Conceptualizing Employee Participation in Organizations
Abstract and Keywords
The concept of employee participation is common to many different discipline areas in the social sciences. The form participation takes varies considerably depending on the discipline. On the one hand, it can relate to trade union representation through joint consultative committees and collective bargaining, to worker cooperatives or to legislation designed to provide channels for employee representatives to engage in some form of joint decision making with employers. On the other hand, it can encompass myriad mechanisms that employers introduce in order to provide information to their staff or to offer them the chance to engage in joint problem-solving groups or use their skills at work via job-enrichment programmes. This article examines the dynamics of participation, illustrating how different forms have come to prominence at different periods in recent history. It looks at how these specific practices might interact with one another.
The concept of employee participation is common to many different discipline areas in the social sciences. In terms of the classic texts on the topic, there are books which relate participation to politics and question the real form of that involvement (Pateman, 1970), that examine the relationship between participation and satisfaction (Blumberg, 1968), and that link participation to notions of industrial citizenship (Clegg, 1960; Webb and Webb, 1902). The pioneering work of the Tavistock Institute (Heller et al., 1998) or the Swedish experiments in work design (Berggren, 1993) constitute yet more perspectives on the subject. Despite often using the same terminology, it is also clear that the meaning and form that (p. 4) participation can take varies considerably depending on the discipline. On the one hand, it could relate to trade union representation through joint consultative committees and collective bargaining, to worker cooperatives or to legislation designed to provide channels for employee representatives to engage in some form of joint decision making with employers. On the other hand, and at a different level, it could encompass myriad mechanisms that employers introduce in order to provide information to their staff or to offer them the chance to engage in joint problem‐solving groups or use their skills/discretion at work via job enrichment programmes.
One of the problems in trying to develop any analysis of participation is that there is potentially limited overlap between these different disciplinary traditions, and scholars from diverse traditions may know relatively little of the research that has been done elsewhere. Accordingly in Part 2 of the book, a number of the more significant disciplinary areas are analysed in greater depth in order to ensure that readers gain a better appreciation of what participation means from these quite different contextual perspectives. To some extent this is reflected in the different terms used to describe the subject. For example, while the notion of industrial democracy clearly draws on the traditions of political science, and representative participation and collective bargaining emerge from the industrial relations and law literatures, employee involvement and engagement are more likely to have their roots in human resource management where the focus tends to be on the role of workers as individuals and their relationships with line managers (Wilkinson and Fay, 2009). While some of the disciplines are more interested in processes, economics tends to look more closely at outcomes and the distribution of resources that flow from participation.
Not only is there a range of different traditions contributing to the research and literature on the subject, there is also an extremely diverse set of practices that congregate under the banner of participation. Part 3 of the book examines the range of forms that participation can take in practice, and the way in which it meets objectives that are set for it, either by employers, trade unions, individual workers, or indeed the state. This requires us to understand the meaning of the terms used in the literature in order to classify these diverse forms, so as to make sure readers are not confusing one form with another.
Following Marchington and Wilkinson (2005), participation can be differentiated into: direct communication; upward problem solving; representative participation; and financial participation. The first two of these are essentially direct and individually focused, often operating through face‐to‐face interactions between supervisors/first line managers and their staff. Some take the form of verbal participation, while others are based on written information or suggestions. The third form is quite different and revolves around the role that employee or trade union representatives play in discussions between managers and the workforce, via mechanisms, such as joint consultation, worker directors, or even collective (p. 5) bargaining. These particular schemes raise major issues about the distribution of power and influence within organizations, and in some cases—unlike direct participation for the most part—is part of the legislative framework of the country in which the employing organization is located. The final form we consider in the second part of the book is financial participation, whereby employees have a monetary stake or benefit from their work, via profit sharing or employee share ownership. In one sense this is a little different from participation based on information, consultation, and joint decision making because employees might be encouraged to participate precisely because there is the expectation that their work efforts might ultimately be rewarded by additional benefits. Of course these forms of participation also raise questions about how the financial benefits are allocated, who makes decisions about their distribution, and what happens if the organization suffers a loss rather than making a profit.
Although this is sometimes overlooked in studies, participation practices do not take place in a vacuum without some clearly defined purpose. As the HR manager of a firm well known for its innovative approach to employee engagement once told one of the authors, ‘We are here to manufacture high quality products at a profit not to practise participation.’ Consequently Part 4 of the book moves on to examine some of the processes and outcomes associated with participation. A key question is who gains what from being involved. In most developed countries management are the key drivers of participation so it is likely they will expect to see some advantage from investing in what critics might see as an expensive waste of time. Evidence suggests that senior managers are not likely to persevere with participation if it does not meet their goals, either in the short or the long term, and that the benefits must be seen to outweigh the costs for it to survive. Yet, as versions of high commitment HRM have some form of participation as a centre‐piece of their models, it seems to be accepted that rather than being seen as a zero sum concept where one party's gains come at the expense of the other, participation might lead to a larger cake to be shared among workers and employers. On the other hand, some critics of participation would argue that it is only a fig leaf behind which the worse excesses of capitalism can hide. Under this scenario, the real purpose of participation schemes, especially those aimed at individual workers, is to increase work intensification and con employees into accepting management ideas that may not necessarily be in their best interests. This might be supplemented by a drive to engage in non‐union forms of participation as well.
