Employee Reporting in New Zealand

Abstract

It has been widely advocated that relationships between management and employees could be improved if the communication between the two parties was more effective. In an effort to encourage effective management/employee communication, many companies have made a practice of issuing specialised annual reports to their employees -called "employee reports". These reports typically contain a simplified presentation of the information provided to shareholders in the company's annual report, with an explanation of financial terminology; a message from the company chairman or executive director and numerous photographs of company employees at their place of work. The objectives of this study were in three areas. The first objective was to research the incidence of employee reporting currently undertaken in New Zealand. The second objective was to research employer attitudes and experiences to employee reporting and the third, to research employee attitudes and reactions to employee reporting. Results obtained indicated that employee reporting has become an established practice in New Zealand. Larger companies (based on the number on employees) were more likely to issue employee reports as were companies that operated from a variety of separate geographical establishments. Employee reports surveyed generally contained a simplified presentation of information presented to shareholders and little additional disclosure beyond that in the statutory accounts. Little of the content was future oriented, and most of the information presented was global in nature, despite clear evidence from employees of their preference for disaggregated information about their immediate place of work. An overall review of the reports suggested that most of the reports were public relations documents designed to convey a favourable impression of the company without attempting to meet reasonable information needs of employees. Results from the research undertaken into employer attitudes show that most employers undertake employee reporting with the main objectives of encouraging a sense of responsibility in their workforce, enabling the firm's financial position to be better appreciated and motivating employees more in the affairs of the company. Employers generally appeared perceptive as to what material employees would like to see in an employee report, but in practice few employers were willing to include such information in their own reports. This may indicate that employee reports are merely condensations of the annual report sent to shareholders or that commercial confidentiality is more important than has been recognised earlier. On the other hand, some companies did not issue employee reports for such reasons as commercial confidentiality and risks of information being misunderstood by employees. Surveys of employees in three companies revealed that most employees found the employee report of interest and regarded it favourably. However many felt the employee report should have given more information especially disaggregated information about how their particular division or plant has performed. The issue of employee reports in many cases has appeared to stimulate demand and inquiries from employees for further information about their place of work. Finally recommendations were made to employers for effective employee reporting based on the results obtained in this study.