About Co-operatives – Page 3

Equal Pay

In this series we aim to debunk some of the commoner myths about co-operatives – the stereotypical beliefs that people hold about what a co-operative is, which can lead to misunderstanding and can prevent people from recognising the very real value of the co-operative business model.

EQUAL PAY

The second topic is equal pay – in a co-op everyone gets paid the same, don’t they? No, not always, some co-operatives do have an ‘equal pay for all’ policy, for example worker co-operatives in the wholefood sector, but this is by no means common. Of course equity is one of our co-operative values, so all co-operatives would subscribe to equal pay for equal work. However many co-operatives do have pay scales and pay differentials, some following the example of the famous spanish co-operative Mondragon, and limiting differentials between managerial staff and shop floor workers pay.

A recent article in Co-operative News described how salaries in worker cooperatives tend to foster gender equality, even though in Europe, inequality in pay between men and women is high. According to the survey: European Project – Active Women in Small and Medium Enterprises (SMEs), in 93.8 per cent of cases in worker co-operatives in Spain, France and Italy, gender based salary discrimination does not exist. The survey interviewed 133 women who said that they receive an equal salary to men for an equal workload.

So when people do get the same pay, how does it work?
At Essential Trading Co-operative, the pay system is based on principles of equality and equity, with a pay scale based on length of service, and is possibly unique among worker co-ops within the wholefood sector in the way in which work responsibilities are allocated. Individuals who wish to join the co-op are recruited into specific roles (e.g. Personnel Worker, Retail Worker, Food Processing Worker). However Essential do not conduct job role evaluations in order to place roles into distinct pay brackets. This is because they do not believe that more value should be placed on some forms of work as opposed to others. Nor are there additional monetary benefits for individuals elected by the co-op membership to sit on committees (such as the Management Committee or Strategy Committee) or elected by their team members to act as Team Coordinators.

However, unlike Suma and Unicorn Grocery, Essential does not simply have one rate of pay. The co-operative operates a pay scale that is based on length of service. All probationary members begin on the same rate of pay. They progress through different pay grades, linked only to duration of employment. It is expected that members will come to take on a greater level of responsibility for the management of the co-op and their own area of the business with time, and it is this that Essential seeks to reward through their graded pay structure.

Similarly, the co-operative calculates members’ entitlement to dividends based on the number of hours that they are contracted to work per week, their length of service and their democratic contribution to the co-op’s decision making processes (e.g. how many General Meetings they have attended and how many ballots they have cast a vote in during the last quarter). Also, all members can access the co-operative’s generous health care scheme.

At Calverts Design & Print co-op, Sion Whellens says “the notion of a ‘market rate’ for different skills and job functions is a myth based on social and workplace hierarchy”. Calverts’ equal hourly pay system has been in place without challenge since 1977.

All workers (whether members or non members) are hourly paid, and the hourly rate is the same for all job functions. The rationale for this is that all job roles are equally necessary to the good performance of the business, and should therefore be equally remunerated – Calverts have never found that their pay system makes it difficult to recruit or retain workers. Staff turnover is less than half the industry average, so they have retained a high and increasing level of skills over the years. All workers are simultaneously members, directors and employees of the co-op. The co-op has never made compulsory redundancies on account of recessions or trading downturns. They have occasionally shared the pain of deferred wages and wage cuts, in order to maintain employment levels in the co-op.

Calverts’ current hourly rate is £16.50 per hour (down from around £17.75 before the current crisis), higher than London industry average. Full time hours are 35 per week, lower than the industry average of 39. All overtime (again irrespective of job function) is paid at x 1.5, serving not only as an incentive to work extra hours when needed, but also for the co-op to maximise working hours and minimise routine overtime.

Thanks to Essential and Calverts members for sharing this useful information.

De-bunking co-op myths

JOB ROTATION – OR MULTI-SKILLING

The first topic is job rotation – all co-ops rotate jobs, don’t they?

Well no, some do and some don’t – it’s not a necessary condition for a co-operative. Co-ops organise in many different ways, ranging from full multi-skilling (mostly found in worker co-ops, owned and controlled by employees) to those which have specific roles and job titles.

