Waterford Crystal and Corporate Social Responsibility

Waterford Crystal and Corporate Social
Responsibility

Diversity, Disability and Strategic Change

Dr. Alan Bruce

Director, Universal Learning Systems

Dublin, Ireland

March 2004

__________________________________

ULS - ICFAI Article 2004 1

1. Waterford Crystal: Context and Background

Waterford Crystal is one of Ireland's leading international brands. It is one of
the largest indigenous private employers in Ireland and operates on a
multinational scale. Originally founded in the 18 th Century, the company was
re-established after the Second World War using the experience of refugee
Czech craft workers. The company has become a by-word for quality crystal
production and has diversified into the luxury goods arena globally. In addition
to its crystal sales (one of the most dominant and recognizable quality brands
in the United States) the company owns and has strategic relationships with a
range of quality producers globally (including Bulgari and Versace). It owns
Wedgwood Porcelain in the United Kingdom, Rosenthal Ceramics in Germany
and All-Clad Cookware in the United States.

The company has pioneered the concepts and methods of corporate social
responsibility in Ireland. This stems in part from its traditions of quality and
customer care – and associated principles of valuing the skills and needs of
its workforce. These traditions have been maintained and deepened during
the years of Ireland’s extraordinary prosperity and economic growth that
began in the early 1990s. But it is important to realize that they also stem from
its response to economic crisis and near-collapse in 1989. This focused
attention on the new to improve productivity and profitability. What makes the
experience of great interest was that this process was linked directly to social
partnership, upskilling and a new emphasis on employability.

Over the past ten years this process has transformed all aspects of the
company’s manufacturing base in Waterford.

Following 30 years of uninterrupted growth (from 1957 to 1987), Waterford
Crystal ran into serious difficulties in the late 1980s due mainly to:

(1) An unsustainable cost base arising from uncompetitive work practices
(2) Weak dollar and disadvantageous exchange rates for Irish exporters


(3) Worldwide recession
(4) High product prices and resulting slackening in demand
(5) Loss of market share in a mature market
(6) Adversarial industrial relations.

These factors combined to create a serious crisis requiring the immediate
implementation of strong cost improvement measures. The crisis years lasted
from 1988 to 1992. A series of draconian measures was implemented
including:

• Pay cuts ranging from 7% to 25%
• A seven year wage freeze
• The introduction of a wide range of flexible work practices
• A new beginning for union - management relations based on
agreed procedures.

Over €50m was taken out of the cost base in that period of retrenchment. A
fourteen week strike in 1990 represented the most difficult period of the crisis.
It was a period of recrimination and bitterness. Employees felt let down by
management and the company performance. It has taken several years of
proactive employee relations initiatives to repair the damage caused to the
social fabric of the organization during the strike.

2. Turnaround Process: 1988-1994

The turnaround process was prolonged and difficult for everyone working in
the company. A comprehensive transformation in operating activities achieved
a new level of competitiveness. Company performance of improved
dramatically. A number of key changes/initiatives impacted significantly on the
turnaround process.

These included:


• Rationalization of the workforce - over 1,000 employees accepted early
retirement or voluntary redundancy.
• Investment of €130m in share capital by a consortium.
• Five major industrial relations agreements were established between 1989
and 1994.
• Reduction of the cost base - creating a new platform for competitiveness.
• Reduction in labour costs (from 70% of overall costs to 50% currently).
• Outsourcing product from a range of highly skilled but cheaper producers
(mostly in eastern Europe). New products were subjected to a make or
buy decision.
• Business strategy was changed from production-led to
marketing/customer-led, with enormous implications for the manufacturing
operations.
• The manufacturing process was re-engineered from predominantly craft to
a techno-craft operation. The best of the craft was married to the sensible
use of technology. This upgrading of the process improved standard cost
and provided new opportunities for innovation and creativity on concept,
design and speed to market.
• Over €75m capital investment was employed in restructuring and re-
engineering plant layouts, processes, products, systems and structures.
• New cross-functional project teams were established to address major
restructuring issues. Cross functional activity and relationship building
helped flatten a hierarchical structure. Many of the rigidities that denied the
organisation the flexibility and agility it required to compete in the global
market were eliminated.
• Employees were re-educated and retrained to work successfully in the
new work organisation. They were motivated to build a new portfolio of
skills and knowledge that enabled them to achieve employability in a
constantly changing work environment.
• An informed and questioning workforce was established to enable
employees make informed decisions and participate fully in the
regeneration process.


