Re-engagement with the employee participation debate: beyond the case of contested and captured terrain

Introduction

Employee participation has been an important feature of debates in Work, Employment and Society since its inception in 1987. These debates have raised major societal issues concerning the inequality of power and influence between labour and capital within organizations, social processes and structures, and legislative frameworks concerning industrial relations, protection and efficiency. They have also raised questions about how financial benefits are allocated, who makes decisions about the distribution of these benefits, and how financial and economic contexts impact on those decisions (Marchington and Wilkinson, 2005). As such, employee participation is inherently an interdisciplinary field that has attracted interest and contributions from different disciplines of the social sciences, including sociology, institutional economics, political science, organizational behaviour and psychology, industrial relations and human resource management (see e.g. Donaghey et al., 2011; Harley et al., 2010; Martinez Lucio and Stuart, 2005; Ramsay, 1991).

While accounts of employee participation are longstanding within different disciplines of the social sciences (see for instance earlier texts on industrial democracy from political science (Pateman, 1970), sociology (Blumberg, 1968) and industrial relations (Clegg, 1960; Webb and Webb, 1902), there has been a sharp increase in interest in this area in recent years among academics, practitioners and policy makers against a background of the decline in traditional employee representation through trade unions; the so-called ‘representation gap’ (Taras and Kaufman, 2006). However, this interest extends beyond these traditional forms to also include non-union forms of employee participation (see e.g. Badigannavar and Kelly, 2005; Butler, 2005; Dundon, 2002; Godard and Frege, 2010; Gollan, 2006, 2007; Kaufman and Taras, 2010; Kim, 2009; Upchurch et al., 2006; Watling and Snook, 2003). The topic of employee participation has become one of great interest especially since the Global Financial Crisis, which not only reshaped industrial relations, but also triggered significant psychological and financial impacts on employees, thus necessitating a cross-disciplinary re-engagement with the debate.

This e-special issue on employee participation will consolidate research findings published in Work, Employment and Society, reinforce the leading role the journal plays in this line of scholarly enquiry and stimulate new discussions that will lead to developments in research, policy and practice corresponding to rapidly changing organizational and societal contexts. In particular this issue focuses on the question of whether employee participation really brings employees increased voice and well-being, or whether it is simply an agenda that promotes the interests of employers. In other words, instead of a contested terrain which balances the antagonistic relationship between labour and capital, is it more the case of a captured terrain that primarily follows managerial agendas?

Extant literature on employee participation is generally concerned with the meanings, forms or structures of participation, the underpinning motives of various parties, the implementation processes, and the effectiveness/outcomes of participation arrangements for both organizations and individuals (Kaufman and Taras, 2010; Marchington and Wilkinson, 2005). This introductory article is therefore structured as follows: the next section examines the evolution of employee participation, with the following section going on to discuss its forms and meanings. The third section focuses on antecedents, and the fourth section examines some outcomes of employee participation. Drawing on articles published in Work, Employment and Society, emergent core themes and contentious issues are highlighted within each of these sections. Twelve articles for inclusion in this e-special issue are then identified in the final section. Importantly, this section of the editorial review also sets a research agenda for the future that potentially goes beyond debates on contested or captured terrain, which assume an antagonistic relationship between labour and management. This e-special issue has particular relevance to European practitioners and policy makers given the majority of the articles selected are European-based and have covered a broad spectrum of issues in relation to both union and non-union forms of employee participation.

The evolution and the paradox

Employee participation as a form of industrial democracy made possible through trade unionism and collectivism (Cressey, 1995), was typified in most Western countries during the late 1960s and 1970s. By the early 1980s, the focus of employee participation had shifted to more managerially-driven human resource management approaches (thathad emerged from the USA). The primary aim of these direct employee involvement arrangements is to improve organizational efficiency and productivity. The shift towards non-unionism and individualism is particularly evident in nations with a neo-liberal orientation, such as the UK (Royle, 2011). Changes in the nature of work, especially the move from large-scale manufacturing to knowledge work, saw employee participation shifting focus again, with ‘employee empowerment’ becoming prominent in the 1990s, ‘high commitment and performance’ taking over in the early 2000s, and ‘employee engagement’ and ‘employee voice’ being the catch-phrases of the 2010s (Royle, 2011; Wilkinson et al., 2010).

