Contemporary trends in employee involvement and participation

Abstract

Employee involvement and participation have been at the heart of industrial relations since its inception, although much of the contemporary terminology has moved away from ‘industrial democracy’ employed by the Webbs in 1898. The labels and terms for employee involvement and participation have expanded and varied over time, reflecting different disciplinary bases (industrial relations, human resource management, psychology and political science), changing socio-economic contexts, competing goals between management, labour and government, and a variety of practices. This complexity has become problematical because not all terms are equivalent in their meanings and their different parameters are not always clearly defined. We attempt to provide some clarity by defining ‘employee voice’ or ‘participation’ as umbrella terms denoting a wide range of practices. The article also clearly delineates direct and representative approaches to employee participation, and their interrelationship. Two critical contemporary issues are the role of the state and the link between participation and organisational performance. The article concludes that the sphere of employee involvement and participation is likely to remain contested, but that its strategic viability is enhanced when linked with employee well-being as well as performance. Successful state intervention requires public policy integration and dialogue between government, employers and employee representatives.

Keywords

Employee engagement employee involvement employee participation employee voice industrial democracy

Introduction

Throughout the history of industrial relations (IR) scholarship there has been a focus on the manner by which employees are actively involved in decision-making in their workplaces. In arguably the first IR text, Industrial Democracy published in 1898 (Webb and Webb, 1898), the Webbs focused on this central theme, and the title of their book has been associated with employee participation ever since. If we take as a starting point the turbulent IR period during the late 19th century, employee involvement and debates about its antecedents, composition and outcomes have persisted through economic cycles, shifts in legislative paradigms, the rise of human resource management (HRM), fluctuations in union density and substantial demographic changes to the workforce and the sectors in which people are concentrated. The Journal of Industrial Relations has a long and rich history of documenting the changes in employee involvement and participation (EIP). For this reason, it is apposite that this journal provides the forum for a special issue (55(4)) titled ‘Reassessing Employee Involvement and Participation: International Perspectives’. The articles included in this special issue have been developed from papers presented at an international symposium held in Brisbane, Australia in August 2012.¹

The persistence of the theme of EIP in various forms in IR literature is based on the very nature of the employment relationship that involves employees in decision-making relating to their work. The basis of a pluralist employment relationship dictates some joint determination over, for example, the work-effort bargain. Even the more unitarist employment relationships implied by many HRM approaches incorporate some, or even extensive, employee discretion over tasks. However, the extent to which employees are involved and participate in decision-making affecting how and when they do their work, and how the spoils of their labour are distributed, varies greatly across organisational, institutional and international contexts.

Labels are plentiful in the area: ‘organisational democracy’, ‘industrial democracy’, ‘employee involvement’, ‘employee voice’ and ‘high-involvement human resource management’, to name but a few. Each of these labels tends to have multiple, often slightly different, definitions. The definitions can be all-encompassing, to include joint decision-making between management and employees and any form of consultation with employees. Alternatively, the definitions can be more narrowly defined, such as information-sharing or a ‘formal, ongoing structure of direct communications, such as through a team briefing’ (Gallie et al., 2001: 7). Typically, different forms of participation have been conflated and treated as versions of the same phenomenon. However, practitioners and scholars understand that there is a gulf of difference between a shift team briefing and a works council with full employee representation and codetermination rights. Over time, subtle shifts in meaning and terminology have occurred as a result of changing priorities in the goals for EIP, associated developments in economic and political circumstances, and the balance of power between labour and capital (Markey and Patmore, 2009: 41–42).

While plagued with the dual problem of multiple definitions and a conflation of practices, it is difficult to be precise when comparing scholarly contributions, as well as workplace initiatives in practice. Terms carry different connotations or have ideological baggage for both academics and practitioners. Varied definitions are particularly evident across different disciplinary traditions – from HRM, political science, psychology, law and IR – which have distinct perspectives on employee voice, as well as the other overlapping and related terms (Wilkinson et al., 2010). It seems that scholars from diverse traditions often know relatively little of the research that has been done in other areas. There have been only rare attempts to address this disciplinary silo approach in the past (see Wilkinson and Fay, 2011; Wilkinson et al., 2010). Gollan and Patmore (this issue, 2013) identify the different epistemological perspectives of employment relations and law, and attempt to transcend their discrete separate limitations by developing a model for combining them. Their approach may ultimately need to be broadened to take account of still other different disciplinary traditions. However, our purpose in this article is not to overcome the cacophony of potentially confusing terminology; rather, we aim to offer an analytical overview of some contemporary scholarly and policy highlights in the field.

