The Workplace Productivity Challenge - Summary - Department of ...

NOVEMBER 2004
THE WORKPLACE
PRODUCTIVITY
CHALLENGE
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summary of the report of the workplace productivity working group

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the workplace productivity challenge
This report is a condensed version of the full report which was presented to the Ministerial
Reference Group of the Ministers of Labour, Finance and Economic Development in August
2004. If you would like a copy of the full report please contact the Department of Labour, PO Box
3705, Wellington, or for an electronic version please visit the workplace productivity website at
www.dol.govt.nz/productivity.
Working Smarter to Build a Higher Value, Higher Skill, Higher
Wage Economy
Our places of work and the people who work in them are two key assets in making sure New Zealanders
have a great quality of life for the future.
It is our people in workplaces around the country who individually and collectively drive our economy
with their ideas, innovations, skills, capital and strong work ethic. If our firms are doing well, our
economy does well and that helps to create an environment where we, as a nation, have choices about
what we spend and how. It is a mutually reinforcing cycle.
The Challenge
The challenge for the future is to build on where our workplaces are performing well, while also
achieving improvements that move New Zealand to a sustainable, high value, high skill and high
wage economy.
To achieve this will require engaging New Zealanders and lifting national awareness about what
improved productivity can contribute to our lives.
The Workplace Productivity Working Group (WPWG) looked at the range of issues that contribute
to how well a workplace performs, particularly how innovation, good culture and leadership help to
create an environment of high performance at firm level.
The Agenda
Many workplaces already have in place business practices that are delivering highly productive,
profitable and high quality outcomes. We need to acknowledge the achievements of these leading
firms and learn from them, as well as identifying new opportunities. There are also many firms that are
doing some things well who could benefit from lifting their performance in other areas.

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This summary of the Working Group’s full report reflects our perspective on some of the tangible
actions to improve New Zealand’s economic growth by lifting everyone’s game at a firm level.
There is no silver bullet. Building sustainable economic growth and lifting living standards demand a
focused effort and strategic approaches across industry, firms and government. This report articulates
how all firms are capable of raising workplace productivity, and how doing even a few things better can
contribute to greater gains for everyone, such as recognising the importance of innovation, training
and new technology as drivers of productivity.
There needs to be sustained attention to workplace productivity issues over time to achieve the longterm
productivity gains to which we are aspiring. We see this report as the beginning of a process
– we hope that this report will be a catalyst to raise awareness and to engage people in the Workplace
Productivity Agenda, and a spark for the effort and activities required to lift productivity.
Andrew Annakin
Workplace Productivity Working Group

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contents
1. Glossary 4
2. Executive Summary 5
3. Background and Scope of the Workplace Productivity Working Group 9
4. The Challenge 13
4.1 New Zealand’s Recent Productivity Performance 14
4.2 Workplace Productivity Drivers 16
4.3 Barriers to Introducing Productivity-Improving Practices 21
5. Case Study – Toll Tranzlink 23
6. Meeting the Challenge 25
6.1 Agenda 25
6.2 WPWG Recommendations 26
7. Appendix 1 – WPWG Members 31
8. Appendix 2 – Consolidated Recommendations 33

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glossary
Workplace Productivity
How firms can utilise labour and skills, innovation, technology and workplace organisation to improve
the quantity and quality of their output.
Labour Productivity
The quantity of output produced by a given quantity of labour input. It is driven by the amount of
capital available to workers, such as equipment, as well as multifactor productivity.
Multifactor Productivity (MFP)
Refers to the way that labour and capital are combined to produce goods and services (also called
total-factor productivity). It is driven by economies of scale, technical progress and the adoption of
best practice.
Gross Domestic Product (GDP)
Represents a broad measure of economic activity and signals the direction of overall aggregate
economic activity. GDP is calculated by the quantity, quality and variety of goods and services available
for consumption.
GDP per capita
The basis for measuring the link between productivity and standard of living. GDP per capita can be
broken down into the sub-components – labour productivity (the quantity of output produced with
a given quantity of labour input) and labour utilisation (hours worked per capita).
Firm
In this report the term “firm” refers to all entities and organisations in the economy that produce goods
and services and includes businesses, non-governmental organisations, not-for-profit organisations,
and government agencies.

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2 executive summary
Productivity isn’t everything, but in the long run it is almost
everything. A country’s ability to improve its standard of living
over time depends almost entirely on its ability to raise its output
per worker. 1
– Paul Krugman, The Age of Diminished Expectations
The Workplace Productivity Challenge
The Workplace Productivity Working Group (WPWG) was established to determine ways that
improved workplace productivity can deliver a high wage, high value economy for the benefit of all
New Zealanders.
New Zealand has recently enjoyed a resurgence in economic growth after a long period of decline. The
two main drivers of economic growth are labour utilisation and labour productivity.
In comparing New Zealand with other members of the Organisation for Economic Co-operation
and Development (OECD), New Zealand has high rates of labour utilisation but much lower rates
of labour productivity. Increases in New Zealand’s living standards are therefore most likely to be
gained through increased labour productivity, of which workplace productivity is a key component
(see Glossary).
Workplace productivity specifically refers to how efficiently and effectively a firm of any shape or size
can turn its inputs, such as labour and capital, into outputs, such as products and services.
Improving workplace productivity is not about working harder but about working smarter. It involves
continuous innovation and improvement in all aspects of the firm’s management and operations in
order to deliver sustainable competitive advantage. The main ways that workplace productivity can be
increased are through investing in capital; achieving economies of scale; investing in innovation and
technology; and adopting better business practices.
1
Krugman, P (1992), The Age of Diminished Expectations: US Economic Policy in the 1980s, MIT Press, Cambridge,
page 9.

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Meeting the Workplace Productivity Challenge
This summary report seeks to identify the challenge that New Zealand faces in raising our quality of
life through improved workplace productivity and identifies some practical actions for encouraging
greater workplace productivity.
The work conducted to meet the objectives of this project was accomplished within a rather ambitious
time frame. We feel that we have been successful in meeting our goals but acknowledge that, given
more time, the breadth and depth of our background research would have been expanded.
Findings and Recommendations
Our findings and recommendations set out a Workplace Productivity Agenda for responding to the
workplace productivity challenge.
The Agenda will contribute to the government’s overall economic goals and complements existing
work programmes and strategies.
A key component of the Agenda is the shared responsibility for action among industry, firms, unions,
employees and government.
We recommend the establishment of a successor body to oversee the implementation of the
recommendations in this report.
As part of its findings, the Working Group identified seven complementary and reinforcing drivers of
productivity, listed below, that form the basis for our recommendations. These are:
• Building Leadership and Management.
• Creating Productive Workplace Cultures.
• Encouraging Innovation and the Use of Technology.
• Investing in People and Skills.
• Organising Work.
• Networking and Collaboration.
• Measuring What Matters.
We have grouped our recommendations around the following four types of actions:
• Raising Awareness – of what workplace productivity means and the actions that can lead
to improvements.
• Diagnostic Tools – to assist firms in identifying how effectively they are performing and to
identify where the firm may need to improve its business practices or performance.
• Implementation – assistance and support for firms to decide what specific actions to take
and the best way to put these in place.
• Research and Evaluation – collecting and developing the knowledge base about workplace
productivity and what business practices are successful.