Chronologically, the articles published in Work, Employment and Society concerning employee participation reflect these major shifts in the industrial relations landscape through, for instance:

What is worth noting though is the paradox of the evolution in research and practice of employee participation. Fundamental to the employee participation argument is the power imbalance between labour and capital, whereas the importance of research in employee participation and its organizational outcomes has been elevated due largely to its prominence in human resource management, especially its centrality to high-performance work systems (Boxall and Purcell, 2003, 2008; Harley et al., 2010). Observations such as the ‘empowerment myth’ (Harley, 1999), marginalization of employee participation (Kessler and Purcell, 1996), and employee silence (Donaghey et al., 2011) are discussed further in a later section of this article.

Meanings and forms of employee participation

In the literature terms such as participation, engagement, involvement or empowerment are sometimes used interchangeably, whereas the meanings and forms that the term ‘employee participation’ can take vary considerably across disciplines (Wilkinson et al., 2010). As Heller et al. (1998: 15, emphases in original) note in their pioneering work on the Tavistock Institute:

In general the term refers to how employees are able to have a say over work activities and organisational decision-making issues within the organisation in which they work. 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.

Essentially employee participation encompasses ‘all forms through which employees take part in decisions regarding their job and their workplace’ (Knudsen et al., 2011: 384).

Forms of employee participation can be direct or indirect, formal or informal workplace arrangements (Knudsen et al., 2011; Marchington and Wilkinson, 2005). More specifically, Marchington and Wilkinson (2005) differentiate employee participation into three forms: direct communication, upward problem-solving, or representative participation (in both union and non-union forms). 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 informal verbal participation, while others are more formalized with written information or suggestions. The third centres on the role that employee or trade union representatives play in discussions between managers and the workforce via mechanisms such as joint consultation or joint working parties (see e.g. Kessler and Purcell, 1996), worker directors or collective bargaining (see e.g. Perrett, 2007 within the context of re-regulation).

These various forms of participation differ in the scope of decisions, the amount of influence workers can exercise over management, and the organizational level at which decisions are made. Some forms are purposely designed to give workers a voice, but no more than a very modest role in decision making, while others are intended to give the workforce a more significant involvement in organizational governance. Therefore, there is differentiation in the degree or strength of participation determined by each form of participation’s depth and scope; where depth may range from the mere reception of information, to consultation and negotiations, or self-determination, and scope varies from operational matters (related to the job/task), to strategic issues (related to company missions and goals, investment and de-investment, etc.) (Knudsen et al., 2011: 384). For instance, joint working parties are positioned at the most influential spectrum of employee involvement (Kessler and Purcell, 1996), whereas appraisal interviews, quality circles and suggestions schemes are usually placed at the lower end of the influence spectrum (Knudsen et al., 2011; Marchington, 2005).

Traditionally, employee participation was equated with union representation until the early 1980s, which witnessed a rapid decline in union membership. This development has led to greater interest in other forms of participation, some of which are very different to earlier notions that were rooted in industrial democracy. This growing alternative strand of research has also looked at non-union forms of employee participation, being it individual or representative (see e.g. Badigannavar and Kelly, 2005; Butler, 2005; Dundon, 2002; Godard and Frege, 2010; Gollan, 2006, 2007; Kaufman and Taras, 2010; Kim, 2009; Upchurch et al., 2006; Watling and Snook, 2003). The move towards more research in non-union forms of employee participation is legitimate, and it is generally recognized that researchers should look for multiple channels of participation to explore fully the extent of workplace democracy (Kaufman and Taras, 2010; Marchington and Wilkinson, 2005).

To academics and practitioners, what is much more important than the terminology are the meanings ascribed to specific practices by the actors within different organizational and societal contexts, whether such schemes can address the social problems they are intended to address, and at the same time improve organizational effectiveness and employees’ well-being. The following sections will now turn to discussions on antecedents (including drivers, motivations and rationales) that are conducive to these various forms of participation, and their subsequent impact on employers (in terms of profitability, efficiency and trust) and employees (in terms of interests, autonomy and well-being).