Defining terms

In the contemporary era, two of the most commonly used terms for employee influence in decision-making are ‘EIP’ and ‘employee voice’ – from a more explicitly HRM perspective, similar initiatives might be seen as ‘empowerment’ or ‘engagement’. But much more important than the labels that are attached to a particular practice is what the specific practices actually mean to the actors; and whether such schemes can make changes in the workplace. The debate persists despite more than a century of research in the area, continual changes to industries, regulations and managerial paradigms, and the economic, social and political contexts. The primary objective of researchers and practitioners remains familiar: to determine if EIP does improve organisational effectiveness and employee well-being, and the processes by which various practices allow workers to have a legitimate say in organisational decisions that affect the workers directly and indirectly.

Cox et al. (2006) argue that EIP has a more significant impact when strongly embedded within the decision-making processes within the workplace than when it is initiated as part of a managerial fad. Clearly, forms of employee participation can differ in the amount of influence workers can exercise over management and their jobs, the scope of decisions, and the organisational level at which the decisions are made. Some forms are purposely designed to give workers a voice but not more than a very modest role in decision-making, while others are intended to give the workforce a more significant say in organisational governance.

Central to most definitions of EIP is an opportunity for employees to have ‘a say’, that is, a voice (Freeman et al., 2007; Marchington, 2005). But, as Strauss (2006) points out, some terms are weaker than others – for example, ‘employee voice’ does not necessarily denote influence and may be no more than having a say but not having anyone listen or pay attention. In its weakest sense, employee voice is a necessary precursor for participation, but voice need not in itself lead to participation in decision-making. Voice has multiple ‘meanings’ and can be interpreted in different ways on a continuum from briefings or suggestion schemes, to mutual gains processes, to countervailing sources of power for employees in relation to management, to self-management (Dundon et al., 2004). Strauss (2006) sees participation as allowing employees to influence their work or employment conditions. Strauss (2006) suggests that there should be a distinction between involvement and influence – involvement can be a passive exercise, while influence is seen to be active. Consequently, in this special issue we define ‘employee voice’ and ‘EIP’ as equivalent umbrella terms, including involvement and participation, in a continuum of concepts and practices that cover varying degrees of employee influence.

Wilkinson and Fay (2011) identify four strands of literature that contribute to our understanding of EIP, for which the authors use the term ‘employee voice’ in their original work. Our classification adapts their original schema (as presented in Table 1), slightly extending the detail and acknowledging significant overlaps between some forms of voice or EIP. Like all typologies, there is a level of simplification, but it is a useful heuristic device. Basically, Table 1 presents how each of the strands of literature covers the dimensions of EIP. These are the types of schemes typically discussed, together with the focus, the forms and the underlying philosophies of these vehicles.

Table 1.

Employee voice and participation: Theory and practice.

Literature strand/discipline	Schemes	Focus	Form of vehicle	Philosophy
HRM	Briefing Open-door policy Suggestion schemes	Performance	Individual	Efficiency
IR	Collective bargaining Works councils Social partnership Non-union employee representation	Power Control	Representative	Countervailing power
Industrial democracy (political science)	Works councils Workers on boards	Decision-making	Representative	Rights
Organisational behaviour (psychology)	Teams Groups Task/job control/ autonomy	Job redesign	Individuals and groups	Autonomy and human needs

Source: Adapted from Wilkinson and Fay (2011).

The context for EIP has changed since the Webbs first coined the term ‘industrial democracy’ (Webb and Webb, 1898) and since the major policy experiments with industrial democracy in Australia, the UK and elsewhere in the 1970s (for reviews, see Markey and Patmore, 2009; Poole et al., 2001). For the Webbs, industrial democracy was based in trade unions and collective bargaining. Since the 1970s, union membership has declined in the Western world and governments have adopted neo-liberal approaches to re-regulating labour markets. However, inside organisations, Boxall et al. (2007: 215) note that ‘management driven forms of involvement’ serve employer goals of improved productivity and flexibility, while increasingly meeting ‘the desire of workers to be involved in the things that relate most directly to them’.

What mediates this desire is addressed by Markey, Ravenswood, Webber and Knudsen (in this issue, 2013). They find strong connections with other aspects of voice and employee well-being, notably, employees’ feelings of appreciation by management, receiving adequate information, opportunities to learn new things and the regulatory environment. The characteristics of employees may also be important, as in this case, where age and length of service were found to have an impact.

