Since the 1980s, many UK organisations have undertaken culture- change programmes in the face of turbulent product-market conditions. One major initiative has been the introduction of employee involvement (EI)(Guest, 1995).

Introduction

Since the 1980s, many UK organisations have undertaken culture- change programmes in the face of turbulent product-market conditions. One major initiative has been the introduction of employee involvement (EI)(Guest, 1995). Today EI appears to be a widespread management practice (Ramsay, 1996). It may be the most recent attempt by employers to discover more ‘participative’ methods of managing employees (Marchington, 1995:282).

However, the participative authenticity of EI is disputed. Hence, the purposes of this paper are five-fold: first, to identify some of the main forms and dimensions of EI; second, to outline some of the main theories and explanations for the introduction by management of EI initiatives; third, to attempt to evaluate the effectiveness of EI practices in the light of recent cross-sectional and case-study evidence from the UK and relate these findings to EI’s ‘fit’ with traditional joint regulation; fourth, to consider participation and thus EI from an ethical perspective; and finally, fifth, to assess whether EI may be regarded as authentic participation or, as suggested by this paper’s title, managerial sophistry.

Definitions

Any assessment of EI as an authentic or mock form of employee participation (EP) requires an initial definition of the concepts involved. However, there appears to be no commonly agreed definitions for either EI or EP (Marchington, 1992).

EP is a wide term. At it widest, it embraces any form of EI in the operations of an organisation beyond the receiving of wages and the following of instructions. At its narrowest, the term describes employee(s) sharing in decision-making with management (Chrysiddes and Kaler, 1996:99).

Two underlying objectives for EI have been suggested by Guest and Peccei (1992): first, to generate employee commitment to the organisation; and second, to encourage performance improvement and acceptance of management initiatives for change. Implicit in these objectives is that EI is management initiated and redolent of control.

EI, then, may be considered the collective term for a range of management techniques (communication, participation and financial stakeholding) that seek to increase employee information about, and commitment to, the organisation (Marchington, et. al., 1992).

Forms and Dimensions of Employee Involvement

There does not appear to be a commonly agreed framework for the analysis of EI/EP, which may well be a reflection of its highly dynamic, contextual nature. For the purposes of clarity, the framework of degree, forms, level and range is preferred (ibid).

Degrees of EP/EI

‘Degree’ describes the degree to which workers, directly or indirectly, influence decision-making (ibid:8). Blyton and Turnbull, (1998:224) describe this as a ‘Continuum of EP’ and thus influence. At one end of this continuum, illustrated below, the minimum level of involvement is the receiving of information from management with no sharing of decision-making. Towards the opposite extreme, the maximum level of involvement (short of full worker control) is joint decision-making whereby employees have the right to influence, rather than be involved with, managerial decision-making. Midway, joint consultation describes management obtaining feedback and suggestions from employees, while maintaining absolute authority over final decision-making.

Forms, Levels and Range of EP/EI

Forms of EP/EI can be grouped into three categories of techniques: direct, representative and financial. Levels describe the organisational point at which practices may occur. Range describes some of the issues on which EI/EP may occur, whether initiated by management, unions or legislation (Heller, et. al., 1998.). These are summarised below together with illustrative examples of specific EP/EI techniques.

It is apparent from this analysis that by far the majority of EI techniques fall towards the left of the ‘Continuum of Employee Participation’. This suggests that:

“…management [appear] more concerned to ‘tell and sell’ than to promote industrial democracy.” (Blyton and Turnbull, op. cit.:225).

So why Employee Involvement?

Four major theoretical approaches to the development of EI can be identified. These are based respectively on cyclical, institutional, conjunctural and secular premises. Cyclical theorists, largely in the radical tradition, have argued that a reduction in management bargaining power in periods of high collective mobilisation, causes management to introduce EI initiatives as a form of counter-mobilisation in order to regain control (Ramsay, 1977). Put differently, involvement equates to control (Marchington et. al. op.cit.). Implicit is the periodic, cyclical nature of employment relations as described by long wave theory, whereby shifts between collectivism and individualism echo the rhythms of advanced capital economies (Kelly, 1998). It follows that if EI is a management response to union activity, then EI should wither as management control is reasserted. That EI appears to be continuing to diffuse, notwithstanding a lengthy period of union weakness, suggests that the cyclical theories may be flawed. (Ackers et. al., 1992).