Depending on the societal regime within which participation takes place, the benefits might be seen in different ways. So, for example, in a liberal market economy participation is likely to be measured in terms of profit and shareholder value at the organizational level and in customer service, product quality, and staff retention at the workplace level. Issues to do with worker commitment, job satisfaction, and alignment with organizational goals are often the proxies used to measure the success of participation but in themselves these may tell us little about the impact of particular (p. 6) schemes on bottom‐line success. In coordinated market economies, the focus is more likely to be longer term and more widely defined in terms of a range of stakeholder interests: government; employers; trade unions; and workers. The timescale over which returns are expected is also longer, and the focus—for the most part—is on peak level institutions and forms of participation that are representative in nature. In other words, in these situations the expectation is more likely to be of mutual gains, either at the level of the individual employing organization or more broadly in terms of citizenship and long‐term social cohesion.
This theme is also woven through the final parts of the book. In Part 5, contributors focus on issues beyond the individual workplace, and on the role that employee participation plays in societies more generally. We know from the studies that have been published over time that participation can take diverse forms in different countries given the role of the state and institutional frameworks in shaping the environment in which it operates. If legislation is extensive, then participation will be present—at least in structural terms—in all organizations above a certain size within that country. It could be argued that this, therefore, provides a safety net and a structure around which other forms of participation can develop, and in most cases that has been assumed to happen. However, there is also the possibility that the presence of formal structures could also hamper the growth, sustainability, and contribution of more informal participation practices, and it is also likely that at least some employers might try to find ways around the requirement to involve their employees. For example, given the growth in subcontracting, employers might seek to avoid some of their responsibilities by shifting work to other organizations, either in the same country or even overseas where the same level of regulations do not exist. This raises major questions about ethics, public policy, and corporate governance, issues that are explored in chapters later in the book.
Discussion about comparative and societal issues provides a valuable lens through which to examine the extent to which product and labour markets can determine the forms that participation takes in practice. In Anglo‐Saxon economies, where the amount of legislation governing participation is limited and employers have a fair degree of choice in what practices to implement, it is easy to assume that markets are very important. The financial turmoil that commenced in 2008–2009 shows how influential they can be. However, in countries where legislation is more extensive and there is a stronger state commitment to long‐term financial stability, the power of product markets is likely to be constrained and there is a greater chance that higher‐level forms of participation will survive. Similarly, in developing countries, labour market expectations may shape participation depending on educational and training opportunities for the population as a whole or on the way in which cultural traditions promote acceptance of or challenge to management decisions.
Having introduced the broad ideas behind the book and its overall shape, we can now turn to examine the forces that shape participation and the ways in which it (p. 7) can be defined. In the next section we examine the dynamics of participation in practice, illustrating how different forms have come to prominence at different periods in recent history. We also look at how these specific practices might interact with one another. Following this we review the ways in which participation can be defined. We believe firmly that the concept of participation needs to be broken down into its constituent parts so as to allow a sharper analytical edge when investigating the range of forms that it can take in practice and comparing different perspectives on the topic. In the final section of this chapter, we introduce briefly the rest of the book.
The Dynamics of Employee Participation in Context
Although much of the research has focused on particular forms of participation, it is also important to note how these forms vary over time, and how they interact with each other. It is clear that new forms of employee participation have emerged during different periods, sometimes replacing and at other times coexisting with prior forms of participation. The political and economic environment has been a key influence on the emergence and spread of particular forms of employee participation, especially in developed economies. During the 1970s, for example, the idea of power sharing through broad industrial democracy and narrower representative participation through trade unions took hold. The subsequent decline in union membership and changes in public policy during the 1980s and 1990s combined to move industrial democracy off the domestic agenda of most advanced economies. In its place came a more managerially‐oriented set of practices under the banner of employee involvement (EI), where the focus was at workplace level and the outcomes were more explicitly measured in terms of what employers might gain from these arrangements (Marchington et al., 1992). During the late 1990s and early part of this century, however, the potential impact of the Information and Consultation Directive on industrial democracy in the United Kingdom led to renewed debate about employee participation in organizations (Gollan and Wilkinson, 2007; Gospel and Willman, 2003).
This British example is by no means an isolated one because the last twenty years have witnessed growing interest in employee participation, specifically in employee involvement. Recent EI initiatives have been largely management sponsored, therefore, and not surprisingly, such initiatives reflect management's dominant concerns about employee motivation and commitment to organizational objectives. Given there has been no legislative framework behind these developments, the take‐up of (p. 8) EI is voluntary and heavily reliant on senior management at each workplace and the expectations of workers and managers at local level. Although evidence shows that direct EI has become much more important across Europe (Kessler et al., 2004), this has been because it fits with the times. Any attempt to legislate would be opposed by employers, and indeed it is hard to see what its role might be, given that direct participation and EI rely on flexible arrangements which suit particular workplaces and competitive pressures. These EI initiatives have focused on direct participation by small groups of employees in workplace level information sharing and decision making rather than on employee input into higher‐level decision making. For whatever else can be said about it, such direct employee participation in workplace level decision making is fundamentally different from earlier notions of industrial democracy and representative participation (Marchington and Wilkinson, 2005).