The depth and breadth of the restructuring process provided employees with
many personal challenges. New qualifications were required to cope with new
job specifications and new processes. Education, training and
communications initiatives promoted within the company facilitated many of
the changes introduced and primed the setting of new standards of
performance throughout the organisation.

The development of an informed and questioning workforce enabled
employees to make informed decisions on personal work related issues as
well as broad strategic organisational issues. It was found that when
management and employees were given access to the same information they
invariably came to the same conclusion on what had to be done.

The re-engineering of the workplace led to the implementation of a massive
redeployment programme. Over 800 employees moved into new jobs
requiring entirely new skills and knowledge sets between 1995 and 2000. This
movement of employees placed huge demands on training and education
resources.

It also meant that there was a need to look at the potential and capacity of the
entire workforce. Changing times and conditions meant that the traditional
pattern of male, mono-craft industrial worker was obsolete. New groups
offered fresh perspectives in terms of diversity and variety – as well as
ingenuity and innovation. Thus the Company began to actively facilitate the
recruitment, retention and promotion of non-traditional sectors within the
context of its strategic change. This meant an orientation towards women,
disabled employees and those of different national origin.

Central to the provision of imaginative HR development programs was
involvement in European Union Human Resource Development programs
(such as Employment Horizon, Adapt, NOW and Leonardo da Vinci).


The EMPLOYMENT Community Initiative Programme, funded mainly by the
European Social Fund, targeted groups facing specific difficulties in the
employment market. The EMPLOYMENT Initiative commenced in 1994
and finished at the end of 1999. The European Union’s contribution to
the overall budget for EMPLOYMENT for the period was €1835 million.
EMPLOYMENT had four strands each catering for specific target
groups: women, young people without qualifications, people with
disabilities and people excluded or at risk of exclusion from the labour
market.

EMPLOYMENT aimed to identify new solutions to the problem of
unemployment in the European Union by funding pilot projects. It sought to
contribute to the development of human resources, to improve the working of
the labour market, to promote social solidarity and equal opportunities.
Projects were selected and approved in each Member State from applications
received after a call for projects. Member States worked within a common
framework of selection criteria. To be eligible a project had to be able to
demonstrate that it was innovative, had a transnational work programme and
had to have two or more transnational partners.

Within the overall context of the EMPLOYMENT Initiative, HORIZON aimed to
improve the employability and job prospects of people with disabilities by:

• The matching of training and work experience with information and
support measures
• Improving the delivery of services based on the individual needs of
people with disabilities and strengthening cooperation between
professionals and actors in the field
• Changing attitudes amongst employers, trade unions and other local
actors in pursuit of more holistic approaches
• Involving people with disabilities as actors in their own progress
towards open employment.


Priority was given to experimental projects falling under one or more of the
following headings:

• Developing new systems of training, counselling and employment
including adapting the work place to new technologies
• Training with appropriate guidance, work placement and support
programmes
• Supporting job creation and innovative measures to secure
employment, including new public and private partnerships
• Raising awareness amongst employers and amongst people with
disabilities themselves.


3. Creating Options for Disabled Employees (CODE)

As a company, Waterford Crystal had a long tradition of including people with
disabilities in the workforce. Some had attended special schools in the area
for a period as they had some form of learning difficulty. More particularly,
many were from the deaf community. The recruitment and employment of
deaf people into the company started in the early 1970's and at one stage
there were 20 deaf employees in the company. There were also a number of
other employees with different types of disability active in the workforce.

In addition to those employees with disabilities still active in the workforce, a
significant number of employees were also absent on long-term disability.
These employees, due to illness and / or the onset of disability, had not been
able to continue in their jobs and were at home inactive.