Institutional theorists, in the pluralist tradition, argue that it is state intervention (in the UK this is primarily voluntarist) that causes management to introduce EI ‘packages’. For example, tax incentives have been announced by Chancellor Brown, in his Autumn 1999 pre-budget report, as a measure to ‘induce’ increased financial participation in the form of employee share ownership (The Times, 1999:1). Put differently, involvement equates to co-operation (Marchington, et.al., op. cit.). It follows that EI, in particular employee share ownership schemes, will be triggered by government policy. However as Braverman warns:

“The solutions they [management] accept are only those ...

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“The solutions they [management] accept are only those which provide improvements in their labour costs and in their competitive position.” (1974:35)

In other words, EI may only be introduced and sustained where it is in line with management requirements of the day. (Marchington et. al., op. cit.).

Conjunctural theorists, also in the pluralist tradition, appear to take a much broader approach and argue that diverse forms of EP (and EI) emerge in different political and economic circumstances (Poole and Whitfield, 1994:210). Consequently, causality is highly complex. It follows that ‘pulses’ of EI occur through the combination of regulatory and business pressures (Poole, 1986). Put differently, the management motives for EP/EI are:

“…shaped by existing levels of [EP] and worker control, latent power, government action and ideologies.” (ibid:26)

Clearly, while conjuctural theory appears to have merit, it lacks parsimony; the ability to test this theory in all ways possible may be likely to prove an exhaustive undertaking and perhaps accounts for the reductionist nature of the other theories discussed here.

Finally, however, secular theorists, in the unitarist tradition, argue that the need for quality and technological superiority (at the very least, parity) in an increasingly turbulent, highly competitive economy, as well as an increasingly better educated internal and external labour market, causes management to introduce EI in order to secure attitudinal and behavioural commitment to continual performance improvement (Walton, 1995). Put differently, involvement equates to commitment (Marchington, et. al., op. cit.). It follows that if EI is a management response to product-market and labour imperatives, then EI will be prominent in quality driven, hi-tech organisations, with well-educated workers and may spread as more organisations become quality focused (Walton, op. cit.). On this basis, the secular thesis appears consistent with the idea of EI emerging in the quest for sustained competitive advantage under the banner of ‘human resource management’ (HRM). However, the highly influential 1980s ‘excellence’ management gurus, for example Peters and Waterman, to whom the concept of HRM has been attributed, appear so obsessed with individual performance, commitment to organisational goals and ‘shared values’, that there is little, if any, recognition that employees have lives outside of work. As Hollway bemoans:

“The committed worker stays at work until the job is done. To hell with other commitments. This is not just bad news for [workers] it is bad news for everyone.” (1991:189n)

Therefore, it could be argued that ‘high commitment’ as a form of management initiated ‘self-regulation’ may be a disguised form of control.

The Effectiveness of Employee Involvement

EI effectiveness can be considered from three perspectives: the ‘perishability’ of EI schemes; employee response to EI; and whether EI can be associated with improved (or otherwise) business performance.

EI Perishability

Four sets of management related ‘problems’ have been empirically identified and are summarised below (Marchington, 1995:286-290).

Effect Attributed cause

Incomplete EI coverage * voluntary non-participation

across organisation * operational blockage

* poor integration of HRM practice

Competing initiatives and * multi-level ‘fads and fashions’

contradictory rationales * conflict between reward/duty schemes

* unplanned phasing of stand-alone EI techniques

Lack of managerial * team-working/empowerment seen as threat

commitment to role

* EI seen as ‘soft’ management

* bright idea of managers on promotion fast-track

Failure to implement * lack of skills to implement EI initiatives

* lack of time due to competing work pressures

* priority given to ‘hard’ performance criteria

Employee response to EI

As workers are the main targets of EI schemes, it follows that EI is intended to modify or reinforce their attitudes and behaviours as suggested by the secular thesis. The Marchington et. al., (op. cit.) cross-sectional survey of 25 UK-based organisations, suggests that while EI has some impact on attitude, any impact upon behaviour is unclear. However, the evidence shows strong employee support for schemes in operation, and a desire for them to continue (ibid:35-37). In addition, while most survey respondents felt EI had improved since the late 1980s, the majority did not feel that EI had increased their commitment to the organisation (ibid).

