Despite being a world-renowned business, BAE Systems Naval Ships has hardly changed its working arrangement over the past years at its Glasgow sites on the River Clyde, explains Chris Westcott, who is the Head of Employee Relations. Employees are expected to work fixed hours, and are paid overtime for extra hours worked.

However, BAE was faced with real affordability challenges amid an increasing market competition BAE Systems had to make a change to its cost structure. A key concern was overtime expenses for the extra work performed by employees. It was viewed as a financial burden that had to be minimized. In response, BAE made something fundamentally different that tapped into knowledge, expertise, and discretionary effort of the work force. Four and a half years on from that realization—and after hours of hard work from the HR team, the entire professional and executive staff and almost half the employees in the manufacturing division moved to “smart working.” In essence, what mattered was staff output, not attendance; the staff were empowered and trusted to determine their own working schedules, and take time off if their work is completed for the week.

Employees, irrespective of their status, could work flexibly, deciding when they start and finish work. The concept seemed tough to get to grips with initially, but it really boiled down to trust. The biggest challenge of the whole project was convincing the work force and the influential trade unions. Therefore, this minimized the risk of the project for all involved, particularly the two trade unions, NMB and Unite, which were of the view that something had to be done to secure the long-term success of the business. The organization has been careful to maintain open lines of communication throughout, with teams taken offsite for a day to explore the SBW concept prior to its launch in each area.

For BAE Systems, this marked the advent of schedule based working (SBW). A sizeable percentage of production employees in Glasgow could take time off if they complete their weekly targets. In essence, Friday is free time if all the work for the week is completed by Thursday. Westcott, however, emphasized that targets and quality standards must be achieved. But workers were willing to put in all their effort to get it as they valued the new arrangement and the challenge.

Introducing SBW has been a significant achievement for BAE Systems. In connection to the success of SBW, Westcott illustrates that when the initial system was set up, employees realized they had actually achieved the target by Thursday afternoon and could go home. This revolutionary accomplishment has come to stay. Soon after, employees came up with more ideas for improvement, such as rotating staff that had to stay late to finish a job—as well as suggesting process improvements, and requesting new tools and training to help them stay on schedule. While the program has taken several years in development, requiring a significant investment, it has been resulted in a fundamental cultural change. There is an increase in accountability for output among workers, higher employee engagement at work, better work relations among workers and managers, and finally a higher degree of freedom or discretionary effort at work has become a reality.

BAE Systems views this project as the single best thing it has done. It not only reshaped the role of HR in the business, but also allowed an understanding of the business that HR would not have achieved if it had focused only on the traditional HR issues.98 

DISCUSSION QUESTIONS

12-1. Why do you think an organization like BAE had to adopt schedule-based work (SBW) pattern?
12-2. What were the challenges in implementing SBW pattern at BAE?
12-3. Discuss the changes that impacted human resources in this case.
12-4. Discuss some of the benefits of the SBW working at BAE?