· Web viewTowards Social Assessment François Beaujolin, as director, Alain Meignant and Georges Sud as contributors. January 2011. Three years after. François Beaujolin founded

Towards Social Assessment

François Beaujolin, as director, Alain Meignant and Georges Sud as contributors.

January 2011

FHDT -1/1 07/04/2011 1 [email protected]

Three years after

François Beaujolin founded the Fondation des Droits de l’Homme au Travail in September 1998 in order to support initiatives that would highlight fundamental rights in the workplace during this period of economic globalization.

During its ten first years, the FDHT has received nearly 400 requests for financial support and accepted more than 200 of them.

A large number of these requests concerned Social Standards. The main aims of the FDHT in this field were:

1 – To develop existing international instruments: by helping to raise awareness of public and private social standards (CIJ, OECD Watch, AA1000, CCC, local NGOs), by studying audit practices themselves for different brands’ subcontractors and various labels (Bulgaria, Bangladesh, China, India), by developing professionals’ competencies and skills in implementing these standards (China).

2 – To further exchanges of know-how between social auditors One-day discussions (London, Brussels, Amsterdam, 2004) One-year working group (6 debates in Paris, 2006)

3 – To promote international meetings between “culturally” different persons and organizations

One-day discussions between more than 50 NGOs from 30 countries on the social impact on workers: “From Social Auditing to compliance results”. A meeting with 350 participants (experts in social auditing, brands, subcontractors, TUs, NGOs…) from nearly 50 countries: “Improving Global Supply Chains Management”.

The FDHT then started to write an analysis of Social Auditing. This first document was sent to 200 organizations and experts via Internet. A one-year debate with most of them followed.


In the Spring of 2008, the coordinating group produced a document of around 90 pages centered on 3 points.

1. Chapter 1 was an assessment of the first 10 years of Social Auditing. The result was not very positive.

i) social audits: what system and how is it used?ii) what goes wrong when auditing? iii) what is at stake?

2 – Chapter 2 showed that attempts at improvement and even new approaches were being made.

3. - Chapter 3 raised several questions that seemed to be priorities.

i) Strengthening the position of the State, with in particular, two major issues:the reinforcement of labour inspection and the fight against corruption.

ii) Developing corporate responsibility in purchasing practices, with in-depth discussions on new ways of thinking and purchasing on the part of companies.

iii) Strengthening the competencies of players from the South. Conclusions were not drawn on new conditions for a Social Audit that would be truly effective for workers and companies in emerging economy countries.

Consequently, the object of this document is to suggest:

1. a new form of social assessment that would contribute added value to companies that submitted to it, and their employees,

2. from now on, to define the competencies of assessors likely to carry out these social assessments effectively,

3. finally, we suggest auto-evalutation tests that would permit current Social Auditors to identify the abilities that would enable them to carry out audits that would be meaningful for them, the companies, and the employees.


From social auditing to social assessing

ISO, the International Organisation for Standardization, has developed a new international standard on CSR – Corporate Social Responsibility: ISO 26000. It has taken four years to produce an international draft: ISO/TMB/WG SR N 172, which is freely accessible on the ISO website.

ISO 26000: Guidance on social responsibilityOrganizations around the world, and their stakeholders, are becoming increasingly aware of the need for, and benefits of, socially responsible behaviour. The aim of social responsibility is to contribute to sustainable development.An organization's performance in relation to the society in which it operates and to its impact on the environment has become a critical part of measuring its overall performance and ability to continue operating effectively. This is, in part, a reflection of the growing recognition of the need to ensure healthy ecosystems, social equity and good organizational governance. In the long run, all organizations’ activities depend on the health of the world’s ecosystems. Organizations are subject to greater scrutiny by their various stakeholders, including customers or consumers, workers1 and their trade unions, members, the community, non-governmental organizations, students, financiers, donors, investors, companies and others. The perception and reality of an organization’s social responsibility performance can influence, among other things: ⎯ competitive advantage; ⎯ its reputation; ⎯ its ability to attract and retain workers or members, customers, clients or users; ⎯ the maintenance of employees' morale, commitment and productivity; ⎯ the view of investors, donors, sponsors and the financial community; and ⎯ its relationship with companies, governments, the media, suppliers, peers, customers and the community in which it operates.

This International Standard provides guidance on the underlying principles of social responsibility, the core subjects and issues pertaining to social responsibility and on ways to integrate socially responsible behaviour into existing organizational strategies, systems, practices and processes. This International Standard emphasizes the importance of results and improvements in social responsibility performance.

It is intended to be useful to all types of organizations in the private, public and non profit sectors, whether large or small, and whether operating in developed, or developing countries. While not all parts of this International Standard will be of equal use to all types of organizations, all core subjects are relevant to every organization. It is an individual organization's responsibility to identify what is relevant and significant for the organization to address, through its own considerations and through dialogue with stakeholders.


The publication of this new standard raises the question of how to audit / assess organisations following ISO 26000 guidelines.

In this short note, our foundation, FDHT, puts forward some ideas on an independant assessment that could help promote transparency and reliability, two essential elements of any CSR policy.This new kind of social assessment considerably alters the process of audit / assessment, and consequently, the skills and qualifications of social auditors / assessors.

What is interesting for Social Auditors and organizations currently in this field, is that the way the entire social auditing process is conducted is called into question.

A Turkish supplier’s expectations of social audit

During the Brussels conference of 18th November 2005, a supplier/subcontractor in the garment-apparel sector gave fresh impetus to companies involved in production chains “exposed” to risks related to the surveillance of stakeholders.This company developed the commonly accepted idea that “social audits” are not really useful to audited companies: the value added is almost nil whilst investment in terms of time from managers and other employees is very high. However, this company was aware of its management deficiencies and was interested in a real organisational audit to examine in depth its strengths and weaknesses with respect to management, including the respect of labour laws and regulations and international labour standards.

1 – Towards the need for a CSR assessment

2 - Towards a social assessment by independent expert

3 – The competencies of the social assessor

4 – Auto-evaluation of the competencies of assessors


1 – Towards the need for a CSR assessment

ISO 2600’s guidelines were relatively easy to write, maybe because there was a great deal of work that could be re-used. But what is probably more important in this new ISO standard, ISO 26000, is the “guidance on integrating Social Responsibility throughout any organization”, specifically transparency and reliability.

1,1 - Twenty years of research in worldwide guidelines

The increase in proficiency, but also in economic power of many companies created by contractors in so-called “developing” or “transition” countries justifies setting out “good governance” guidelines that are close or even similar to those of the main companies dealing with globalisation, often called multinational or transnational companies.

Three sets of guidelines relate to the good conduct or good governance of companies within the framework of globalisation:

i) The OECD guidelines on multinationals (version 2000, amended in 2003),

ii) ILO’s Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (version 2000)

iii) The United Nations standards on the Human rights responsibilities of transnational corporations and other business enterprises (version 2003).

The first two are official documents that have been approved by the official authorities of these two international institutions. The third is a document drafted by independent experts and coordinated by the UN Human Rights Committee (Geneva Palais Wilson) but it has not been voted on – and probably will not be in the near future – by the UN General Assembly, which proves that the struggle for Human Rights is far from over.