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These actions are designed so that all organisations may benefit but it is acknowledged that they are
most likely to benefit existing firms in terms of raising productivity.
The intention is to create an ongoing process that generates continuous improvements in the
processes and systems available to all stakeholders. It is proposed that support for firms will continue
to be the shared responsibility of all partners identified in the framework.
For a full list of our recommendations, please refer to Appendix 2 of this document or the Working
Group’s Full Report which is available from the Department of Labour, PO Box 3705, Wellington, or for
an electronic version please visit the workplace productivity website at www.dol.govt.nz/productivity.

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3
background and scope of the workplace
productivity working group
A number of government initiatives have been established over recent years to address the challenge
of raising New Zealanders’ overall quality of life by improving productivity.
At the broadest level the government’s Growth and Innovation Framework (GIF) aims to deliver
long-term, sustainable growth, and issues around productivity have also been subject to informal
discussions in a number of forums, including between such groups as the New Zealand Council of
Trade Unions (CTU) and Business New Zealand, facilitated by Treasury.
Historically, New Zealand has not put the same emphasis on producing improvements in workplace
productivity within the firm 2 as it has on establishing the broad regulatory framework for business to
operate within, even though workplace productivity is one of the foundations for driving national growth.
High productivity at a firm level contributes to the overall productivity of the national economy, which
in turn helps to create higher living standards. Workplace productivity therefore benefits everyone.
The government appointed the Workplace Productivity Working Group (WPWG) in February 2004 to
identify the issues affecting New Zealand’s workplace productivity and how they might be addressed.
The Working Group was given a strongly practical focus, which is reflected in its terms of reference, 3
and was specifically charged with providing the government with information on:
• How New Zealand is doing in terms of workplace productivity and practice compared with
other countries.
• What practices have been successful and/or unsuccessful.
• How New Zealand’s policy settings and processes are promoting workplace productivity.
• Possible future policy options for lifting workplace productivity.
2
See Glossary page 4.
3
The Workplace Productivity Working Group’s full terms of reference can be found at www.dol.govt.nz/productivity.

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To meet the objective the government set of advising on possible future policy options for lifting
workplace productivity, we undertook an extensive process that included:
• Ten meetings of the Working Group and meetings by the supporting officials.
• Engaging industry, business, unions and employees in formal and informal forums
and discussions.
• Reviewing key New Zealand and overseas research.
• Commissioning case study research into good workplace practice.
• Hosting a two-day workshop in Wellington to identify key issues, learn about best practice
examples and build consensus among key decision makers on some of the practical
solutions. Over 70 business leaders, union representatives, academics, officials and other
interested parties attended the workshop. Feedback from the sessions was compiled
into a Summary of Proceedings that we considered in reaching the recommendations
in this report. This summary was also made publicly available and provided to workshop
participants in June 2004.
• Holding seven focus groups (5-20 July 2004) in five locations around the country to further
test the workshop conclusions and to engage more broadly about the Working Group’s
thinking. A full copy of the focus group report can be found at the workplace productivity
website at www.dol.govt.nz/productivity.
Linkages to Existing Policies and Practices
Our terms of reference also required that existing policies and practices were taken into account. This
created natural links to existing advisory groups and required that we look at existing policy review
processes as part of our scope. Specifically, we set out to look at the following key issues:
• What we think are the most important drivers for achieving improvements in
workplace productivity.
• Consideration of available information on how New Zealand businesses are
currently performing.
• Possible barriers to improving New Zealand’s workplace productivity performance.
In light of our terms of reference we were not charged with addressing how broader economic and
public policy issues impacted on productivity in New Zealand firms but rather accepted them as
“givens”. For example:
• We did not consider the issue of low unemployment and the impact of key pieces of
legislation, such as the Holidays Act 2003, the Resource Management Act 1991 and the
Employment Relations Act 2000.
• Macroeconomic concerns about the need for increased capital investment are not addressed
in this report but we did consider issues about the quality and accessibility of capital.
• A wide range of commentators have identified the need to unblock infrastructure bottlenecks
in order to create an environment more favourable to business activity. Two areas where
bottlenecks are frequently cited are transport and electricity. While we recognise the
importance of having a sound infrastructure for overall productivity improvements, this was
not an area that we considered fell within our focus at firm level.

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We were conscious of the need to ensure our considerations did not duplicate activities already being
undertaken by government and non-government processes and other advisory bodies, and to ensure
that a wide range of perspectives was reflected in our final recommendations. We met with both the
Growth and Innovation Advisory Board (GIAB) and the Small Business Advisory Group (SBAG) to
discuss their perspectives on workplace productivity and growth. It will be important that these
groups in particular are engaged further in the development and implementation of the planned
Workplace Productivity Agenda (as outlined later in this report).
Our view of what some of the relevant linkages are between our work and other processes or advisory
bodies is presented in Figure 1 below. This diagram is only intended to be indicative of these linkages
as there are a large number of complementary initiatives currently underway.
Figure 1: Some linkages between the WPWG and Other Processes and
Advisory Bodies
S O ME C O MP O N E N T S O F T H E G OV E R N M E N T ’ S
O VERALL E C O NO M I C S T R AT E G I E S
GROWTH AND
INNOVATION
ADVISORY BOARD
WORKPLACE
PRODUCTIVITY
WORKING GROUP
Networks,
clusters and
industry
organisations
Government agencies
providing assistance to
individual businesses
(e.g. NZTE)
Other
private providers

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4 the workplace productivity challenge
Over long periods of time, small differences in rates of productivity
growth compound, like interest in a bank account, and can make an
enormous difference to a society’s prosperity. Nothing contributes
more to reduction of poverty, to increases in leisure, and to the
country’s ability to finance education, public health, environment and
the arts. 4
– Alan Blinder and William Baumol, Economics: Principles and Policy
New Zealand’s challenge for the future is to build on its high performing workplaces, while also
achieving improvements that move New Zealand to a sustainable, high value, high skill and high
wage economy.
Productive workplaces are the cornerstone of economic growth and therefore the basis of the living
standards that New Zealanders enjoy.
This report focuses on the specific challenge of how improvements in workplace productivity at a firm
level will contribute to future economic growth and improvements in New Zealand’s living standards.
To build momentum at firm level is going to take a concerted effort and shared commitment from
government, industry, firms, unions and employees.
Improving productivity is not primarily about working harder but about working smarter. It sounds
straightforward but there is no one answer to achieving it.
Instead productivity gains are achieved by doing a number of complementary things well at a firm
level. This could include investing in labour and skills, introducing innovation and new technology or
looking at organisational structures.
For the greatest gains, a firm will employ as many of these mutually reinforcing actions as possible. But
even one or two actions will help to improve workplace productivity in a firm as long as the approaches
“fit” from a business and cultural perspective with the firm that is implementing them.
4
Blinder, Alan and Baumol, William 1993, Economics: Principles and Policy, Harcourt Brace Jovanovich, San Diego,
page 778.

