BUID January 2013 Employee Voice: Dynamics and Challenges

1. BUID January 2013Employee Voice: Dynamics and Challenges Professor Miguel Martínez Lucio

2. Outline • Dialogue and Foundations • Participation and HRM and Human Relations • Forms of Participation • Politics, Context and Outcomes

3. 1. Dialogue and Participation: Social Foundations of Management • The question of participation and involvement has a long history in the study of management • Utopian and Co-operative Movements • Early 20th Century political concerns with the question of participation were driven by moral and even sometimes religious approaches but also political ones due to the threat of disorder • Questions of participation and social order • The Role of Trade Unions and Collective Bargaining

4. Emergence of Personnel Management and Industrial Relations Bruce Kaufman (2008) Managing the Human Factor Ithaca:Cornell University Press • argues there are a range of factors in the early 20th Century giving rise to a more organised and structured approach to personnel management and industrial relations: • a combination of organisational factors and change in management, developments in social organisations concerned with personal development, and the impact of educators, unions and government in the case of the USA. • this is of relevance because traditions of participation are shaped by various actors and processes and narratives

5. Movements contributing to the development of modern management (the case of HRM) in the USA

6. 2. The Link with Human Relations Question of management’s authority and undermining of legitimacy in 1930s due to failures and tensions in the Taylorist approach to management. Elton Mayo and the Hawthorne Studies • Work as group activity • Work is central life interest • Lack of attention to human relations was a major flaw in management • Work and group belonging and need for satisfaction • Complaints may be reflection of broader issues • Informal social groups have a major role on worker wellbeing • Management can foster collaboration • Workplace should be view as a social system made up of interdependent parts

7. Hence there is a counterveiling approach to the way people are managed when compared to the more controlling aspects of ‘Scientific Management’ – many institutions, groups of professionals, leading firms, government and events mould management and in the 1930-40s we see the emergence of alternatives to Taylorism and direct control (counter-narratives)

8. The Role of Industrial Relations • The age of state regulation and the emergence of collective bargaining in key developed countries but also a selection of developing countries • The emergence of worker representation in the form of independent trade unions • The age of organised capitalism and regulated forms of employment relations

9. The Harvard School: soft HRM? The Harvard school is based on a series of key texts and individuals such as Beer et al HRM: A Genera1 Managers Perspective 1985: They provide a map of the HRM territory that placed that human dimension at the centre along with reference to the internal and external environmental factors: Central elements are • Pluralism: mutual influence between management and employees (divergence) • Policies must be mutually reinforcing • General Managers must be central to HRM within a context of a clear strategy and philosophy • ‘Employee influence’ is to be key to areas related to Work Systems, Human Resource Flow, and Rewards

10. (a) the ‘human dimension’ • (b) the way in which different elements of HRM fit together. • Co-ordinating key levers of management and in the work of Pettigrew in terms of the mapping of complex organisational processes. • Strong attraction to the European model of HRM and its stronger regulatory context (extensive state-labour relations, tripartite processes, stronger legislative support, emphasis on social partner roles in strategic issues such as training and development, and organised employer and labour movements). • The more recent work of Kochan (see ‘HRM: An American View’ in Storey HRM: A critical perspective): The question of a common interest between employees and managers has re-emerged. Employee voice mechanisms are seen as best achieved and sustainable through a joint commitment to competitiveness and quality. The move to flexibility and new forms of working practices are seen to be in the interest of ‘both sides’ through a ‘mutual commitment’. (see Claydon in Sparrow and Marchington, 1998).

11. 3. Participation and Management • Introduction: In recent years, management has again shown widespread interest in implementing different forms of employee involvement. This includes schemes to improve direct communications with the workforce; forms of task participation; Total Quality Management (TQM) initiatives; and forms of financial participation, such as profit-sharing.

12. Increasing pressures for involvement in recent times MARKET PRESSURES • Quality competition - competitive strategies in the product market based on quality and adaptability require active co-operation and flexibility from employees, and devolvement of decisions to employees. • - Crisis and rationalisation; pressures to get employees to accept urgent cost reducing measures (e.g. cuts in benefits and pay, work reorganisation and intensification) may lead management to 'share control'. Business awareness is seen as vital:Townley terms this an educative approach, designed primarily to achieve greater support for management, although it is likely to be limited to one-way employee communication, e.g. internal marketing. • - Enhancing Managerial Prerogative: Shift relations with stakeholders such as trade unions (marginalise or change their role). Such arguments imply that employees can be committed to the organisation, or to the trade union, but not to both but there is some evidence of ‘dual’ commitment

