EurWORK European Observatory of Working Life

Box Marche Spa, Italy: wage policy

About

Case study name: 
Ageing workforce
Organisation Size: 
Small
Sectors: 
Pulp and paper
Target Groups: 
Skilled Manual
Initiative Types: 
Wage Policy
Scope: 
All

 

Organisational background

 

Located in Italy’s eastern Marche region and founded in 1969, Box Marche is a packaging company originally involved in the manufacturing of shoeboxes mainly. After 1982, it phased out manufacturing of shoeboxes and modified its production and sales structure. Between 1988 and 1989, it completely renewed its production machinery and began to focus on packaging for products like food, household goods, toys, etc.

It currently has 56 employees, of whom 13 are white-collar workers and the remainder blue-collar workers. There are 38 men (68%) and 18 women (32%); seven of the male workers are over 45 years of age. Although the workforce is quite young, turnover is low and the company aims to foster employee loyalty, so it is aware that it will have older workers in future. Most workers are young because there are few qualified job applicants in the area (there are only four packaging companies in the Marche region); therefore, the company prefers to recruit and train young workers. However, older workers are respected and promoted in the company and are valued for the knowledge they can transfer to younger colleagues.

There is no formal trade union representation in the company, although there is a workers’ representative, in compliance with the international social accountability certificate, SA 8000. Monthly meetings also take place with all employees to discuss human resource issues and corporate policy.

The original initiative

In 1996, Box Marche introduced a performance bonus scheme – an annual financial award based on five measurements, four related to the company’s performance and one related to each worker’s performance. The company measurements were:

  • productivity;
  • gross operating margin;
  • quality (rejects and returns from customers as a percentage of turnover);
  • per capita turnover.

A personal characteristics assessment chart evaluated each employee’s performance. Workers and management together defined the company’s targets. Department managers filled out the individual assessment charts, which record 10 personal characteristics. If the company achieved its four performance targets, a worker who reached the personal performance target could earn up to €1,250 extra annually.

The company set up the performance bonus to foster growth, by encouraging employees to participate more and to play leading roles in the company. This initiative still continues today and has remained unchanged due to its success. Based on the 10 personal characteristics measurements, older workers demonstrated good professional and technical skills, proved to be responsible, reliable and determined, and influenced and made an impact on others. The company considers these characteristics to be very important and was extremely satisfied with the contribution of older workers.

Overall, the initiative motivated employees and improved productivity. Therefore, the company considers it a valid, low-stress tool for assessing and motivating older workers.

Good practice today

Box Marche’s performance bonus initiative succeeded in its aim of increasing efficiency. Workers, including older workers, showed their appreciation and company turnover increased. However, the annual employee satisfaction survey eventually began to show a decline in worker motivation, apparently because workers grew accustomed to the bonus and because it was no longer a novelty.

Nevertheless, the company retained the bonus programme and, in 2003, introduced another initiative designed to maximise employee loyalty. The ‘skill passport’ initiative also awards a financial bonus to all workers, regardless of age or sex, who meet company requirements. It involves a task analysis intended to increase productivity, reduce inefficiency, qualify, motivate and reward workers. The award consists of variable added earnings, including a partially fixed 20% consolidation for the next year.

Once again, the criteria for calculating the bonus related to both company and individual performance measurements. The new bonus was determined by the achievement of team productivity objectives, defined by management and workers together, for the various departments. Employees’ individual performance was evaluated by department and company managers, using seven indicators:

Ø attendance;

Ø flexibility;

Ø polyvalence;

Ø punctuality;

Ø sharing of company values;

Ø new ideas;

Ø expertise.

If all objectives are achieved, a bonus of 15% of annual gross salary, paid at six-month intervals, is awarded to the employee.

The results of the skill passport initiative are encouraging. Older employees score particularly well in attendance, punctuality and expertise. Employees of all ages greatly appreciate the new initiative and motivation levels have increased, resulting in increased productivity growth. As in the case of the original performance bonus, the amount awarded under the skill passport bonus (on average €1,300 a year) does not differ significantly between older and younger workers. In the case of employees who receive a particularly low bonus, management intervenes and analyses the reasons for this, working with the employee to find a solution, including remotivating the employee if necessary.

In 2004, the company developed another initiative called the ‘wellness chart’, a project which is still in the pilot stage. This is a self-assessment tool aimed at finding out how employees, including older workers, feel about the company. The weekly satisfaction levels are charted graphically so that any negative or positive peaks, and their causes, can be identified and analysed and so that improvement strategies can be thus implemented.

Box Marche’s general manager devised this initiative, with the cooperation of the workers. It aims to improve employee welfare in the workplace throughout the working life, with direct and indirect benefits for the company also. Charts are plotted on a calculated average of self-assigned personal satisfaction values, using parameters that include ‘smiling at’ or ‘being smiled at’, ‘chatting with co-workers’, ‘making a decision’, etc.

The company is aware that, in the future, it must focus on training for all workers, including older workers, addressing more specifically how the company is managed. This focus will be aimed at enabling employees to make decisions and to manage their own budgets, thus increasing each department’s independence. Such a measure would serve both the company and the workers, who would be more empowered and involved in the corporate fabric.

Further information

Tonino Dominici, General Manager, email: t.dominici@boxmarche.it

Elisabetta Toniolo, Sales, email: e.toniolo@boxmarche.it

Workers’ SA 8000 representative: Sergio Saccinto

Company website: www.boxmarche.it

Publications: Next (bi-monthly periodical published by Box Marche Spa)

 

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