All these guidelines were drafted with the uncontrolled consequences of multinationals’ practices in countries where they have subsidiaries or suppliers in mind. Nevertheless, each of these guidelines specifies that the principles intended to frame the social and human consequences of multi/transnationals in host countries are meant to be followed up and applied by all local companies, large or small. There is thus a universal stake in these social and human guidelines.

A comparison of these three documents is presented in the appendix. This contains global mapping of what subjects might be assessed in a company governance assessment. The way each document treats the common topics could easily give rise to a homogeneous synthesis as the objectives are very similar from one document to the other and the differences are mainly editorial. Most of the time, the instigators


and/or authors are the same or come from the same institutions.

The main advantage of these guidelines is their global coherence. The ILO’s standards stipulated in the guidelines of voluntary codes of conducts of companies or in MSI (MultiStakeholders Initiatives) guidelines rely on a limited number of themes (often the ILO core principles): the supplier or subcontractor assessed in this way must respect several standards that are not consistent with their management issues. The guidelines, principles, and standards are global in their approach and address the company as a coherent whole in terms of management. They involve managerial practices that respect principles of “corporate responsibility” and contribute to the “sustainable development” not only of the companies concerned but also of the societies in which they evolve. These guidelines promote the convergence of managerial practices and are not a set of unrelated individual rules.

1,2 - ISO 26000 - Guidance on core subjects in social responsibility

To define the scope of its social responsibility, identify relevant issues and set its priorities, an organization should address the following core subjects (see also Figure below): ⎯ organizational governance; ⎯ human rights; ⎯ labour practices; ⎯ the environment; ⎯ fair operating practices; ⎯ consumer issues; and ⎯ community involvement and development.

Economic aspects, as well as aspects relating to health and safety and the value chain are dealt with throughout the seven core subjects, where relevant. The different ways in which men and women are concerned in each of the seven core subjects are also considered.

Each core subject includes a range of issues related to social responsibility. These are described in this clause together with related actions and expectations. Social responsibility is dynamic, reflecting the evolution of social and environmental concerns, so further issues may appear in the future.

Action on these core subjects and issues should be based on the principles and practices of social responsibility. For each core subject, an organization should identify and address all those issues that have a relevant or significant influence on its decisions and activities. When assessing the relevance of an issue, short- and long-term objectives should be taken into account. There is, however, no pre-determined order in which an organization should address the core subjects and issues; this will vary with the organization and


its strategy.

Although all the core subjects are interrelated and complementary, the nature of organizational governance is somewhat different from the other core subjects. Effective organizational governance enables an organization to take action on the other core subjects and issues.

An organization should look at the core subjects holistically, that is, it should consider all core subjects and issues, and their interdependence, rather than just concentrate on a single issue. Particular improvements targeted at a specific issue should not be allowed to affect other issues adversely or create adverse impacts on the life cycle of its products or services, on its stakeholders or on the value chain.

ISO 26000


1,3 - ISO 26000: reliability of data and information collection and management

Organizations that are required to provide performance data to governmental or non-governmental organizations, other organizations or to the public, or to maintain databases containing sensitive information can increase their confidence in their data collection and management systems by detailed reviews of the systems. The aim of such reviews should be to: ⎯ increase an organization’s confidence that the data it provides to others is accurate; ⎯ improve the credibility of data and information; and ⎯ confirm the reliability of systems for protecting the security and privacy of data, where relevant. Such detailed reviews may be prompted by legal or other requirements for the release of data on emissions of greenhouse gases or pollutants, requirements for the provision of programme data to funding bodies or oversight departments, conditions of environmental licences or permits and concerns about protection of private information, such as financial, medical or personal data.

As part of such reviews, independent people or groups, either internal or external to the organization, should examine the ways in which data is collected, recorded, stored, handled and used by the organization. A review can help identify vulnerable areas in data collection and management systems that would allow the data to become contaminated by errors or would permit access by unauthorized individuals. The results of the reviews can help the organization strengthen and improve its systems. Data accuracy and reliability can also be improved through the effective training of data collectors, clear accountability for data accuracy, direct feedback to individuals making errors, and data quality processes that compare reported data with past data and from comparable situations.


2 - Towards social assessment by independent experts

Who might these “ independent people or groups, either internal or external to the organization,” that would examine the ways in which data is collected, recorded or stored, handled and used by the organization, be?

2,1 – Qualified and certified experts

The social assessment/audit of supplying or subcontracting companies on such bases requires experts with different qualifications from those of social auditors, be it in terms of mastery of the companies’ operational processes or in terms of investigation techniques within the companies.

France – IAS Institut de l’audit social (1982) and CCIAS - Centre for International Certification of Specialised Assessors (1993) or “when social audit means “social assessment”The project to create a certification centre for social assessors was initiated at the end of 1992 by the Social Audit International Institute. The Institute, created in 1981 to promote the concepts and practices of social audit, was willing to change its internal approval process. The aim was to be able to provide any candidate, member of the Institute or not, with a social assessor’s certificate that complied with the general requirements of international standards at that time. A certification centre organised and administered in accordance with NF EN ISO/CEI 17024 standard1

was then created within the Institute.

Certification operations actually started at the end of 1993. The first certificates were delivered during 1994.

A social assessor’s certificate can currently be obtained in one of the following four specialisations:

HR – At the present time, more than 200 applications have been recorded for this specialisation by the CCIAS. Their number is rapidly growing. They are submitted by HR consultants, HR managers and jurists, quality auditors, internal auditors, rating agencies analysts, etc. They come from France, Belgium, Luxembourg, Italy and the Maghreb: Algeria, Tunisia, and Morocco. Forty certifications have been granted and another twenty are currently under scrutiny.

CSR – Faced with a new demand for the certification of auditors in corporate social responsibility, in 2002 and 2003, the CCIAS developed a system of certification adapted to this new specialisation. The first certificates were delivered at the end of 2004.

1 ISO/IEC 17024:2003 specifies requirements for a body certifying persons in specific requirements, including the development and maintenance of a certification scheme for personnel.


Health – A system dedicated to Health auditors was also developed and 15 applications are under scrutiny. The first certifications were granted in the second half of 2005. The accreditation of this specialised system was submitted to the COFRAC2

in 2006.

The medical/social area – The elaboration of a system of certification for medical/social assessors is currently underway.

These social assessors should respect chapters 3 and 4 of the ISO 19011 standard3

on auditors. In addition to the definitions in chapter 3 of the ISO 19011 standard, the definition of “social audit” should be “the audit applied to the management and operating mode of organisation members using them, and to the articulation of their internal and external relations”.

2,2 – Nature of the assessment/audit service

Social assessors act within the framework of an engagement letter agreed upon with the client organisation. They carry out investigations using appropriate methods (collection and analysis of data, calculation of indicators, interviews, questionnaires, etc.) allowing them to provide a constructive answer to the question(s) asked in the engagement letter. Social audit applies to organisational and institutional situations and specifically analyses the human and social operating mode of the audited situation.

