Models of Employee Participation in a Changing Global Environment

Diversity and Interaction

Ray Markey, Paul Gollan, Ann Hodkinson, Alain Chouraqui, Ulrike Veersma

• Publisher: Taylor & Francis
• Year: 2018
• Print ISBN: 9781138730830
• eBook ISBN: 9781351745635
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

This title was first published in 2001. Management of the employment relationship changed markedly in the last two decades of the 21st century, and a major part of this has been the extension of employee involvement and participation in the workplace. Modern management theorists and researchers have commonly emphasized the importance of two-way communication and co-operation between management and labour in determining the success of human resource management (HRM) strategy and in maximizing workplace efficiency. Some researchers argue employee participation and empowerment are progressive management practices which have universal benefits to performance enhancement, as opposed to most other HRM practices whose success is contingent upon the organizational context. This title explores these themes through an international collection of case studies, which are the outcome of a comparative project of the Workers' Participation Study Group of the International Industrial Relations Association (IIRA).

Part I
Perspectives and Theory

Chapter 1
Introduction: Global Patterns of Participation

Raymond Markey

Management of the employment relationship has changed markedly throughout the world in the last two decades, and a major part of this change has been the extension of employee involvement and participation in the workplace. This extension has occurred in terms of global penetration and the range of types of participation employed in enterprises. It has been the subject of considerable research and documentation, much of it presented at the last three World Congresses of the International Industrial Relations Association (IIRA), The revival of interest in employee participation in the past decade or more has been closely associated with a discernible international trend towards employer/employee cooperation and social partnership and dialogue. Modem management theorists and researchers of all kinds have commonly emphasised the importance of two-way communication and cooperation between management and labour in determining the success of Human Resource Management (HRM) strategy and in maximising workplace efficiency. Cooperation relies upon building employee commitment, and employee consultation and participation are intrinsic to this process (see Gollan and Davis 1998; Dunlop Commission 1994:2; Keller 1995; Markey and Monat 1997:6-12; Storey 1995:3-33). Indeed, some researchers argue that employee participation and empowerment are progressive management practices which have universal benefits to performance enhancement, as opposed to most other HRM practices whose success is contingent upon the organisational context (Arthur 1994; Delaney and Huselid 1996).

This book explores these themes through an international collection of case studies, which are the outcome of a comparative project of the Workers' Participation Study Group of the IIRA. The project was initiated at the 11th World Congress of the IIRA in 1998 in Bologna. In terms of its much wider scope, this volume represents a significant development on the Group's earlier project on works councils, the outcome of which – Raymond Markey and Jacques Monat (eds), Innovation and Employee Participation Through Works Councils, International Case Studies (Avebury, 1997) – was launched at the European Regional Congress of the IIRA in Dublin in 1997.

Employee involvement or participation may be defined as any workplace process that 'allows employees to exert some influence over their work and the conditions under which they work' (Strauss 1998:15). This definition includes a wide spectrum of practices from consultation of employees concerning aspects of the production process or workplace environment, to codetermination in decision-making by employee workplace representatives, or even the supplanting of management to some extent by full workers' control. Conceptually and in practice, employee participation includes collective bargaining between trade union representatives and management. The collection of case studies in this book traverses most of these possibilities short of workers' control. Employee participation also may occur on a formal and/or an informal basis, such as consultation of employees through a daily walk around the plant or office by managers, but this book focuses upon formal processes of employee involvement or participation.

Broadly speaking, formal processes for employee participation can be divided into three approaches which may coexist in the same workplace: financial participation, direct participation, and representative or indirect forms of participation. Financial participation occurs when employees own all or part of a firm. Cooperatives involve full employee ownership, often occurring as a result of an employee buyout when a firm is in financial difficulties. Most of these have a relatively small workforce. More commonly, financial participation consists of employee share ownership or profit-sharing as part of general management strategy for improvement of efficiency and commitment (Ben-Ner and Jones 1995). However, financial participation involves no participation of employees as employees, and conceptually it has been classified commonly as a form of employee incentive or reward. Consequently, we have left this issue aside for the time being to focus upon the other forms of participation.

