in terms of job/task performance, attitude towards the company and potential for full time employment as a result of the progressive short term employment policies.
This type of program would provide the company with a better pool of employees to pick from in that similar workers employed in these capacities at other operations would be drawn to the this progressive outlook thus yielding the company with a better and more experienced reserve from which to draw upon. Owing to the service nature of this sector the yield from better employees translates into higher productivity as said workers would be aware that the firm has a broader selection from which to choose employees thus providing it with the image as more desirable place to work. Any program, series of or combination of programs which creates this impression in the work market yields beneficial results.
As a result of the preceding the short term costs of implementing and maintaining such a program for these classifications also yields corresponding savings in training, retraining and supervisory time as these employees are motivated to perform at higher levels. This area is gaining support in such locales as Australia as well as the United Kingdom, and the Netherlands in addition to the country which originally put forward this approach, Switzerland.
Research conducted in Australia revealed that casual employees were in excess of fifty present (50%) of those employed throughout the industry. As a result of the foregoing the unions put forward a series of proposals recommending that casual positions be replaced by permanent part-time jobs and that this include paid holiday and other benefits. In the United Kingdom Granada Entertainment and Hotel Group, a company that owns and operates a number of theme parks, hotels and nightclubs, has demonstrated a voluntary approach to the foregoing.
The company provides part-time employees, which are 50% of their staffing, with the same benefits as full time employees. Granada utilizes performance reviews as well as a training program for part-time employees that provide them with the opportunity to qualify for study under national vocational programs. In the Netherlands work hours have been modified to be flexible in nature that means that employees as a result of this governmental policy can select shifts to work from available choices. In addition, under the law employees can opt to change their status to part-time.
The preceding examples point to companies and government legislation supporting and providing rights to casual as well as part-time workers in response to public opinion which proved popular enough to be converted into actual commercial utilization. The preceding represents the vanguard of tomorrow's generally accepted practice and once companies are aware of such a trend as part of the 'social contract 'they become morally obligated, if not legally, to offer employees the benefits of advanced societal thinking under the implied 'social contract'. The fact that there is a better methodology by which accompany can employ and offer benefits to a certain classification of workers becomes a social responsibility.
4.5 Other Social Responsibility Areas
The list of areas as contained in the European Social Charter Additional Protocol of 1988 provides insight as to the extensive social underpinnings, which are a part of the United Kingdom. As such, the following list shall deal with those aspects where their relative newness to social precepts warrants same;
1. The right to compensation in keeping with the norm to enable obtaining a decent standard of living
The general compensation pattern for the hospitality and catering sectors is on a par with other industries. The instance referred to by the indicated area 'The right to compensation in keeping with the norm to enable obtaining a decent standard of living' seems in the instance of this context to refer to the condition of part-time, temporary and casual workers, as discussed.
2. The right to facilities devoted to vocational guidance to aid employees in better performance in their positions
The relative cost to comply with this aspect would seem to be minimal as any company space could be utilized to satisfy this condition as a result of the provision not specifying that said space must be for this use exclusively. As a result, its impact upon costs and thus productivity as explained under the 'Total Factor Productivity(TFP) would be minimal.
To recap, this formula was developed by Professor Shalom Marital of the Massachusetts Institute of Technology and stated that to determine the productivity output of nations the calculation takes the revenue per employee, after deducting any productivity enhancements that occur under capital assets (such as the upgrading of plants, equipment, technology), as these areas improve upon output.
The inclusion of this aspect is to add emphasis on the following segment of the list from the European Social Charter Additional Protocol of 1988.
3. The right to facilities for vocational training
The International Labour Organization's Sectorial Activities Programme held in Geneva, Switzerland in 1997 devoted considerable attention to this aspect of its discussions as a result of the decision of the Organization to implement this in the 1989 meeting. The impetus behind the drive to include vocational programs as a socially responsive component was based upon taking a proactive approach to improving the skill set of workers which served the interest of the industry in that it also aided employees by providing them with training that improved their productivity as well as employability.
What could be construed as a self-serving solution in the end was and is beneficial for all concerned. The cost expenditure in this area actually invests in increased productivity in the future, therefore the initial negative impact entailed in implementing these programs should by and large be accomplished or at least in place in the majority of enterprises within the hospitality and catering sector.
And while the understanding for the need of vocational training was recognized in prior meetings, the scope of the areas which programs need to cover has determined that vocational training is a broad-spectrum and the base of needed elements is continuing to expand. As such this cost output area tends to look as if it will continue to be function of the Human Resource process thus representing a negative impact upon productivity due to its deductive state from the revenue per employee equation.