The company, by means of training analyses, performance reviews and
forward business planning were aware that many of the company's
employees with disabilities (particularly those deaf employees) had not
participated in the kind of training and development programs which most of
the workforce had undertaken. This was prejudicial both to the individual
employees (as their future employability was at risk) and to the company (as a
group of employees were not contributing to improving the company's
competitive advantage). The company recognized that specific measures
would have to be taken to ensure that employees with disabilities would
receive equal training and educational opportunities. These measures could
also be applied to those on long-term disability who were interested in
retraining for alternative employment, either within the company or elsewhere.

Waterford Crystal has extensive links to the community in which it operates.
The company therefore was also anxious to assist the development of other
people in the community with disabilities through the attainment of knowledge
and skills which would improve their chances of labour market. It was
decided, therefore, that whatever measures were taken to encourage the


growth and development of existing employees with disabilities would be
made available to people with disabilities from the community at large.

This was in keeping with the company's evolving culture of adopting practical
measures to further demonstrate and strengthen the level of its corporate
social commitment. The project beneficiaries therefore were to be:

 Existing employees with disabilities
 Employees on long-term disability
 People with disabilities from the local community.

The project, as finally approved by the Commission of the European Union,
was called CODE (Creating Options for Disabled Employees).

The project was to focus on 3 main areas:

• The development of employees with disabilities to ensure maximum
competitive advantage
• The piloting of methodologies and approaches which would allow the
company to further develop and strengthen its commitment to equal
opportunities and social inclusion
• The reinforcement of the company's identity as a committed
stakeholder in the local community, responsive to identified social
needs within that community.

The overall aim of the project was to develop a deep rooted consciousness
within Waterford Crystal around the issue of equality of employment
opportunities for people with disabilities which would inform future policies and
actions.


Specified project objectives were:

• To ensure that those people with disabilities working in the company
would have sufficient skills, versatility and flexibility to retain their
employment in the company by developing their maximum potential as
employees.

• To offer an opportunity to employees on long term disability to retrain
and acquire new relevant skills should they wish to do so.

• To provide training in relevant skills to a group of 20 people with
disabilities from the wider community which would improve their
opportunities of obtaining and retaining employment on the open labour
market.

• To develop sustainable transnational partnership arrangements which
could lead to joint future actions

• To develop a model of best practice on the growth and development of
employees with disabilities within a modern manufacturing context.

• To develop a model of Employer Based Training for people with
disabilities which could be replicated at a broader level in Ireland and
Europe

• To develop a model of best practice in relation to equality of
employment opportunities for people with disabilities even in contexts
of minimal recruitment.


Core project activities centred on the following initiatives:

(a) The Employability Development Programme

The programme was designed in such a way as to ensure its relevance to the
needs of all employees in a modern manufacturing context. The training
programme incorporated an eight module format:

o Teamwork
o Information Technology (European Computer Driving Licence)
o Quality
o Business Awareness
o Communications
o Health and Safety
o Customer Care
o Engineering Technology

The programme incorporated a four-week work experience in various
departments within Waterford Crystal.

(b) Accreditation and Certification

Certification options for the modules of the above programme were as follows:

Information Technology (ECDL)
Quality (NCVA Level 1)
Business Awareness (NCVA Level 1)
Communications (NCVA Level 1)
Health and Safety (City & Guilds )


(c) Job Club

The Job Club element of the programme was delivered by a consultancy firm
with extensive experience of Job Club delivery in the Dublin area. The primary
aim of the Job Club approach was to equip participants with the necessary
skills to seek and obtain employment.

The Job Club programme provided training in the following areas:

• Review of past experiences
• Identification of strengths and weaknesses
• Compilation of Curriculum Vitae
• Job Analysis/Requirements
• Company research
• Job Application
• Interview Techniques
• Psychometric Testing in Recruitment.

(d) Rehabilitative Employment

The CODE Project envisaged an extended work experience period for those
participants who wished to undertake this part of the programme. There were
a number of steps involved in this process.

Formal agreement for this extended work experience programme took place
at Management and Senior Trade Union level. The company paid eligible
participants a rehabilitation allowance of (as permitted by the Department of
Social, Community and Family Affairs). Participants would work 19.5 hours
per week on work experience in the company. This extended period of
experience in the working environment was to be known as rehabilitative
employment.


To facilitate this placement the following steps were necessary:

• Discussion with individual participants to ascertain the area of work
they would be most interested in for their work experience.
• Negotiation with individual Front Line Managers for work experience
placements.
• Negotiation of flexibility of working time for those participants who
required it.