A major factor shaping employee participation in private sector organizations is increasing product market competition. The public sector has also been subjected to increasing competition, as reflected in numerous deregulation and privatization actions on the part of governments and in the rise of the idea of the citizen–taxpayer as a ‘customer’ of the government. In both sectors, increased competition has led to a barrage of new employee participation initiatives. Shifts in the structure of employment away from manufacturing toward services have also impacted concepts, forms, uses, and scope of employee participation as well as the employment relationship, per se. (Wilkinson et al., 2007). In particular, both private and public sector employers have substantially increased their use of contracted or outsourced employees. In these situations, where the employer is ‘elusive’ and there is no simple, traditional employer–employee relationship, it becomes more difficult to devise and implement appropriate systems of employee participation (Marchington et al., 2005).
While each of the aforementioned factors is important in shaping the environment within which direct employee participation operates, it is also necessary to examine how macro‐level factors interact with developments at the organizational level—where business decisions are made—to influence employee participation. Notable here is the influence of ‘ideas brokers’—consultants and popular management writers—who offer their particular interpretations of the changing global marketplace and who advocate normative recipes for responding to such change. To illustrate, organizations are encouraged to be flexible, innovative, and responsive in dealing with newly intensified global competition, rather than seek economies of scale through more conventional mass production (Piore and Sabel, 1983). A related line of reasoning argues that the knowledge economy provides enhanced impetus for employee involvement in decision making, which is claimed to be a positive development for employers and employees (Scarborough, 2003). Assessing such arguments, Poole et al. (2000: 497) observe that ‘increased competition and concerns about economic performance have made the achievement of “rights‐based” employee participation more remote whilst encouraging the development of EI as a route to better “market performance” ’.
These various arguments and prescriptions appear to have clear implications for the management of employee participation in organizations. Among these implications are that hierarchy and compliant rule following are inappropriate for employees who are expected to work beyond contract and exercise their initiative. As Walton (1985: 76) put it, managers have now ‘begun to see that workers respond best—and most creatively—not when they are tightly controlled by management, placed in narrowly defined jobs, and treated like an unwelcome necessity, but instead when they are given broader responsibilities, encouraged to contribute, and helped to take satisfaction from their work’. The contrast here is between a ‘high control’ and a ‘high commitment’ work environment, with employee participation constituting a ‘best fit’ with the latter environment (Wright and Gardner, 2003). A high commitment‐type work system is intended to improve employee relations and increase organizational performance through substantive communication and consultation between management and employees. As part of this approach, jobs are designed broadly and combine planning with implementation, individual responsibilities are expected to change as conditions change, and teams rather than individuals are the organizational unit accountable for performance. In addition, differences in status are minimized, with control and lateral coordination based on shared goals and expectations. There is thus an alignment of interests with expertise, rather than formal position or title, in determining influence and power. Similarly, US‐based ‘best practice’ human resource management (HRM) research emphasizes the importance of employee participation by drawing on an array of sophisticated statistical evidence to document systematic links between high involvement‐type HRM and organizational performance (Becker and Huselid, 2009; Huselid, 1995). Comparable findings and conclusions have been reached by British researchers (Patterson et al., 1998; Wood, 1999).
Several studies have found that many new employee participation initiatives lack sufficient structure and scope (Gollan, 2007; Gollan and Markey, 2001; Kessler et al., 2000). This research also concludes that an integrated approach to employee participation in which such participation is accompanied by related initiatives in employment security, selective employee hiring, variable compensation, extensive training, and information sharing with employees is most likely to lead to higher levels of organizational performance (Dundon and Gollan, 2007; EPOC Research Group, 1997; Gibbons and Woock, 2007; Guest and Peccei, 1998). In other words, a ‘bundled’ or ‘packaged’ approach to employee participation (and HRM more broadly) is preferable to narrow, one‐dimensional employee participation initiatives (Ichniowski et al., 1997; MacDuffie, 1995; Marchington and Wilkinson, 2008; Wood and De Menezes, 1998).
A wide variety of labels has been attached to these newer employee participation initiatives: high‐performance work design (Buchanan, 1987), lean production (Womack, et al., 1990), voice (Lewin, 2005b), high‐involvement work systems (Edwards and Wright, 2001), teamworking (Mueller, 1994), self‐managed teams (p. 10) (Pfeffer, 1998), and employee engagement (Emmott, 2007). Despite (or perhaps because of) these labelling differences, there is a notable tendency for employee participation initiatives to be viewed solely in a positive light and therefore to ignore the more contested and mundane aspects of such participation. Many would argue that, rather than leading to autonomy and self‐management, employee participation may lead to work intensification, increased stress levels, and redundancies (Ramsay et al., 2000). There is also a tendency for employee participation researchers to ignore industries, firms, and types of work in which low involvement rather than high‐involvement HRM practices predominate (Lewin, 2002, 2005b, 2008).