Direct and indirect or representative participation

EIP may occur directly or indirectly. Direct EIP refers to influence, control or autonomy in performance of tasks and/or jobs without the mediation of employee or firm representatives (Bryson et al., 2006; Markey, 2001). Direct participation may also be individual- or group-oriented. Indirect EIP affects employment conditions more broadly and occurs through employee representatives such as unions, works councils, joint consultative committees or employee representation on boards (Kim et al., 2010).

A key issue is how direct and indirect voice coexist and the extent to which they complement or conflict with each other. In a European context, direct and representative forms of voice usually complement each other, especially in Scandinavia and Germany (EPOC Research Group, 1997; Knudsen et al., 2013; Marchington and Wilkinson, 2008; Purcell and Georgiadis, 2006). In Europe, government policy and legislation provides a statutory right to voice in certain defined areas and among both union and non-union establishments. Other countries, notably the liberal market Anglo-Saxon-dominant ones, have much less emphasis on statutory provisions for employee participation, with more emphasis on unilateral management choice or arrangements negotiated with unions. Direct participation may often be at the expense of representative forms in this context. In many organisations, the result is a cocktail of direct and indirect participation (Wilkinson, Townsend and Burgess, this issue, 2013).

It is also worth noting that varying benefits for EIP are emphasised in the different societal regimes within which it is situated. Thus, in the liberal market economies, EIP is predominantly framed in terms of contribution to profit and shareholder value at the organisational level and in customer service, and product quality and staff retention at the workplace level. However, Budd and Zazgelmeyer (2010) remind us that employee participation or voice is not simply about improving economic performance. Issues to do with worker commitment, job satisfaction and alignment with organisational goals are often the proxies used to measure the success of EIP and voice schemes, but these may tell us little in themselves about the impact of particular schemes on the bottom line or the consolidation of management prerogative, which are likely to be the primary goals of management. In coordinated market economies, the focus is longer-term and holds a more widely defined range of stakeholder interests, including those of government, employers, trade unions and workers. In these situations, the expectation is more likely to be of mutual gains, either at the level of the individual-employing organisation or more broadly in terms of citizenship and long-term social cohesion (Wilkinson et al., 2010). Hence, in coordinated market economies, representative forms of employee voice – union and non-union – are more strongly institutionalised and embedded in IR than in the liberal market economies, where direct participation is more evident. In addition, the coordinated market economies place more emphasis on collectively-based, as distinct from individually-based, direct participation (Knudsen et al., 2013).

Policy interventions and the role of the state

A contribution from Greg Patmore (2013) in this issue demonstrates the importance of historical perspective. According to Patmore, ‘public policy amnesia’ is evident when contemporary debates over how policy should be developed ignore experimentation from the interwar period. Throughout the world, Employee Representation Plans or company unions (US), union management cooperation (US), works committees (UK) and works councils (Germany) were structures developed to overcome a concerning ‘representation gap’. Patmore uses this period to study how unions are affected by such policy initiatives.

Patmore indicates the critical role of the state in policy intervention. This may be through direct legislation, as in the case of German works councils in the Weimar Republic, through promotion of EIP initiatives such as the British Whitley works committees and joint industrial councils, or though the nature of IR legislation that provided the context for employer initiatives in North America. Since the Second World War, the role of the state has underwritten the spread of works councils in Europe at the level of individual countries and the EU as a whole, as well as in Asia (Gumbrell-McCormick and Hyman, 2010; Markey, 2006; Markey et al., 2010).

During the international upsurge of interest in EIP in the 1970s, the South Australian state government arguably led the way in Australia’s policy experimentation (Markey and Patmore, 2009). Policy discourse in South Australia moved from one promoting ‘worker participation’ to one promoting ‘industrial democracy’. However, while government promoted various forms of EIP systems, unions remained lukewarm to the idea and many businesses actively opposed the approach, particularly as the government envisaged legislation in the private sector. Ultimately, ‘government leadership could not overcome a lack of consensus and support among the employers and unions’ (Markey and Patmore, 2009: 61). More recently, from 2008 to 2012, the Queensland state government in Australia initiated a pilot programme titled ‘Workplace Partnership and Productivity’, engaging consultants to support change initiatives for EIP. Six manufacturing worksites participated in the pilot project, all of which reported significant improvements in performance attributable to greater involvement of employees in decisions that affect their work (Workplace Partnership and Productivity Project (WPPP), 2013).