However co-operatives that do organise around multi-skilling enjoy a variety of benefits – as long as it is implemented thoughtfully and as long as the costs are recognised, anticipated and accounted for.

Job rotation as practised in worker co-ops can be more usefully described as multi-skilling, meaning that all co-operative members must be ready to perform a range of tasks, so when extra hands are required (at certain times of the week for example, or seasonally, or if someone is off sick or on holiday) they are readily available.

Advantages
Apart from the obvious advantage of having those extra hands available, co-operatives that have successfully implemented multi-skilling report improved communications between departments, leading to fewer demands on the personnel department, more variety in the working environment, enabling the co-operative to cope more effectively with high workloads, so members are fresher and enthusiastic for longer; it allows recuperation from stress and enables the co-operative to use labour and skills more efficiently to cope with the troughs and peaks of business.

Pitfalls
If you are learning a new job, you will not be up to speed for some time, and nor will the person teaching you. This is a cost which needs to be built into budgets and projections. If it is not, the lower productivity implied by people ‘learning on the job’ can quickly become a drain on the co-operative’s resources. Another disadvantage is the resentment that can be caused when a trained and qualified worker is recruited for a specific task only to find that he or she is expected to perform tasks they are not experienced in while people who do not have their skills and experience step into their shoes in the job they were recruited for. I am remembering a new-start co-op veggie restaurant that rotated all their members around all jobs including the kitchen, with the unfortunate result that they lost the two qualified chefs they’d recruited! A major pitfall is to assume that all jobs can be rotated and to undervalue the specialist skills that qualified and trained staff bring to the co-operative.

Suma Wholefoods, based at Elland, near Halifax, have been practising multi-skilling for over 30 years and their 150 employees perform more than one role in the co-operative. They say that this broadens their skills base and gives every member an invaluable insight into the bigger picture. It also helps to play to each member’s different strengths, enabling them to ‘think outside the box’ when it comes to creativity and problem solving. Suma workers multi-skill, usually between desk and manual work and contribute to collective management. Drivers often drive for part of the week and work in the warehouse or offices for the remainder. Desk workers are encouraged to do manual work for at least one day per week.

At Unicorn Grocery, in south Manchester, members learn a range of core tasks – working the till, packing, cleaning – and then two or sometimes three people are trained up in specialist roles, so there is back-up when needed.

Suma says: “to avoid the chimps tea party approach of everyone trying to grab the best job, it must be agreed democratically and organised co-operatively. You can use regular HR practice such as job analysis to identify what needs to be done, then share the jobs according to skills and desires. That way you won’t be held to ransom by people with rare skills.”

Summary
What are the key benefits of multi-skilling?

improved communications
improved awareness of the business ‘big picture’
more efficient use of labour and skills
more variety, less boredom, less stress
more opportunities for individual continuing professional development

And the main pitfalls?

assumption that all jobs can be rotated
failure to identify those jobs that most need back-up
failure to include learning on the job into production costs
lack of planning

Co-operantics provides lots of free downloadable resources that will help you with democratic decision-making, the essential foundation for implementation of an effective multi-skilling approach.

Co-operative skills and motivation

It doesn’t take a genius to work out that a workforce, team or any other group of people will perform better when it is motivated. But how do you go about motivating people? In the world of motivation there is a theory that unpicks how to get the most from your workers, volunteers or members called the “Hygiene-Motivation Theory” developed by Fredrick Herzberg and published in “The Motivation to Work” in 1959.

The crux of this theory is that there are the factors which satisfy people in the work place and others that dissatisfy them. Motivation occurs where there is satisfaction and demotivation occurs where dissatisfaction prevails. However, contrary to what you might expect, what motivates people at work is not just the opposite of what causes dissatisfaction.

Hygiene factors must be met in order for people to stop being dissatisfied, but halting dissatisfaction does not itself provide satisfaction. This involves extra activity. If you like, the hygiene factors are the foundations upon which motivation can be built. Meeting basic hygiene needs provides only momentary satisfaction – in much the same way that finding a deserted building as shelter on a rainswept moor would provide momentary relief: you would not want to live there! Satisfaction, and sustained motivation, comes from meeting separate motivation factors. But, failure to address hygiene factors makes any work on motivation factors a waste of time and energy.