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4.1
New Zealand’s Recent Productivity Performance
The basis for measuring material living standards, or the link between productivity and standard of
living, is Gross Domestic Product (GDP) per capita. 5
New Zealand’s material living standards are currently 15% below the average of the member countries
of the Organisation for Economic Co-operation and Development (OECD), 6 as shown in Figure 2.
Until the mid-1970s, New Zealand enjoyed living standards in excess of the OECD average. From the
mid-1970s to the early 1990s, New Zealand slipped and a gap widened because of slower rates of
growth in this country compared with other OECD countries.
Figure 2: GDP Per Capita as a Proportion of the OECD Mean: Selected Countries
Source: OECD (2004) Annual National Accounts, Paris
Since the early 1990s, New Zealand’s rate of economic growth has generally been higher than that
of many other countries and above the OECD average. This has arrested the decline in New Zealand’s
material living standards as shown in Figure 3.
Figure 3: Comparison of New Zealand’s Per Capita GDP Growth with the OECD
Mean and OECD Total
Source: OECD (2004) Annual National Accounts, Paris
5
See Glossary page 4.
6
See Glossary page 4.

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The main source of growth in New Zealand’s per capita GDP during the first half of the 1990s was
increased labour utilisation. However, this increase in the utilisation of labour came from reductions
in the unemployment rate and increases in labour participation, rather than increases in labour
productivity, 7 or the average hours worked (see Figure 4).
Figure 4: Contributors to New Zealand’s Economic Growth
Source: OECD (2004) Annual National Accounts, Paris
Labour productivity growth was a more important source of growth in per capita GDP in the latter half
of the 1990s and continues to be an important factor, growing at about 1.7% per year.
Despite recent improvements, most of the difference in GDP per capita between New Zealand and the
OECD average can be attributed to relatively low labour productivity. New Zealand’s level of labour
productivity is much lower than that of many OECD countries, especially those with higher levels of
GDP per capita. In contrast, New Zealand’s labour utilisation rates are high by OECD standards.
Given already high rates of labour utilisation, further increases in New Zealand’s living standards are
therefore most likely to come from increased labour productivity.
Labour productivity is determined by the amount of capital available to each worker (the capital-to-labour
ratio) and how the capital is used to produce goods and services (multifactor productivity or MFP). 8
Growth in capital per worker declined in the late 1980s, although it has improved recently as
shown in Figure 5. The slow growth in capital investment, relative to the OECD, and strong growth
in employment means New Zealand currently has a lower capital-to-labour ratio than many other
countries. This capital shallowness may be a reason for New Zealand’s lower rate of labour productivity
growth. Improving labour productivity may therefore require increased capital investment.
MFP growth was weak in the late 1980s and early 1990s, but its growth has improved since the early
1990s. Where it can be more easily measured, MFP growth has been similar to that experienced in
Australia since the early 1990s.
7
See Glossary page 4.
8
See Glossary page 4.

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Figure 5: Contributions to New Zealand’s Labour Productivity Growth
Source: Black, M, Melody, G and McLellan, N (2003), “Productivity in New Zealand 1988 to 2002”, New Zealand Economic Papers 37(1): 119-150,
Statistics New Zealand.
2.00%
6- year average annual growth rate
1.50%
1.00%
0.50%
0.00%
-0.50%
-1.00%
LABOUR PRODUCTIVITY
MULTIFACTOR PRODUCTIVITY
CAPITAL-TO-LABOUR RATIO
-1.50%
1987-1992
1988-1993
1989-1994
1990-1995
1991-1996
1992-1997
1993-1998
1994-1999
1995-2000
1996-2001
1997-2002
Improvements in workplace productivity can contribute to labour productivity, notably MFP, and
therefore to economic growth and New Zealand’s living standards.
OECD research suggests that productivity gains within existing firms account for 50%-80% of labour
productivity growth in most OECD countries. The entry and exit of firms account for most of the rest
of labour productivity growth, although the contribution of the expansion and contraction of existing
firms should not be overlooked.
New Zealand faces a continuing challenge in improving living standards for all. For New Zealand to
move back up the OECD rankings, per capita GDP growth would need to exceed the growth rate of
richer economies in the OECD by a significant margin. For example, it would need to exceed the UK’s
per capita GDP growth by 1.9% per year over the next 10 years to rise above the UK’s per capita GDP.
4.2
Workplace Productivity Drivers
Firms face strong incentives to invest in productivity-enhancing activities that will increase their
returns. The productivity of the firm reflects how it brings together people, skills, technology, capital
and other inputs to increase its profitability and market share. Continuous innovation and improvement
in all aspects of the firm’s management and operations are key components of lifting productivity.
The main ways that firms can increase their productivity are through investing in capital, achieving
economies of scale, investing in innovation and technology, and adopting better business practices.
Capital investment in physical resources such as machinery and technology complements labour,
enabling workers to be more productive. Investment in new technology that embodies the latest
innovations can boost productivity further, as can complementary investments, such as training
workers and improving the organisation of work.
Economies of scale improve productivity as the firm engages in mass production. As the firm produces
more and more goods, average cost begins to fall because of economies in production, such as using
expensive machinery more intensively.
Adopting better practices across the range of business procedures can also lift productivity
directly through improvements in efficiency, for example in production processes, but also through

