People management

In 2003, the UK Department of Trade and Industry and the Economic and Social Research Council commissioned a review of the UK’s competitiveness, with a particular emphasis on quality of management, from Michael Porter and Christian Ketels of Harvard University. They produced an excellent report, making it very clear that the actions of managers cannot be divorced from the context in which they operate, and that many UK firms were unable or unwilling to raise their game because of a lack of ambition, capability or resources. They also made it clear that there were no simple solutions and this is probably why the report has largely gathered dust.

Nevertheless, the issues identified in that report are more salient today than ever. UK hourly labour productivity is still below its 2008 level. Some of the forces driving productivity improvement during the 1980s, 1990s and the early part of the last decade appear to have run out of steam. With this in mind, the latest report in our Megatrends series takes an in-depth look at the quality of people management in UK organisations and whether this has improved since Porter and Ketels published their report.

Quality management and employee engagement

The results are mixed. There are some positive signs. More employees appear to display high levels of commitment to their employer and job satisfaction has held up remarkably well given the severity of the recession. High-performance working practices are spreading – if still not the norm – and the employee engagement agenda resonates with employers and employees. But there has been little change in perceptions of the quality of management. Internationally comparable data suggest that UK manufacturing firms lag behind their counterparts in the USA, Germany and Japan in adoption of structured management practices. However, applying similar techniques to schools and hospitals shows the UK in a much better light. We are keeping up with our competitors but we may not be making up ground.

This is because many of the factors that Porter and Ketels identified as holding UK firms back still apply today. New data show that almost three-quarters of private sector organisations say their product and service strategy is aimed towards premium rather than basic quality and less than one in ten say their competitive strategy is based on low cost.

Click here to read the full report


Are UK organisations getting better at managing their people? What's your opinion? Share it in the comments section below!

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