New forms of work organisation in Germany

Since the beginning of the 1990s, Germany has seen an accelerated introduction of new forms of work organisation, as well as broad debates among employers and trade unions about the consequences for German industrial relations. However, in 1999 there is no homogeneous trend towards a single model of new work organisation but rather a great variety of organisational concepts. While some companies have experimented with relatively innovative "post-Tayloristic" forms of work organisation, other companies have introduced more conservative models with only small changes from the Tayloristic division of labour. Since the extent of new forms of work organisation in Germany is still far from being universal, there are currently also tendencies towards a "return to Taylor", resulting in a broader extension of "shareholder-value" concepts and a renewal of short-term thinking within management. Against this background, the reactions of both employers and unions to the European Commission's 1997 Green Paper "Partnership for a new organisation of work" were rather sceptical, as the Paper is seen as setting out a rather idealistic conception of new forms of work organisation.

Changing perceptions on new forms of work organisation

Discussions on "new forms of work organisation" have a long history in Germany. First attempts to introduce them can be found as early as the 1920s, when the German automobile producer Daimler-Benz- in particular - conducted first experiments with an early form of group work. A broader discussion on the negative consequences of "Tayloristic" mass production started in the early 1970s when the German trade unions launched a broad political campaign for a "humanisation of work" (Humanisierung der Arbeit) and demanded a substantial improvement of working life. Since that time, many companies have seen growing problems with labour productivity, work discipline and absenteeism, and there has also been an interest on the employers' side in improving the quality of work. Finally, the German government created a framework programme on "humanisation of work" which promoted various projects on the improvement of working conditions and the introduction of new forms of work organisation.

The results of this first wave of projects on new work organisation in the 1970s were rather limited. Changes at the workplace were mainly made within the paradigm of Taylorism, rather than creating new post-Tayloristic forms of work organisation. The most prominent example was the conclusion of "wage framework agreement number 2" (Lohnrahmentarifvertrag II) in the metalworking sector bargaining district of North-Baden and North-Würtemberg in 1973. This agreement contains various provisions aimed at humanising Tayloristic work - for example, the definition of a minimum standard time for work cycles or the introduction of extra breaks in the case of piecework. Regarding new forms of work organisation, such as the widely discussed concept of the "semi-autonomous group work", both employers and trade unions, however, were rather sceptical at that time. While the employers doubted the economic efficiency of new forms of work organisation and were afraid to give more work-related decision-making power to the employees, the trade union saw the new group work concepts as an ideological construct which might create the illusion of "autonomous self-organisation" by the employees. Furthermore, the unions feared that the new work organisation concepts would lead to a weakening of collective workers' rights and of the power of workers' representative structures.

Until the mid-1980s, Germany followed a primarily technology-oriented path of rationalisation which concentrated more on automation strategies rather than on organisational change. At the end of the 1980s, however, there was a fundamental shift towards more organisation-oriented rationalisation strategies with a strong emphasis on work organisation. Both employers and trade unions changed their fundamental positions on new forms of work organisation and adopted a more positive view, especially on group work. The reasons for these changes were manifold. For the employers, increasing competitive pressure created a need to find new ways in improving productivity. Comparisons with other countries' rationalisation strategies and, in particular, the broad review of the Japanese production system (through "Toyotism" or "lean production") showed that the traditional German production model had reached its limits. At the same time, the trade unions recognised that a defence of the old production system against management initiatives for new forms of work organisation was becoming more and more inadequate. Therefore, a new approach became dominant within the unions which supported the introduction of new forms of work organisation in order to develop their potential for a humanisation of work. To sum up, at the beginning of the 1990s Germany saw a new "modernisation compromise" whereby both parties were in favour of new forms of work organisation, as they seemed to allow the simultaneous improvement of labour productivity and working conditions.

Extent of new forms of work organisation in Germany

Although available data on the spread of new forms of work organisation is incomplete, all existing studies and surveys indicate an accelerated introduction of new working methods since the beginning of the 1990s. However, the same studies also make it clear that new forms of work organisation are far from covering all German workplaces.

