Nick Isles, author ofThe Good Work Guide: How to make organisations fairer and more effective, argues that only by striving to establish and enable a good work environment will organisations be able to release the discretionary effort of their workforces to optimum effect.

Good Work can seem a rather off-putting concept for the average business leader. At one level it can seem somewhat trivial - an obvious statement of intent. After all who is for Bad Work? At another it has the moralising preachiness that repels rather than attracts. And yet in my forthcoming book, The Good Work Guide: How to make organisations fairer and more effective I argue that only by striving to establish and enable a good work environment will organisations be able to release the discretionary effort of their workforces to optimum effect. Thus Good Work has both a moral case and a business case to sustain it.

Michael Marmott in his recently published review for the UK Government, ‘Strategic Review of Health Inequalities Post 2010’ defines Good Work as follows: “Good work is characterised —— by a living wage, having control over work, in-work development, flexibility, protection from adverse working conditions, ill health prevention and stress management strategies and support for sick and disabled people that facilitates a return to work.” Though clear and understandable I believe this is a somewhat utilitarian view of Good Work.

I argue that there are three broad strands of thinking that feed into a Good Work analysis, and which taken together, create a more profound view of how workplaces and organisations should change to reflect 21st Century economic realities. The first, and one I draw on most, is that expressed by John Budd in his book Employment with a Human Face. In this analysis Good Work recognises that work is a fully human activity and that it should be seen as a more democratic activity than that endured in most workplaces. For Budd, crossing the threshold of work does not, and should not, mean that you give up your rights as a citizen. In Budd’s view Good Work thus combines three elements: equity (or procedural justice), employee voice (the right to be heard) and effectiveness. For Budd and others Good Work is both a moral and business imperative. This analysis has been built on by those researchers looking at the harm done by ‘bad work’, notably Michael Marmott’s work on health outcomes.

The second strand of thinking on Good Work is that led by the Harvard Good Work project and Richard Sennett in his work on craftsmanship. In this analysis, Good Work is a psychological state that most of us aspire to achieve. We all want to give of our best when we go to work. We have an innate sense of craftsmanship that too often lies dormant inside us, shackled by poor job design and even poorer organisation of work. Freeing the inner craftsman is thus a business necessity.

The third strand is overtly moral. Both Pope John Paul II and Pope Benedict XVI have published papal encyclicals on work which argue that people have the right to be treated with dignity in work and paid a fair wage for working in a healthy environment.

So much for the theory. What of the hard facts of organisational life. Well if the credit crunch, financial crash and recession that has followed has taught us anything it has shown that orthodox economic theory got it badly wrong. As I argue at some length neo-liberal economic theory has been largely a con trick played on the rest of us. Home Economicus – the self maximising rational individual at the heart of so much orthodox economic theory - rarely exists. The house of cards built upon mathematical modelling of risk had homo economicus at its heart but the latest research in psychology and behavioural economics backed up by neurological studies shows that we are more likely to be quite irrational and impulsive in our economic behaviours. Far from weighing up all the options carefully before we make a purchase we too often act impulsively, follow the herd, get nudged into behaving differently and are highly susceptible to peer group pressure rather than pragmatic rational decision-making. As the work of Nobel prize winner Daniel Kahnemann has observed we fear losses more than we appreciate gains and entrepreneurs, being super optimists, are usually stupidly oblivious to the risks they run.

Since people are at least as irrational as rational in their economic behaviours it means markets will tend to fail at some point or another. Indeed this has been the story of our economic history. Smart regulation is thus required to adapt market conditions and behaviours to avert failure. And organisations working in this environment become even more reliant on their human capital to read the runes, interpret behaviours and second guess irrationality. This requires high levels of motivation and engagement and often the exercise of considerable dollops of free will. All of which are difficult to engender and then control.

In addition the world’s developed economies have been shifting as they have become wealthier from being primarily process driven manufacturing economies to high level service focused knowledge economies. In 1979 some 8 million of the UK’s 24 million workers were employed in manufacturing occupations. The figure is now 2.5 million out of 29 million and shrinking. Soon more than 50% of the UK workforce will be doing knowledge work of some kind or another. In service economies generally and in Knowledge economies in particular this means that knowledge has become an important factor of production. The combination of better educated workers and powerful computers has led to a fundamental shift in how we do what we do. The new general purpose technology of digitalisation is affecting every sector of the economy and every workplace within it. In this world of work value adding activity is generated by the discretionary effort of the workforce. Once all the business process re-engineering has been completed you’re left with the people. What is in the heads of the workforce is what matters to the bottom line and how you encourage discretionary effort is the key differential between you and your competitors.

In order to release that discretionary effort I argue you need to develop a good work solution for your organisation. This means developing effective plural as well as unitarist mechanisms for employee voice; systems of procedural justice that are felt to be fair; workplaces that function well and are amenable and high levels of engagement. Now the internet is awash with scholarly research into employee engagement strategies but I argue very straightforwardly that to release discretionary effort employers have to give more. And that ‘more’ is ownership.

I do not mean simply shares in a private sector business for I define ownership more broadly. Most businesses and organisations tend to develop a menu approach to engagement offering carrots such as flexible working, longer holidays for longer service, duvet days, four day weeks, nine day fortnights, maternity and paternity leave, paid sick leave, benidorm leave for older workers, home-based working some of the time. The lists are often ingenious and long. Now don’t get me wrong, such benefits are an essential part of delivering on the deal but I argue they don’t go far enough. Only when a person feels they have true investment in what they do will they fully align their own effort with that of the organisation.

I define ownership as having five dimensions: financial, intellectual or craft and the three inter-linked sovereignties of task, time and place. Often organisations will move heavily into the latter three but ignore the first two. All are inter-linked and interdependent. They reflect the need to trust more and control less. It is now evident that in most workplaces individual performance related pay depresses performance rather than raises it due to the spillover effects of such practises on other workers. When a worker is also an owner they have a vested interest in releasing their discretionary effort all the time – and not just some of the time. In a Good Work organisation performance management is very tough. Owners don’t like to tolerate slacking by anyone - even co-owners.

The evidence from the literature on high performance shows that organisations that have stumbled upon ownership as a solution to getting the best from their people are often very successful. The obvious example is John Lewis but there are many more. The public and voluntary sectors also need to develop their own ownership matrixes to encourage higher performance.

Good Work is an ideal – a moral universe in which people can be treated with respect, where fora are created to resolve political differences and where felt fairness is the norm. I believe the way to deliver such a utopia in organisational life is through a refined and recalibrated version of ownership that enables people to fulfil themselves through work and that leads to work being profitable and sustainable. The changing economic environment requires new analyses on how organisations work and how economies operate. Good Work is one such idea.



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Nick Isles is the author of The Good Work Guide: How to Make Organizations Fairer and More Effective (£24.99) published by Earthscan on February 26 2010. To purchase the book for a 20% online discount (£20.00) enter code TC20 when you order online here.