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improvements in the management and implementation of productivity-enhancing strategies such as
worker training or R&D.
New or improved products and processes, whether developed in the firm, adopted and adapted from
elsewhere or purchased off the shelf, allow the firm to make things better, improve efficiency and
quality, and develop new products.
In reaching our findings, we identified seven complementary and reinforcing drivers that can be used
by firms to improve productivity (outlined later in this section).
Implicit within each of the drivers is the understanding that the way people are treated and managed
is of fundamental importance to workplace productivity. People tend to be more motivated in the
workplace if they feel appreciated and respected. Creating a positive work environment not only
boosts morale but also productivity levels.
Productivity improvements can be made using any of these drivers, depending on the priorities facing
a particular firm. We note that it is not an “all or nothing” approach and implementation of all seven
drivers is not necessarily imperative to achieving workplace productivity gains. For example, a firm that
implements one of the drivers well is likely to see greater productivity gains than if it did nothing.
However, the drivers tend to be complementary, so that changes in one area reinforce changes
in another. The case study on page 23 illustrates how a firm has identified which strategies when
combined will have the greatest impact and has implemented them with the engagement of
management and employees to improve workplace productivity.
A more detailed analysis of each of these drivers and their inter-relationships is available in the
Working Group’s full report.
Building Leadership and Management
“Leadership is an influence relationship between leaders and followers
that seeks to elicit voluntary commitment and action to effect real
change and outcomes that reflect their shared purpose.”
– Lester Levy, NZ Leadership Institute, WPWG Workshop, May 2004
Leadership and management capabilities are key drivers of firm capability and performance and cut
across all of the other workplace productivity drivers. If there is a lack of strong leadership and/or
management in a firm, it will be difficult to successfully develop and implement initiatives around the
other main productivity drivers.
We identified a strong role for leadership, and in particular leadership by example, in creating a positive
and productive workplace culture. Leadership capability relates to an individual or team’s ability to
identify new opportunities and inspire others to pursue those opportunities. Leaders are found at
every level of an organisation and a productive workplace will have leadership depth.
Managerial capability includes the strategic ability to adapt to a changing environment that creates
internal and external threats and opportunities; organisational and management skills; people and
communication skills; and information acquisition and learning processes – all critical factors in
workplace productivity.
High performing organisations have both effective management and effective leadership and, as a
result, excellence in execution.

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There are already a number of government initiatives to improve leadership and management
capability in New Zealand firms. The Ministry of Economic Development (MED) Management
and Business Capability Co-ordinating Project (MBCC Project) has been established to develop
and implement well-focused management capability initiatives. The Working Group notes this
programme and recommends that our successor body be advised of its progress.
Creating Productive Workplace Cultures
“Culture is how people behave when the boss isn’t around.”
– Kevin McKenna, PricewaterhouseCoopers, WPWG Workshop, May 2004
High performing workplaces are founded on a strong workplace culture in which motivated and
engaged employees are willing to “go the extra mile”. There is no single prescription for creating
a productive organisational culture but firms can cultivate such an environment by fostering some
significant cultural attributes, such as acknowledging the contribution of individuals, rewarding
participation and good ideas, developing healthy and respectful relationships in the workplace and
promoting a sense of shared goals and values.
More emphasis needs to be placed on good employment relationship management practices as
an important factor in boosting employee participation, building stronger workplace culture and
therefore creating more productive workplaces. Unions can play a constructive role in supporting a
positive culture, both as the representatives of their members within particular workplaces and as
sources of information about employment practices.
To be successful, productive workplace cultures also need to embody New Zealand’s distinctive
cultural characteristics and in particular the way in which people respond and interact.
The WPWG notes that funding has been announced for a Partnership Resource to promote workplace
innovation, productivity growth and improved service delivery through constructive employer/union
partnerships. This Partnership Resource will provide a useful complement to our recommendations.
Encouraging Innovation and the Use of Technology
“We need business-savvy people in the R&D sector, and R&D-savvy
people in the private sector.”
– Institution of Professional Engineers New Zealand, Growing Smartly
Innovation is a key part of raising workplace productivity. Creating new products or services or just
doing things better are vital ways to achieve firm growth.
A large number of studies supports the link between productivity gains and innovation. In particular,
the appropriate introduction of advanced technology is linked with higher productivity, greater
market share and employment growth. Firms with more sophisticated equipment and machinery
employ more skilled workers and these workers receive higher wages.
The major challenge is for firms to harness the capability to extract value from innovation processes,
services and/or technologies. This requires the ability to access, absorb and exploit technology.
Innovation can be incremental, such as doing things slightly differently, or it can be more radical, such
as incorporating new technology or introducing entirely new products into a firm’s business. The

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knowledge and skills of employees at all levels provide a platform for further innovation and the ability
to adopt and adapt ideas from elsewhere.
The ability of a firm to innovate depends on a variety of internal and external factors, including
organisational culture, how work is organised, a shared sense of the vision and strategy within the
firm, and the impact of the wider economic and regulatory environment.
We believe there is a sound economic case for public support of innovation, and R&D in particular.
The government has recently agreed to an extensive medium-term work programme on issues related
to the innovation system and strengthening the innovative capability of firms. We believe this agenda
will provide a sound base for improving the level of innovation in New Zealand.
Investing in People and Skills
“Don’t get the machinist to hang his brain at the door when he comes
to work.”
– Geoff Vazey, Ports of Auckland, WPWG Workshop, May 2004
Our people are our greatest asset. Skills shortages choke off growth potential. New Zealand needs to
match up the potential and talents of New Zealanders with the skills needed in the workforce.
The knowledge, ability and skills of workers contribute to workplace productivity. Ongoing investment
in foundation, technical, supervisory and managerial skills, together with improvements in work
organisation, can help improve the productivity and performance of New Zealand firms.
A skilled workforce can lead to more innovative behaviour and can enable the use of higher levels
of technology, which in turn leads to higher productivity and a better quality of life for all New
Zealanders. Priority must therefore be put on making sure that all adults in the workforce have access
to appropriate learning mechanisms and work skills training and that employers understand how best
to add value to their firm by investing in skills and training.
While there has been an increased emphasis on investment in education and training by employers,
employees and the government, more needs to be done to address barriers that exist to people
obtaining the skills they require.
In particular, a lack of foundation skills, including literacy and numeracy, has been identified as a
critical issue in the New Zealand workforce, and this may be limiting productivity levels in firms.
We believe there is a role for government in improving the accessibility and uptake of foundation skills
training as a means of building the productivity of the existing workforce and overcoming the current
skills shortage. This will involve further government investment in the skills training area. We also
believe the balance of government spending between tertiary education and workforce training needs
to be reviewed.

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Organising Work
“The last true source of competitive advantage… is organisational
capability – the ability of the organisation to innovate, to motivate,
to satisfy customers. And tied to that is another source of advantage:
intellectual property or intellectual capital, which is the result of
organisation capabilities that can’t be easily copied or reconstructed.”
– David Nadler, President of Delta Consulting Group, in “It Could Happen to Us”. 9
In order to maintain a competitive edge in a highly competitive, global environment, firms need to
assess and adapt their structures and business practices and the way they carry out their work on an
ongoing basis.
To extract the greatest value out of its investment in new technology and skills, work processes and/or
products and services, firms need also to look at their organisational design. In particular they need to
make sure the activities that create value within a firm are aligned with each other and with the overall
business strategy, and that they are functioning effectively.
A significant factor in ensuring that work organisation contributes to workplace productivity gains
is employee participation. It is critical that employees at all levels of a firm have an opportunity
to contribute to work organisation and to provide relevant practical advice from their respective
positions. The ability of firms to learn from experiences and pass on knowledge about how to do
things better is closely related to how work is organised, such as structuring work groups or workplace
processes. Designing good quality jobs is also a crucial consideration for effective work organisation.
Networking and Collaborating
“Clusters are the building blocks of a productive, innovative economy.”
– Professor Michael Porter
Firms do not operate in isolation and there are significant productivity gains to be achieved by improving
the exchange of knowledge, information and ideas through both formal and informal networks.
Existing networks are already doing an excellent job in lifting scale, improving the adoption of best
practice and assisting with the adoption of strategic approaches specific to particular sectors.
There is also a role for government to act as a catalyst and broker in strengthening network formation.
Specifically, government can help to increase firm awareness about the importance and value of
both informal and formal networks as a key business tool. Government also has an important role
to play in providing information to existing networks, and widening networking activities to include
key stakeholders.
Measuring What Matters
“Key performance indicators should be appropriate to people’s level of
control, within their sphere of influence and in their language.”
– Alan Bennett, Fonterra, WPWG Workshop, May 2004
9
Across the Board, October 1993, page 28.