Direct participation, often implemented under the title of Quality of Working Life (QWL) or Employee Involvement programs, involves the employee in job or task-oriented consultation or decision-making in the production process at the shop or office floor level. The success of Japanese management techniques, especially in terms of productivity, has been attributed often to their utilisation of these schemes, and this partially also accounts for their popularity in recent years in the United States, Australia and elsewhere. The most common forms of direct participation include problem-solving groups, often known as quality circles, and decision-making work teams, frequently called semi-autonomous work groups. They both represent formalised means for management accessing of employee knowledge through small groups or teams of employees, but they differ in the extent of employee influence which they allow. Problem-solving groups only make recommendations to management, and usually their focus is defined in a particular area or areas, such as safety, quality or productivity. Total Quality Management (TQM) extends the concept of isolated problem-solving groups to an organisation-wide structured process involving teams of employees and managers. Decision-making work teams generally enjoy greater discretion in organising their own work within broad guidelines with minimal direct supervision. They require a reorganisation of technology and work flow, multiskilling and training (Strauss 1998: 21-26).

The incidence of direct participation mechanisms appears to have grown significantly in recent years. However, although it is difficult to make comparisons between different surveys because of differences in methodology, the incidence, scope and intensity of direct participation varies somewhat between countries. Japan and the US seem to have the highest coverage. In Japan group work is practised by 90 per cent of large companies in secondary industry and by over 80 per cent in the services sector. This compares with 60 per cent in the ten EU countries surveyed in 1996 in the Employee Direct Participation in Organisational Change Project (EPOC), and with 47 per cent in Australia according to the Australian Workplace Industrial Relations Survey (AWIRS) of 1995 (EPOC 1997: 57-61, 205; Frohlich and Pekruhl 1996; Morehead 1997:188). However, the prevalence of integrated group work covering a majority of the workforce in workplaces is 41 per cent in the US, but only 16 per cent in the EU. Sweden has the highest European frequency of integrated work teams covering a majority of the workforce, at 31 per cent of workplaces.

As with direct participation, indirect or representative participation also may take many forms. The most common forms are trade unions, joint consultative committees, works councils, and employee members of boards of directors or management. Trade unions are perhaps the most widely dispersed and least culturally specific form of representative employee participation in the decision-making process of the workplace. Works councils are typically a European phenomenon, whereas consultative committees are the most common form of representative participation in mainly English-speaking countries. These councils or committees vary considerably in terms of organisational level of operation, composition, jurisdiction and powers. They may operate at plant, divisional or enterprise levels in large firms, or indeed, at all or a number of these levels. They may be composed solely of employee representatives (works councils), or include management representatives for up to half of their membership (consultative committees). Sometimes they are appointed by management, sometimes by unions or a combination of the two, and sometimes they are elected by employees. Works councils or consultative committees most commonly have an advisory role to management, although sometimes they may have decision-making powers or powers of codetermination over certain issues. Consultative committees may have jurisdiction generally over a wide range of matters concerning employment relations in the workforce, short of bargaining over wages but including investment policy, or their scope is restricted often to particular issues, such as safety, work organisation, grievances, etc. Finally, they may be standing committees, or they may be ad hoc task forces with a specific brief for a specific time period; for example to deal with technological change or organisational restructuring (Strauss 1998: 28-9; Markey and Monat 1997: 1-26).

Works councils are similar to consultative committees in many respects. The main point of difference is that they are statutory bodies with legally defined rights of codetermination and/or consultation over specified issues, whereas consultative committees are usually the result of management initiative or agreement between management and unions (the main exception being legally enforced committees dealing with specific issues such as health and safety). Works councils are usually kept separate from unions by law, and are composed of employee representatives only (who may be union members but not union representatives) elected from amongst all employees in the plant or enterprise. Works councils defined in this sense are largely confined to Europe (Markey and Monat 1997), although similar versions of representative structures, including company councils, works and employee committees, do exist elsewhere.

Another common European phenomenon is the employee representative on boards of directors or management. Whilst this is a statutory requirement in countries such as Germany, in the mainly English-speaking countries (USA, UK, Australia, Canada, New Zealand) it occurs as the result of management initiative or agreement between management and unions in the private sector. In the Australian public sector it has been common since the 1970s for statutory corporations and authorities to include employee representatives on their boards of directors or management, either chosen by relevant unions or directly elected by employees in some cases. This also has occurred in a number of developing countries, such as Tanzania and Ghana. However, this phenomenon has declined in significance in recent years as many of these corporations or authorities have been privatised or have adopted more traditional managerialist structures.