Audit can apply to both private and public organisations, within the organisation or in its relationship with the environment. It can take different forms that can be combined:

iii) compliance audit (detection of possible divergence from the guidelines)iv) explanation of this divergence and identification of the risks incurred v) audit to assess the relevance of the guidelinesvi) audit to assess the coherence between these guidelines and other

guidelines vii) efficiency audit of a social management system or a process compared

to the expected results

It particularly applies to:

2 COFRAC is the French committee on conformity assessment respecting ISO/IEC 17000:2004 specifies general terms and definitions relating to conformity assessment, including the accreditation of conformity assessment bodies, and to the use of conformity assessment to facilitate trade.

3 ISO 19011 is an international standard that sets forth guidelines for:

quality management systems auditing environmental management systems auditing


http://en.wikipedia.org/wiki/Auditing

http://en.wikipedia.org/wiki/Management_systems

http://en.wikipedia.org/wiki/Built_environment

http://en.wikipedia.org/wiki/Auditing

http://en.wikipedia.org/wiki/Management_systems

http://en.wikipedia.org/wiki/Quality_(business)

- the assessment/audit of a policy or process specific to HR management (recruitment, evaluation, training, absenteeism, remuneration, social relationships and communication, etc.)

- the assessment/audit of a specific situation, in particular to assess the coherence of a social policy with an organisation’s strategy, often during periods of critical change (merger, re-engineering, changes in Management, strategic redeployment, relationships with internal and external stakeholders…)

- the compliance assessment/audit of the organisation regarding regulations, conventions, standards or deliberate social or societal commitments.

At the end of their mission, social assessors draft a detailed report of their observations and present it to the client. They can be called on to provide recommendations, but their activity should not be equated with consultancy since they will not, in any case, be responsible for applying these recommendations. However, they can be commissioned to carry out the supervision and control of the implementation of decisions taken by the client following the audit.

The report of the social assessor should not in itself be considered to be a certification of the organisation.

2,3 – Conduct of the social assessor’s mission

An assessor’s mission is generally conducted in four stages: the definition of the mission’s parameters (§1), the realisation of the mission (§2), the production and presentation of the report (§3). It also implies the application of specific principles during the mission (§4).

1 – Definition of the mission parametersA social audit mission, just like any other audit mission, requires the intervention of a requisitioner explaining his request through a letter of engagement.

This request must be thoroughly analysed by the assessor: scope, guidelines - existing or to be defined -, agreement on the investigation methods and the means to be allocated, identification of the audit recipient(s), mutual commitments.

First of all, the definition of the mission parameters allows the assessor to clarify some points with the requisitioner:

- the objectives set;- the scope of the audit (main offices/subsidiaries, upstream/downstream/lateral,

geographic, type of business, etc.); - the object of the mission (priority themes of the audit and, if needed, themes

related to the realisation of the mission);- the way the mission is organised;- how the conclusions are to be delivered.


2 – Realisation of the missionThe realisation of a social audit implies the understanding of deviations and their causes, explanations for which are built upon the collation of information collected from different sources (databases, indicators) as well as an understanding of the players themselves.

A social audit – just like any other audit – requires the existence of guidelines. One of the specificities of the social audit is, more often than not, the difficulty of having guidelines available beforehand. The social assessor will then define the audit guidelines, primarily by gathering standards, conduct codes, (internal or external) process codes, conventions or international recommendations, etc. and draft and distribute the audit guidance document - containing the questions - before carrying out the mission.

The collection of data for social audit is done through different methods: Collection of documents: social but also economic and financial data; specific

reports, official authorities’ bulletins, public information, information created specifically for the audit, rules and processes, objectives set, etc.;

Observation: individual or collective working situations; Interviews with the players concerned (possibly through a survey sample):

individual or collective, internal or external. Questionnaires can also be used.

The data collected are then cross-checked in order to determine the causes of the identified situations. Assessors strive to found their observations on facts and, based on these, to check any opinion or information suggested by the interviewee.

3 – Production and presentation of the reportA written report is then handed to the bidder and commented on at the conclusion of the mission. This report includes a summary of the assessor’s observations answering the questions asked in the engagement letter. The report describes the deviations observed, based upon supported and verified facts, the causes of anything which may explain these deviations, and the observed consequences or risks incurred. Based upon these elements, an assessor will be able to provide recommendations, if this is specified in the engagement letter.

4 – Principles of conducting the mission Since it is a question of audit methodology, other assessors must be able to reproduce the social audit approach. The players in the organisation have to be informed of the social audit approach - its reasons, objectives, context and programme. The assessor must not interfere in the internal relationships between players. The conclusions and propositions provided should be distributed freely, in varied forms, to all players concerned. The assessor has to sign the final report.

If the social audit report is integrated into a broader communication (sustainable


development report, annual report…), the guidelines must be included as an appendix.

Developing such competencies in countries where the economy is growing as a result of globalisation would represent new assets for the promotion of managerial and good governance practices for all the stakeholders, particularly employees and their representatives. But this is currently out of reach with social audit as it is practised today.


3 – THE COMPETENCIES OF THE SOCIAL ASSESSOR

This kind of assessment calls for a competent assessor. The IAS (Social Audit Institute) in France has produced a form of standard for these assessors.

This IAS 2006 Standard and Guidance Document replaces the previous 93/IAS Standard and Guidance Document drafted by the IAS in 1993 and revised in 2002.

This Standard and Guidance Document presents guidelines on the principles and conduct of social audit missions and on the qualifications of assessors performing these missions.

These guidelines refer to Chapters 3 and 4 of the ISO 19011 standard; 12-13-2005 IAS-COMP Standard and Guidance Document relating to social assessor competencies.

3,1 – Nature of the social audit service

Social assessors act within the framework of an engagement letter agreed upon with the client organisation. They carry out investigations using appropriate methods (collection and analysis of data, calculation of indicators, interviews, questionnaires, etc.) that enable them to provide a constructive answer to the question(s) asked in the engagement letter. Social audit applies to organisational and institutional situations and specifically analyses the human and social operating mode of the audited situation.

Audit can apply to both private and public organisations, either within the organisations themselves or in relation to their environment. It can take different forms that can be combined:

iv) compliance audit (detection of possible divergences with the guidelines)v) explanation of these divergences and identification of the risks incurred vi) audit to assess the relevance of the guidelinesvii) audit to assess the coherence between these guidelines with other

guidelines viii) efficiency audit as to a social management system or a process, in

comparison with the expected results.

It particularly applies to:

- the audit of a policy or process specific to HR management (recruitment, evaluation, training, absenteeism, remuneration, labour relations and


communication, etc.)- the audit of a specific situation, especially to assess the coherence of a social

policy with an organisation’s strategy, often during periods of critical change (merger, re-engineering, changes in Management, strategic redeployment, relations with internal and external stakeholders…)

- the compliance audit of the organisation regarding regulations, conventions, standards or deliberate social or societal commitments

By the end of his mission, the social assessor drafts a detailed report of his observations and presents it to the client. He can be asked to make recommendations, but his activity should not be equated with that of a consultant since he will not, in any case, be asked to carry out these recommendations. However, he can be commissioned to carry out the supervision and control of the implementation of decisions taken by the client following the audit.

The report of the social assessor should not in itself be considered as a certification of the organisation.

The social assessor complies with the general principles of audit framed in the ISO 19011 standard, chapter 4.