Probably the best researched field in Germany is the introduction of group work. Studies estimate that group work had spread to between 7% and 15% of all companies in German manufacturing in the mid-1990s. There are, however, a few branches with a much higher proportion of group work. A survey by the IG Metall metalworkers' union found that, for example, the proportion of automobile production workers who were members of work groups rose from 4% in 1990 to 22% in 1994. According to a 1995 survey by the employers' association for the chemical industry (Bundesarbeitgeberverband Chemie, BAVC), about 28% of BAVC member companies had already introduced group work in that year and a further 22% were planning to introduce it in coming years.

A relatively high proportion of new forms of work organisation can also be found in the German machine-building industry. In 1996, a works council survey carried out by the University of Bochum showed that about 24% of all German machine-building companies had introduced group work and that 32% had quality circles ("Betriebsräte gewinnen Konturen. Ergebnisse einer Betriebsräte-Befragung im Maschinenbau", Walther Müller-Jentsch and Beate Seitz, in Industrielle Beziehungen Vol. 5, No. 4 (1998)). The extent of new forms of work organisation depended largely on the size of the companies: only 16% of smaller companies (with fewer than 50 employees) had introduced group work, compared with 57% of larger firms (with more than 500 employees). Furthermore, the extent of group work was significantly higher in west Germany (25%) than in the east (19%).

Apart from group work, the quantitative dimension of other forms of new work organisation is not very well researched in Germany. Probably the most comprehensive data is provided by the Employee Direct Participation in Organisational Change (EPOC) project sponsored by the European Foundation for the Improvement of Living and Working Conditions (EU9711202F), which carried out a survey of he nature and extent of direct participation in 10 EU Member States ("New forms of work organisation. Can Europe realise its potential? Results of a survey of direct employee participation in Europe", European Foundation for the Improvement of Living and Working Conditions, OOPEC, Luxembourg (1997)). The EPOC survey focused on six forms of direct participation, involving both individual and group consultation. Individual consultation can be either:

  • "face-to-face", involving discussions between individual employee and immediate manager, such as regular performance reviews, regular training and development reviews and "360-degree" appraisal; or
  • "arms-length", that is arrangements not involving discussions between individual employee and immediate manager, such as a "speak-up" scheme with a "counsellor" or "ombudsman", attitude surveys and suggestion schemes

Group consultation can involve:

  • "temporary" groups - groups of employees who come together for a specific purpose and for a limited period of time, such as "project groups";
  • "permanent" groups - groups of employees that discuss various work-related topics on an ongoing basis, such as "quality circles";
  • individual delegation - individual employees are granted extended rights and responsibilities to carry out their work without constant reference back to managers, sometimes known as "job enrichment"; and
  • group delegation - rights and responsibilities are granted to groups of employees to carry out their common tasks without constant reference back to managers, most often known as "group work".

The EPOC study found out that the overall incidence of direct participation in Germany is somewhat below the average of the 10 EU member states covered by the study, as the table below indicates.

The incidence of direct participation in Germany and Europe (% of all establishments)
Form of direct participation Germany Europe (Average of 10 EU countries*)
Individual consultation: "face-to-face" 20% 35%
Individual consultation: "arm's length" 38% 40%
Group consultation: temporary groups 26% 31%
Group consultation: permanent groups 31% 30%
Individual delegation 64% 55%
Group delegation 31% 36%

* Denmark , France , Germany , Ireland , Italy , Netherlands , Portugal , Spain , Sweden , United Kingdom .

Source: European Foundation, EPOC project 1997.

Regarding the delegation of rights and responsibilities, Germany seems to follow rather different concepts than most of the other European countries. While in Germany the concept of individual delegation is more widespread that in the rest of Europe, the use of group delegation in Germany is significantly below the European average. To sum up, the EPOC study found out that, regarding group work, Germany has a significant "modernisation gap" (Modernisierungslücke) compared with its main European competitors ("Gibt es bei den neuen Formen der Arbeitsorganisation in Deutschland eine Modernisierungslücke?", Hubert Krieger and Dieter Fröhlich, in: WSI-Mitteilungen 3/98).