summary of the report of the workplace productivity working group
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Workplace productivity measurement is essential in assessing the value to a firm of investing in other
workplace productivity drivers.
There is a lack of information about the nature or extent to which New Zealand firms are implementing
measurement and reporting practices. The research that has been conducted shows that there is a low
level of best practice benchmarking among New Zealand firms. This is despite the proven value that
measurement and reporting tools create in terms of realising added value within a firm.
To fully realise workplace productivity improvements within New Zealand firms will require much
more widespread adoption of effective measurement and reporting practices.
Good measurement and reporting practices are linked to an assessment of an organisation’s
strategy and how to better achieve those strategic objectives. There needs to be a commitment to
measurement throughout the firm and to communicating the results in a transparent way that relates
individual and team performance to the overall business performance and helps employees to take
leadership roles in making appropriate changes to improve productivity.
Measurement and reporting also need to be tailored to the individual firm and to balance both
qualitative and quantitative factors, including finance, organisational culture and human capital.
4.3
Barriers to Introducing Productivity-Improving Practices
The way firms respond to productivity issues will depend on the costs and benefits of the options
available to them. They also need to have adequate information about the bottlenecks they face and
the strategies they could use in order to make good decisions.
There may be a number of barriers that impede firms from developing or implementing productivity
improvements, typically where firms do not see them as worthwhile due to their costs or risks or the
inability to appropriate the benefits.
Firms may lack timely and relevant information about the productivity bottlenecks they face and/or
the appropriate strategies for overcoming them. Tacit and/or diffuse information, for example about
best practice, may be particularly difficult to acquire. We have identified information costs as a major
barrier to improving workplace productivity and our recommendations contain measures to address
this issue.
The costs of new practices and strategies to lift productivity can exceed the potential benefits to
the firm particularly in the short term. We note that regulation can have a significant effect on the
costs facing a firm, with commonly cited examples being the impact of labour market and resource
management regulation on investment decisions.
Implementing a strategy to lift productivity may be difficult if there is a lack of “buy-in”. For example, a
perception that a productivity strategy would result in job losses or be pressured to work longer hours
could result in opposition to its adoption.
The risks associated with a new strategy or practice may deter firms from new productivityenhancing
initiatives.
Firms can be reluctant to invest in productivity-enhancing activities if they think their competitors
could capture so much of the gains that the investment is not worthwhile.

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5
5 case study – toll tranzlink
“We were on a downward spiral with no real future. However,
we didn’t let this stop us. We went for a 50-50 strategy – 50%
best-of-breed technology and 50% the best in management and
education. In three years we have turned the firm around and it
is now financially stable and growing. We have an operationally
sound network and a proud culture. Informed decision-making
happens at the coalface or at a grass-roots level first in our
company. We are now moving at pace in one direction as a
world-class logistics operation that people want to work for.”
– Greg Miller, Group General Manager, Toll Tranzlink
Just over two years ago Toll Tranzlink was facing massive business challenges and significant
financial losses. Poor systems and reporting at all levels in the firm meant that misinformation
was running the company into the ground.
The poor systems were also leading to poor decision-making in the firm and inconsistent
customer service. As a result, Toll Tranzlink had grumpy customers, high customer and staff
churn and constant leadership and management changes. Shareholders were also discouraged
from making much needed investments to improve the firm.
When Greg Miller joined the firm as Group General Manager, his first priority was to stabilise the
business. Once the lack of business knowledge was identified as the foundation of Toll Tranzlink’s
performance issues, Mr Miller set out to implement a solution that involved integrating the
people and systems, implementing an enterprise-wide new management system, and ensuring
that a strong leadership team was in place that included industry specialists.
Mr Miller says that Toll Tranzlink’s leadership team embarked on a strategy that involved the
introduction of a broad range of technological solutions to improve their business knowledge,
including the development of a “best of breed” web-based system for global access to business
information. This technology was designed to be used by mobile operators in the field, in trucks,
in the yards or working on a fork hoist.
The data could be collected at all stages and while workers were on the move. Many
communications options existed but Toll Tranzlink settled on a strategic partnership with
Vodafone to provide GPRS technology (and RF, radio band and frequency-Fleet Link).

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“As they say, a picture is worth a thousand words so that’s what we did. We turned our business
data into pictures, and we have just reported a 400% return on investment (ROI) in 30 months,”
Mr Miller says.
The leadership team also recognised that getting good data collection and making a difference to
the firm would require the commitment of every staff member. This meant developing a full suite
of educational tools to teach staff how to use the new mobile data collection system and setting
up two education centres.
Toll Tranzlink’s First Class Training School was designed for both literate and illiterate workers,
and covered how to self-measure within all areas of the organisation, as well as understanding
the productivity drivers that are relevant to each staff member and how they can individually
influence the firm’s outcomes.
Mr Miller says that once the significant investment in training had been made, Toll Tranzlink’s
new enterprise management system was deployed nationally, with the leadership team taking a
central role in the roll-out.
“Our new systems meant every worker had full transparency on their business decisions, down
to the minute, 24/7. And we managed to do all of this concurrently and on a budget that was less
than the past operation’s system-licensing cost,” Mr Miller says.
The successful implementation of the technology, staff and business process strategies at Toll
Tranzlink has enabled far broader and more accurate reporting. The accuracy of the information
has also resulted in a 55% increase in the number of on-time, undamaged deliveries and more
effective use of each truck’s capacity, creating significant improvements in customer confidence
and far better overall business performance.
The following additional case studies of New Zealand companies who have introduced best
practice workplace productivity activities are featured in the WPWG’s full report and are
available at www.dol.govt.nz/productivity. These include:
• Vodafone – Creating a Productive Workplace Culture
• Jenkin Timber, West Auckland – Encouraging Innovation and the Use of Technology
• Rotaform Plastics Ltd, Auckland – Investing in People and Skills
• Good Time Food Company, Hawke’s Bay – Organising Work
• Kiwi Expat Association (KEA) and battery technology company Anzode Ltd –
Networking and Collaborating
• Fonterra Co-operative Group Ltd – Measuring What Matters