3,2 – How the social assessor's mission is conducted

The social assessor’s mission is conducted in four stages: the definition of the mission parameters (§1), the realisation of the mission (§2), the production and presentation of the report (§3). In addition, a mission implies the application of specific principles (§4).

1 – Definition of the mission parametersA social audit mission, just like any other audit mission, requires the intervention of a requisitioner explaining his request through an engagement letter.

This request must be thoroughly analysed by the assessor: scope, guidelines - existing or to be defined -, agreement on the investigation methods and the means to be allocated, identification of the audit recipient(s), and mutual commitments.

First of all, the definition of the mission parameters allows the assessor to have some points clarified by the requisitioner:

the objectives set; the scope of the audit (main offices/subsidiaries,

upstream/downstream/lateral, geographic, type of business, etc.); the object of the mission (priority themes of the audit and, if needed, themes

related to the realisation of the mission);


the mission’s conditions of organisation; the conditions under which the conclusions are released.

2 – Realisation of the missionThe realisation of a social audit implies an understanding of divergences and their causes, the explanations for which are based on the collation of information collected from different sources (databases, indicators) as well as an understanding of the players themselves.

The social audit – just like any other audit – requires the existence of guidelines. One of the specificities of the social audit is, more often than not, the difficulty of having guidelines available beforehand. In this case, the social assessor should define the audit guidelines, primarily by gathering standards, conduct codes, (internal or external) process codes, conventions or international recommendations, etc. and draft and distribute the audit guidance document - containing the questions - before carrying out the mission.

The collection of data for social audit is done through different methods: viii) Collection of documents: social but also economic and financial data;

specific reports, official authorities’ bulletins, public information, information created specifically for the audit, rules and processes, objectives set, etc.;

ix) Observation: individual or collective working situations; x) Interviews of players concerned (possibly through survey sample):

individual or collective, internal or external. Questionnaires can also be used.

The data collected are then crosschecked in order to determine the causes of the identified situations. The assessor strives to found his observations on facts and, based on these, to check any opinion or information suggested by the interviewee.

3 – Production and presentation of the reportA written report is then handed and commented on to the client at the end of the mission. This report includes a summary of the assessor’s observations in answer to the questions asked in the engagement letter. The report describes the divergences that have been observed, based on justified and verified facts, the causes of anything that might have produced these divergences, and the observed consequences or risks incurred. Based upon these elements, assessors will be able to make recommendations, if specified in the engagement letter.

4 – Principles of the mission conduct As it refers to audit methodology, the social audit must be something that can be reproduced by other assessors.


The reasons, objectives, context and programme of the social audit have to be explained to the players in the organisation.

The assessor must not interfere in the internal relationships between players.

The conclusions and propositions provided should be distributed freely, in various forms, to all the players concerned.

The assessor has to sign his final report.

If the social audit report is integrated into a broader communication (sustainable development report, annual report…), the guidelines must be included as an appendix.

3,3 – The Knowledge, competencies and qualities required of a social assessor

These are defined in Chapter XX of the IAS-COMP Standard and Guidance Document (12-13-2005).

1 – Knowledge and general abilities

The realisation of social audit missions requires the assessor to possess certain knowledge and abilities. We will only pinpoint here those which are not specific to the practice of social audit (they will be detailed in the guidelines), but which make up a “solid groundwork” for the exercise of competencies specific to social audit. The “knowledge” list is mainly built upon the conclusions of the selection test made by the CCIAS for the first step of social assessors’ certification.

Only general knowledge requirements are indicated hereunder. Instructors are invited to detail and update them.

KNOWLEDGEc1 Work organisationc2 Managementc3 Company managementc4 Internal control and audit; basic notions of compliance audit, relevance,

coherence, effectiveness, efficiency c5 Normalization and certification (general knowledge of all, and more

specifically, to the audit field)c6 General survey methodology (collection and treatment of data, interviews,

questionnaires, indicators…), and statistics databases c7 Labour Law databases


c8 Knowledge of social institutions, their role, their prerogatives, rights and obligations

c9 Knowledge of documentary resources in the social fieldc10 General questions of HR management, and questions specific to the field of

auditsc11 Sociology of the organisations (specifically the strategic analysis of the links

between players)c12 Deontology (code of practice of the assessor)

ABILITIESa1 Use of basic office technologies: Word, Excel (or similar) and email / Interneta2 Fluent and clear oral expressiona3 Clear written expressiona4 Taste for human contact, social nature, ability to listen, availability,a5 Autonomy and initiative: to seek out information beyond the immediately

reachablea6 Ability to remain within the framework of the missiona7 Ability to place the relationship with the interviewees at an appropriate level

(empathy without complicity and a professional attitude) a8 Ability for team worka9 Ability to analyse one’s strengths and weaknessesa10 Respect of deontological rules and commitments (confidentiality…)

2 – Structure of the competencies library

The chosen methodology is the AMC (Aide au management des compétences4). It combines the two dimensions of competencies5 globally necessary to the good conduct of social audit missions:

- vertically: competencies related to the two main steps of the activity (obtaining the mission, carrying out the mission)

- horizontally: competencies related to relationships with the “clients” (relational), technical competencies (skill), organisational competencies.

This approach can give rise to the creation of a competencies library, with classification in 12 boxes. For the social assessor, the library is shown below:

ACQUISITION OF THE CARRYING OUT THE MISSION

4 Competencies Management Support : this methodology was created by Alain Meignant (www.alain-meignant.com ) ans is here used to produce the standard of social assessor published by the Institu International de l'Audit Social (www.auditsocial.org )

5 A competence is an operational savoir-faire, observable in a working situation. That is why it is formulated with action verbs. The knowledge is a constitutive element of the competence (just as much as experience), but is not directly observable.


http://www.auditsocial.org/

http://www.alain-meignant.com/

MISSION AND DEFINITION OF THE PARAMETERS

ANALYSIS OF THE AVAILABLE DATA AND PRE-AUDIT

CARRYING OUT THE AUDIT

PRODUCTION AND PRESENTATION OF THE REPORT

RELATIONALCOMPETENCIES (R)

BOX 1IDENTIFY THE EXPECTATIONS OF THE AUDIT REQUISITIONER AND HIS OFFER

BOX 4PREPARE THE COMMUNICATION WITH THE INTERVIEWEES

BOX 7MAINTAIN A POSITIVE RELATIONSHIP WITH THE REQUISITIONER

BOX 10PRESENT AND COMMENT ON THE CONCLUSIONS TO THE REQUISITIONER

SKILLCOMPETENCIES (M)

BOX 2BUILD UP AN AUDIT PROJECT (TECHNICAL AND FINANCIAL)

BOX 5CHOOSE / DEVELOP THE AUDITING TOOLS

BOX 8CARRY OUT THE AUDIT ACCORDING TO THE RULE BOOK

BOX 11FORMALIZE CONCLUSIONS

ORGANISATIONALCOMPETENCIES (O)

BOX 3FINALIZE THE PROJECT WITH THE ENGAGEMENT LETTER

BOX 6 -ORGANISE THE AUDITING TEAM

BOX 9MANAGE THE PROJECT IN PROGRESS

BOX 12ASSESS THE MISSION

Each box in the library is itself divided into sub-boxes (see lists below) comprising a classification of the competencies required in the assessor. The whole scheme constitutes the guidelines, including a complete list of competencies.