The Meanings of Employee Participation
Whether labelled employee participation, high‐involvement HRM, voice or any other of the aforementioned descriptors, each of these is a somewhat elastic term with a considerably wide range of definitions rather than a single uniform definition (Bar‐Haim, 2002; Budd, 2004; Marchington and Wilkinson, 2005; Poole, 1986; Wilkinson 1998, 2008). Indeed, the definitions may be as broad and all‐inclusive as ‘any form of delegation to or consultation with employees,’ or as narrow as a ‘formal, ongoing structure of direct communications, such as through a team briefing’ (Gallie et al., 2001: 7). Stated differently, the extant literature has often treated different forms of participation as if they were synonymous, and there has not been sufficient distinction between the different forms that employee participation in decision making can take. As Heller et al. (1998: 15) observe in this regard:
Definitions of participation abound. Some authors insist that participation must be a group process, involving groups of employees and their boss; others stress delegation, the process by which the individual employee is given greater freedom to make decisions on his or her own. Some restrict the term ‘participation’ to formal institutions, such as works councils; other definitions embrace ‘informal participation’, the day‐to‐day relations between supervisors and subordinates in which subordinates are allowed substantial input into work decisions. Finally, there are those who stress participation as a process and those who are concerned with participation as a result.
Consequently, it is difficult to make precise comparisons about employee participation initiatives and changes over time in such initiatives, which also means that caution must be exercised in generalizing about employee participation when different practices (and outcomes) are being compared (Wilkinson et al., 1997).
It is helpful if the terms can be deconstructed according to degree, form, level, and range of subject matter (Marchington and Wilkinson, 2005). Taking the first of these, degree indicates the extent to which employees are able to influence decisions about various aspects of management—whether they are simply informed of changes, consulted, or actually make decisions. The escalator of participation (see Figure 1.1) illustrates this; it implies a progression upwards rather than simply a move from zero participation to workers control. Second, there is the level at which participation takes place; task, departmental, establishment, or corporate HQ. Clearly there are likely to be major differences in the nature of participation at these different levels, and in the type of people who are actually involved in the process. But it is not a simple matter of correlating degree and level; it is just as feasible that high‐level participation might be little more than an information passing exercise as that workplace level involvement could lead to control over decisions about work organization. The range of subject matter is the third dimension, ranging from the relatively trivial—such as the quality of canteen food—to more strategic concerns relating, for example, to investment strategies. Fourth, there is the form that participation takes. Indirect participation is where employees are involved through their representatives, usually elected from the wider group. Financial participation relates to schemes, such as profit sharing or gain sharing, whereby employees participate directly in the commercial success or failure of the organization, usually linking a proportion of financial reward to corporate or establishment performance. Face‐to‐face or written communications between managers and subordinates that involves individuals rather than representatives is often referred to as ‘on‐line’ participation (Appelbaum and Batt, 1995), where workers make decisions as part of their daily job responsibilities as distinct from ‘off‐line’ participation where workers make suggestions through a formal scheme.
From our perspective, employee participation encompasses the range of mechanisms used to involve the workforce in decisions at all levels of the organization, (p. 12) whether undertaken directly with employees or indirectly through their representatives. Information and consultation are two main components of this process. Information in this context means the provision of data about the business—regarding workplace issues or more strategic matters—to employees or their representatives, which allows employees to participate in dialogue with employers. Consultation in this context means the exchange of views between employers and employees or their representatives but which stops short of formal bargaining, so that final responsibility for decision making remains with management. Although less likely to be researched than formal forms of employee participation, it is important not to forget that informal participation—between first line managers and their staff, and within teams—is vitally important to provide some of the glue that holds together more formal practices and helps to make them work (Marchington and Suter, 2008).
A key theme that has emerged from organizational behaviour‐based research on employee participation is the importance of such initiatives to achieving successful organizational change. Particular attention is given to creating and developing an organizational culture that provides a foundation for successful organizational change—foundation building that may require a considerable investment of management time and resources (O'Reilly, 2008). Where there is a lack of formal participative (or representative) structures, such as in the growing non‐unionized sector, stronger emphasis is placed on management's ability to implement change processes. Research also shows that many organizations do not involve employees in organizational change initiatives until the later stages of change, that is, after management has designed an organizational change initiative and determined how it will be implemented (Gollan, 2007; Millward et al., 2000; Terry, 1999; Tushman and O'Reilly, 1996).