summary of the report of the workplace productivity working group
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6
meeting the workplace productivity challenge
Productivity isn’t everything, but in the long run it is almost
everything. A country’s ability to improve its standard of living
over time depends almost entirely on its ability to raise its output
per worker. 10
– Paul Krugman, The Age of Diminished Expectations
In this section we identify steps New Zealanders can take to raise workplace productivity that improves
economic performance and ensures we have the very best quality of life possible.
6.1
A Workplace Productivity Agenda
Our findings and recommendations set out a Workplace Productivity Agenda for responding to the
workplace productivity challenge. This Agenda emphasises the need to build a shared commitment
and responsibility for action among industry, firms, unions, employees and government.
The process undertaken by the Working Group has generated a heightened level of attention in
workplace productivity issues, a significant level of commitment from key stakeholders and goodwill
for initiatives to lift New Zealand’s overall workplace productivity performance. However, this is just
the beginning. We consider that it is essential this commitment and goodwill be harnessed to achieve
sustained emphasis on continuous improvements in workplace productivity.
In communicating messages about the Workplace Productivity Agenda there needs to be a greater
emphasis on learning how to do what we do better, increasing the value of what we do now and
identifying the new opportunities that will lead to the higher value, higher skill, higher wage economy.
This Agenda is necessary to ensure a co-ordinated response to our recommendations. We
recommend that an Advisory Board or Committee be established to oversee the implementation of
the recommendations in this report. This successor body should be:
• Founded on the basis of shared responsibility, consultation and active engagement of
industry, firms, unions, employees and the government.
10
Krugman, P (1992), The Age of Diminished Expectations: US Economic Policy in the 1980s, MIT Press, Cambridge,
page 9.

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• Established for a specified period of time (two to three years) and subject to a review of
its purpose, effectiveness and composition towards the end of that period.
• Focused on short- to medium-term implementation.
• Representative of a broad range of industries and different sized firms.
• Supported by a secretariat seconded from interested departments and agencies.
We consider that this successor body should be responsible for the following functions:
• Strategic communications to raise the profile of workplace productivity.
• Sharing knowledge by supporting the distribution of research and diagnostic tools and
technologies with the support of all the key stakeholders.
• Creating or commissioning new diagnostic support tools and other assistance to help
identify possible workplace productivity improvements.
• Facilitating productivity improvements by providing a catalyst for learning, such as
bringing firms together for business-to-business exchanges.
• Providing funding support for capacity-building activities and workplace
productivity improvements.
• Undertaking research and knowledge-deepening activities, including developing links
to international productivity organisations and commissioning and reporting on research
into workplace productivity issues.
• Reviewing government programmes to ensure that resources are focused, targeted
and relevant.
In Budget 2004, the government set aside a contingency of up to $2.5 million per year for activities
to promote improved workplace productivity. We recommend a flexible method of allocating funds
across the functions proposed for the Workplace Productivity Agenda be used because this will allow
for targeting areas of greatest importance each year.
The successor body should be required to identify to Ministers the areas on which it considers the
most emphasis should be placed each year and the allocation of funds it proposes making across these
areas, and should be accountable to Ministers for the achievement of agreed outcomes.
6.2
Specific WPWG Recommendations
Our recommendations are grouped under four key areas of action. These actions are designed so that
all organisations may benefit but it is acknowledged that they are most likely to help existing firms to
achieve productivity gains.
These actions, as illustrated in Figure 6, support and complement the Workplace Productivity
Agenda and represent a broad framework for the ways that industry, firms, unions, employees and the
government can implement productivity improvements.

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Figure 6: Framework of Recommendations
The intention is to create an ongoing process that generates continuous improvements in the
processes and systems available to all stakeholders. It is proposed that support for firms will continue
to be the shared responsibility of all partners identified in the framework.
For a full list of our recommendations, please refer to Appendix 2 of this document or the Working
Group’s full report.
1. Awareness Raising
We believe it is important to raise general awareness of the ways that workplace productivity can be
improved, including the potential opportunities and benefits that can be created.
The Working Group’s specific recommendations to improve awareness of workplace productivity
issues are primarily focused on raising awareness of the importance of the seven drivers for improving
workplace productivity. This includes highlighting the interdependence among the drivers through
the promotion of best practice, case studies and demonstration workplaces, and through the use of
industry groups and employee organisations to share good practice and experiences.
The Working Group sees a strategic communications role, focused on these activities, as being core to
the functions of a successor body
We also recommend an awareness raising campaign around skills investment, in particular the importance
of raising foundation skills within the firm and positive perceptions around vocational qualifications.

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2. Diagnostic Tools
The Working Group notes that diagnostic tools can assist firms in identifying how effectively they
are performing and where they may need to improve. These can measure performance individually
against any of the seven drivers of workplace productivity, although the diagnostic process will be
more effective where it examines performance against a combination of these drivers (reflecting the
complementarities among different business practices).
Our recommendations to improve awareness of workplace productivity issues focus on the need to
review the availability and effectiveness of existing tools for the drivers of workplace productivity,
and to develop new tools, information and frameworks to address gaps. New tools should utilise
international best practice, but be relevant to New Zealand industry.
3. Implementation
To achieve the potential productivity gains outlined in the Working Group’s report, firms will need
assistance and support to implement specific strategies, including the availability of information and
expertise about specific actions and how to put these in place.
Based on feedback from the workshop, firms have indicated they want to be able to access information
and expertise in a simple, user-friendly and streamlined way.
Our recommendations to assist firms in implementing productivity improvements focus primarily
on the need to improve the relevance, co-ordination, responsiveness and accessibility of government
support for the drivers of workplace productivity.
This would include facilitating linkages and collaboration among industry, government and employee
organisations to improve workplace productivity and is particularly important in the areas of
employment relations, skills development and innovation.
We also recommend a review of how government currently supports skills investment by firms,
including the mechanisms for supporting firms to identify skills needs and training solutions. In
developing these forms of assistance, the Working Group notes the need to consider the role of ITOs
as a delivery mechanism.
In its full recommendations, the Working Group proposes that further work is undertaken to address
the needs of existing workers with low foundation skills. This will require a substantial increase in
government funding in this area and alignment of foundation skills training with wider industry
training to ensure broad skills develop aligned to industry requirements. The Working Group would
also like to see greater adoption of management and commercialisation courses as part of the tertiary
engineering and science curriculum.
We recommend assessing existing quality standards for the drivers of workplace productivity and
developing these further as necessary.
4. Research and Evaluation
Research and evaluation are useful for identifying progress and areas for improvement that can help
focus efforts to continuously lift New Zealand’s productivity performance.
The WPWG is keen to see more research undertaken into the following areas:
• The incentives for firms to invest in the drivers of workplace productivity, including
particularly the returns on that investment.