BOXES 1. 2. 3. RELATED TO THE ACQUISITION OF THE MISSION

BOX 1. IDENTIFY THE EXPECTATIONS OF THE AUDIT REQUISITIONER AND HIS OFFERApprehend the economic, technical, organisational and social environment of the clientFigure out the objectives he wants to reach: expressed and unexpressed Conduct the procedures to meet the request, apprehend the expressed or unexpressed expectancies, the strategic objectives and analyse themReformulate and ratify the main question concerning expectations Determine the relevance, in terms of audit, of an answer to a request Identify the points beyond our competencies Profile the requisitioner: function, prerogatives, influence, objectives, psychological profile


BOX 2. BUILD UP AN AUDIT PROJECT (TECHNICAL AND FINANCIAL)Identify the relevant guidelines for a normative audit Identify the relevant guidelines for a non normative social auditObtain from the client the necessary complementary information to the proposition – if neededDraw up a technical proposition for the requestReformulate the request and main question of the clientSpecify the "deliverables" for the missionDescribe the suggested methodological approachSuggest an audit program (stages, nature of the activities, necessary information, sources and methods)Brush up practice principles (confidentiality, etc.)Identify intervening assessors and gather their CV

BOX 3. FINALIZE THE PROJECT WITH THE ENGAGEMENT LETTERContractualize mutual commitments between the client and the assessor in an engagement letter (deadlines, deliverables, mission organisation)Define the release of the results: who, what, where, when?

BOXES 4.5.6 RELATED TO THE ANALYSIS OF THE AVAILABLE DATA AND PRE-AUDIT

BOX 4. PREPARE THE COMMUNICATION WITH THE INTERVIEWEESDefine with the client the contents, form and chronology of information to be communicated to the different players before beginning the auditSpecify messages and commitments vis à vis the assessors (objectives, confidentiality, method, planning….)Specify the messages distributed to the other players (identify and target the messages)Support the client in the production of informative document(s)

BOX 5. CHOOSE / DEVELOP THE AUDITING TOOLSGATHER USEFUL DOCUMENTSCREATE AUDITING TOOLSIdentify the information to be sought and the appropriate methodsIdentify the persons to meet for the pre-auditing phaseBuild up a survey sampleBuild up the interviewing guidance document(s)Build up a questionnaireChoose the indicators to be filled inBuild up grids for observation/ information/ classification

BOX 6 - ORGANISE THE AUDITING TEAM


BOXES 7.8.9. RELATED TO THE REALISATION OF THE MISSION

BOX 7 - MAINTAIN A POSITIVE RELATIONSHIP WITH THE REQUISITIONERINFORM ACCORDING TO PLANNING AND RULESPrepare and carry out partial releases, if planned in the engagement letter Inform the requisitioner during the mission of any difficulties with respect to the planned process Ensure the coherence of the assessors during the communication of information to the clientMAINTAIN PROFESSIONAL RELATIONSHIPSResist possible pressures (breach of anonymity, extension or desertion of the auditing field, advice seeking)Maintain a good distance between the interviewees to preserve the independence required (neutrality, empathy)Manage possible tensions with the interviewees in the interest of the missionStrictly respect deontological commitments (confidentiality...)Strictly respect organisational commitments (appointments, reports delivery, etc.)

BOX 8 - REALISE THE AUDIT ACCORDING TO THE RULE BOOKREALISE AN AUDIT BASED ON A STANDARD OR JUDICIAL REFERENCESApply the rules, grids and processes planned by the standardSearch and check relevant figuresIdentify divergence with regard to the judicial references (Law, Collective agreement, agreements) and incurred risksMaintain the investigations in the field covered by the standardREALISE A NON NORMATIVE SOCIAL AUDITCollect and treat references and quantitative and organisational data Identify relevant internal references (policies, rules, processes, objectives)Analyse the divergences between the reality observed and the chosen referencesAnalyse risks incurred deriving from recorded divergences Identify the causes of divergences (relevance of references, coherence, etc.)Search and check relevant figures and factsDescribe and analyse a process and its malfunctionsMake a data cross-check in order to test reliability Collect and treat qualitative dataBuild up interview gridsConduct interviewsBuild up and use questionnairesBuild up and use an observation protocol Make the best of the qualitative information collected through the interview, questionnaire or observationAnalyse players’ strategies (as an explaining factor and as an important feature of the recommendations)


BOX 9 - MANAGE THE PROJECT IN PROGRESS

BOXES 10.11.12 RELATED TO THE PRODUCTION AND PRESENTATION OF THE REPORT

BOX 10 - PRESENT AND COMMENT ON THE CONCLUSIONS TO THE REQUISITIONERPREPARE A RELEASE SESSIONPrepare the release meetings with aids that are appropriate to the recipients (according to the plan set) Synthesize the ideas in a clear and comprehensible document (synthesis, terminology and editorial qualities)LEAD A RELEASE SESSIONPresent and comment on the conclusions orallyMake a clear distinction between analyses, conclusions, and recommendations Present the risks of the statu quo, grading them in terms of probability, magnitude and scopeRecord the remarks and suggestions of the requisitioner Record the remarks and suggestions of the interviewees

BOX 11 - FORMALIZE CONCLUSIONSStructure the audit reportStructure the report according to the points mentioned in the engagement letter Make a clear distinction between the observation-based report and comments and recommendationsEmphasize divergences (conformity), risks incurred, relevance problems, coherence, and effectivenessCheck the editorial quality of the reportWrite clearly and concisely, based on facts Insert verbatim to bring the audit in line with the reality of the interviewees (representativeness)Write conclusions and recommendations in a way that will allow the requisitioner to take decisions

BOX 12 - ASSESS THE MISSION

ASSESS FROM THE REQUISITIONER’S POINT OF VIEWCollect the requisitioner’s point of view in the adequate form (normative audits) Organise a conclusion meeting with the requisitioner at the end of the mission


ASSESS FROM THE TECHNICAL POINT OF VIEWAnalyse the difficulties, the changes brought in the course of the audit, the unexpected and experience-bringing elements brought about by the missionGather the assessors in order to collectively assess the mission and find ways to improve and develop competencies


4 – Auto-evaluation of the competencies of assessorsMost Social Auditors currently carrying out missions for social certification organisations do not posses the competencies described below.

Nonetheless, in every country in the world including India, South Africa, Thailand, France and Canada, we have met social auditors who have anticipated the need to become social assessors.

As long as Social Audit remains a type of insurance that the companies who buy it take out to avoid gaining a bad reputation, the competencies of the auditors will remain undeveloped. Young quality auditors, with two or three years’ post-Baccalaureate training in compliance auditing are deemed adequate.

The first chapter of the FDHT’s previous publication, Beyond Social Auditing, (September 2008) showed the limits of the knowledge and competencies needed to carry out social audits in their present form. Since then, the FLA (Fair Labour Association6) has demonstrated its desire to develop traditional audits into audits that provide added value for the subcontractors who submit to them.