Several studies have also identified managerial attitudes as key to the existence of highly‐developed employee participation practices (Fenton‐O'Creevey et al., 1998; Kessler et al., 2000; Millward et al., 2000; Wilkinson et al., 2004; Wood and Albanese, 1995; Wood and De Menezes, 1998). They suggest that underpinning such practices is a relationship based on a high level of trust between management and employees. In such circumstances, management assumes that employees can be trusted to make important workplace decisions that will result in positive outcomes (e.g., increased productivity), and employees assume that management can be trusted to share with employees the rewards emanating from those outcomes (e.g., a gain sharing payment)—in other words, mutual gains (Lewin, 2008). In order to make more substantive workplace decisions and to enhance the likelihood that trust‐based employee participation initiatives will work well, employees must be given the opportunity to develop the requisite knowledge, skills, and abilities (Coyle‐Shapiro et al., 2002). It is also necessary for management to sustain its support for a particular employee participation initiative, and not modify or abandon that initiative when market conditions change or a portion of (p. 13) management turns over. Otherwise, and as considerable research has shown, employee trust in management can dissipate quickly (Bruno and Jordan, 1999; Frost, 1998; Horvath and Svyantek, 1998).
While business imperatives generally, and supportive management in particular, may lead to enhanced employee participation initiatives (Wilkinson et al., 1998), these are hardly the only ‘drivers’ in this regard. A substantial literature that also supports such initiatives is rooted in concepts of industrial citizenship, worker rights, and organizational democracy (Harrison and Freeman, 2004). Indeed, these concepts are grounded in even more fundamental notions of free speech and human dignity for which supporting arguments are often expressed in political, moral, and religious terms. To illustrate, consider these examples:
Managers are the dinosaurs of our modern organizational ecology. The Age of Management is finally coming to close … Autocracy, hierarchy, bureaucracy and management are gradually being replaced by democracy, heterarchy, collaboration and self‐managing teams.
(Cloke and Goldsmith, 2002)
Organizational democracy is frequently associated with increased employee involvement and satisfaction, higher levels of innovation, increased stakeholder commitment, and, ultimately, enhanced organizational performance. However, democratic processes can also absorb significant time and other organizational resources and bog down decisions, which may lead to reduced efficiency. In the end, we conclude that although the economic arguments for organizational democracy may be mixed, increased stakeholder participation in value creation and organizational governance can benefit both society and corporations. In fact, the corporation itself may be envisioned as a system of self‐governance and the voluntary cooperation of stakeholders.(Harrison and Freeman, 2004: 49)
Another strand of the employee participation literature focuses centrally on the role played by trade unions, not only as a vehicle for representative democracy at the industry or organizational level, where the emphasis is on increasing liberty on the job, but for political democracy as well (Voos, 2004). This dual focus was made manifest in the recent (2008) US presidential election and continues to the moment as unionists and would‐be union members seek to replace formal union representation elections with Canadian‐style authorization card‐determined union membership and representation.
The Book: Approach and Structure
In this book, leading perspectives on employee participation, including those briefly summarized above, will be analysed, discussed, and assessed with the aim of identifying key challenges associated with employee participation in practice.
The book is organized into five parts and contains twenty‐five chapters. We have managed to bring together a group of leading scholars from around the world in order to ensure that the book is not just based upon experiences in any one country. These authors bring a variety of disciplinary perspectives, empirical research and case examples to bear on the topic of employee participation in organizations.
Part 2 features five chapters that provide, respectively, HRM, industrial relations, legal, political science, and economics perspectives on employee participation. Despite drawing on different theoretical traditions and country examples, it is also apparent that there is rather more overlap—at least in terms of the practices examined—than at first sight might have been expected. Peter Boxall and John Purcell develop ideas that have appeared in previous work on what they term ‘analytical HRM’ to examine the notion of employee voice. Analytical HRM eschews the ideas of best practice HRM, instead focusing on the sorts of choices that appear before management (and to a lesser extent, workers) in building and sustaining viable versions of voice and participation. One of the key outcomes therefore is that participation can take quite different forms depending on the factors shaping HRM, and unlike some of the more critical accounts of HRM (Bolton and Houlihan, 2007) they consider representative participation to be a potentially core feature of voice just like direct employee involvement. Unlike the other perspectives, however, Boxall and Purcell devote much more space to talking about high‐involvement work systems and the benefits these might offer to employers whose objectives can best be furthered if employees are allowed considerable discretion at work.
Peter Ackers' chapter starts out by considering the view that employee participation at work should centre exclusively on collective bargaining and other attempts to create industrial democracy at the workplace. He counterpoises the ideas propagated by the utopian socialists and the industrial relations realists, arguing that in Britain they effectively ‘fought themselves to a standstill which lead to the silent triumph, by default, of EI’. Rather than deal with the issues merely from a contemporary perspective, Ackers examines six different historical examples of how key British industrial relations scholars have approached the topic of employee participation. His conclusion is somewhat pessimistic, at least from the standpoint of participation, in that he argues that future research is likely to be more mundane and dull than in the past because it is now centred on everyday workplace realities rather than the big struggles of the past.
The law chapter has been written by Glenn Patmore, who has focused almost entirely on the role that legislation can play in indirect or representative participation. This review considers the legal framework in three separate jurisdictions; the EU, Australia, and the USA, and it examines legal intervention in the areas of information, consultation, and representation. Among other things he raises questions about whether or not the law automatically acts as a support for the development of participation, and in the case of Australia notes how joint (p. 15) consultation is flourishing compared with other mechanisms. He concludes that its success undoubtedly owes a lot to the legislation, and much the same conclusion is reached from experiences in the EU where the law has braced and/or stabilized representative participation. By contrast a voluntarist regime, while not preventing some organizations from investing in participation, does run the considerable risk of contributing to a workplace culture of unilateralism.
