Online Case Study: Employee Voice, Tengo Ltd

Tengo Ltd is a manufacturer of notebook computers. Since first entering the market in 2000, it has enjoyed rapid growth due to the ongoing popularity of its low-cost laptops aimed at the student market and the development of a range of higher-spec ‘business’ notebooks. Its products self in 30 countries across Europe and the Far East, although its main manufacturing operations, research and development and support functions (HR, finance, sales, marketing and IT) continue to be based in the UK where over 500 members of staff are employed. Given that Tengo trades exclusively over the Internet – it does not have retail outlets nor does it sell its products through high street retailers – the customer contact centre provides a number of key functions: it is the customer point of contact for spares, accessories and extended product warranties; it provides technical support for existing customers; and it is the channel for customer complaints and enquiries about Tengo products. The contact centre was built three years ago on a greenfield site on the outskirts of a large town in the Midlands. There are a number of other customer contact centres situated nearby and, following a number of new employers locating to the region, competition for labour is intense, especially for those with prior call centre experience. The workforce in the contact centre consists of a customer service director, a HR advisor, a call centre manager, eight team supervisors and 70 contact centre advisors. Tengo’s call centre is known locally to offer comparatively high pay, however a recent benchmarking study of local competitors found that other terms and conditions of employment were less favourable. In particular, advisors were required to work longer shifts than employees in other nearby centres and received less holiday entitlement and fewer opportunities for training and development.

There is no trade union presence at the Tengo call centre but management employs a number of direct and indirect techniques to disseminate information and to involve employees in managerial decision-making. These include a workplace consultative council, regular team briefings and a monthly e-newsletter which outlines changes to company policy and publicises company social events and the outcome of the employee of the month award. Two representatives from the workplace council sit on the company council who meet with senior company management and representatives of the other divisions of Tengo Ltd. The company also seeks to promote an ‘open-door’ culture where employees feel able to informally raise suggestions for service or performance improvements or to discuss and remedy concerns with their line manager.

The call centre consultative council consists of eight ‘elected’ worker representatives who meet on a bi-monthly basis with the HR director, who chairs the meetings, and the customer service director. A wide range of work-related matters are discussed at the council, including the adoption of new technology, staffing levels, health and safety and customer service problems. Pay and terms and conditions of employment are, however, beyond the remit of the council. For management, the council fulfils a number of important functions. First, it is seen as a valuable means of reinforcing information passed on through the direct channels of communication. Second, it is felt to lend legitimacy to managerial decisions and to lead to greater employee acceptance of these decisions. Third, it has, on occasion, proved useful in highlighting flaws in managerial thinking or challenged assumptions which have led to better decision-making. Despite these recognised benefits, the customer service manager often expresses frustration with the operation of the works council and the need to ‘run even the slightest little thing’ by the worker representatives. Workers view the council rather differently to management. Many call centre operators are suspicious of the motives of the council and hold the view that it fails to provide a strong enough voice for employees, doesn’t address many real issues of concern (such as overtime pay) and, fundamentally, does not constitute proper worker participation. Employees also tend to view the worker representatives on the council with suspicion. In reality, worker representatives are not elected by their colleagues but rather are simply picked by managers from those that put themselves forward for the role. Representatives tend to be seen as trying to ingratiate themselves with managers and, rather than acting as a counterweight to managerial decision-making, simply go along with whatever managers say in order to further their own careers. Indeed, in the last two years a number of employee representatives have been given promotions which others in their team view as unwarranted. Despite these reservations, some employees feel that the council has, at times, acted in their interests and could prove to be a useful means of expressing grievances without having to approach management directly. Indeed, until recently, employee relations at the call centre have been relatively harmonious.

In the light of a recent restructuring and spate of redundancies at the call centre, to both streamline a ‘bloated’ workforce and to improve the quality of customer service, a number of employees have begun to strongly question the role of the works council in resisting or challenging these decisions and there is a growing consensus that a trade union presence is necessary to protect workers’ interests. In reality, the employee representatives on the council did put forward a number of suggestions in response to management’s proposals, all of which were rejected in favour of the original decision to enforce a number of redundancies. Operators know of a number of nearby call centres where workers are members of the Communications Workers Union (CWU) and where terms and conditions of employment are better than at Tengo. A number of Tengo workers have arranged to meet with a local representative of the union to discuss the issues being experienced at Tengo and to explore the benefits of membership, with the ultimate aim of securing union recognition.

A representative on the consultative council has made the customer service director aware of the ill-feeling among the staff and the desire for trade union representation. The customer service director has passed on this information to the HR director who is both surprised and appalled at the news. Whilst assuming that staff would feel insecure and resentful about the restructuring and redundancies, he had thought that this could be dealt with via the usual channels of communication. Consistent with its association with new technology, the HR director views Tengo as a progressive employer and is keen to resist any trade union presence at the call centre.

Questions

1. How would you characterise the depth and scope of the participation practices at Tengo? Where would you locate Tengo’s consultative council on the ‘escalator’ of participation?
2. Reflecting on the competing perspectives on the employment relationship, how can we account for the different views of managers and employees on the effectiveness of the consultative council?
3. Why might the HR director have expressed a desire for Tengo to remain union-free? Given the current employee relations climate at Tengo, what benefits might accrue to management from a union presence at the company?
4. What changes or new policies and practices would you recommend to the HR director to help to avoid union organisation at the call centre?