Many of the participants, although obviously keen to undertake the activity,
were very anxious that they might lose their benefits. Their anxiety in some
cases was increased when they received letters from the Department
informing them that their benefits were to be reviewed in the light of their
participation in this activity. Through liaison, the difficulties were eventually
overcome. All 14 participants who wished to avail of this rehabilitative
employment were placed in areas of the company.

(e) Transnational Co-operation

The transnational element of the CODE Project incorporated the following
partners:

EEGA Ergonomie, Holland

The main objective of EEGA is to support people with disabilities to enter the
labour market. They have a thorough knowledge and expertise of telematics
and information technologies. Great emphasis is placed on acquisition of
appropriate skills and also advising employers on workplace adaptations.
EEGA generally deals with people with a physical disability although they also
cater for some people who have a background of psychiatric illness


ENAIP Toscana, Italy

ENAIP Toscana is the regional agency of ENAIP, the National Association for
Vocational Training promoted by ACLI (Christian Association of Italian
Workers ). It has specific interest and expertise in the development and
application of innovative technologies and methodologies for multi-media
based learning. Its services cover people with disabilities in general -
although the Lucca based element of the project concerned mainly people
with a background of psychiatric illness

Ellingham Employment Services, United Kingdom

Based in East London, Ellingham Employment Services is a non-profit
vocational training and supported employment placement organisation. It
specializes in various local and national supported employment strategies for
people who have a range of learning disabilities and other socially
disadvantaged groups.

The transnational co-operation agreed the following activities:

* Joint research

* Joint development of products / services

* Joint seminar, conferences

* Exchange of information and material

* Exchange of staff

* Create, maintain and update a project website


* Joint Development of training methodologies (Exchange of Information,
Material; Joint Development of Products / Services; Exchange of Staff).

The co-operation of the partners within the transnational project led to a
model of best practice for the integration of people with disabilities into the
workplace.

The model incorporates guidelines on the following elements:

• Assessment Procedures
• Training of Trainers
• Training delivery : Content, Methodology and Evaluation
• Approaching Employers
• Developing Networks with Employer Involvement.

The transnational partnership also laid the basis for future collaboration in the
form of a generic training programme to promote social inclusion in the
workplace. The programme, designed in such a way as to be suitable for staff
from public, private and voluntary sector bodies, would incorporate the
following modules:

• Assessing Human Capacity
• Ergonomics and " Design for All"
• Assistive Technologies
• Managing Diversity
• Equality Legislation
• Interpersonal, Communicating and Networking Skills
• Objectives and Standards Setting
• International Best Practice : Critical Review and Analysis
• Advocacy


(f) Training of Trainers

The project provided for trainer skills development for a number of Waterford
Crystal staff. This encompassed:

1. A specific trainer skill development programme organized and certified by
the Irish Institute of Training and Development.

2. A programme to develop the skills necessary for the management of a
diverse workforce. This program, developed in conjunction with University
College Cork, is the “Diploma in Professional Studies (Managing Diversity)”. It
is a major innovation and is the first course of its kind to be run in Ireland.

(g) The European Policy Conference: New Perspectives: Disability and
Employment

The "New Perspectives: Disability and Employment" conference held in
Waterford in November 1999 firmly put the issue onto the national agenda.
The array of speakers attracted significant coverage in the national media.
Ted Kennedy Junior, a leading activist in disability issues in the United States,
gave the keynote address. Other main speakers included: Brian Crowley,
Member of the European Parliament; Michel Laine of the European
Commission; Niall Crowley, CEO of the Equality Authority in Ireland.

The large attendance at the event was testimony to the high profile of the
conference speakers. The conference, in addition to the contributions from the
main speakers, gave particular scope to highlighting the work of the
transnational partners. It also highlighted the commitment of Senior
Management of the company with contributions from the Chief Executive
Officer, the Manufacturing Director and the Director of Human Resources.
Trade Union representatives also made significant contributions to the
success of this event as did participants on the programme.


(h) Thematic Groups

Waterford Crystal participated in one of several national thematic groups to
promote the mainstreaming of good practice from individual projects with
related aims and objectives. The project was represented on the Thematic
Group known as JobNet.