Miguel Martinez Lucio has contributed the political science chapter, and this draws from a wide range of sources both at the macro and micro levels of debate. He commences by focusing on the role of the state in terms of organizations and individuals and with Marxist accounts of work and participation, and with what is often seen as the inevitable subjugation of labour. But, rather than restricting his analysis to the macro framework he chooses to link Marxist accounts with more recent developments in labour process theory that have concentrated on workplace issues, often from a sociological perspective. He notes a continuing tension between forces for cooperation and conflict, and dismisses simplistic notions that workers (and trade unions) automatically lose out if they choose to engage with management. He suggests that rather than seeing cooperation as nothing more than a route to incorporation, it can also offer opportunities for workers and trade unions to occupy new spaces for confrontation. To do otherwise would be to regard them as cultural dupes, always outwitted by management, and to see currently popular forms of participation—such as teamwork—as totally controlled by management for their own objectives. As analysts such as Burawoy (1979) make abundantly clear, workers can also play games to beat the system.
The final chapter in Part 2 examines economics and participation. In this chapter, David Marsden and Almudena Cañibano take a wide‐ranging view of the topic, and choose not to focus narrowly on issues to do with supply and demand. They draw upon literatures that are also common to sociology and psychology—such as the alienation at work material—and on notions of exit, voice, and loyalty, on frontiers of control, and even population ecology—to argue that participation needs to be investigated for its impact on both performance and employee well‐being. In terms of the alienation literature, for example, the case for participation is effectively made in the negative: workers who are alienated from work are likely to be unproductive, so therefore some form of participation is of value. The authors argue that the contribution of economic approaches to participation within organizations lies in their focus on the difficulties of coordination under conditions of uncertainty and limited information where actors are subject to bounded rationality in that their activities are mostly goal‐oriented. They suggest the question arises as to how different models of the employment relationship help to solve the resulting problems of coordination, and in so far as their solutions build on arrangements that endure over time, how these can be best adapted to changing needs.
Part 3 reviews a range of forms of participation in practice. This contains eight chapters dealing, respectively, with direct participation, collective bargaining, other (p. 16) processes of collective voice, non‐union forms of employee representation, works councils, worker directors and worker ownership/cooperatives, employee share ownership, and financial participation. Adrian Wilkinson and Tony Dundon review developments in direct participation over the last twenty‐five years showing how schemes have been influenced by different political, economic, and legal climates and how fads and fashions have played a key role. But they also suggest that it is the orientation of management which may be more important than the specific scheme. They suggest that practices may have become more embedded as management have learnt from the limitation of the shallow depths of participation in the 1980s and 1990s. While it is too grand to talk of participative architecture, they do see some attempts to integrate participation. The challenges that lie ahead are how such a dynamic will be played out in practice, and how multiple schemes for participation can be embedded.
Richard Block and Peter Berg look at the role of independent representatives, such as unions and works councils. As they point out, these forms of representation are generally part of a legal structure that sets the context for participation. The rights of labour unions, works councils, the bargaining process, and labour agreements may be defined by law as in the United States and Germany or left in the hands of the parties themselves to resolve as in the United Kingdom. They compare and contrast collective bargaining in the United States and Europe, and show how the basis for collective bargaining in the former has been the removal of barriers to economic efficiency caused by disputes over union recognition in contrast to that in Europe which gives more weight to worker rights.
Paul Gollan examines employer strategies towards non‐union collective voice. He suggests that when employer‐initiated voice arrangements are established they create employee expectations about outcomes. If these expectations are not realized, a widening of the gap between expectation and achievement leads to lack of trust and disenchantment in management leading to instrumental collectivism. This could manifest itself in either the peaceful pursuit of desired outcomes through mutual gains, such as union recognition by the employer and/or employer–employee partnership, or through union readiness for action against an employer based on a conflict of interests and a ‘win’ and ‘lose’ strategy. He argues that the old dichotomy of a union versus non‐union channels of voice is likely to prove inadequate in shaping future representation arrangements.
Raymond Markey, Greg Patmore, and Nikki Balnave assess the role of employee representatives on the boards of companies and producer cooperatives. Employee participation in decision making can be seen via employee representatives sitting alongside shareholder representatives on the boards of public companies and state‐owned enterprises; and producer cooperatives in which the workers own the organization. Producer cooperatives are also likely to have employee representation on their boards, but as they point out the two forms of participation differ (p. 17) fundamentally. In the case of the former, employee representation on the boards of public companies and state‐owned enterprises constitutes employee participation as employees, whereas producer cooperatives owned by the employees constitutes participation as owners. They observe that consequently the motivational bases for each approach differ, even when the structures may be similar.