These instances illustrate that EIP is continually affected by state intervention and the nature of employer and union responses to this intervention. In this issue, Bull, Pyman and Gilman (2013) examine Information and Consultation of Employees (ICE) regulations in the UK, which implemented European Union (EU) provisions at the national level. They suggest that these ICE regulations have changed the character of non-union employee representation in the UK, but in a subtle, rather than substantive, manner. Non-union firms have enjoyed some ‘quick wins’ and employees have become more aware of the business environment because of a new-found requirement of managers to share information. Nevertheless, the authors question the extent to which this minimal extent of voice is better than no voice at all.

In Australia, Barnes, MacMillan and Markey (this issue, 2013) examine the unusual instance of the state introducing a form of EIP in one sector with the intention of undermining unionism. This occurred with universities under the Higher Education Workplace Relations Requirements (HEWRR) introduced by the John Howard-led Liberal–National Party Coalition government in 2005. However, union representatives were overwhelmingly voted onto the ‘non-union’ consultative forums created by legislation, paralleling earlier instances noted by Patmore and common European experience with works councils. What the authors refer to as ‘hybrid’ forms of voice, with union and non-union representative structures in the workplace, has also been an ongoing issue in EIP, with the parties adopting different stances depending on the regulatory context.

Employers and organisational performance

While Freeman and Medoff’s (1984) seminal work suggested that employee voice through unions can lead to improvements in organisational performance, many researchers have failed to reproduce similar results (for a discussion, see Doucouliagos and Laroche, 2003). More recent research shows quite a mixed bag of results. Some examples include: Black and Lynch (2001) showing a positive link between voice and performance; Wilkinson et al. (2004) showing that voice led to a more open and constructive working environment, with improvements in absenteeism and staff retention; Bryson et al. (2006) not finding an association between employee voice channels and labour productivity, although they did show a statistically significant and positive relationship between employee perceptions of managerial responsiveness to voice and managers’ perceptions of productivity in non-union organisations; Kim et al. (2010) not finding a positive association between team or representative voice and productivity; and Addison and Belfield (2004) finding that union workplaces have reduced labour turnover and increased labour stability – similar to findings from Batt (2002). In a study of luxury hotels, Townsend, Wilkinson and Burgess (2013) found that those hotels with more established and effective voice systems were able to demonstrate better performance in measures of employees’ satisfaction, line manager performance and employee turnover. The hotel where managers had poor relationships with unions had the worst overall levels of employee turnover and employee satisfaction. Fakhfakh, Perotin and Robinson (2011) found that workplaces that have employee representatives but do not involve them in change could have lower performance than workplaces that have no employee representation at all. In contrast, when EIP is involved at all levels, the impacts were positive. Pfeffer (1998) argues that increased participation through High Performance Work Systems empowers employees to make decisions, reducing the need for multiple layers of management, ultimately reducing administrative costs.

Despite numerous publications on the topic of High Performance Work Systems, we are no nearer to identifying an agreed set of practices that comprise the high-road HRM bundle of practices, although it is well understood that there are commonalities among the lists (Guest, 2011). Sometimes, this literature refers indiscriminately to ‘high performance work systems’, ‘high commitment’ HRM or ‘high involvement’ HRM. A number of review papers have summarised the evidence to date, such as Boselie et al. (2005), Wall and Wood (2005), Hyde et al. (2005) and Boxall and Macky (2009); each examines slightly different samples of work, uses different data sets and comes up with different conclusions. Despite the ongoing debate, various labels for voice or participation are often included as a key factor in the high commitment literature (e.g. Batt, 2002; Boxall et al., 2007; Dundon et al., 2004; Huselid, 1995).

Wilkinson et al. (2004) explain that EIP, whether through union or non-union channels, can have a positive impact on an organisation in three ways. First, when managers legitimately value employees’ opinions it can lead to improved attitudes and behaviours, including loyalty and commitment to the organisation. Second, this increased loyalty and commitment can lead to the flow-on effects of lower absenteeism and greater cooperation, which can lead to improved productivity. Third, accessing employee input and ideas can lead to improved managerial systems. While the authors are largely silent on the notion of distributing the gains from these improvements, they do acknowledge that while these concepts are simple and logical in theory, decades of research demonstrate that practice is much more complicated.

This complexity is illustrated in very different ways in the three final contributions to this special issue, each of which shows the importance of context in a contested terrain where organisational performance rather than democracy is the key driver. Wilkinson, Townsend and Burgess (this issue, 2013) note that management’s main interest in EIP concerns whether there is a pay-off in terms of efficiency and added value to the business. However, they also warn us to avoid assuming that channels for EIP are homogeneous, as managers and workers, and even different managers, will likely have different approaches shaped by the context provided by management style and employment relations generally. Cathcart (this issue, 2013) also shows that even in a long-term case of employee ownership, as provided by the John Lewis Partnership in the UK, organisational democracy is contested terrain, subject to the contemporary pressures for organisational efficiency.