Antecedents of employee participation

Antecedents of employee participation can be exogenous or endogenous and operate at various levels – regulatory, sector or organizational – and the motivations and rationales for participation at the workplace may be based on economic, moral/ethical or pragmatic grounds. For example, the degree or strength of workplace trade union representation has been frequently attributed to regulatory changes, overall trends of union membership and major shifts in the economy, such as mass unemployment and market integration in Europe. Mortimer (1988) points to the weakening of trade union strength at workplaces as a result of mass unemployment in Britain in the late 1970s and throughout the 1980s: ‘Unemployment makes workers less disposed to challenge the decisions of their employers’ (Mortimer, 1988: 536). Ramsay (1991) discusses potential changes introduced by the market integration of European countries from 1992 and the implications of the Social Charter for capital and labour, including both positive and negative influences on union strength within multinational enterprises whose economies of scale were expected to increase after the integration of European markets. Such increases in economies of scale in both finance and management systems affect employee and employer relations and the power of trade union representation – the former enables multinational companies to resist strike action by spreading the costs across their operations, while the latter allows these companies to shift sourcing of professionals across frontiers. On the other hand, it is also evident that trade union representation can be more influential in some multinational companies, relying on the possibility of spreading protective action across multiple plants (Ramsay, 1991: 547).

At an organizational level, one of the prominent interests lies in the influence of managers’ union-avoidance motives and strategies on the establishment and strength of employee participation in union or non-union forms. Perrett (2007), through an ethnographic case analysis, explores how management applies union-resistant strategies and tactics (overt opposition or a stick and carrot approach) and how these strategies affect workplace union recognition and union strength within a context of re-regulation – the introduction of the statutory recognition procedure in the UK.

Other major organizational-level forces shaping the forms, structure or degree of employee participation include employee financial involvement (Pendleton et al., 1996) and the way management and trade unions respond to risks (Martinez Lucio and Stuart, 2005). Pendleton et al. (1996) explore the potential of an Employee Share Ownership Plan (ESOP) in facilitating greater levels of employee participation in corporate governance as compared with conventional employee share ownership and worker cooperatives. Their findings indicate that innovations of participation in the advanced form of ESOP studied are primarily indirect and representative (here non-union forms are referred to) and tend to focus on strategic rather than task-related decisions (Pendleton et al., 1996: 222). ESOPs are significantly more likely to have introduced Total Quality Management schemes and to have employee directors on the main company board. Significant differences between companies with ESOPs in place and conventional firms are also found in terms of the extent to which decisions are made jointly with employee representatives, with ESOPs scoring higher in the areas of investment, product and marketing, and management selection. More recently, Martinez Lucio and Stuart (2005), through an extensive review of the literature, highlight the different ‘partnership’ forms that result from the way management and trade unions navigate exogenous forces as well as endogenous risks inherent in the partnership process that could legitimize negative employment conditions. In particular, their article shows how the containment of political risks (related to organizational practices and legitimacy) and distributional risks (related to material and environmental factors and exchanges in employment relations) within a changing exogenous context leads to a variety of partnership forms. These forms may be of a ‘nurturing’ type, but are more likely to be transitional (like a marriage of convenience) and at worst coercive (like a shotgun wedding) in the way they manage and respond to risk (Martinez Lucio and Stuart, 2005: 799).

Outcomes for organizations and individuals

The outcomes of employee participation feature prominently in the debates (see e.g. Harley et al., 2010; Kessler and Purcell, 1996; Knudsen et al., 2011). From an organizational perspective, much of the research on the efficacy of employee participation has focused on short-term impacts on productivity or profitability, while a few have adopted longer-term measures, such as the trust between management and labour (Kessler and Purcell, 1996). In their article, Kessler and Purcell (1996) point out that using crude short-term measures of profitability or efficiency for evaluating employee participation programmes can lead to incorrect conceptualizations of cause and effect. They go on to demonstrate how longer-term measures, levels of trust between management and the workforce, are more effective in assessing the impact of joint working parties over a process of change. Through comparing the outcomes between firms with and without joint working parties, Kessler and Purcell (1996) find that joint working parties contribute a strong positive benefit to both union and non-union firms. These positive effects may vary across different stages of the problem-solving process. For example, participation at critical stages, such as the identification of the nature of the problem and then taking action to correct it, is associated with the highest trust-improvement scores.

