Reference no: EM132947561

Question

'No Constant Accessibility': The Volkswagen Group Company Agreement

This case study presents a company agreement between the managers and the works council at Volkswagen (VW) Wolfsburg in 2011, and the strategic importance of this is discussed. The Volkswagen Group, with its headquarters in Wolfsburg, Germany, is one of the leading automobile manufacturers in the world and has a worldwide brand known for its reliability and safety. In 2014, VW's share of the world car market amounted to 12.9 per cent and group sales revenues totalled €202 billion, with profit after tax reported as €11.1 billion (VW 2014).

The company employs approximately 592,600 people worldwide, who are either involved in producing nearly 41,000 vehicles or work in other fields of the business (VW 2015). The production site in Wolfsburg employs around 67,000 people and the works council consists of 75 members. In March 2014, the election for the WC showed the following results based on a voter turnout of 64 per cent: 67 of the members of the works council are members of the Industrial Union of Metalworkers (IG Metall) 3 members are members of the Christian Union Metal Industry 5 members are organized in a non-union capacity, in the Employees Interest Group 18 (24 per cent) of the new elected members are women. (Wolfsburger Allgemeine Zeitung 2014) As discussed above, although trade union membership is not a prerequisite for works council membership, these figures demonstrate that a large proportion of WC members at the VW Wolfsburg site are trade union members. We now turn to the issue of out-of-hours accessibility at VW Wolfsburg. The problem of having to be constantly available In today's world, with the growing number of mobile devices, employees can be accessible to management around the clock. There is a growing flexibility in working hours and workplace, especially for those employees who are in a position to decide where and when they want to work and enjoy the advantages of working away from the office.

There is, however, another side to the flexibility coin as managers are able to access their employees outside of normal working hours; in fact, through company mobile phones and Blackberrys they can be contacted 24/7. While self-determined flexibility is welcomed by many people as they see it as a way to have better work-life balance, employer access to staff is further criticized as work-life boundaries become blurred (see Chapter 6). It is not always clear whether companies want their employees to be accessible all of the time or whether employees want to be informed and able to react all the time. A study by the University of Freiburg found that constant availability can lead to increasing pressure on employees; conflicts between work and life are growing and lead to more stress (Pangert and Schüpbach 2013). It is, however, not only employers forcing employees to be available all the time, but it is also employees who are checking their work emails at home, over the weekend and while on holiday. Leslie Perow from Harvard University asked around 1,600 managers and professionals about their smartphone use habits: 70 per cent checked their smartphone each day within an hour of getting up, 56 per cent did so within an hour before going to bed and 48 per cent checked it over the weekend (Perow 2012).

A study drawn by the German Trade Union Association (DGB) showed in 2012 that around 27 per cent of all employees have to be available in their free time (Carstensen 2015). The Trade Union for Metal Workers in Germany asked around 500,000 employees about the flexibility of working hours. In the study, most employees wanted flexible work arrangements but with clear and transparent regulations and limitations (IG Metall 2013). It is perhaps worth noting that this is the union with the largest representation on VW Wolfsburg's works council. At VW Wolfsburg, it is reported that employees were angry and frustrated by a 'blurring of the dividing line between workplace and home' (FT 2011). The works council spokesperson, Hans-Joachim Thust, commented on how family life might be disrupted by Blackberrys and mobile phones and might also lead to employee 'burnout' (Independent 2011). He was quoted as suggesting that 'new possibilities of communication also contain inherent dangers' (Thust, quoted in Independent 2011). It is within this context that the WC raised the issue with managers at VW Wolfsburg. The company agreement on employee accessibility at VW Wolfsburg In December 2011, the managers and works council at VW Wolfsburg were party to a formal company agreement regarding the accessibility of employees through their company smartphones. With this company agreement, all employees who come within the remit of the works council (i.e. not executives of the organization and other senior personnel) and who have a company smartphone are no longer accessible 24/7.

The smartphones have been programmed so that employees are only able to receive company emails between the hours of 07.00 and 18.15, although the telephone function is always working. Heinz-Joachim They are no doubt pleased that a VW spokesperson, Markus Schlesag, is reported to have said that VW has to ensure a balance between reaching staff all the time and protecting their private lives (Bloomberg 2011). On the face of it, this would appear to be a good result for the employees. At the time of writing this case study and despite more recent issues faced by VW (such as the notorious carbon omissions 'scandal' in 2014), the company agreement was still valid. In 2011 when it was signed, the coverage of the agreement was about 3,000 employees (of 590,000 worldwide), that is, all pay-scale employees in possession of a company smartphone at six different sites in Germany.

The number seems small, but the strategic impact is not only about the number of employees covered, it is also about the commitment of the management and the scope of this step.

Questions

1. How would you describe the employment relationship in this case study (remember, Germany is seen as a successful economy, despite having employment relations practices, as described above, in place for many years!)?

2. To what extent do you think an active works council impacts on strategic HRM decision-making and on the formulation of policies and practices?

3. The number of employers who are covered directly by this company agreement is relatively small. With this in mind, to what extent do you think that company agreements like this have a strategic impact at national and/or international business levels? Give reasons for your answer.