Increasing the competencies of Social Auditors to enable them to become Social Assessors is possible in certain situations: varied professional experience in industrial management, an objective view with regard to an overall understanding of the way organisations work, analysis of the management’s managerial values.

To help Social Auditors position themselves in relation to the new missions they may be entrusted with, we have created an auto-evaluation test covering two types of competencies that are indispensable for Social Assessors.

The first type concerns the ability to « look at production processes ». Several professional situations assessors may encounter are dealt with in this first test:

The Social Assessor’s tour of the company is a very important time for understanding the potential dysfunctions of an organisation. The cleanliness of the floor and passages, the use of protective clothing, inquisitorial looks on the part of manual workers and other categories of staff etc. are all indicators that can direct the assessor towards asking the managers relevant questions and even seeing what other categories of personnel it may be useful to meet.

Meetings with the managers and those who occupy intermediary positions in the hierarchy should not be limited to seeking quantitive information (of varying degrees of sincerity and transparency), but should extend to a qualitative understanding of the company’s management methods: its managerial ideology, attitude towards events that « perturb » production,

6 Fair Labor Association (FLA), a non-profit organisation dedicated to ending sweatshop conditions in factories worldwide. Www.fla.org


interpretation of work station dysfunctions, understanding on the part of the management of the hidden costs linked to the inadequate management of human resources, etc.

The information collected is often limited simply to social data, whereas information on productivity, waste, quality defects, the length of time machines are occupied, etc. are just as essential in diagnosing the quality of the conditions under which staff are working.

The second type of competence concerns the directors’ understanding of « systemic/overall management competence ». Managing change has become a major challenge for today’s companies. Such change is very varied in origin and can be technological, commercial, social, organisational, etc. Change can upset the overall balance of the management of accompany. The second test will allow you to identify your understanding of the indirect impacts of any new event on the social management of the company.

4.1 – Knowing how to look at production processes

A social auditor, and even more so, a social assessor, cannot be satisfied with an examination limited how questions of safety (even if this is essential) affect the workers: the real working conditions need to be studied in depth if an outside analysis is to contribute to providing ideas for increasing the competitiveness and productivity of the companies audited or assessed.

We would suggest an auto-evaluation of the competencies of auditors/assessors on several points (regrouped into 5 situations) where their objective approach to the work observed will create value for the audited/assessed companies.

Situation 1: Is direct labour always the appropriate « work unit » in production?

In India, in a factory manufacturing electronic components, two types of production process, similar with regard to the materials used and in the technical functioning of the product, are possible:

« Professional » components produced for many years for the manufacture of relay devices for the distribution of electricity and in the manufacture of locomotives. These are complex components of which several thousand units are produced each year,

components intended for the general public, a new technology for the company, and used mainly in the manufacture of televisions, automobiles, Hi-Fi equipment. These are small, standard components produced by the million each year.

The production cost structures can be analysed thus (in %):


Cost item « Professional » components

Components for the « general public »

Materials used 20% 30%Direct labour 33% 3%Depreciation of the machines

20% 40%

Structural costs 27% 27%Total 100% 100%

In the first case (« professional » electronic products), the overall cost of the product is calculated from the main cost item: direct labour. The cost is put at 3 times the cost of the manpower (3*33% = 99%).

In the case of the production of « general public » components, should the overall cost also be calculated from the direct labour item? That is to say 33 times (33*3 = 99%) the cost of the workers? Or should the calculation system be changed and therefore modify the place of manpower management?

Your observations:


Suggested answer to situation 1:The cost of labour is no longer the essential element in the production cost in the case of the « general public » components. It is more important to concentrate the attention of the managers on the major added value items:

the machines: essentially, the number of breakdowns and time in use, materials used: waste, importance of the production « outstandings », for

example.

Production management that continued to focus on labour time would bypass the real elements of added value in the company, because the structure of added value can change radically.


Situation 2: how to increase the economic performance of the production material (output)?

In this Indian « general public » manufacturing workshop, the automatic machines were working at 50% of their theoretical capacity when they first came into operation. Two years later, they were operating at 75%. How was this significant improvement in the machine’s output achieved?

Your observations:


Suggested answer to situation 2:According to the engineer, this 50% increase in output came about through unspectacular, slowly won gains, acquired as a result of the resolution of a series of minor dysfunctions in the man-machine relationship.

Three management principles are indispensable in achieving this type of success:

the hierarchy and process planning department must listen to what the production staff (workers) have to say: the production operators are those who identify the problems, and – above all – the origin of the breakdowns, quality defects, etc.

xi) improvements in the workers’ qualifications: new apprenticeships (writing, calculation, elements of statistics: tally of the defects/mistakes/dysfunctions, calculation of percentages, graphs, etc.) operators have made it easier for them to communicate and progress in their control of automatic machines.

xii) a dialogue between the different professional categories present in the workshop: engineer, supervisor and workers have been vital in identifying errors and their solutions. As usual, it is a question of a joint contribution of competencies: the knowledge of the engineer, know-how of the supervisors and information from the operators.

Material investment (automation, computerization) should always be accompanied by a major « immaterial investment » (staff training, quality circles, etc.).


Situation 3: is the intensity of « direct » labour enough to ensure that the company remains competitive?

Four cases of problems encountered in the production process:

In Thailand, a producer of corrugated sheeting for the building industry lost market shares to a competitor in Malaysia. The production engineers accused the « sales team » of being incapable of taking large orders (3,000 – 4,000 metres) and of being content with small orders of 300 – 400 metres which meant the lamination and pressing tools had to be constantly adjusted. The factory realised that the Malaysian competitor produced small series of short lengths (300 – 400 metres) for the same cost as the Thai factory produced big series (3,000 – 4,000 metres). The main problem involved the change of tools: changing the cold roller cylinders called for the use of gantries and clearly took too long to acquire the flexibility required by the various product ranges demanded by the client.

Competition forced the factory to reduce the tool-changing time from 2 days to half a day, in other words, a reduction factor of 7. This result is common and was obtained by trial and error.

In Pakistan, a cart manufacturer’s premises were cluttered with a highly diverse collection of spare parts needed to satisfy the very varied demands of farmers during the ploughing season. His cash-flow was undermined by advance production. To diversify production and reduce his bank loans, the forge had to be capable of producing short runs. But a tool change lasted three hours, which was negligible when the production of long runs required 2 changes a week, but proved a handicap when demand required 12 changes a week. In this case, launch times were dived by 9, falling from 3 hours to 20 minutes.

The market forced him to organise « rapid » tool changes, to install a machining centre to link operations and reduce intermediary stocks, and to reduce the correction of defects (blasting – sanding).

In Turkey, an agri-food company producing tinned vegetables acquired its first automatic machine to put the lids on the tins. For the food engineers, conversant with health-food safety issues, mastery of this new electronic tool was problematic, output was no higher than 40%, the manufacturer’s maintenance technicians were 80 kms away and it cost a lot of money to call them out.

Return on investment time stood at 5 years and the management ordered this to be reduced to 2 years.