More recently, research has also focused on how employee participation affects employee benefits, such as the quality of the work environment, and employee interests and well-being. These are important, yet under-investigated, outcomes (Harley et al., 2010; Knudsen et al., 2011). Employee participation initiatives are embedded in concepts of industrial citizenship, worker rights and organizational democracy (Harrison and Freeman, 2004), and these concepts are grounded in fundamental notions of free speech and human dignity for which supporting arguments are often expressed in political, moral and religious terms. The empirical evidence for the effects of participation on workers’ welfare and well-being, however, is mixed (Handel and Levine, 2004). The employer-sponsored perspective is typically less concerned with workers’ voice per se, and the related issues of social justice and organizational democracy, and more focused on the possible business benefits of participation (Wilkinson et al., 2004).

On the positive side, using multi-method (both qualitative and quantitative) and multiple case studies of Danish workplaces, Knudsen et al. (2011) reveal that work environment quality (hence employee well-being) and high levels of participation go hand in hand. It is noteworthy that the workplaces with top work environment quality have high levels of direct as well as representative participation. Another study by Harley et al. (2010) using survey data on employees working in the Australian aged-care industry shows that ‘high-performance work system’ (HPWS) practices can generate positive outcomes for employees by meeting their interests (specifically their interests in an orderly and predictable working environment).

There is yet another side to the story. Substantial modern human resource management literature from the 1920s espouses the importance of participation in industrial relations and other disciplines of the social sciences, although often in very specific ways in terms of getting employees to contribute more effectively to the business using their skills and knowledge (Kaufman, in press). Participation, consequently, has featured in most definitions of high-commitment human resource management since the 1980s. This is premised on informing and allowing employees to have input into work and business decisions, the idea being that such an approach can help create better decisions, enhancing employees’ business acumen and hence their commitment (Boxall and Purcell, 2003). The centrality of participation in high-performance work systems has drawn management and behavioural scholars into the research domain on employee participation, and has elevated the importance of understanding participation–performance linkages for both individuals and organizations (Boxall and Purcell, 2008; Harley et al., 2010). However, the high commitment/performance approach to participation predominantly reflects a managerial agenda concerned with increasing employees’ commitment and securing their enhanced contribution to the organization (Boxall and Purcell, 2008). While some forms of participation may provide employees with new channels through which their influence is enhanced or their interest is satisfied (Harley et al., 2010; Knudsen et al., 2011), facilitating employee participation does not involve any de jure sharing of authority or power as there is not always a link between participation and decision making.

Thus there is the observation of the modern myth of employee empowerment, that workers do not enjoy greater levels of autonomy in the ‘empowering form’ of organizations (in particular Total Quality Management, team-based work and consultative committees) (Harley, 1999), and the tendency of marginalizing employee participation due to the dominant concern of its negative impact on efficiency or on economic growth (Kessler and Purcell, 1996). There is also a growing body of research on employee silence, the antithesis of voice, that investigates when and how employees in organizational settings exercise voice and when and how they opt for silence (Donaghey et al., 2011). This approach tends to explicitly focus on the intentional withholding of ideas, information and opinions with relevance to improvements in work and organization. Equally, management might, via agenda setting, seek to perpetuate voice on a range of issues (Donaghey et al., 2011).

It is pertinent to note here that the characteristics and outcomes related to employee participation can be contingent on many contextual factors, such as regulatory condition, sector IR climate, organizational and employee characteristics, motives/objectives of actors, employer dominance and union strength. For instance, Pendleton et al. (1996: 220) point to the objectives of the actors involved to explain the preference for indirect forms of participation, focused on strategic decision, in firms with ESOPs; Samuel (2007) explores the impact of managers’ motives, employer dominance and union strength on the endurance of partnership consultation and the fostering of more trust-based longer-term relationships; while Harley et al. (2010) highlight the importance of contextual factors of industry and employee characteristics in shaping outcomes. Therefore, it has been suggested that rather than attempting to determine definitively whether certain types of participation are universally good or bad, research should explore the circumstances in which particular outcomes arise, and seek to understand the causal processes through which outcomes emerge in particular contexts (see e.g. Harley et al., 2010; Samuel, 2007).