Business Performance and EI

The impact of EI upon business performance is considered by some to be too problematic to evaluate (Marchington et. al., op. cit.; Ramsay, 1996). Methodologically, cross-sectional studies of EI appear unable to clarify causality, while longitudinal studies appear to suffer from the difficulties of treating EI as the independent variable and isolating it from the multi-various extraneous variables that may also affect the dependent variable of business performance.

Evidence from the WERS98 study (Cully et. al., 1999) indicates that direct, downward communication forms of EI are widespread with more than 50% of establishments reporting the use of newsletters, management chains and team-briefing. What is perhaps more revealing from the analysis is how few establishments report employing techniques towards the right hand of the ‘EP Continuum’ discussed earlier, such as workplace committees (17%) (ibid:99). However, financial participation in its cash-based forms of profit-related-pay (PRP) or bonus is reported by 47% (ibid:233). Nevertheless, as previously mentioned, forms and incidence of EI are not hard measures of effectiveness.

Perhaps the nearest indicators of EI effectiveness available from WERS98 are ‘soft’ measures, based on management reports of high commitment management practices (HCM), of which team-briefing, problem-solving groups, PRP, ESOPs and SAWs fall under the EI umbrella. Workplaces reporting the use of at least eight HCM practices* and recognising a trade union report:

Above average financial performance (73%)
Above average labour productivity (62%)
Below average voluntary resignations (9.7%)
Below average dismissals (0.5%)

Source: (ibid:134)

* It should be noted, that of 15 HCM practices specified in the study, precisely which EI-type practices, if any, are included in this ‘group of 8’ are not specified.

This may indicate that the more sophisticated forms of EI, that is, those located centre-right of the ‘EP Continuum’, when operating alongside or with trade unions, may be associated with improved business performance. While those relatively unsophisticated forms of EI, located left-of-centre, have seemingly little discernible pay-off.

In summary, there is limited evidence of an association between EI and improved business performance. However, the causal direction is highly problematic: does EI cause improved business performance, or does improved business performance cause EI? (Marchington et. al., op. cit.).

Joint Regulation and Employee Involvement

A common assumption is that union avoidance is a main motive for management introduction of EI schemes and thus EI is incompatible with joint regulation. However, as the WERS98 evidence discussed above suggests, this should not be assumed a priori. Union avoidance, or weakening, may be a by-product of EI but may not be its primary objective (Ackers et. al., op. cit.). Nevertheless, the evidence for and against compatibility is considered below.

Evidence supporting incompatibility:

∙ In 72% of workplaces, managers prefer direct communication with employees to dealing through unions (Cully et. al., op. cit:88)

∙ In workplaces experiencing difficulties and with above average levels of unionisation, EI has involved attempts at union by-passing (Legge, 1995:269)

∙ Large non-unionised multinationals employ complex EI programmes (Black & Decker; Gillette; Mars; Polaroid; Texas Instruments; Nestle; IBM; Hewlett Packard; Marks & Spencer) (Blyton and Turnbull, op. cit.:251)

Evidence supporting compatibility:

∙ Where unions are recognised and involved in EI/EP joint consultation more common (Millward et. al, 1992, cited in Hyman and Mason, op. cit.:153)

∙ 85% of workplaces practising four or more HCM techniques recognise trade unions (Cully et. al., op. cit:110)

∙ Unions tend to be associated with more sophisticated forms of EI (Blyton and Turnbull, op. cit:325)

Conclusion:

∙ Union avoidance/weakening not a priori objective for EI but perhaps a by-product

∙ EI and representation through unions may be more effective when integrated

∙ Business performance may be improved where integration (partnership) exists

An Ethical Perspective on EI/EP

While thus far this paper has attempted to establish claims of fact, before arriving at any claim of policy (as will be found in the next, concluding section), claims of value must also be argued.