Bruce Kaufman and Daphne Taras analyse indirect participation through forms of non‐union employee representation (NER). They note that NER has been practiced in industry for over a hundred years but with considerable diversity and variation both across countries and over time. As they observe, this is a subject of much controversy but NER's importance appears to be increasing. Non‐union forms of employee representation are one method for implementing employee participation in organizations and are both a complement and a substitute for other methods, such as direct forms of participation and other forms of indirect participation via trade unions.
Rebecca Gumbrell‐McCormick and Richard Hyman review experience with works councils as a form of participation. They focus on countries with generalized systems of representation where participation structures exist largely independently of management wishes and not with those where representative bodies may be established voluntarily through localized management (or union) initiatives. Using this definition, works councils are largely confined to continental Western Europe, and they explain why this is the case looking at six European countries: Germany, the Netherlands, Belgium, France, Italy, and Sweden. As they explain, works councils are engaged in a difficult balancing act with employees, unions, and management which is made more precarious as a result of changes in work organization, corporate ownership, and the global economy.
Eric Kaarsemaker, Andrew Pendleton, and Erik Poutsma take‐up the issue of employee share ownership and show how governments in North America, Europe, Australasia, and Asia have promoted various forms of employee share ownership. In theory, employee ownership provides employees with additional rights to those normally expected by employees and these could bring about changes in employee attitudes and behaviour, which may affect company‐level outcomes, such as productivity and financial performance. However, they conclude that most share ownership plans do not appear to transform the employment relationship. Of course this should not be surprising as the amount of equity passing to employees is usually small, and those involved do not expect that share ownership will transform the way their company is run. But they do argue there is evidence to suggest that share ownership does have favourable effects on company and workplace performance.
In the final chapter in Part 3, Ian Kessler focuses on financial participation more generally. This is defined as a mechanism by which employees are provided with a stake in the performance or ownership of an organization. This stake is reflected in remunerative arrangements, typically in the form of a payment linked to a (p. 18) corporate outcome measure or to an allocation of shares in the company. It directly involves workers in corporate financial performance with a payout, but also provides the basis for employee involvement in organizational decision making. He reviews the character, use, and consequences of financial participation, and in so doing explores the contributions made by these different research communities to our understanding. Much research on financial participation has focused on the consequences of schemes, in particular on whether and how it has impacted on employee attitudes and behaviours as well as on organizational performance.
In Part 4, the book shifts to examine the processes and outcomes of participation. It contains four chapters dealing, respectively, with labour union responses to participation, the shift from union to non‐union voice, high‐involvement management and performance, and employee voice and mutual gains.
Gregor Gall examines how labour unions have sought ‘participation’ in an attempt to gain the organizational and institutional means to protect and advance their members' interests. Participation would on the surface represent a movement towards achieving greater workers' control or codetermination at the workplace. But, as Gall observes, the majority of systems of participation originated from employers with almost all the remainder derived from initiatives by the state. The problem for unions is that while they want forms of workers' control, as the weaker party to the employment relationship they face a dilemma which makes them unsure whether entering participation will strengthen or weaken their ability to prosecute their members' interests. This raises concerns about whether avenues of participation facilitate or undermine collective bargaining.
Alex Bryson, Rafael Gomez, and Paul Willman look at the nature of workplace voice and its determinants in Britain since the early 1980s focusing on implications for debates about worker participation, labour relations, human resource management, and organizational behaviour. Their approach draws on insights from consumer theory, industrial organization and transaction cost economics and explores the conditions under which employee voice mechanisms emerge inside the workplace. They show that union collective representation has been replaced by non‐union voice in new workplaces and, where union voice persists in older workplaces, it has been supplemented by non‐union voice.
The chapter by Stephen Wood on high‐involvement management and performance provides a more nuanced picture regarding the link between worker participation and individual performance. As Wood suggests, while worker participation can provide an opportunity for workers to influence events it is also assumed that it will not only provide greater procedural justice but fairer substantive outcomes and thus have an impact on individual and organizational performance. However, Wood suggests that studies of the association between job satisfaction and individual performance may be weak and may be contingent on the type of job undertaken. In addition, the link between participation and performance at individual and organizational levels may not necessarily be positive.
The chapter by David Lewin explores employee participation and mutual gains. He argues that the theory and research on mutual gains has focused largely on employee exercise of voice in unionized settings featuring collective bargaining between representatives of management and labour. These typically lead to formal written agreements (i.e., contracts) that contain grievance procedures. This chapter by contrast focuses on employee voice in non‐union enterprises addressing a central question, ‘Do mutual gains to employer and employee result from non‐union employees' exercise of voice?’ Lewin suggest that a substantial majority had a formal arrangement of voice through alternative dispute resolution (ADR) mechanisms, were used by employees, and were considered by senior executives as beneficial for the business. Lewin concludes that implication of these findings is that employee voice can be exercised outside of a collective context, and that analysis of mutual gains should include both collective and individual forms of participation.