One of the primary duties of the project in relation to its role in the National
JobNet Thematic Group was the filming and production of a video aimed at
highlighting examples of the successful integration of people with disabilities
into the workforce and how that success was achieved. The video
complements a disability awareness reference manual. Both represent a
resource for raising awareness among employers about the potential of
people with disabilities to contribute positively to the workforce.

In addition to the thematic activities carried out at national level, project
representatives also participated at European level in conferences in
Luxembourg, Dublin and Copenhagen, aimed at developing European
Networks of Employers with a commitment to providing equality of
employment opportunities for people with disabilities. This work resulted in the
production of a policy paper submitted to the European Commission for
review and action.

Outcomes

The outcomes from the CODE project can be considered from the following
perspectives:

• Organizational
• Local and Community
• Transnational
• Participant


Organizational

Within Waterford Crystal it is clear that the CODE project had a significant
impact in a number of areas:

1. Organizational Culture

Through the project activities and prolonged presence of a substantial group
of people with disabilities in the company, there is a greater acceptance of
people with disabilities into the workplace. Although it can be argued that this
had been present in the company for some time, the project served to
facilitate the growth of this and opened the door to further development
opportunities for people with disabilities. By enabling the removal of barriers
for one group of disadvantaged persons, the project also helped to establish
mechanisms for similar actions with other groups. In this way, the company is
not only complying with the provisions of recent Equality Legislation but is
setting a standard for compliance with the spirit of that legislation.

2. Employee Contribution

The development of skills and knowledge that took place within the project in
relation to existing employees with disabilities enabled the company to benefit
from maximising the contribution of each employee. The employees
concerned also felt more involved in the company's operations and
participated more in company activities. This assists the company in gaining
sustainable, competitive advantage in the marketplace in which it operates.

3. Enhanced Management - Employee/Employee Representatives Relations

The general effort of the company to include existing employees with
disabilities and long-term disabled employees in initiatives of benefit to them
further developed relations between management and trade union
representatives. The fact that the company offered employment to a number
of participants from the outside community also reinforced the credibility of the


company in relation to its actions on this particular initiative.

4. Improved Facilities

The physical and infrastructural changes that took place within the lifetime of
the project greatly benefited not only the participants on the CODE Project but
also the general workforce.

5. Development of Accreditation Options and New Training Methodologies

Through the project activities, the company developed a number of training
tools, methodologies and approaches for use with the general workforce.
These include:
• The Employability Development Programme
• NCVA certified Locally Developed Modules in Quality and Business
Awareness Modules, available in electronic and printed format
• Improved trainer skills
• Disability Awareness programmes.
• Specific supports for the delivery of training to people with separate
needs.

6. Development of In-House Trainer Capacity

Employees have improved trainer skills as a result of completing the IITD
Certificate in Trainer Skills and the Diploma in Professional Studies
(Managing Diversity) certified by University College Cork.

6. Enhanced Links with Third Level Institutions

The company also further strengthened its links with third level institutions
through the programme. The Diploma in Professional Studies (Managing
Diversity) organized is one of the first of its kind to operate in Ireland - indeed
in Europe. It is generally accepted that skills in diversity management will


become of greater importance to organizations in Ireland given the increase in
foreign workers and the effect of equality legislation. The company is now one
of the leading organizations in the country on this particular issue.

7. Consolidation of Reputation as An Equal Opportunities Employer

Waterford Crystal's reputation as a company that promotes equal
opportunities has been reinforced by the project. This is not just within the
local community but also, through the dissemination activities associated with
the project, particularly those around the " New Perspectives: Disability and
Employment " conference, to a national and international audience.

8. Status in Local Community Enhanced

The commitment to the local community is an important element in the
company culture. The implementation of the project activities was a platform
for strengthening ties between the company and a range of public, private and
voluntary bodies in the communities in which it operates.

9. Development of Networks

The company has also developed networks locally with other employers and
trade union representatives in the context of the work of the JobNet South
East grouping and with agencies from other parts of the country in the context
of the Thematic Groups organized under the Horizon programme.

Local and Community Outcomes

The outcomes for the local community can be described as follows:

 Increased job security for a number of members of the community in
employment with Waterford Crystal.