A contested terrain, a captured terrain, or beyond

From all the above-mentioned articles previously published in Work, Employment and Society, 12 have been selected for inclusion in this e-special issue on employee participation (as noted with an asterisk in the reference list: Cressey, 1995; Donaghey et al., 2011; Hales, 2000; Harley, 1999; Harley et al., 2010; Kessler and Purcell, 1996; Knudsen et al., 2011; Martinez Lucio and Stuart, 2005; Pendleton et al., 1996; Perrett, 2007; Ramsay, 1991; Samuel, 2007). These articles provide excellent examples of employee participation research published in this journal over the last two decades. They are representative both in terms of their high quality and, collectively, as a broad coverage of the employee participation debate. This e-special issue thus consolidates research findings published in Work, Employment and Society, and reinforces the leading role the journal plays in this line of scholarly enquiry. Importantly, it pays particular attention to the question of whether employee participation really brings employees increased voice and well-being, or whether it is simply an agenda that promotes the interests of employers, that is, instead of a contested terrain, is it more the case of a captured terrain?

Obviously, there is no definitive answer to this question. The literature shows that there are competing rationales and interests surrounding participation and the findings are mixed in terms of whether participation is beneficial. The paradox, as discussed earlier, in the evolution of employee participation, and the mixed findings in terms of outcomes, especially those from the perspectives of employees, calls for interdisciplinary re-examination of the legitimacy of employee participation, as well as the conditions (when) and mechanisms under which (how) it works well for both employers and employees in changing organizational and societal contexts (see e.g. Knudsen et al., 2011; Samuel, 2007). These recent studies have suggested looking beyond the antagonistic relationship, be it contested or captured, and embracing realistic new models underpinned by workplace cooperation, as opposed to continuing to promote a social science paradigm that assumes conflict will predominate over a true partnership. For example, the empirical evidence in Bryson et al.’s (2006) study shows that managerial responsiveness to worker voice does lead to superior labour productivity, especially in non-union workplaces. The authors therefore suggest that policy interventions should focus on how to motivate managers to become more responsive to their employees.

Knudsen et al. (2011) develop a typology in their study on the impact of participation on employee well-being. This typology groups workplaces into four models of participation, namely the bipartite, HRM, hybrid and democratic models. Among these, the highest level of participation, including strong elements of collective participation and the best work environment quality score, were found at workplaces that followed the democratic principles. This means, by acting closely together with local managers, employees are able to deal quite effectively with workplace threats to their psychosocial well-being: ‘Configurations of participation which balance democracy and efficiency concerns, and employer and employee interests, are possible, if supported by managers and employees alike’ (Knudsen et al., 2011: 394). In reality, such practices are considered to be among the most advanced in Scandinavian countries and Germany, and are characterized by ‘bargained corporatism’ rather than ‘contestation’ or ‘pluralist bargaining’ (Knudsen et al., 2011: 383). Additionally, Dundon et al. (2004: 1152) note the research gap in their fourth research theme; employee voice, which can be expressed through mutuality of interest in the form of an employee–employer partnership aimed at securing long-term viability and sustainability for the organization and its employees. Samuel (2007), using case studies of two British life and pensions firms, illustrates that such a partnership wins. Therefore, this can be considered a fruitful direction for future research, especially within the context of post-Global Financial Crisis, which has had significant impacts on organizations and individuals, both financially and psychologically.

The business case of sustainability has gained substantial support from both academics and business practitioners (Hart, 1997; Porter and Kramer, 2006, 2011; Porter and Van der Linde, 1995), which represents another major shift in the values and practices of society. This has significant implications for academics, policy makers and practitioners in all fields. Corporate sustainability requires a balanced integration of the triple bottom line corresponding to profit, planet and people (Elkington, 1997, 2001). There is a growing literature of sustainable human resource management that also stresses the centrality of people and the partnership relations between management and employees (Dunphy et al., 2003; Ehnert, 2009), and employee participation and engagement is likely to be a necessary (not sufficient) condition for the ultimate goal of sustainable organization. Such partnership relations between management and employees, although still rare to find in reality, require dense supportive systems based on a vision of corporate governance that includes stakeholders’ rather than merely shareholders’ perspectives (Martinez Lucio and Stuart, 2005). We consider it a beneficial direction for the journal and researchers in the related fields to develop a sociological or interdisciplinary perspective on whether or how employee participation is related to the corporate sustainability agenda.