Tool 3

Embedding Decent Work Into Corporate Processes and Systems

Buyer KPIs

The conversations and processes set out in Section 1: “Resolving dilemmas around decent work” are designed, at their heart, to help clarify the company’s expectations of buyers when it comes to decent work. This also extends to the targets, indicators and incentives used to measure and reward buyers’ performance.

Ideally, targets and key performance indicators for buyers should result from companies working to align commercial and social targets for their procurement decisions. When buyers are incentivized to adopt responsible procurement behaviours and practices, they are more likely to drive change with the suppliers they interact with.

The following examples may spark thoughts for adapting or including responsible procurement KPIs in buyers’ performance management plans. Recognizing that buyers may move positions within the company (e.g. from one category to another), they can also be used in the overall performance management systems of a procurement department.

  • Year 1

    Communication

    Buyer’s knowledge of decent work and engagement of suppliers

    • Buyer has participated in a training session to understand the companies’ Code of Conduct/Code of Labour practices
    • Buyer has participated in a training session around decent work and how to engage suppliers on the topic
    • Buyer has visited production units
    • Buyer can demonstrate an understanding of how the company’s buying practices impact decent work (e.g. whether the pricing strategy impacts wages for supplier employees)
  • Year 2

    Engagement

    Internal engagement and learning

    • Number of conversations with relevant business units around potential conflicts between business objectives and social responsibility
    • Examples of a change in the quality of conversations with requesting business units that reflect an understanding of potential impacts on decent work in the supply chain, related to a specific buying decision (impact KPI)

    Supplier engagement and training

    • Number of interactions (phone calls/meetings) with suppliers outside of contractual negotiations to discuss the implementation of decent work for supplier employees
    • Number of suppliers trained on decent work (can be in collaboration with the responsible procurement/sustainability team, but should be driven by the buyer)
    • Number of capability-building programs run in collaboration with suppliers aimed at improving working conditions for supplier employees
    • Examples of instances when suppliers fed back information that the impact of a specific purchasing request had on ensuring decent working conditions for the suppliers’ workers (impact KPI)
  • Year 3 and after

    Understanding Impact

    Integration of decent work in contracting processes

    • Number and volume of contracts where decent work considerations were included in a specific buying decision (beyond e.g. written supplier confirmation of code of conduct compliance)
    • Examples of specific benefits that came about as a result of contracts where decent work considerations were included in buying decisions (e.g. increased productivity, reliability of supply or product quality that can be linked to decent working conditions) (impact KPI)

    Feedback and learning

    • The buyer uses available feedback channels to alert relevant manager/third party to conflicts between business demands and decent work for supplier employees (this should be seen as positive!)
    • The number of supplier/supplier employee complaints regarding the impacts of buyers’ demands. This requires a supplier grievance channel that suppliers/supplier employees feel comfortable using (e.g. anonymous, easily accessible and user-friendly)
    • Evidence that supplier/supplier employee complaints regarding the impacts of buyers’ demands were reviewed and addressed by the buyer in a satisfactory way

    Broader performance of suppliers

    • Beyond impacts of buyers’ demands, examples of specific policies the supplier has in place to advance decent work/number of supplier employee complaints beyond specified demands