 One-year contracts within Waterford Crystal for unemployed people
with disabilities in the community. This comes at the end of a process
in which additional skills and knowledge were also acquired.

 Improved access to the labour market for all participants of the
programme through the acquisition of necessary skills and knowledge.

 Development of networks, involving of other employers, to improve
work opportunities for people with disabilities. This was facilitated by
having the support of Waterford Crystal, a major employer who has
experienced the benefits of providing opportunities for people with
disabilities and who has developed a model of good practice to be
adapted and used by other employers.

 Through local and national media exposure, there was development of
awareness in the community about the issue of disability and
employment.

 Enhanced access to a major local employer such as Waterford Crystal
by a number of local public, private and voluntary organizations.

Transnational Outcomes

On a transnational, European wide level a number of outcomes can be
identified:

A model for the systematic involvement of employers in developing equality of
employment opportunities for people with disabilities which can be applied
and adapted for a wider European employer audience

A best practice approach to developing Employer Based Training that can be
adapted depending on the national context.


A training and development path promoting the integration of people with
disabilities into the workforce was identified through the exchange of
experiences of training approaches, models and methodologies in the
transnational activity of the project incorporating: Assessment, Training of
Trainers and Employer Involvement.

A generic training module, aimed at further developing equal opportunities
within organizations for disadvantaged groups, was identified for development
through partner collaboration in future projects.

Participant Outcomes

In quantifiable terms the following are the main participant outcomes:

 Nine employees with disabilities in Waterford have enhanced skill
profiles and improved employability.

 Fifteen participants were offered a one year contract of employment
with Waterford Crystal

 Twenty-three participants achieved full European Computer Driving
Licence (ECDL) certification

 Nine participants achieved City and Guilds Certification in Health and
Safety

 Ten participants achieved NCVA Level 1 certification in Business
Awareness and Quality.

 Sixteen participants achieved the Diploma in Professional Studies
(Managing Diversity ) certified by University College Cork.

 One participant successfully undertook an Arts Degree in University


College Cork

 Under the Trainer of Trainers element, 23 people received certification
under the IITD Certificate in Training Skills Programme

 A number of trainers enhanced their training and knowledge imparting
skills.

What is abundantly clear in relation to the community participants on the
Employability Development programme is that a key factor for them was to be
able to undertake training in a mainstream setting such as Waterford Crystal.
The status this gave them had an extremely positive effect on their overall
well-being.

4. Strategic Perspectives

Since the CODE project concluded in 2000, Waterford Crystal participated in
a number of other European Union projects concerned with equality, diversity
and best Human Relations practice. It was a major partner in the TRED
Project (Training Responses to Equality and Diversity) financed by the EU
Equal program. With its partners in Finland and France it drove forward an
employer focused agenda which looked at the opportunities inherent in
diversity to develop enhanced communications and teamwork for all
employees.

Under the European Social Fund In-Company Training Initiative, the
Company is developing two new employer based courses in association with
the National College of Ireland. These seek to develop a national Diploma in
Employability and a national Certificate in Work Based Skills.

The company is at the forefront of Irish employers in driving the agenda for
employability, adaptability and enhanced profitability in the context of social
inclusion and corporate responsibility.


CODE remains the largest and most influential project of its kind. It developed
the process which is now advancing beyond disability to include the other
areas of discrimination and marginalization identified by Irish equality
legislation: age, sexual orientation, gender, family status, nomadism, religion
and ethnicity.

Waterford Crystal operates in changed economic circumstances since 2001.
The emphasis in many companies is on increased profitability at any cost –
ignoring environmental and social factors. The Company has re-asserted the
need to put human beings first. In this context it believes that improved profits
are compatible with social responsibility if a number of key factors are
included. These include:

 Open communications
 Social partnership
 Dialogue
 Transparency
 Added value
 Community linkage
 Environmental awareness
 Flexible working conditions.

Waterford Crystal is proud of its record. It is equally aware that there is quite a
distance to go in advancing best practice among employers to meet the
challenges and opportunities of diversity and equality in a globalized
economic context.

Dr Alan Bruce
Dublin - March 2004

abruce@ulsystems.com


www.ulsystems.com


Waterford Crystal and Corporate Social Responsibility

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