The rationale for employee participation, or involvement and representation in the workplace is threefold (see Strauss 1998: 8-14). Firstly, a longstanding human relations tradition has argued that employees have non-pecuniary needs for creativity, achievement and social approval. By allowing employees a voice in the workplace, participation may promote their sense of competence, self-worth and self-actualisation (see Wilpert 1998:40-64; Mathieu and Zazac 1990). As the workforce becomes more educated, and basic material needs are better satisfied, this perspective has gained greater currency. Secondly, employee participation has been advocated as a form of power sharing on the basis of democratic principles. This is sometimes referred to as 'industrial citizenship'. Those who advance this argument for participation commonly favour the terminology' industrial democracy', although this has usually not been the preferred terminology of employers. On the left of the political spectrum, workers' control extends industrial democracy to the polar opposite of managerial prerogative. Workers' control was the official ideology and practice of workplace governance in the former socialist Yugoslavia. Both of the broad rationales described here refer to empowerment of employees through participation.

Thirdly, the case for employee participation has been based upon the argument that it contributes substantially to organisational efficiency. An extensive literature has argued that employee participation has the capacity to enhance the quality of decision-making by broadening the inputs, promotes commitment to the outcomes of the decision-making process, improves motivation, communications and cooperation in the workplace, may reduce the workload of supervisors, encourages skills development in the workforce, and can contribute to improved employee/employer relations generally in the workplace (for examples see Aoki 1990; Dunlop Commission 1994: Section II; Freeman and Lazear 1995; Meyer and Topolnytsky 2000; Markey and Monat 1997: 6-7, 415-16; Miller and Monge 1986; Rogers 1995). These arguments represent a reaction against Fordist mass production technologies, and their tendency to deskill employees.

Current trends, strategic HRM and industrial relations

Historically, the main appeal for employee participation has shifted between the three broad rationales referred to above. Whereas the humanistic and power-sharing arguments were dominant in the 1960s and 1970s, organisational efficiency has provided the strongest base for promotion of employee participation since the 1980s. This trend in the literature of participation is confirmed by recent surveys. For example, the EPOC survey found that most managers emphasised productivity or efficiency as a motive for introducing direct participation mechanisms, although quality of working life concerns also motivated a significant number, and a majority were motivated by both. A similar pattern was also evident in the AWIRS in Australia, but it was less marked for representative than direct forms of participation. In both the European and Australian cases managers overwhelmingly reported that participation had led to improvements in workplace performance (EPOC 1997:81-5, 110-12; Morehead 1997: 189-91, 195).

The explanation for this emphasis on organisational efficiency as a motive for employee participation lies in the economic uncertainties since the late 1970s associated with intensified competition in a more globalised environment, and related to that, the dominance of economic rationalism in public policy. Technological change and economic restructuring have contributed to the greater emphasis on employee participation in management thought and union policy since the 1980s. High wage countries often have sought comparative economic advantage through embracing rapid technological and market changes and focusing production on high value-added, niche market products and services. Together with 'Just-in-Time' approaches to production, these approaches require flexibility in production processes that can be facilitated with a highly motivated workforce through participative practices. In addition, technological change has assisted employee participation through enhancing communication, for example, through e-mail and the internet. The growth in service sector employment has also provided farther incentive for employee participation because 'to the extent that participation improves attitudes [of employees] it also improves the quality of the service provided' (Strauss 1998: 12; see also Kramar 1998; Markey and Monat 1997: 2, 5-10; Campling and Gollan 1999).

The importance of organisational efficiency as a motivation for employee participation has been confirmed by its association with strategic Human Resource Management. The purpose of strategic HRM practices, which have spread so widely throughout the world in recent years, has been to enhance productivity at the workplace level by attempting to link employment policies and practice more specifically to corporate strategy. Some of the major components of these changes have included increased responsibility of line managers for employment policies, flexible employment practices, broadening job structures, performance appraisal, increased training, performance related pay sche...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Tables
• List of Figures
• Contributors
• Foreword
• PART I: PERSPECTIVES AND THEORY
• PART II: DIRECT PARTICIPATION
• PART III: TRADE UNIONS
• PART IV: WORKS COUNCILS AND CONSULTATIVE COMMITTEES
• PART V: INTERACTION BETWEEN DIFFERENT FORMS OF PARTICIPATION