THE factors responsible for pushing Pakistan towards economic collapse include the departure of major MNCs due to an unfavourable business environment and the absence of foreign investment. Even local entrepreneurs are reluctant to set up manufacturing industries.
In the 1960s, billed as the golden era of industrialisation in the country, foreign corporations established manufacturing industries here. Those already functioning in the country expanded their business.
Organisations that were run professionally then, like Esso Corporation and ICI, achieved their production targets as employees worked with full devotion. Local workers’ productivity was comparable with their counterparts’ in other countries.
Even in 2000, Pakistan’s worker productivity exceeded that of China and India. The decline started when the workers in the other two countries improved their skills and their companies adopted advanced technology.
Pakistan’s workforce is lacking in skills and strong work ethics.
Worker productivity is calculated on the basis of output in relation to GDP. It is determined by dividing the latter by total production hours. For example, if the country’s GDP is $100 billion and production hours are 4bn, then productivity is $25 of output per hour worked. A highly productive economy will be able to produce more goods or services with the same number of resources or produce the same level of goods and services with less resources.
In comparison with labour in the developed countries, Pakistan’s workforce is lacking in skills and strong work ethics. Higher worker productivity in business brings dividends: greater profits for entrepreneurs; higher wages and better working conditions for the workers and more tax revenues for the government.
Due to the low level of trust between business owners and workers, the former are averse to investing in the productivity of their workforce. The low wages and inadequate benefits given to workers result in both the shirking of responsibility and the lack of sustained effort.
Company culture also influences the work environment and employees’ behaviour. Company culture is developed over a long period, mostly through the values and leadership style of the senior management. In progressive organisations, senior managers set work standards through competence, effective leadership and commitment to achieving their targets. Employees look up to them as role models and reciprocate in the same spirit of enthusiasm to produce the expected level of output.
In contrast, senior managers in state enterprises are generally desirous of meeting just the minimum target. Such behaviour demoralises the employees, who end up not respecting their leadership and develop a lethargic attitude towards job responsibilities, which adversely affects overall productivity.
The following initiatives taken by employers, among others, can improve workers’ productivity if a concerted effort is made by the management to succeed.
a) There are usually vast gaps in monetary incentives given by organisations to their senior-level managers and lower-level employees. As the ultimate responsibility to deliver rests with the former, it is fully justifiable to allow them an attractive salary and perquisites for retention. However, to keep lower-level employees fully committed to the organisation’s success, monetary incentives should enable them to live in comfort. This factor had a very positive impact on employees at Exxon Chemical’s fertiliser plant in Daharki. Even the company’s top leadership in New Jersey was surprised about the much higher output than expected. Unlike in some other organisations, union officials would also perform their duties like the rest of workers.
b) Workers need to be trained in jobs in which they are engaged. Most mechanics and operators work on the basis of limited experience and don’t get the opportunity to improve their skills with further training. Employers don’t seem to realise that by investing in training and developing the skills of their workers, they will get higher returns through improved productivity. Workers in China and Europe excel in output in comparison with their counterparts in Pakistan as they are properly trained and certified for a certain job.
c) In addition to training, access to technology and the ability to use it effectively, is imperative for productivity. In the absence of technology, only traditional tasks can be performed but since the world is moving towards new value-added and challenging products, technological knowledge is necessary.
Work productivity management is one of the most important elements of modern business management and indispensable to remaining in the game.
The writer is a consultant in human resources at the Aga Khan University Hospital.
Published in Dawn, February 21st, 2023