In Egypt, in a weaving workshop producing fabric for mattresses (white), furnishings (light colours) and jeans (dark blue), the machines are operated by women workers who control 24 machines each. The types of fabrics (white, light, dark) are distributed by groups of 12 machines: certain workers only pilot the production of white material, others the light-coloured fabric, and the remaining workers, the dark blue. Output is very different from one group of machines to another. Breakdowns in the assembly line – the most frequent breakdown – can immobilise from 2 to 18 machines at a time: the time all 24 machines are in use


varies from 30% to 90%.After study, the cause is identified. The dark fabric chains (mainly jeans) are more vulnerable because the dye weakens the thread.

What common defects can be detected in these four (4) production management situations?

Your observations:


Suggested answer to situation 3:In principle, companies try to maintain the costs of « indirect » labour at a low level. This policy, founded on the idea that added value is solely the result of direct labour proves inadequate when logistics staff - maintenance, production study and process planning department, production management - become essential to the quality and quantity of production.

The four (4) examples show that logistics has become an essential factor in the overall productivity of the various production factors. Productivity cannot just be measured by the rate of activity of the direct labour force, but by the performance of the production departments taken as a whole, including the various logistics departments.

ix) Cold-rolling (Thailand) and cart parts (Pakistan): insufficient technicians and engineers in the research and/or process planning departments.

x) Food industry (Turkey): change of production paradigm (for production engineers, mechanical and electronic skills are just as important as those relating to food specialities). The management had introduced electronic equipment (automation) that no worker knew how to operate correctly. The engineers had mastered food techniques (hygiene, safety) but not electronic and information technology techniques.

xi) Weaving (Egypt): start-up choices are a major issue in balancing production tasks. This information is important if start-ups are to be made in such a way as to balance production loads – a major issue.


Situation 4: should the production operators (workers) be judged on their manual activity in the production process?

Three cases where the company directors consider that low productivity comes a lack of activity on the part of the labour force. Some even complain of having to « pay people to do nothing ».

In Alep (Syria), the head of a workshop in a cold rolling factory making angles and plain bars complains that his workers are often « twiddling their thumbs ». They watch the machines work and walk round them whilst their hands remain inactive. Sometimes, the workers sweep the floor to prevent patches of oil from spreading and injuries from steel particles. The director wonders why he has to pay skilled workers to carry out these tasks.

In a factory making wall-mounted gas boilers in the south of Italy, the traditional conveyor belt assembly line has been replaced by a « flexible » line. This makes it possible to create intermediary stocks to deal with dysfunctions and allows workers over the age of 50 to sit down. This reform was at the request of the company director who wanted to retain his older staff who had been loyal over very many years. The head of the workshop does not understand why the job-cutting that is possible with these new investments has not resulted in staff cuts. He does not understand why the all-round workers who have been freed in this way come to the aid of their colleagues in difficulty from time to time. He nonetheless admits that productivity has risen and defects fallen.

Are the workshop managers of these factories really right?

Your observations:


Suggested answer to situation 4:Do we ask fire-fighters, police officers and security guards in general to calculate the time they spend working solely on the time spent in the field?

No, of course not. We expect of these professionals:

Availability: that they are not busy with other tasks and know how to listen to requests

Diagnosis: the ability to implement resources suited to the problem posed

Rapidity of action: limiting the consequences of the event (safety, unavailability of personnel and equipment).

Modern production is increasingly moving towards these kind of operational methods. Production operators must be available when an event, a disruption or a dysfunction arises. Their timely intervention:

- in a production process in which machine costs have become preponderant, - in which the continuity of production guarantees overall productivity, - in which deadlines are ever shorter,

is a guarantee of efficiency.

The importance of the labour force is less ‘to have its hand on the wheel’ than to identify future production problems in good time, to understand the reasons for problems and to intervene rapidly to fluidify production.

In management, competence and availability to act are remunerated by comparing the cost of this to the cost of a shut-down in production. Amongst the management tools used most frequently to manage these work-place situations are: the management of queues (control over random occurrences) and the "ABC" method (statistical evaluations of many management phenomena).


Situation 5: do workers have no professional conscience?Some classic complaints heard by various social auditors:

In Sri Lanka, the personnel manager of a big garment company is at a loss to understand the behaviour of the workers: absenteeism of over 20% and an annual staff turn-over of around 100%.

In Costa Rica, the manager of a banana plantation finds that workers change employer without warning to go into another activity (factory or plantation) as soon as the wages offered there are a few cents higher.

Do these behaviours have major economic consequences for the companies? Do you think that these recurring incidents cannot be controlled by the employers, condemned to suffer from such behaviour on the part of their workers?

Your observations:


Suggested answer to situation 5:

1. Hidden costs, source of savings and productivity

« Hidden costs » are production costs (industry or services) that are not identified by traditional information systems such as the budget, results account, general and analytical accounting, or trend chart. They are characterised by their ability to explain the quality of the way an organisation functions. The definition of hidden costs covers all that is at stake in the management of human resources (HRM) and the organisation through an analysis of costs that have not been properly examined and recorded by traditional accounting systems. Hidden costs correspond to organisational and human problems. Hidden costs are the monetary expression of regulation activities: dysfunctions > regulations > hidden costs.

The following example concerns a frequently occurring issue in staff management, the impromptu departure of staff, known as turn-over. The rate of this is often equal to 100% in many companies. The departure (or hiring) of staff in one year is equal to the number of work stations.

The potential costs of turn-over originate from three distinct types of situation:

Costs linked to departure: the unexpected absence of an employee causes disruption to the work schedule, resulting in waiting and non-production costs.

The costs of replacement: the hiring of a new employee occupies the recruitment and staff management department (hiring formalities, opening of new staff files) - the costs, probably higher, of integration: a productivity differential of several days or even weeks exists between the time a former employee leaves and the time a replacement becomes equally effective. -

Cost of internal apprenticeship: these include the time spent by the staff department and the foreman in advising and assessing the new employee during his/her integration. Efficiency differential: this is the loss of efficiency between the departure of the former employee and the return of productivity to its previous level. Inexperience: during integration, developing competencies and inexperience may produce wastage, loss of materials, a fall in quality, etc.

These three costs together often represent one or two months’ salary, that is for a turn-over of 100% a year, a cost of 15% to 20% of the wage bill.

Absenteeism is also a very high hidden cost. For an absenteeism of 20%, the cost also reaches 20% to 25% of the wage bill.

It is in the company’s interests to identify the causes of the turn-over and absenteeism. It is often a question of low wages. Paying 5% or 10% more than other companies often means a saving of 15% to 20% of the wage bill in « hidden costs ». The description below of worker inconsistency in the industrialised countries shows the advantages of staff management as a corporate resource.


2. High turn-over in workers: the case of the industrialised countries.

From the 1930s in the United States, and from the 1950s in Europe, « hidden costs » have proved very high and are a risk factor in the loss of competitiveness of industrial companies. Hidden costs are the expression of the behaviour of workers who refuse the industrial working conditions of their work station. The principle costs stem mainly from three instances:

turn-over (staff rotation) : impromptu departure of a worker who must be replaced as quickly as possible,

absenteeism: absence of a fairly high number of workers (sometimes 10% to 20% of staff) at the beginning of the working day or change-over.

production quality: the refusal of a station is often expressed by loss of attention to production, meaning production has to be repeated and part of the production goes to waste.