Herzberg identified typical examples of these factors which we can take as a starting point, but it may be possible to identify specific factors in your organisation which have either a motivational or demotivational effect on members:

Hygiene and motivation factors — Hygiene & motivation factors diagram

There is a useful introduction to Herzberg’s theory on the BusinessBalls website: http://www.businessballs.com/herzberg.htm

How can we apply this theory in our co-operatives?

A first step would be to get members talking so the co-operative can establish how they feel about these issues. One person’s idea of status may not be the same as another’s, and what is for one person an adequate salary (or total pay if you include profit share) may not be enough for another. Desirable terms and conditions can vary between people with different circumstances e.g. the parent might rather be able to work flexibly around school start & finish times whereas the hardened festival goer may want to take the bulk of their holiday in the summer. What does achievement mean to your members? At what point for individuals does responsibility provide motivation and at what point does it constitute unnecessary pressure? Do they want individual responsibility or shared responsibility?

What does this have to do with co-operative skills?

To benefit from this motivational theory, your co-operative might look at management decisions and organisational changes. However improving co-operative skills will address some of these motivational factors at a fundamental level:

Developing good communication skills and learning how to deal with conflict helps people to maintain relationships for longer (a hygiene factor).
Improved efficiency and effectiveness of the organisation through better meetings can generate better conditions, remuneration and job security – each of them an acknowledged hygiene factor.
Recognition of status as an equal in the business is an important hygiene factor in co-operatives. Poor co-operative skills such as bad communication can undermine the status of a member. If some members feel their views are not heard or taken on board they may feel they do not have equal status – despite what the governing document says about one member one vote. Behaviours that have developed over years and some policies, procedures or systems can also contribute to this .
Direct influence on company policies (a hygiene factor) and the way work itself is organised (a motivation factor) are more likely if your organisation adopts good decision making processes that take into account all members – not just the majority or the most vocal.

Well organised meetings encourage individuals to share responsibility (motivation) giving all members opportunities to gain recognition as important joint players in the organisation (motivation)
Training in co-operative skills is motivational as it provides advancement and personal growth.
A co-operative that functions well is a less stressful, more supportive place to work.

It is worth looking at the free resources on the Co-operantics website to develop the co-operative skills in your organisation, or you can bring us in to help.

We can also assist you to identify factors that can assist motivation or advise on improvements to your governance structure, policies and procedures.

Email us at nathan@cooperantics.co.uk

Playing Co-opoly at Co-ops United Manchester

We were delighted to have the opportunity to play and promote the game of Co-opoly at the Co-ops United event in Manchester on Thursday 1st November. We managed to set up four games running concurrently and came away totally vindicated in our belief that Co-opoly is an excellent tool for learning about co-operatives and especially what it’s like to work in one.

There was much interest in our ‘Pod’ – with people coming in to watch, asking us about the game, and asking where they could get hold of one.We asked players for feedback about the game – here are some of their comments:

the game cleverly illustrates a real-life problematic in co-ops, which is trying to find out what’s going on in colleague’s heads …
realistic but fun game, similar to working in a workers coop
one of the players immediately adopted the role of “Treasurer” to keep tabs on how many points the co-op owned in real time. This was used by the group along with some forward planning in case the points were needed to cover losses to weigh up spending decisions (e.g. “wage” rises for members). This demonstrated an awareness that the co-op needs enough working capital to survive to trigger member benefit in the longer term and it also needs up to the minute financial information – something not all new-start co-ops understand!
die needs round corners, doesn’t roll well
black text on red cards is hard to read
good for children to learn an alternative to competition (especially siblings)
lastly a small child made the clever observation that for countries that don’t use Roman numerals – 1,2 3 etc. – the die would not work, so we agreed that the traditional dots would work better!

We were privileged to have the participation of Donna Balkan, from the Canadian Co-operative Association, who has played Co-opoly “at least 12 times” and who is a great fan of the game. See her blog about Co-ops United & thanks for the photos Donna!

There was a lot of interest in the new version of Co-opoly, which Toolbox for Education are currently fundraising for, which will be cheaper overseas, because easier to pack and post. Check their website & contribute if you can.

