Release type: Media Release

Date:

Leadership and fairness the key to increasing productivity and profit

Ministers:

Senator the Hon Chris Evans
Minister for Tertiary Education, Skills, Jobs and Workplace Relations
Leader of the Government in the Senate

Comprehensive research presented at the Future Jobs Forum today confirms that innovative, positive leaders and progressive management practices are central to increasing productivity in Australia’s workplaces.

An 18 month study by the Society for Knowledge Economics, found that companies with strong leadership and a positive workplace culture are significantly more productive and profitable than their less progressive peers, Senator Evans, Minister for Skills, Jobs and Workplace Relations said.

“It is clear from this research the key to increasing productivity at the workplace level comes from investing in people rather than changing the industrial relations system,” Senator Evans said.

The report found that High Performing Workplaces (HPWs) have 12 per cent higher productivity than Low Performing Workplaces (LPWs) when ranked in terms of their innovation, employee engagement, fairness, leadership and customer satisfaction. 

Furthermore, the report found that the quality of an organisation’s leaders and their ability to innovate and create positive employee experiences was directly related to the organisation’s financial performance and productivity.

The report found that the average profit margin of HPWs are three times higher than those of LPWs. 

“The Gillard Government’s investment in workplace research shows we are committed to exploring every possible avenue to create better jobs, smarter workplaces and a more productive economy,” Senator Evans said.

“This report provides clear evidence that improving Australia’s productivity can be achieved by developing leadership and management capabilities in Australian workplaces.

“As the economy goes through a period of structural adjustment it is even more important that managers are able to innovate and adapt at the workplace level to ensure we have a strong and productive economy into the future.”

The report – Leadership, Culture and Management Practices of High Performing Workplaces: The High Performing Workplace Index –follows 18 months of research involving 78 companies and more than 5,000 employees.

The study is ongoing, with the next phase examining how lower performing workplaces can improve their practices to become more productive and profitable.
 
The report is available at: http://www.ske.org.au/partner.php