Social partners' initiatives to introduce and promote new forms of work organisation

The introduction of new forms of work organisation in Germany is usually initiated by the management, but its successful implementation seems to depend on the active involvement of the employees and their representation. Therefore, in many companies, for example, the introduction and development of group work is regulated by a works agreement (Betriebsvereinbarung) between the management and the works council. These works agreements contain provisions on:

  • the overall aims of group work (mostly defined as the improvement of performance and quality of work);
  • the tasks, rights and responsibilities of the groups, their individual members and the group leaders;
  • the organisation of the work process within the group;
  • training measures for employees in group work;
  • special remuneration for group work; and
  • the rights of the works council regarding the design and control of group work.

Many companies have created joint bodies of management and employee representatives to plan and accompany the introduction of group work and to solve possible conflicts in the process. Many studies in Germany indicate that the implementation of group work usually involves numerus conflicts, whereby the works council very often gains a crucial role in moderating between the management and the employees.

Apart from company regulation, there exist no significant legislation or collective agreements on new forms of work organisation. However, the introduction of new working methods has a strong influence on other collectively agreed issues (eg working time and wage grades) and sometimes even contradict them. The introduction of new forms of work organisation, therefore, is one major reason for the ongoing debate on a modernisation of Germany's branch-level collective bargaining system (DE9708225F and DE9712240F).

In some industries, the employers' associations and trade unions have concluded non-legally binding agreements or joint political statements on the promotion of group work. In July 1996, the chemicals employers' association BAVC and the former Chemical Workers' Union (IG Chemie Papier Keramik) - which today is part of the Mining, Chemicals and Energy Union (Industriegewerkschaft Bergbau, Chemie, Energie, IG BCE) - were the first to adopt so-called "joint information for companies on group work in the chemicals industry" (""Gemeinsame Hinweise für die Unternehmen zur Gruppenarbeit in der chemischen Industrie). In this document, both parties expressed their common view that "semi-autonomous group work" could help to improve competitiveness and productivity as well as being a major instrument for a humanisation of work. Therefore, the process of implementation should be organised jointly by management and the works council in a spirit of partnership.

Following the chemicals agreement, similar initiatives occurred in other sectors, such as the machine-building industry. In addition, some employers' associations and trade unions provide various services for their members, such as special training seminars on group work, information material or handbooks. In some federal states (Länder), the Federation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) has "technology consultation offices" (Technologieberatungsstellen) which specialise in supporting works councils in all aspects of work organisation.

Scientific evaluation of new forms of work organisation

During the "boom" in introducing new forms of work organisation at the beginning of the 1990s, both employers and trade unions were rather optimistic about achieving the double goal of better productivity and better quality of working life. However, the concepts of group work, for example, differed very much from company to company and from sector to sector. German industrial sociologists have essentially distinguished between a modern-innovative type of group work on the one hand, which really changes the work process by an extension of work tasks and responsibilities among the employees, and a conservative type of group work on the other hand, which simply implements group work in a mainly unchanged Tayloristic organisation of work. While at the beginning of the 1990s Germany saw many experiments with the "modern-innovative" type of group work, the more "conservative" type of group work became predominant after the sharp economic recession in 1992-3.