The Sweet Shop Co-op

a fascinating example from childhood by Cooperantics member Nathan Brown:

Co-operation is a human instinct, or “how a bunch of children set up a consumer co-op”

Through the filter of hindsight, childhood in the 1970s seemed to involve the sun always shining and the school holidays lasting forever. We lived on a small estate of about 12 streets which was full of kids haring around on bikes or skateboards, and it also had a parade of shops. This is the story of how a few of those kids set up an enterprising little buying group on the street we lived on.

Being the last street before the wilderness that had once been farmland, our street was not quite the “fleabag” but being on the outskirts of the estate made us something of outsiders and it would be a lie to pretend there wasn’t an element of tribalism over which part of the estate you came from. This led to a form of solidarity – regardless of age or gender, we would generally play together because we lived on the same street. We all had pocket money in varying amounts and to the chagrin of our parents we all liked sweets. Whilst the local shop sold various sweets in an array of huge jars the minimum purchase was a quarter of a pound. You couldn’t buy just one or two of a particular sweet. They did have some “penny sweets” that could be bought individually but as nice as Mojos, Black Jacks, Fruit Salad and Flying Saucers were they didn’t offer the value that buying “proper sweets” by the quarter did.

So, without prompting from any adults we developed a “brand new idea”. Well, it was new to us! We would pool our resources and buy a range of sweets which we could all share. It’s quite possible that the inspiration came from a colouring book telling the story of the Rochdale Pioneers that my younger sister had been given by the Co-op at some point. We all contributed money and sent a delegation (a girl my age and me as we were the oldest and therefore allowed by our parents to walk to the shops) armed with a list.

When we returned, we set up the “shop”. Up went a garage door and out came a paste table. Bowls were “borrowed” from kitchens with or without parents’ knowledge. And then we set out our stock. Each member of the group counted out a variety of sweets into a bowl and we set about working out a price. For most, our pricing strategy (we didn’t call it that!) we divided the cost of the bag by the number of sweets in it and rounded up to the nearest half penny.

First we discussed if we should split the sweets equally, but then after some discussion we realised that this form of “socialism” wasn’t totally fair. Everyone had credit based on what they had contributed and this was written down. As we consumed sweets our credit was reduced accordingly. Once everyone had received sweets to the value of the money they had contributed there were some left over! We had magically created more sweets. We grouped together and discussed what to do. Our final decision was to divide these up equally, after all we had all “worked” all day long buying and selling to ourselves. The “shop” was a resounding success but only lasted a day. We resolved to repeat the process as soon as anyone had any pocket money to go back to the sweet shop. More than just a means to access a wider range of confectionery it had been fun! It kept us busy all day and we enjoyed pitching in and working together for mutual gain. The social aspect was as important as the transactions that took place. While we didn’t have any “stock” we set about improving our retail area, devising systems for how people should be served and generally planning.

What we didn’t recognise was that while we had enough money to buy in the stock (capital) there wasn’t any extra to spend as income – which would be a barrier to growth. And if we retained money to spend as income we wouldn’t have the capital. Our solution was simple – a loan from the bank of mum and dad. We would each ask for 2 weeks pocket money and explain why. 1 week for “investing” and 1 week for spending. And if it worked out as it had the previous week, we would still have money to spend for week 2. Our backers (parents) agreed. The cost to us was no pocket money the following week. A risk we were all prepared to take.

Other kids liked the idea and became “customers”. We gave them the option of contributing to the pot but some wanted sweets in return for cash right there and then. We didn’t mind that they hadn’t contributed in the first place as the money they spent still enabled us to buy in more stocks. We had liquidity! Two or three times a day there would be a bike run to buy in fresh supplies. The choice of what to buy was based on what we had left (stock), what sold well (demand) and what we wanted (member need). And if there were kids who didn’t have enough pocket money we would hold a meeting and decide whether or not to give away freebies. More often than not they “earnt” some sweets by working a shift on the shop front.

