How can HR help to solve the UK’s productivity problem?

Why does the UK have a productivity problem?

Before we look at if and how HR can help solve a productivity problem in the UK lets first look at what the problem is. According to The Productivity Institute the UK has experienced significantly slower productivity growth than comparable counties over the past 15 years (since the global financial crisis in 2009). They state that if the current trend in productivity growth continues over the next two decades, it will not be possible to maintain current living standards, let alone deliver sustainability and improved wellbeing.

From 2010 to 2022, the annual average growth in UK GDP per hour worked was just 0.5% with little sign of improvement since then. Why is this? According to The Productivity Agenda it relates to underinvestment, inadequate diffusion (spread of technology and innovation from the most productive companies to those that are more productive) and an absence of joined-up policy making.

How does this relate to HR?

We know that the UK has suffered from chronic underinvestment in Human Capital for years. There is a gap between the most highly educated in the workplace and those trapped in low-skill, low-wage modes of operation. The CIPD reports that in 1/3 of all businesses 50-100% of all training that occurs is health and safety or induction based. 

The UK continues to underinvest in people management skills which means that unskilled managers don’t have the knowledge or skills to increase the productivity (or engagement) of those that work for them. Taxes like the Apprenticeship Levy have become too difficult for companies to take advantage of to deliver management training which means that it continues to be seen as a luxury for a business. In times of slow growth, luxuries are cut leading to a vicious downward cycle.

How to improve business performance

We talk a lot about how managers and HR can turn around individual underperformance, but why do we focus on this so much? Especially when the outcome we are after is improved business performance? What if we could turn this idea upside down and start with the macro view? How can we turn around business underperformance?

I started thinking about this when I was planning the HR Uprising Podcast on this topic. As HR professionals it is a constant challenge to balance time between supporting individuals and supporting the business to add value.

Looking at the situation from a different perspective

Some of us will have come across the term ‘Chunking Up’ or ‘Chunking Down’ from NLP (Neuro Linguistic Programming). This refers to looking at a situation or problem from different levels. For example, we may be asked to help because a line manager believes an employee is underperforming. If this is the case, we have tips on how to manage this in our blog: How to manage poor performance at work. Further links to useful resources can be found at the bottom of this blog.

However, turning around one individual may mean we are only working on the symptoms of the problem rather than the cause. If we decide to ‘Chunk Up’ we then look at what might be causing or influencing this underperformance. When we consider this, we realise that the cause could be at this higher level. For example, perhaps the problem is the style of the line manager or the behaviours of the team around them.

As we continue to ‘chunk up’ we may realise that there are causes higher up in the organisation e.g. the behaviours of the senior leadership, prevailing culture, or business processes. Any of these factors could be positively or negatively affecting individual or business performance.

Diagnose the causes of underperformance

In our white paper ‘Managing Underperformance in a virtual world’ we explain the simple CISS model used to diagnose the causes of underperformance. The model stands for Clarity, Individual Attitude, Skills and Surroundings. Most causes of individual underperformance will fall into one of these categories and typically in 3 out of 4 cases, the cause is not the individual themselves.

Identify ways to improve performance across all levels

We can take the simple acronym ‘CISS’ and apply it at multiple levels in the organisation. This will allow us to identify ways we could improve business performance. Take ‘Clarity’ for example, at an individual level we need to know what is expected of us in terms of our job role and objectives. As a line manager, we need to have clarity about how to manage people effectively. This includes being able to provide a clear link between an individual’s objectives and the overall business strategy. At a business level, we need to have a clear vision and goals and aligned metrics that help others realise how to deliver against these goals. It is a really simple but effective concept to work with.

By ‘chunking up’ we can see that it may well be the manager who isn’t providing clarity of expectations, or access to training or coaching which is the true cause. ‘Chunking up’ further, we may realise that the organisation or senior leadership are not providing a clear vision to follow. Or perhaps they are setting a bad example for management behaviours which impacts the ‘Surrounding Culture’. Of course, it could also be skills as the managers or leaders have never had any management training or it is out of date for the current hybrid working environment.

So whether you are trying to improve business performance or individual performance, remember to ‘chunk up’ the simple CISS acronym. This will help to get to the root of the problem and address poor performance at all levels of the business.

Discover how Actus can support you with performance issues by booking a free demo below.

Further reading

Part of our ethos is to help build a better workplace for people, whatever their location. We achieve this through great performance management software, the HR Uprising Podcast, and free thought leadership resources.  Therefore, if you would like to learn more about this topic, you can find some additional resources below.

White Paper – Managing Underperformance in a Hybrid World

Or alternatively Lucinda’s 45 minute webinar on this subject is available now below – download the slides and watch the replay.

Previous webinar – Turning Round Underperformance

The HR Uprising Podcast – Performance Management episodes

Actus offers a complete performance, talent and learning platform

Actus has evolved over the past 12 years, starting with pure performance management and building out our own fully integrated talent, learning, compliance and feedback functionality. We also have API’s to link to payroll/HRIS systems. This means you can start with Actus as a software solution for your initial requirements with full confidence that this can evolve over time to address future strategic requirements with fully integrated add on modules and the same great customer service.

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