In the first instance, salary increases by companies wishing to retain their staff (reduction in turn-over and absenteeism costs) was a satisfactory response. Rather than leaving the company for a 5% increase, staff paid 10% more than on the rest of the labour market remained with the company.

Later, companies in the industrialised countries – notably under pressure from Japanese industrial firms – concentrated on « the interest of the work ». What changes in staff management were needed for quality to improve? To attain this second objective, industrial firms invested in improving working conditions, the quality of the intermediary production management, the development of social security cover (health insurance, redundancy payments, etc.), limitation of overtime, etc.

These extra social management expenses were compensated for by the savings made on previous hidden costs.


Ways for auditors/assessors to measure the directors’ competence in social management:

Firstly: identify the management ideas of the company’s managers. Ask various managers (general management, workshop managers, staff managers) to give details of their approach to the competencies needed by their production staff (workers, operators) and their logistics staff (maintenance, process planning department, in particular) for effective and flexible production methods.

Secondly: put forward hypotheses for « costs – advantages » analyses as regards hidden costs, and for improvements in the social management of the balance between direct and indirect labour and in the competencies of the immediate management in their role of supporting production workers.

Thirdly: the auditor/assessor submits these hypotheses to the management as a contribution to the evolution of its ideas on staff management and management in general.

For further information:

Buono, A. F. & Savall H., Socio-economic intervention in Organizations: the intervener-researcher and the « socio-economical approach of management » approach to organizational analysis, Charlotte (USA), IAP (2007)

Frederick S. Hillier & Gerald J. Lieberman, Introduction to Operations Research, McGraw-Hill: Boston MA; 8th. (International) Edition, 2005

Hamdy A. Taha, Operations Research: An Introduction, Prentice Hall; 9th. Edition, 2011

Savall Henri, Realising the untapped potential of enterprises through economic management, ILO, 2005


4.2 – Does the company have a global/systemic approach?

The challengeWhen a major transformation occurs in one of the « dimensions of an organisation », has the company really measured the consequences on the other dimensions of the system, or on the contrary, does it retain tools/dimensions that may be outdated in terms of the new challenges facing the company?

1 - Identification of the « dimensions of an organisation »In the preceding auto-evaluation, industrial case histories were presented. Using certain of these, we suggest you try to identify which of the various dimensions of the organisation are involved in the event described.

Search for the « dimensions of the organisation » in the case of the electronic components company (situation 1 and situation 2).

This was the Indian company that had begun to manufacture electronic components for the « general public » using a new technology to that used for the « professional » components it had been producing for a long time with a familiar technology.

Mass production requires both workers and engineers to master these new tools. Improvements in output of 50% (from 50% to 75%) took 2 years. The competencies of the workers were systematically developed.

Question: which « dimensions of the organisation » are affected by this development?


Suggestion for consolidating the dimensions of the organisation involved in the developments in the case of the electronic components company.

The company’s market has changed: besides power components which are still technologically relevant, the company is entering a promising new market, that of « general public » components.The machines are automated and require more training and greater adjustments than before. The technical system has been modified.The work organisation has changed. The workers, instead of working directly on the material, have the role of overseeing and checking the fluidity of the processes: their competencies are evolving.The management must also teach the workers about the problems, dysfunctions, and defects of the new process. They must learn to communicate with each other.The management tools (analytical accounting) have to be totally revised.

Dimensions affected: market, technical system, work organisation, management, management tools.


Identification of the « dimensions of the organisation » in the case of the vegetable canning factory (situation 3)

This is an agri-food company canning vegetables that has acquired its first automatic machine to put the lids on the tins. For the food engineers, conversant with health–food safety issues, mastery of this new electronic tool is problematic: new players therefore appear on the production scene: electromechanical technicians. Moreover, the engineers are obliged to perfect their food industry competencies in the field of electronics.



Suggestion for consolidating the dimensions of the organisation concerned by the changes in the case of the canning factory.

The change of technical system brings about transformations in other dimensions of the organisation.The place of the maintenance staff is now essential to the functioning of the workshop: the work organisation has been permanently transformed, even though the engineers have been obliged to train in electronics as well.The management tools must also be reviewed, as in the preceding case.

Dimensions affected: technical system, work organisation, management tools.


Identification of the « dimensions of the organisation » in the case of the garment factory in Sri Lanka (situation 5)

In Sri Lanka, the personnel manager of a big garment company is at a loss to understand the behaviour of the workers: absenteeism of over 20% and an annual staff turn-over of around 100%.



Suggestion for consolidating the dimensions of the organisation concerned by the changes in the case of the garment factory in Sri Lanka.

The starting-point for the changes awaiting the company is related to the socio-economic environment: the behaviour of the workforce is dominating the company.If the company wants to reduce the « hidden costs » linked to the high level of absenteeism and staff turn-over, it must take certain measures in various fields: management (support, rather than verification), work organisation (improvements to working conditions), but also management tools (evaluation of the hidden costs to encourage loyalty through wage increases).

Dimensions affected: socio-economic environment, work organisation, management tools, and management

Summary of the « dimensions of the organisation » to be systematically examined

A company is in permanent interaction with the market, and the conditions of the technical system, but also with the transformations in its environment.

Within the company, the work organisation, management tools and management conditions are affected at the same time by external transformations. Voluntary action in one dimension may therefore have involuntary consequences for other dimensions.We would like to put forward a list of the principal dimensions we have noted, six in all.

Market: clientele, diversification of products, renewal, semi-finished goods, competition, pricesSocio-economic environment: education, living standard, means of transport, habitat, and public healthTechnical system: production materials, technologies, requirements, and possibilitiesWork organisation: tasks, qualifications, competencies, distribution of tasks, trades, and responsibilitiesManagement: accounting standards, analytical accounting, management control, and quality of the productsManagement: leadership style, guidance, training, and management of the workforce

None of these dimensions is independent of the others: they form a system.


Ways of measuring the systemic competence of the management:

Firstly: identify the major transformations that have occurred in the company « system » over the past 2 – 3 years.For each « system », suggest that the management list the main developments that have taken place in the following dimensions: market, socio-economic environment, technical system, work organisation, management, (costs, analytical accounting) staff management.

Secondly: after a description of the changes, get them to list the changes/impacts implemented by the management in the other dimensions.

Thirdly: the auditor highlights areas where there is a lack of coherence in the company’s systemic transformations together with the company manager in order to check his ability to develop his organisation, his management and HR management, thereby responding to the social expectations of the customers whilst at the same time improving the economic conditions under which the goods are produced.

For further information:

Schwaninger M., Intelligent Organization. Powerful Models of Systemic Management, Springer (2009)

Simon F. B., The Organisation of Self-Organisation. Foundations of Systemic Management, Carl Auer (2004)


Conclusion

As is its custom, the FDHT does not offer any conclusion.

It is for NGOs, Unions and companies to take up or reject these views.

The FDHT’s only opinion is that the evolution of the social assessment is relatively inevitable!


Documents

· Web viewTowards Social Assessment François Beaujolin, as director, Alain Meignant and Georges Sud as contributors. January 2011. Three years after. François Beaujolin founded