With our success came the capitalist attempt to take over. There was one family in our street who had money. They had a new car, the son of the family boasted about his pocket money and he always had the latest toys. They lived next door to where our “shop” was set up in the garage. The dad – who smoked cigars, as all good capitalists do, just to make sure we can recognise them – went to the cash and carry and bought whole jars of sweets. This competing venture had access to capital of a scale that we could only dream of. Up went their garage door. Out came their paste table. And they set out to compete with us. They failed. Yes, they sold some sweets, but we sold more than they did. Quite simply, kids enjoyed hanging round in a shared space. They liked the opportunity to play “shop keeper” and we had a core of customers who had a shared interest in making our venture a success.

The “shop” came to an end when it was subject to an attempted coup. The person whose garage it was decided they should be “in charge” and make the decisions as it was their garage. We didn’t like the thought of subjecting ourselves to a dictator – we were democratic and thrived on equality. First we tried to convince parents to let us use a different garage – no go, as everyone else’s was full of junk, dangerous chemicals or being used to fix a car. So, rather than work through the issues and resist this internal threat, we resorted to childish behaviour (we were children y’know): we wound the little enterprise up. All the remaining “stock” was distributed according to how much people still had credited to what was effectively their account. And what was left was divided up among everyone who had been buying.

A nice little tale and on reading it you may recognise most of the Co-operative Principles in action, but what does it prove? I like to think it shows that co-operating is more of a natural instinct than competing. A group of children, some of whom were as young as five, developed a way of working together pretty much in the spirit of the Co-operative Principles. Transfer this “childs play” example to a real business and the undoing of our sweetshop co-op also shows that maintaining the integrity of the co-op requires more than agreed ways of operating, it requires skills in how to work together to overcome problems. Co-operative skills!

Co-opoly

To celebrate International Co-operatives Year, Cooperantics is proud to promote Co-opoly: The Game of Co-operatives where players collaborate to found and run a democratically owned and controlled business. In the game players make tough choices in order to survive as individuals and strive for the success of their co-operative business. We’ll be playing it with Somerset Co-operative Services before the AGM on 18th July in Taunton, so look out for a review of the game shortly after that.

You can purchase a copy of the game by clicking on the logo in the right hand side bar below

Principles Really Do Matter

Here’s a useful tool for ensuring that your co-operative remains true to co-operative principles – and hence continues to enjoy the co-operative advantage.

Principles Really Do Matter by Nathan Brown

Over the years, I have noticed that many co-operatives I have worked with or known who had suffered some sort of business crisis have had something in common. They had lost sight of the Co-operative Principles at the heart of the business and the business problems were a symptom of a failing co-operative organisation.

The Co-operative Principles imbue co-ops with what is referred to by co-op geeks (hands up!) as “The Co-operative Advantage”, a very real but ever so intangible attribute that enables co-ops to succeed where other businesses might fail. In all the focus on celebrating the co-operative advantage and the benefits that being a member of a co-op brings, it is sometimes easy to forget that they are a product of the application of the principles. So what can you do to ensure your co-op stays a co-op in deed as well as name? Here are a few tips:

Get back to basics. Be clear about your purpose or aims

A co-operative is based around common economic, social and/or cultural needs. This is central to the internationally agreed definition of a co-operative. Clarity about the needs you hold in common and want to address is vital to success. Ignore the importance of shared and regularly acknowledged purpose at your peril. There is a risk that ignoring your purpose can lead to “mission creep” as members with differing needs try to bend the co-op to meet those needs. This can especially be the case if your membership processes require attention. Eventually the co-op could cease to deliver what it was established for, or break into factionalism. Sometimes your co-op may be able to address the developing needs of members, but this should be done as a strategic priority, not by stealth. Sometimes the needs of the membership change but if an individual’s needs cannot be met by the co-op they can always leave – and start another one! The open and voluntary nature of co-ops applies equally to leaving as to joining.

Sticking to the principles

It’s not difficult to audit yourselves on how you apply the Co-operative Principles, although sometimes some outside assistance can be useful. It is also a highly educational experience for members both new and old alike. As time, members, the trade sector and the technological environment change we may find better ways to implement the principles for shared benefit.