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• The incentives and relationship between decisions by individuals and workplace productivity,
including individuals’ investment in life long learning and achieving an appropriate worklife
balance.
• Current practices in New Zealand and identification of good practice as well as how
the distinctive values and cultural characteristics of New Zealanders enhance or impede
firm productivity.
• Current and potential mechanisms to support the drivers of workplace productivity, including
evaluation of the effectiveness of current government programmes and funding mechanisms,
and proposed refinements to existing government programmes particularly with regard to
investment in skills.
The Working Group notes that it is critical that any research undertaken in these areas is aligned with
current government research in relevant areas.

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7
appendix 1 – wpwg membership
Workplace Productivity Working Group Membership
The members of the Workplace Productivity Working Group have a wide range of backgrounds, and
bring diverse and practical perspectives. They are:
• Owen Harvey – Innovation and Systems Ltd
• George Lafferty – Professor of Human Resource Management & Industrial Relations at
Victoria University, Wellington
• Jan Mottram – HR Director, Vodafone
• Katherine Percy 11 – Chief Executive, Workbase
• Craig Ellison – Moana Pacific Fisheries Limited
• Greg Miller – Group General Manager, Toll Tranzlink.
(More detailed biographies for these Working Group members are available at www.dol.govt.nz/
productivity.)
11
Katherine was supported by Carla White, Acting Chief Executive of Workbase.

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Representatives of organisations or agencies
• Peter Conway – NZCTU representative
• Nick Clark 12 – Business New Zealand representative
• Andrew Annakin 13 – Department of Labour representative (Working Group Chair)
• Peter Wilson 14 – Treasury representative
• David King – Ministry of Economic Development representative
• Maria Crook – New Zealand Trade and Enterprise representative
• James Buwalda – Department of Labour, Project Sponsor.
12
Nick was supported by Jeremy Baker and Peter Whitehouse.
13
Andrew replaced Geoff Bascand as the Department of Labour’s representative on the Working Group.
14
Peter replaced Jeremy Corban as the Treasury’s representative on the Working Group.

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8 appendix 2 – consolidated recommendations
Building Leadership and Management Capability
Awareness Raising
1 Raise awareness of the importance of good leadership and management to workplace
productivity by showcasing effective leaders and celebrating their success, and highlighting
the need for leaders at all levels of an organisation.
2 Examine how existing government assistance programmes could be improved to raise
awareness of the benefits of leadership and management development.
3 Use industry networks to raise awareness of the importance of leadership and management
capability in improving performance, and to spread best practice, through the sharing of
management and leadership skills and experiences.
Diagnostic Tools
4 Review the availability and effectiveness of existing tools for diagnosing the level of leadership
and management capability in individual firms and improve them, as necessary, to ensure
they meet the needs and circumstances of all types of New Zealand firms.
Implementation
5 Make it easier for firms to access government leadership and management development
services in a seamless way.
6 Assess the extent to which quality standards exist for leadership and management services
and, where necessary, develop such standards.
7 Bring together businesses and organisations delivering and developing courses and
information on leadership and management capability to ensure that they are accessible
and relevant to firms. This may include bringing together education institutions, third-party
training providers and firms.

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Research and Evaluation
8 Research whether firms have sufficient incentives to invest in building leadership and
management capability and, if necessary, take action to strengthen these incentives.
9 It is proposed that the Management and Business Capability Co-ordinating (MBCC) Project
advise the Working Group’s successor body of its progress in carrying out its planned work
programme to check that activities aimed at increasing overall productivity are well aligned,
co-ordinated and complementary to the proposed Workplace Productivity Agenda. This
co-operation would also provide the successor body with the ability to ensure that our
recommendations (as outlined in this report) are delivered.
10 Research the value and potential mechanisms for introducing mentoring for managers
in SMEs.
11 Conduct research to gain a clearer understanding of leadership and management capabilities
to avoid duplication and add value to existing programmes, such as the MBCC Project.
Creating Productive Workplace Cultures
Awareness Raising
12 Model and communicate the benefits of good employment relationship practices through
industry organisations, networks, clusters and unions.
13 Promote purposeful employee participation, including in change management.
Diagnostic Tools
14 Review existing programmes and support to promote productive workplace cultures and
develop tools, information and frameworks to address any identified gaps. This would include
assessing what tools are available for measuring and addressing employment relations issues
and employee participation.
Implementation
15 Continue to support firms, employees and unions in improving their employment
relationships and in developing supportive workplace cultures.
16 We endorse the establishment of a Partnership Resource to promote workplace innovation,
productivity growth and improved service delivery through constructive employer/union
partnerships.
17 Create greater dialogue between industry, firms, unions and employees on how to develop
combined strategies for encouraging productive workplace cultures and building effective
employee participation mechanisms.
18 Promote and roll out tools, information and frameworks for building productive
workplace cultures.

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Research and Evaluation
19 Undertake research on employee participation mechanisms in New Zealand workplaces,
including identifying good practice examples.
Encouraging Innovation and the Use of Technology
Awareness Raising
20 Raise awareness of innovation as a broader concept than research and development (R&D)
or high-tech investment.
21 Promote an understanding that innovation requires a range of supporting practices within
the firm, such as environmental scanning and information management, close customer
relationships, a culture that encourages new ideas and teamwork, investment in staff and
strong leadership.
22 Use industry networks to raise awareness and spread best practice through sharing
innovation management experience.
23 Raise awareness of the importance of continued investment in the right technology for firms
facing labour shortages.
24 Encourage the adoption of firm management and commercialisation programmes as part of
the engineering/science course syllabus in tertiary organisations and among staff involved in
innovation processes in firms (and vice versa).
Diagnostic Tools
25 Evaluate the effectiveness of existing tools and programmes, particularly around the issue of
firms’ ability to adopt and adapt innovations and new technology. Develop tools, information
and frameworks to fill identified gaps.
Implementation
26 Facilitate linkages and collaborative relationships, both between firms and Crown Research
Institutes (CRIs), tertiary institutions and research expertise; and firm-to-firm, to encourage
the exchange of information, skills and technology, improve opportunities for capturing
knowledge spillovers, and build up the innovation capability of firms.
27 Consider making mentor support an integral part of the delivery of technology and
innovation assistance, to provide owner/managers with some space and guidance to work on
the firm rather than in the firm.
28 Improve co-ordination and responsiveness of government services, making management and
marketing support available alongside R&D support and improving the “front end” client
advisory services, so that the most appropriate support is provided to firms from the first
contact, irrespective of the agency first approached.