According to one of the leading German industrial sociologists, Michael Schumann, the growing pressure of international competition and the increasing influence of "shareholder-value" concepts are encouraging a shift in management strategies back towards the predominance of more short-term cost-cutting measures which correspond with more conservative types of group work, or even concepts for a "re-Taylorisation" of work organisation ("Frißt die Shareholder-Value-Ökonomie die Modernisierung der Arbeit?", Michael Schumann, in "Arbeit, Gesellschaft, Kritik. Orientierungen wider den Zeitgeist", Hartmut Hirsch-Kreinsen and Harald Wolf (eds), Edition Sigma, Berlin (1998)). Therefore, it is claimed, many employees have become disillusioned about the promised positive effects of new work organisation and sometimes even see the new working methods as a mere intensification of work. Although the patterns of new work organisation in Germany are still rather differentiated, the growing influence of short-term cost-cutting thinking on the management side, combined with the rather negative workplace experiences of many employees, are eroding the "modernisation compromise" for a new organisation of work. In some sectors and companies the readiness of works councils and trade unionists to support new working methods is clearly diminishing.

German reactions to the European Commission's Green Paper

The European Commission published its Green Paper on Partnership for a new organisation of work in April 1997 (EU9707134F), with the aim of stimulating a debate on new forms of work organisation (TN9903201S). The publication of the Green Paper did not lead to broad debates or concrete policy initiatives among either the social partners' organisations or the scientific community. The relatively low importance afforded the Green Paper in Germany might have two reasons. First, when the Commission published the paper, German debates on new organisation of work had clearly passed their peak, which was in the first half of the 1990s. Second, the description of new forms of work organisation in the Green Paper is, to a great extent, seen as being rather idealistic and as not corresponding with the reality of working life in Germany. The latter view was also expressed in the rather sceptical comments on the Green Paper by both German employers' associations and trade unions.

Employers' reactions

In August 1997, the Confederation of German Employers' Associations (Bundesvereinigung der deutschen Arbeitgeberverbände, BDA) published a detailed statement on the European Commission's Green Paper ("Stellungnahme zum Grünbuch der Europäischen Kommission Eine neue Arbeitsorganisation im Geiste der Partnerschaft", Bundesvereinigung der Deutschen Arbeitgeberverbände, August 1997). The document contains a fundamental critique of both the analytical and the political approach of the Commission.

Regarding the analytical basis of the Green Paper, BDA criticises the Commission for using a "rather simplistic conception" of new work organisation which assumes a general shift from a Tayloristic system of work organisation with a high division of labour towards a flexible team-based work process. For the German employers, such a view is not acceptable since developments in work organisation are very different depending on the specific national, branch-level and company circumstances and on particular market conditions. According to BDA, there is "no general turning away from Taylorism". On the contrary the BDA document considers that after a period of widespread use of "lean production concepts" in the early 1990s, the "pendulum is currently swinging in the opposite direction", with many companies are reintroducing more Tayloristic work concepts.

BDA further criticises the Commission's assumption that new forms of work organisation would automatically promote employment: "On the contrary, in recent years the introduction of new working methods has, from the perspective of the individual company, usually been accompanied by a reduction of the workforce." From the employers' perspective, the safeguarding and creation of employment is not so much related to the issue of work organisation, but depends mainly on labour costs and other framework conditions such as taxes and labour law regulations.

Regarding the political approach of the Green Paper, BDA first states that, considering the "principle of subsidiarity", it is not the task of the European Commission to give practical advice to companies concerning work organisation. In the opinion of BDA, the Commission should concentrate its policy more on the framework conditions and should guarantee that EU regulations provide enough flexibility for company regulation.

Second, BDA declares that - in contrast to the Commission's assumption - there is no "blueprint for optimal work organisation". Although employers usually involve their employees in the introduction of new forms of work organisation, BDA emphasises that there is no equality between the two sides, since decisions on working methods can be taken only by the employer.

Third, BDA rejects the Green Paper's notion that new forms of work organisation need a balance between flexibility and employment security: "The emphasis on employment security can be found in many parts of the Green Paper while there is no equal recognition of market constraints." According to the German employers, there is a strong need for more flexibility which "will necessarily lead to a reduction of employment security, for example, by greater use of fixed-term work".

Finally, BDA strongly refuses any kind of European-level regulations on work organisation, a view which corresponds with BDA's general reservations against any European social regulation (DE9805164F). Instead, the German employers appeal for reforms of existing national regulations, such as deregulation of existing working time law and further flexibilisation and decentralisation of the German branch-level collective bargaining system.

