Message from the workers' paradise: we're doing fine

Michael Streeter visits a company where the staff set their salaries based on the order books

Derek Prickett admitted that he was worried when the new philosophy of work took over the company. An experienced metal polisher, and accustomed to the traditional overtime and wrangles with management of his trade, the new buzz phrases of total quality, trust and team-work came as a culture shock.

"I thought, what have we let ourselves in for?" said Mr Prickett, 41. "One or two colleagues just didn't want it at all and left."

But those who remained at Dutton Engineering (Woodside) Ltd in Sandy, Bedfordshire, have seen their working lives transformed with better pay, more responsibility and have seen the company held up as an example to British industry - or as some have called it, "a workers' paradise".

On the outside Dutton looks like any other small-town firm. The first clue that this stainless steel engineering company may be at the forefront of a mini-revolution in working practices comes in its cramped reception, where a small plaque outlines the firm's philosophy. Entitled "Our quality policy", it exhorts "communication" with customers, listening and responding to their needs, "doing what we say we will do," and completing the right orders "on time, every time".

According Tina Mason, the firm's business manager, "the labels are irrelevant except for outsiders" - the key elements to its undeniable success are trust and work structures that place the emphasis on self- reliance. The 28 staff are grouped in three cells - red, blue and green teams - each with a leader who decides on the orders, ensure that they are done on time, to the right specification and to the highest quality.

A separate management as understood in most companies barely exists. "We've got away from the idea that management can do it all themselves - they like to think they can, but they can't. It's the people in there that can," she said, pointing to the shop floor.

The bare figures seem to support the view. The firm has sales per employee of twice the national average, paperwork has been cut by 70 per cent, lead times on jobs are down to 8 hours from six weeks, and a pounds 250,000 overdraft has turned into a healthy balance.

Innovative ideas include the "annualisation" of hours, that is working to a set number of hours per year, rather than on a weekly rate; giving more flexibility, and a new scheme where staff will set their own salaries according to what they know the order books can sustain. This new concept, outlined on Wednesday at a business summit in London, is the brainchild of the company chairman, Ken Lewis. He helped to arrange a management buy-out in the 1980s and then looking for a new direction went to Japan to examine the best work practices before returning to adapt them to the small engineering firm.

"It all about trust, we have got no secrets from each other," said Mr Lewis yesterday.

Mr Prickett believes the same. On a basic package of pounds 16,500 a year, with overtime no longer necessary, a working week of normally four days, unless a job needs finishing, and a share in company profits he believes the new arrangements benefit everyone.

"If one of our team needs to take the afternoon off because, for example, they need to pick up the children, we will cover for him knowing he will do the same for us. It's all about teamwork. I wouldn't go back to the old ways - not unless you paid me pounds 20 an hour!"

While there are still some tensions, "like anywhere else," he says staff are happy in their work and he has learnt new skills on top of his metal polishing expertise. "It's like a little factory."

Dave Beech, 18, has never known anything different and was taken on by a firm which recruits on "attitude, attitude, attitude". He said: "They didn't ask me what I was like at metalwork. They wanted to know if I had 100 per cent commitment.

Mr Lewis said: "We get lots of visitors coming to see what we do, but they go away and can't seem to do it themselves. It does invoke bravery. The point is we are beating the competition ... This is absolutely the way ahead."