Take the 7 principles and then examine each one by one:

How does your co-operative implement the principle?
How does this contribute to your purpose or aims?
Do the ways you implement the principle pro-actively put that principle into practice or is it routine and “it’s what we’ve always done”?
Are members clear about why you implement the principles in that way?
Is this the most effective way to implement the principle?
Does the current way of implementing the principle cause friction or resistance among the membership?
Could this be done in a better or different or easier way?

You can find this and other useful thoughts at Nathan’s blog

Co-opoly

It’s arrived! My Co-opoly game arrived yesterday.

Co-opoly: The Game of Cooperatives is a creative and exciting game designed for the growing cooperative movement. Games have been proven to be unique resources that shape the way people learn, work, and interact with one another, but Co-opoly is more than just a board game. It is an innovative way for aspiring and existing cooperators, as well as other interested parties, to discover co-ops and to practice cooperation.

People who have played the game call it “fun and engaging” as well as “a great teaching tool about how to build and sustain” cooperatives.

Can’t wait to start playing!

Will there be a game in Taunton during Co-ops Fortnight?

Elinor Ostrom

A powerful and moving tribute to the late Elinor Ostrom by the Grassroots Economic Organizing Collective :

“Lin Ostrom died on this past Tuesday, June 12th, but there is no tragedy in the loss. We certainly doubt she spent her time feeling tragic about her cancer.

Yes, there is real pain in losing her, but the reasons for celebrating are just as real and much more abundant. Her life contributed mightily toward reversing a major tragedy for all species on Mother Earth—that profound mistake in thinking known as the ‘tragedy of the commons’.

A few of us here at GEO had the immense pleasure and great privilege of working with a team from the Workshop in Political Theory and Policy Analysis at Indiana University in Bloomington on the Collective Action issue we published a year ago this coming September. One of our collective members, Michael Johnson, also met her in Amherst, MA, at a dinner that the Valley Alliance of Worker Co-operatives held for her. Everyone in attendance was impressed with her razor-sharp mind, but also charmed by her simplicity and down-to-earth graciousness. She may have known even then that she had cancer, as she continued working through the last year of her life until shortly before her passing. A rather impressive way to deal with the knowledge of one’s imminent death, no?

Another awesome message came from her relentless and joyful focus on what needed to be done to make the world better at all levels of her life. This seemed to free her from her being mired in that endless status-seeking in which so many of us are trapped in order to validate our lives to ourselves. Prestige seemed to be a big nuisance to her even as she turned it to the advantage of her work with a twinkle in her eye. Oh! that we should all be just a bit more free of that absurd Sisyphean effort.

Finally, her legacy includes a working community of scholars in deep solidarity with her at Indiana University and beyond. A stunning resource to pass on to all of us. Let us hope and help in any way asked that the ‘Workshop’ community deals with the huge transition that faces them with as much freedom from the nemesis of rivalry and status-seeking as is necessary to keep the Workshop on the course she and Vincent, her husband, set it on.

Her’s was an awesome life lived fully to the end. May we all continue to nurture her legacy.”

-The GEO Collective

Co-operative skills

What we mean by co-operative skills is the skill-set you need to be able to co-operate effectively – i.e. work with others in a collective, non-hierarchical, democratically managed organisational structure.

Co-operative skills include:

Communication skills (understanding the essential elements of communication, i.e. sending and receiving messages, and minimising ‘noise’)
Meetings and decision-making skills
Conflict management
Understanding how to avoid potential conflict caused by poor governance or poorly planned growth.

It has been suggested that Emotional Intelligence is a necessary basis for the development of co-operative skills, and if we assume that what we mean by that is self-knowledge and self-awareness, reflection, empathy and social awareness, then common sense would suggest such attributes are indeed essential. Here’s a brief summary of current understanding of emotional intelligence, a look at some of the skills and how we can improve our own emotional intelligence.

Whether or not it’s possible to identify and measure emotional intelligence, some of the basic requirements for co-operative working – such as good communication skills and the ability to behave assertively (instead of being passive, aggressive or manipulative) require self-knowledge, social awareness and empathy.

It’s my belief that such skills are not innate, and can be learned – indeed if children were taught co-operative skills in the classroom they would be better equipped to help build the better world we all want to see.

The elements above are all described and explained in the various topic areas of the website – with games, exercises, and links to other websites and sources of information.