In terms of management motives for EI, two broad ethical options are ‘equity’ as opposed to ‘efficiency’. When the motive is ‘equity’:

“…then participation [including EI] is seen as a means to the end of giving employees a greater share in the operational and/or financial aspects of the business.” (Kaler, 1999)

This is essentially a moral motive which views the ‘share’ in decision-making that employees currently have as being unfair. When the motive is ‘efficiency’:

“…participation is seen as a means of improving the performance of employees.” (ibid)

Therefore, efficiency is not necessarily a moral motive. However, if increasing efficiency is considered to increase the overall welfare of wider society, then it can have a moral dimension. Consequently, it could be claimed that participation can increase equity and efficiency at micro and macro levels.

Any claim, that employees have no right to participation, as implied by the terms, ‘right to manage’ and ‘management prerogative’, may be challenged by the Kantian notion of respect for persons:

“Not to involve people in the workings of business is to treat them as simply a means to an end – the end of profit – and so fail to respect them as persons. Denying people a say in matters that so affect their lives is failing to treat them as fully human beings; it is [therefore] a denial of human rights to be compared to a denial of democratic freedoms. Consequently, employees do have a moral right to participation.” (Chryssides and Kaler, op. cit:104) [emphasis added].

Pseudo-Participation?

The principle objectives of this paper have been to analyse: the forms and dimensions of EI; the management motives for its practice; its effectiveness in terms of business performance and its integration with joint regulation; its morality in the wider social context; and in so doing arrive at the point where the authenticity of EI as EP may be assessed as objectively as possible within the constraints of this short treatment.

The examination of forms and dimensions of EI suggest that management employ a range of primarily unsophisticated downward communication techniques, to shape favourable attitudes and behaviour towards management and its strategies.

Theoretical analysis of managerial motives for EI, suggest that the secular explanation has merit in that EI may be promoted by management in response to turbulent, highly competitive environments, in the search for continual performance improvement, and ultimately survival. However, there is little evidence that this unitarist approach is based on social democratic values, rather, individual workers are ‘expected’ to be committed solely to the welfare of the organisation.

In terms of EI effectiveness, the evidence suggests this to be patchy for reasons of poor management planning, implementation and control. While generally welcomed by employees, and having some impact on positive attitude formation, there is little evidence of its success in increasing commitment. The WERS98 data suggests that EI may be more effective when operated in conjunction with trade unions. Organisations with a strong, active union presence are likely to have more effective, sustained, relatively sophisticated EI schemes in operation, giving credence to claims of EI synergy with joint regulation.

Ethically, employees have a moral right to participation. In this context, participation is taken to mean ‘sharing in decision-making’. Clearly, with the majority of EI practices to the left-of-centre of the ‘EP Continuum’, EI provides little opportunity for the sharing of decision-making and in this respect, may be considered a management technique to create a ‘feeling of participation’ (Heller, et. al., op. cit:176). Therefore, it is vulnerable to charges of ‘pseudo-participation’, perhaps more so when participation itself is confined or defined by individual level, unsophisticated EI practices. With the exception of those instances in UK industry where management have established co-operative, beneficial partnerships with all stakeholders in the employment relationship, the picture looks bleak.

“Industrial democracy…has largely disintegrated…Employees are… left with management-inspired and –controlled involvement as their main, or even sole, source of information, communication and action.” (Hyman and Mason, op. cit.:193)

Clearly, the balance of power in the employment relationship is now with management, following nearly two decades of attrition against collectivism and worker rights. However, while employers may continue to initiate involvement programmes, this period of counter-mobilisation may be drawing to a close; EI might be vulnerable to the impact of national and international politico-economic dynamics, especially those emanating from the EU which remains committed to employee participation (ibid:195).

Until such time as the UK government legislates to restore the balance, EI must be viewed as pseudo-participation and, therefore, as immoral in that it denies employees a path to real influence over the management decisions that profoundly affect their lives in all respects. It would appear that in the UK at least, social democracy and social justice was left in the polling booths of 1979. It is to be hoped that it was rediscovered in those same of booths of 1997 and that the new Labour administration will have the collective will ‘to throw the herrings to the gulls’.

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