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Research and Evaluation
29 Ensure research is undertaken into the issue of firms’ access to finance.
30 Identify any barriers to increased capital accumulation and how these can be reduced.
Investing in People and Skills
Awareness Raising
31 Raise awareness of the need for firms to undertake skills needs assessments, so they can
identify what skills they need and where they have skill gaps including identification of
where improvements in foundation skills are needed. Promote the benefits of undertaking
these assessments.
32 Provide information on the best ways of matching skills to the needs of firms and linking to
ongoing improvements in managerial capability and work organisation.
33 Provide information on the return on investment in foundation skills for all firms, and the
return on investment in education and training generally for small and medium-sized
enterprises (SMEs). More robust information which has credibility within the business
community has the potential to change managers’ perceptions, with an increase in the
investment in people and skills.
34 Encourage positive perceptions by school leavers of vocational occupations as careers and
promote industry training as an option, in order to increase the level of investment in these
areas and to reduce the negative impact for business of skill shortages, including targeted
information for school career guidance counsellors.
Diagnostic Tools
35 Review the availability and effectiveness of existing tools to help employers and employees
undertake an assessment of the potential return on investment in skills development
generally (with tools targeted at SMEs in particular), and develop new tools to fill any gaps.
36 Provide a tool to assist firms in undertaking an assessment of skills required by a firm, the gap
between the required skills and the existing skills within the firm, and the steps required to
address any identified skill shortages.
37 As part of the assessment of skills needs, these tools need to identify where foundation skills
training is necessary and the potential return on investment that can be achieved through
workplace-based foundation skills training.
Implementation
Education and Training Infrastructure
38 Build a strong infrastructure, including Industry Training Organisation (ITO) capability, for
the delivery of workplace-based training and ensure ITOs are involved in workplace-based
training for foundation skills and training for SMEs.

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39 Continue to build on the improvements in the tertiary education sector to the linkages
between government, suppliers and firms so that over time workplace training increasingly
meets the skill needs of firms.
40 Continue to provide support for the ongoing work of the Skill NZ campaign.
Support for Firm-specific Training
41 Develop support for firms to identify skill needs, placing those skill needs in a wider
productivity and firm improvement context, and a specific brokerage role to support
investment by SMEs in skills and training. In developing these forms of assistance, consider
the role that ITOs can play as a delivery agency and how this can be encouraged (and identify
other appropriate organisations where no ITO exists).
Foundation Skills Training
42 The government needs to focus on addressing the needs of existing workers with low levels
of foundation skills. This will require a substantial increase in foundation skills funding
targeted at those already in the workforce. Funding should cover learning delivery, including
workplace-based training, co-ordination, and capacity/capability building and support for
providers, practitioners and learners.
43 Integrate foundation learning with industry training so that those with lower levels of
foundation skills can develop those and other skills.
44 Trial (and evaluate) new ways of delivering foundation learning to improve the quality of
training in the workplace and the incentives to design improved high quality training, for
example designing programmes that closely match workplace tasks.
Research and Evaluation
45 Research the effectiveness of workplace foundation skills programmes through evaluating any
new initiatives that are approved as a result of our proposals to provide improved information
for employers, employees, unions and the government on the best approaches to adopt.
46 Evaluate whether changes are required to the design of funding and accountability
arrangements for government-funded workplace training to help ensure that SME training
needs are met (for both foundation skills and wider skills training).
47 Research the effectiveness of steps to enhance education and training in SMEs through the
evaluation of trials, to provide assurance that the education and training are providing a
return on the employer’s investment and to identify critical success factors.
48 Research whether the different funding arrangements for workplace training and other
tertiary education represent an unnecessary barrier to skill development in the workplace.
49 Explore the level of longer-term skill investment needed to achieve a significant improvement
in lifelong learning, in order to support ongoing productivity improvements.

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Organising Work
Awareness Raising
50 Make available and/or produce relevant information about how work organisation affects
workplace productivity and the benefits of implementing these strategies, including the
benefits of employee involvement.
51 Provide background information on tools used overseas to assess work organisation
issues, such as the UK’s Department of Trade and Industry Tool Kit and Danish Technology
Institute tools.
52 Identify case studies and demonstration workplaces that focus on successful organisational
design, processes and practices.
Diagnostic Tools
53 Develop and test diagnostic tools, modifying overseas models for the New Zealand business
environment, for assessing structural and work reorganisation requirements.
54 Provide diagnostic tools to assist in assessing whether a firm’s structure/work design is
appropriate and/or effective. This may be especially relevant to organisations in times of
change, as well as when developing an ongoing strategy.
Implementation Support
55 Facilitate the provision of networking and other learning opportunities as well as mentoring
assistance, including facilitators and consultant practitioners, to undertake redesign
assessments and to engage in redesign work.
Research and Evaluation
56 Assess availability and accessibility of advice for firms, particularly small business services,
and potential for intermediaries as service providers.
57 Assess the linkages between the Work-Life Balance Project and workplace
productivity improvements.
Networking and Collaborating
Awareness Raising
58 Identify the full range of networking and collaborative opportunities and mechanisms already
available and ensure firms are aware of how to use these effectively.
59 Identify and disseminate examples of best practice in networking and collaboration, and case
studies showing the resultant benefits.

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60 Explore the scope for using employer and employee organisations as complementary
mechanisms to help spread key awareness messages.
Diagnostic Tools
61 Review whether existing tools to diagnose business capability are putting sufficient emphasis
on the extent to which firms are utilising networking and collaboration both within New
Zealand and internationally, and adapt these tools, as necessary, to ensure that they are
including this emphasis.
Research and Evaluation
62 Review whether the impact and reach of existing firm capability services (in addition to
the Enterprise Development Fund and Growth Services Fund) could be increased by adding
further networking and/or collaborative elements to spread the benefits beyond the
primary beneficiary.
63 Undertake more detailed research into why networks are established and, more
particularly, what constitutes best network design and operation, particularly in relation
to enhancing productivity.
Measuring What Matters
Awareness Raising
64 Raise awareness of the value of measurement and reporting as an integral part of workplace
productivity strategies.
65 Develop greater accessibility to both public and private information and other resources
available to assist firms in measurement and reporting activities.
Diagnostic Tools
66 Provide diagnostic support to assist firms in getting started on measuring and reporting.
Research and Evaluation
67 Undertake further research to better understand:
a
b
c
The type of measurement and monitoring that is effective in identifying good performance.
The nature of measurement and reporting practices in New Zealand and how good
measurement practices contribute to increased workplace productivity, such as the
Ministry of Economic Development (MED) continuing to include questions relating to
measurement practices in its business practice surveys.
The determinants of firm performance using good micro data and research techniques.

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For a copy of the full report of
The Workplace Productivity Working Group
Please contact
The Department of Labour
PO Box 3705, Wellington, New Zealand
or for an electronic version please visit the Workplace Productivity website at
www.dol.govt.nz/productivity