This understanding came from the realization that because the sector, hospitality and catering, is service oriented the skill sets as well as personal demands are greater than for the manufacturing sector in that service industries deal directly with the tastes, perceptions, needs and wants of people whose tastes, perceptions, needs and wants are consistently changing. This dynamic creates a crucible whereby the elements that need to be addressed and prepared become a formula that is fluid rather than static. The International Labour Organization's Sectorial Activities Programme held in Geneva, Switzerland in 1997 uncovered that the following components were areas of importance;
The preceding examples of social responsibility programs inconsideration of their effect upon productivity represent those social issues that seem to be identified as the more prevalent areas. There remains the distinct possibility there are other social responsibility issues of important that have not been included in the above. The question of the effect(s) on productivity of social responsibility areas seeks to determine if there is an effect, and if so how it impacts upon that area (productivity). With the preceding as the qualification if any seemingly important social responsibility areas have not been included their absence does not invalidate the findings achieved.
Chapter 5 - Conclusions & Recommendations
Friedman's (1970) statement that the 'The Social Responsibility of Business is to Increase Its Profits' also addressed the spectrum of social responsibility on the part of business. He observes that even though businesses are considered as 'entities' it is not business which has responsibilities but the individuals in whom is vested the power to conduct said business and its affairs. The point is made that by farther majority of decisions reached by business are calculated to impact and maximize their sales and bottom line performance while adhering tithe prevailing social understandings.
Thus, social responsibility is profit-oriented consideration balanced against the external prevailing understanding of contemporary society. As hard-edged as the preceding might seem, one needs to understand that the competitive and predatory nature of the business environment does not allow much room for charitable functions unless the enterprise is awash with excess profits. As this description identifies large multi-national corporations, the application of social responsibility in the hospitality and catering sectors by virtue of its high composition of smaller enterprises (employing 10 or fewer individuals), would seem to render the importance of social responsibility issues as a moot point.
However, the equations governing the conduct of business, employers, public image, long-term objectives and competition for employees can create conditions whereby these objectives of profits and social responsibilities serve each other. In the instance of the hospitality and catering sector said dual objectives have been shown to be compatible and have been actively addressed through a formal series of conferences, and official legislation by the industry in general as shown by the International Labour Organization's Sectorial Activities Programme, as well as the Tripartite Meeting on Human Resources Development, Employment and Globalization in the Hotel, Catering and Tourism Sector, and the governmental Ministerial Conference on Human Rights, of the European Social Charter. The preceding shows that Labour, the Hospitality and catering sectors as well as governments are in agreement and working collectively to implement programs which serve the social fabric as well as address internal problems and opportunities.
1. The Employment Rights Act of 1996
4. Working Time Regulations of 1998
5. Employment Relations Act of 1999
6. Part-Time Workers Regulations of 2000
6. 1990 Food Safety Act and subsequent amendments
a. General Product Safety Regulations
b. Hygiene Legislation
c. Food Control Regulations
d. Food Law Guide
The caldron of the free world is basically split between the United States, the European community and Japan in the Far East. Global policy walks hand in hand with monetary policy and today's climate includes social policy as the other ingredient. The pressures which brought about change in South Africa, and are pressing for change in other regions, is borne from the principles as defined in the preceding three regions introducing the catalyst for change. This evolutionary processes been indicated in Britain's 'Poor Laws ' which underwent transformation after World War II through the passage of the reforms of1958 to fit the contemporary social understandings and has been and will continue evolve.
Anderson's (1983) postulation that the 'social bond of deep horizontal comradeship' is a key foundational element in nationalism and the corresponding socio-psychological ideology was expounded upon by Connor (1993) who adds that 'the idea of a nation 'is an emotional process and in global terms it forms an aspect of an individual's identity. Social consciousness fuels the climate for change in social policy which feeds through the fabric of society and helps to make the planet more humane.
Professor Shalom Mittal's 'Total Factor Productivity (TFP) ,provides the formula by which to measure productivity in the service sector. He states that service productivity is calculated by taking the revenue per employee and deducting any productivity enhancements that occur under capital assets, such as the upgrading of plants, equipment, technology as these areas improve upon output. Pragmatically the industry has been and from all indications continues to be diligent in its meshing of productivity, profits and social responsibility issues for the betterment of the enterprises, employees and public in general through a number of progressive initiatives.
The process of public opinion, elected officials, activist groups, industry action, and international labour have all demonstrated a visionary approach to understanding the encompassing social contract which is inherent as an active part of communities (nations). The focus on human rights is no longer a subject that just refers to nationalistic policies in countries with an abusive history regarding its treatment of their citizens, it now is a rallying cry for human rights in progressive societies as they seek the moral high ground.
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