13. LABOUR PRESSURES • - The New Politics of Involvement (and Ethical dimension) - may introduce forms of EI in order to secure legitimacy for wider economic and social measures e.g. EU social charter, include rights to info and consultation at European level. There is also an ethical imperative with regards to EI within the Corporate Social Responsibility literature (See the Journal of Business Ethics). Employee Ownership may also be a contributory factor here. • - Social and Technological Pressures? • technological developments require greater specialist knowledge, and therefore place a premium on employees having responsibility for their own work • 'learning society': highly educated workforce will demand greater control/ influence over their jobs

14. INTEREST AND ENGAGEMENT • - Time Frames: Cycles and Waves Ramsey (1991) argues that we can view the history of EI in terms of a series of cycles, with periods of development followed by periods of relative stability. He puts the emphasis on the need (by both management and the state) to periodically accommodate the power of labour. Marchingtonet al (1993) reject the idea of cycles in favour of waves, whereby EI ebbs and flows, and come in different shapes and sizes. This approach offers a multi-causal explanation of EI, taking into account the pressures in the product market and not just the need to accommodate labour militancy.

15. So …. EI and HRM Employee involvement and participation are often seen as central to the practice of human resource management. This can be: • - business driven: in terms of securing a closer connection between the performance of work and production requirements and business objectives, or • - employee oriented: through the perceived contribution of EI schemes to enhancing employee commitment

16. Forms of EI • In their major study of EI, Marchington and colleagues identify four types of employee involvement practice (see Marchington and Wilkinson, 2000 for a further variant on this) • a. Direct communications with employees: team briefings, company communications, the use of noticeboards, video communications, email. • b. A more active problem solving approach, which is designed to tap employee knowledge, expertise and opinion: • Upward forms of individual communication, such as suggestion schemes and opinion surveys; • Group forms, such as quality circles, TQM and customer care committees; • Forms of actual task participation and ‘self management’, such as team working and TQM • c. Financial participation, which is aimed at involving employees in wider aspects of organisational performance • d. Representative participation, which takes place through structures of employee representation: For example: joint consultative committees, collective bargaining, works councils, worker representation on company boards

17. Different views/perspectives:(a) Whether they are direct or indirect • direct methods communicate with or involve employees directly – This tends to occur at lower levels of the company (e.g. Team meetings) • indirect methods tend to take place at higher levels and here employee involvement in decision making occurs through their representatives.

18. b) Whether they are Task- or power-centred • task-centred methods operate at the level of the job, and are usually concerned with the organisation and performance of work – (e.g. Quality circles, teamworking, TQM) • power-centred methods are concerned with more fundamental issues of management authority and decision-making, and determine the framework within which decisions are made - ( e.g. works councils with rights, co-determination)

19. c) Thirdly and finally, issues of Information, involvement or influence • This gives some idea of the depth of involvement and the extent to which employees or their representatives influence the decision making process: • involvement – involves more upward communication (making suggestions, giving opinions = one-way, weak forms of EI) • influence - joint decision-making = employee rights of veto, collective bargaining, co-determination

20. 4. Politics, Context and Outcomes : (a) agents for change Workers and traditions of representation: • The key concerns will focus on issues of job control, control over work organisation, control over change e.g. new technology. But also concerns of broader business development - effects job security and future incomes. Unions, by their nature, will have a preference for collective forms, based on representation: European Works Councils, national company consultation, specialised committees on organisational change, even involvement on the board. Employees will have a preference for direct influence over their jobs (this desire for influence can vary depending on the morale and concerns of the employees) The state: The interests of the state lie in: • Averting labour conflict, and securing industrial peace through labour inclusion or sense of financial/organisational involvement • Using forms of EI&P as a form of regulation at different times • The state as an agent for developing models of HRM (Martinez Lucio and Stuart, International Journal of HRM, 2012)

21. Management and participation: management style • commitment versus command • avoidance, adverserial, co-operative (Boxall and Purcell, 2011: 184) extent of management learning • employment relations • communication skills • line management and participation

22. (b) Context and Outcomes: why participation and how? Cultural DimensionEconomic Dimension • make people identify with company removing demarcations • achieve a common outlook flexible working practices • more solidarity between employees higher capital productivity • climate of trust better quality • commitment more local responsibility • management and labour share goals more decentralised decision-making • improve absenteeism & labour turnover inspection and maintenance part of operator job support new and flexible technology Social Dimension • work more satisfying • higher earnings • less isolation • opportunities to acquire more skills • less physical strain • better ergonomical arrangements • longer job cycles • reduced machine pacing • better health and safety Mueller (1994) onteamworking

23. Conclusion • Need for awareness of purpose and history of participation • Context – economic, cultural and social • The drivers of participation • ..And the choices and the types • Importance to a people-facing HRM • But pressures to develop EI growing