Reactions of the German trade unions

In September 1997, the Federation of German Trade Unions (DGB) presented a detailed statement on the European Commission's Green Paper ("Stellungnahme zum Grünbuch der Europäischen Kommission 'Eine neue Arbeitsorganisation im Geiste der Partnerschaft'", Deutscher Gewerkschaftsbund, in DGB Bundesvorstand (ed), Informationen zur Wirtschafts- und Strukturpolitik No. 5, 8 September 1997). First of all, DGB welcomes the Commission's initiative and gives its support, in principle, to the aims of the Green Paper, in particular that:

  • new forms of work organisation have created a need for a new balance between employment security and flexibility;
  • the concept of a "flexible firm" should be based on high qualification levels on the part of the employees and a company culture of trust and partnership;
  • new forms of work organisation need to improve the participation rights of employees at company level; and
  • new participation-oriented forms of work organisation are the key to improving competitiveness, in contrast to other more technology-centred management strategies or simply short-term cost-cutting measures.

However, DGB also criticises the Green Paper's analysis as being too simplistic and undifferentiated. The unions state that they would like to have seen a thorough analysis of the economic and social framework conditions for the introduction of new working methods. They also reject the Green Paper's assumption of a general trend towards new forms of work organisation. In reality, there exists a great variety of concepts and strategies among different companies and branches. Even the notion of new work organisation can have very different meanings. The concept of group work, for example, could be implemented either through semi-autonomous working groups or through rather hierarchical and Tayloristic teamwork.

According to DGB, the introduction of new forms of work organisation takes place "in a tense relationship between a long-term orientation towards the development of innovation and a short-term orientation towards maximising profits". In recent years, however, the unions have seen a growing dominance of a short-term "shareholder-value orientation" which destroys the notion of partnership and blocks the innovative, productivity-increasing potential of new working methods. As a result, a growing polarisation between winners and losers in new working concepts can be observed, whereby overall employment security is diminishing.

To sum up, DGB criticises the Green Paper for "totally ignoring existing differences of interest and power at company level". In order to guarantee a certain balance between flexibility and workers' security, the unions demand an extension of individual and collective employee rights concerning:

  • employee participation during the introduction and implementation of new forms of work organisation;
  • a right to further training for all employees;
  • more security and individual "time sovereignty" regarding flexible forms of work organisation and working time; and
  • better protection for teleworkers.

Those new rights should be introduced by collective and works agreements and/or by new legislation at national and European level. Concerning the Green Paper, DGB bemoans the lack of concrete proposals for certain European minimum standards on employee participation at the workplace. All in all, the unions warn against a fundamental misunderstanding that deregulation of labour law and collective agreements would ease the introduction of new work organisation. On the contrary, a partnership for new organisation of work can function only when the employees have clearly defined individual and collective rights.

Commentary

The successful introduction of new forms of work organisation depends on a "modernisation compromise" between employer and employees, which has to be grounded on a "positive balance between the interests of business and the interests of workers", or in other words a "balance between flexibility and employment security". This is the fundamental message of the European Commission's Green Paper on Partnership for a new organisation of work.

However, the Commission's conception seems to be rather idealistic, since it generally ignores the contradictions arising from the fact that the introduction of new forms of work organisation is embedded in economic constraints, as well as in power relations and different interests between employers and employees. The latter has been expressed - from different viewpoints - in the statements of the German employers and trade unions about the Commission's Green Paper.

The crucial question for the future of work organisation in Germany and in Europe seems to be whether the dominant socio-economic model will be based primarily on a "shareholder-value" or on a human resource philosophy. Only the latter model opens up the opportunity for a new "modernisation compromise" whereby the introduction of new forms of work organisation might create something like a "positive-sum game" for both sides. (Thorsten Schulten, Institute for Economic and Social Research (WSI))

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