In Part 5, attention turns toward comparative and societal issues which are addressed in the final eight chapters. These deal respectively, with participation across organizational and national boundaries, public policy and employee participation, corporate governance and employee participation, cross‐national variation in representation rights and work governance, employee participation in developing and emerging countries, international and comparative perspectives on employee participation, and freedom, democracy and capitalism through the lens of ethics and employee participation.
Mick Marchington and Andrew Timming's chapter investigates employee participation across organizational boundaries. They suggest that the recent growth of inter‐organizational contracting, whether in the form of a public–private partnerships, joint ventures, agency work, or outsourced production, poses a significant threat to the traditional conception of employment relations as a contract between a single employer and an employee. Those workers employed by the weaker party to a commercial contract have less scope for both direct and indirect participation as compared to core employees in a traditional employment relationship. They go on to suggest that non‐citizen workers, as Marchington and Timming define them, face a set of unparalleled obstacles to participation that effectively dampens their ability to influence decision making and have their ‘say’, a situation that is only likely to worsen as globalization becomes yet more pervasive.
The chapter by John Budd and Stefan Zagelmeyer highlights a number of issues around public policy and the role of employee participation. They state that employee participation is frequently seen within the private sector context in voluntary terms; that is, employers that believe it is in their self‐interest to provide vehicles for employee participation will do so; others will not. However, the authors argue that employee participation can reach far beyond competitiveness and profitability and also shape the psychological and economic well‐being of individuals, the physical and emotional health of a community's families, and the quality of a country's democracy. As a consequence employee participation has important (p. 20) implications for public policy through governmental regulation of the employment relationship.
Corporate governance and the role of participation are examined in the chapter by Howard Gospel and Andrew Pendleton. The authors analyse the role and extent of employee participation in the main areas of corporate governance differences between countries. They provide an overview of the main practitioner and academic perspectives on governance, highlighting differences in the role accorded to employees. To ascertain the potential for employee participation they go on to identify the main elements of corporate governance systems—the involvement of owners, the role of governing boards, information flows and transparency, the remuneration of managers, and the market for corporate control. The chapter outlines how employee participation and representation may impact on various aspects of ‘mainstream’ corporate governance, such as executive pay, even where there is little direct role. The authors argue that if corporate governance is defined in broader terms than the conventional way found in most policy discussions, the role for labour should be greater.
Carola Frege and John Godard explore cross‐national variation in representation rights and governance at work. In particular they address the reasons for the considerable cross‐national diversity in both the institutional context of the employment relationship and the way in which conflicts are resolved given this diversity. They address various explanations that have or can be advanced to explain this variation and why it persists. The authors argue that attempts to prescribe or alter representation rights are not likely to succeed unless they take into account not just the broader institutional environments within which these rights are (or are not) embedded, but also historically rooted institutional norms and traditions.
Employee participation in developing and emerging countries is examined by Geoffrey Wood. Wood argues that outside a few ‘islands’ of economic activity, characterized by sophisticated production paradigms, the levels of participation and involvement encountered in the developing world are generally low. He goes on to state that while Fordist practices are widespread in these economies, unions have been unable to limit the wholesale abandonment of pluralist employment relations polices under increasing forces of global forces. Wood argues that in the informal sector networks are built around the usage of labour on an open‐ended basis. These are generally outside of formal labour law and great power imbalances between employers and employees exist with the concentration of power under management control which has resulted in many cases of labour repression. However, in some developing societies, such as South Africa, greater higher‐value‐added production practices based on longer‐term productivity and equity have created opportunities for employees to have a voice in firms, increasing fairness and creating greater corporate sustainability.
Nick Wailes and Russell Lansbury apply the varieties of capitalism (VofC) framework to evaluate international and comparative perspectives of employee (p. 21) participation. They attempt to modify and extend the VoC approach to account for both within country diversity and the role that international factors play in shaping national patterns of participation. They highlight two main limitations of existing VoC theory. First, the VoC framework makes it difficult to explain diversity in participation practices within national systems. Second, the VoC approach does not account for developments in participation which are international in origin. They argue that VoC analysis should adopt a less deterministic view of the role institutions play in shaping social action, to focus more on the role of agency and interests, and suggest the need to explore the interconnections between countries in more detail. The authors apply this modified VoC framework to examine the extent to which it can explain recent developments in the United Kingdom and Germany.
The final chapter in this Handbook, highlights the role of freedom, democracy, and capitalism in ethics and employee participation. Robin Archer suggests that the idea of individual freedom or individual liberty has provided a basic ethical reference point against which the legitimacy of social and political institutions has been judged. He outlines an argument for democracy being based on individuals being free only to the extent that their choices govern (or determine) their actions. He then seeks to show that it applies not just to political institutions but also to many other kinds of associations and, in particular, to economic enterprises. He argues that the same basic ethical commitments that lead us to promote political democracy should lead us to promote economic democracy in terms of a system in which enterprises operate in a market economy but are governed by those who work for them.
Overall not only do these chapters provide readers with a wide range of theoretical and empirical insights into employee participation, they connect such participation to broader issues and influences of organizational and political change. As such, we intend the book to be a leading reference work and to thereby provide a benchmark against which students and scholars of employee participation can assess its contribution in the future.
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