Sablok, Bartram, Stanton, Burgess and McDonnell (this issue, 2013) show that the choice of employee voice strategies of foreign-owned multinational corporations (MNCs) operating in Australia was affected by country of origin, trade union recognition and whether the MNC had adopted a strategic HRM approach. High trade union presence was associated with an indirect representative approach to employee voice through unions, quality circles and joint consultative committees, more often in non-US MNCs, whereas weak union presence is associated with direct or minimalist approaches. Direct voice mechanisms focused on informal means of communication such as interactions between employers and employees, information-sharing, quality circles, newsletters, suggestion schemes and employee feedback.

Lewer (this issue, 2013) presents a counter-intuitive finding worthy of special note. One of Lewer’s key conclusions is that EIP mechanisms under the appropriate conditions can achieve significant mutual gain outcomes. After studying productivity and performance at the BHP steelworks in Newcastle, the author noted a significant rise in performance levels after senior management made a decision to close the plant. Following this decision, there was a dramatic improvement in the EIP experience at the workplace, an improvement that is attributed to increasing overall output and performance, although it is really an instance of causal ambiguity. Assuming a causal link between EIP and performance in this case, the key for practitioners in ongoing worksites is to understand how to translate this performance improvement when there is no closedown imperative.

Conclusions

The notion of EIP in decision-making is not a new one for IR practitioners or scholars. However, the field is plagued by the conflation of different practices and the different labelling of what may actually be the same practices. There are many forms of participation and it can occur at a variety of levels. Typically, people want to participate in decisions that directly affect them. One question remains though: Should the business case be the prime consideration, or is EIP enough just to improve the experience of the workforce?

Historically, managers have held the power to decide what forms of EIP are used and how they are used, although this power has never been absolute. The sphere is regularly contested by employees, and the state frequently intervenes to shape processes and structures, with mixed success. However, in the foreseeable future the contribution to organisational performance is likely to remain the dominant theme in many of the ongoing debates around EIP. Hence, HRM strategies within organisations must be considered in conjunction with, not separate from, IR strategies. Channels of EIP will be best used as part of a suite of workplace or organisational policies designed to provide employees quality of working experience while contributing to organisational performance. Key to this success is having managers who are well trained in understanding how to capture and use employee voice for the benefit of all parties.

Policy and regulation at a government level need to support these workplace goals and integrate them within other key public policy areas such as workforce development and the productivity agenda. However, process is equally critical: development of national policy needs to be part of a broader process of dialogue between government, employers and employee representatives. As the South Australian case of the 1970s shows, governments cannot ignore the need to bring the major parties along with them in support of initiatives. It is clear from the articles in this issue that flexibility to take account of varying contexts is also important: what may work in one industry will not necessarily work in another, and what will work in one organisation may not translate to another with the same success.

Scholars play an important role in the ongoing development of EIP. We must be more precise with our explanations of the phenomena we are studying. Context is critical, and the development of theories to predict and explain practitioner experiences will assist the practitioner community to model their practices for the greatest benefits to all involved. However, scholars cannot do this alone. Practitioners need to be engaged with academic research and even provide resources for studying the practices in situ so that the ideas to feed back into the practitioner community may be developed. By working together, employees, unions and employers can develop mutual gains and, likewise, practitioners and academics working together can make greater gains for all parties.

Footnotes

Note

Funding

This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.

Biographical notes

Raymond Markey is Professor of Employment Relations and Director of the Centre for Workforce Futures in the Faculty of Business and Economics, Macquarie University which he joined at the end of 2011. He was foundation Director of the New Zealand Work & Labour Market Institute and Foundation Chair of the New Zealand Employment Relations Society. He has published 20 books and 60 journal articles, specialising in employee participation and labour history. He is currently leading a project on Climate Change, Work and Employment.

Keith Townsend is an associate professor in the Griffith Business School. He has published four books and more than fifty journal articles in the areas of industrial relations and human resource management, specifically in areas of EIP/voice, line managers, and employee misbehaviour. Keith balances the academic-practitioner divide through engaging in teaching, high levels of research outputs and engagement with the practitioner community in his role as vice president of the Industrial Relations Society of Queensland and executive member of the Australian Labour and Employment Relations Association.

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