Labor Toolkit: Framework and Overview
INTEGRATING LABOR PROGRAMS IN THE PPI PROCESS: A ROAD MAP
This section presents an illustrative road map for integrating the labor program in the broader PPI process. The road map will help the implementing agency put the various tasks and activities of a labor adjustment program within the context and phasing of the overall PPI transaction. The first steps for the implementing agency, however, are to establish a labor unit and to secure funding for the labor program.
There are four main phases involved in developing a labor program for PPI:
- Phase 1: Initial assessment or diagnostic phase
- Phase 2: Design of the labor program
- Phase 3: Implementation of the program
- Phase 4: Monitoring and evaluation activities.
Figure 1.2 presents a road map or overview of the labor adjustment process. It illustrates the integration of labor program planning with the wider PPI process. For example, the initial assessment of the labor issue should follow or take place parallel with a wider assessment of the health of the enterprise and in the context of the overall economic, social, and development objectives sought from enterprise restructuring or PPI.
Planning of a labor program needs to be integrated with the wider enterprise restructuring program.
The main boxes in the road map link to key modules in this Toolkit, and the oval shapes represent specific tasks or tools in the Toolkit.
Editable copy of the road map in Microsoft Power Point format
Phase 1: Initial Assessment
The first phase–initial assessment–is critical because it identifies the nature and scope of the labor program and provides the planning framework for the program as a whole. It includes:
- Clarifying the overall goals and objectives of labor adjustment (see the third section of this module)
- Assessing staff levels, skills, and the extent of overstaffing (module 3)
- Reviewing the external stakeholder environment (module 6), the legal circumstances, and likely costs including those related to severance and to pensions (module 5)
- Beginning the implementation of "soft" options.
In most cases, Phase 1 will be an initial assessment of labor issues in PPI; the analysis, however, will continue through Phase 2 (design) where detailed strategies and options are refined. In Phase 1 there will not only be assessments regarding labor issues, but also assessments of the operational, regulatory, legal, and financial aspects of the PPI transaction more broadly.
The various Phase 1 assessments can provide the basic information needed to prepare the initial submissions for decisionmaking by senior ministers or the cabinet. Box 1.18 sets out a generic checklist for such submissions.
Box 1.18: Guidelines for Submissions to Decisionmakers
What are the minimum requirements for a paper submitted to the decisionmakers for decision? Although there may be detailed government procedures set out, in principle any proposal for a labor adjustment or work force restructuring program sent to the decisionmakers (be it a committee of senior ministers, the Cabinet, or the Council of Ministers) should fulfill a few simple, straightforward tests:
- There should be a one-page executive summary for busy ministers.
- There should an adequate explanation of the objectives of the proposal (so that ministers do not have to try to guess the purpose of the proposal from the details).
- There should be a range of options presented (typically three or four), including a base case "do-nothing" option where appropriate.
- The authors should have identified the cost and revenue effects of the options on the government budget.
- Subject to confidentiality and sensitivity concerns, the authors should have discussed the proposal with other ministries and agencies that will be most affected by, or most instrumental in, successful implementation of the program.
- There should be some comment on the plans for implementation to demonstrate that these are practical and workable. Implementation risks should be identified.
- There should be some attempt to identify and comment on the likely effects of each option. If these can be quantified, so much the better, but at least there will be quantitative assessment.
Phase 2: Design of the Labor Program
Phase 2 builds on the assessments of Phase 1 and allows the implementing agency to make specific proposals to decisionmakers. More specifically, Phase 2 involves:
- Developing an overall strategy and restructuring options (module 4) for dealing with labor issues as part of the overall PPI strategy
- Developing concrete pension arrangements, severance packages, and retraining/redeployment programs, as well as financing arrangements (module 5)
- Obtaining a legal mandate to deal with labor adjustment, including approval of policies to undertake work force restructuring supported by relevant government orders or regulations
- Defining implementation arrangements and developing implementation capacity (see the seventh module)
- Engaging with stakeholders through communication, consultation, negotiation, and cooperation (see module 6)
- Developing broader public information programs to ensure that the government's early messages are communicated (module 6).
The above tasks typically result in the development of an overall plan for dealing with labor restructuring that is similar to the road map in figure 1.2. A manager in the implementing agency might edit the road map in this Toolkit (which is a Microsoft Power Point diagram) and adapt it to his or her local circumstances, or use the Microsoft Project Plan template (see the CD-ROM).
Outline project plan for a labor program in Microsoft Project format
Phase 3: Implementation
Monitoring and evaluation are often neglected.
Phase 3 involves implementing the actual labor adjustment program, in particular:
- Implementing restructuring options (module 4) and completing any soft options started during Phase 1
- Implementing severance and pension packages (module 5)
- Implementing redeployment programs (module 5)
- Engaging with stakeholders (module 6)
Phase 4: Monitoring and Evaluation
Although important, the final phase of any labor adjustment program–monitoring and evaluation– is often the most neglected aspect. When the difficult and painful task of adjustment is over, many government officials and implementing agency managers wish to move on and overlook this phase.
There are good reasons, however, to take monitoring and evaluation seriously:
- It demonstrates that the implementing agency is accountable. Given the very high costs of many labor programs, most implementing agencies will want to be able to show that they have managed the program effectively.
- It reduces risk. Effective monitoring allows problems to be recognized early and action taken to deal with those problems.
- It allows lesson-learning. Many implementing agencies recognize that they know very little about what really has happened to workers who were displaced. This puts the manager of the implementing agency at a disadvantage, facing questions from his or her boss, the press, or trade unions. It also allows subsequent programs to be implemented much more effectively.
The details of monitoring and evaluation systems are covered in detail in module 7.
