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9. Employee Involvement

Strategy

Professor Debi S. Saini (debisaini@mdi.ac.in)

Management Development Institute, Gurgaon

mailto:debisaini@mdi.ac.in

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HRM and Employee Involvement

Objectives of this session are to discuss the following:

EI and EP: Historical development & meaning and Aims

Types of EI: Downward & Upward

EI and employee engagement

Company newsletter as a form of downward EI

Team Briefing: Naturemeritsdeterminants of Success

Team working/suggestion scheme/attitude surveys & EI

QCs: Naturemeritsprerequisites; TQM: Naturefeaturesthemes

EI at Delta airlines

Working of EI at global level:

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What is Noticeable in People Mgt. Today?

Shift from Taylorism: i.e. indl. revolution model of HR mgt.

Taylorism reflects: ControlDisciplineSanctionsDirection

As in music, even in business there is a Shift to involvement/teams

EI intertwines trust and responsibility

The idea: Help & take others along with you

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Employee Participation

and

Involvement: Historical

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Economists Sydney & Beatrice Webb in their book Industrial Democracy(1897)

talked of industrial governance--But by this they merely meant wage bargain

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Salamons Distinctions

Industrial Democracy: Worker control

Employee Participation: Influences decision making

EI: Engagement, understanding, commitment & contribution

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EI and EP: Recent Thinking contd

Thatcherism led to Globalization

Japanization in HRM was seen attractive

Shift from Collective bargaining to HRM: EI a key theme

HRM/New IR aim to Build employee commitment

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How is EI Linked to Japanese Mgt. Practices

Japan exemplary in employee participatory practices

Impact of Confucius: A leadership theorist, stressed

Cooperation and harmony

Social hierarchy through benevolent leader

Leader to act in interest of followers: Young to respect sr.

Export of Japanization to other countries esp. UK

Used partly to water down pluralist UK attitude

Most EI issues relate to small shop-floor concerns

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HRM philosophy & Employee Involvement

HRM/excellence movement in 1980s: EI

Tom Peters: People are most valuable asset

HRM: Mgrl. aversion to EP in generalBut EI helps

EI reflects: managerial strategies for productivity

Not for building a participatory society

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Phases & Influence of Forms of Participation in UK

1900 1920 1940 1960 1980 2000

Unitarist

Pluralist

Marxist

Employee

Involvement

Task-Based

Participation

Collective Bargaining

Joint Consultation

Downward Communications

Worker

Control

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Nature

of

Employee Involvement

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Meaning of EI and EP

Employee Participation

Refers to state or collective-employee initiatives

in promoting collective representation of employees

in organizational decision-making

possibly in the face of employer resistance

(Hyman & Mason, 1995)

EP includes financial participation & profit sharing

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Meaning of EI and EP

Employee Involvement

EI is a strategic device used by management

in promoting employee commitment

& the consent/cooperation of the workforce

through information given directly (not reps.)

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High

Medium

Low

Levels of Employee Participation/Involvement

High involvement: Complete decision making power with employees

Full consultation: Employees offer recommendations (e.g., QC, Work organization)

Selective consultation: Employees give information, but dont know the problem

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Forms of Employee Involvement

Informal

Casual information

exchanges

Example: Boss asks for

ideas

Formal

Codified practices

Example: WCs under

IDA

Statutory

Required by law

Example: German

codetermination

Voluntary

No legal requirement

Example: Strategic task

force

Direct

Employees

personally involved

Example: Staff vote

against smoking in the

workplace

Representative

Reps decide for

other employees

Example: Employee

reps as directors

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Levels of Participation

Worker Directors

Task-Based Participation

Joint Consultative Committees

Trade Union/Works Councils

Collective Bargaining

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Employee Involvement

&

Engagement: What Does Research Say?

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HR Practices &

operating systems

designed & bundled to

enhance:

Ability

Motivation

Opportunity

Supportive

company, industry

and societal context

Expanded

employee

potential and

increased

discretionary

effort

Improved

systemic

response to

employee

effort

Improved

company

performance

Improved

worker

outcomes

Linkages within High Performance Work Systems

Cummings & Worley, 8e (c)2005 Thomson/South-Western 15-20

EI and Productivity

Employee

Involvement

Intervention

Improved

Communication

and Coordination

Improved

Motivation

Improved

Capabilities

Improved

Productivity

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And Engagement?

Engagement represents ;

--a belief in org.s goals, and

--making efforts to operationalize it

But keep in mind that engagement is a strategic issue

that cannot simply be left as employees duty;

it has to be constantly nurtured

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The Power of Employee Involvement

Customer needs met through employee engagement

Intrinsic desire to control ones work

So EI help promote engagement

EI is crucial for building people-centric culture

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The Power of Employee Involvement

Own the process: Helps build trust/commitment

Inspire and drive the message

Respecting individual

Tap into their imagination, ingenuity, energy

Serve as consultants

Customer needs through employee prospects

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Involved Employees are Committed Employees

Commitment:

1. To be responsible for

2. To pledge (oneself ) to a position

Dedication

Pride

Responsibility

Integrity

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And Engagement?

Engagement is an idea whose time has come.

it represents an aspiration that

employees should

understand, identify & commit themselves

to the objectives of the organisation they work for..

(however).HR professionals need to recognise

that engagement is a strategic issue

that cannot simply be left to manage itself

(CIPD 2005, 2006)

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Employee Engagement (CIPD 2007)

Opps. For

upward feedback

Feeling

informed

Mgt commitment

to the Org.

Managers

fairness re: issues

Treating employees

With respect

Engagement

Performance

Intention

to Stay

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What Does Evidence Tell Us?

Management control: Involvement on mgt.s terms?

Emphasis on top-down communications unitarist

More communication and consultation far less negotiation

Is management really listening?

Management cultures: is knowledge still power?

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Types of

Employee Involvement

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Types of Employee Involvement

Downward communicationtop-down

I. In-house journals/company newsletters

II. Team-briefing sessions

Upwards problem-solving forms

III. Team Working

IV. Suggestion schemes & problem-solving groups

V. Attitude surveys

VI. QCs

VII. TQM

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I. Company

Magazine

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A. Downward Communication (DC)

The company magazine

Common methods of DC in past 20 yrs.

First used by Lever UK (in 1898)

Range: Amateur desk-top by WM to Glossy production

Levers found helpful in new programs e.g.

Used (in 1950) for acceptance of work measurement scheme

Used (in 1953) for job evaluation scheme

In 1990s they used it for flexible & harmonious working

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II. Team Briefing

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II. Team Briefing (TB) Concept of TB

A device to involve everyone in the organization

level by level in face to face meetings

organized by line managers

to present, receive, discuss information

approved by top management

on a regular basis

by providing a two-way communication

Aimed to replace casualism, & inject order in system

It was viewed as productivity breakthrough of 1990s (Fortune magazine)

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II. Team Briefing (TB) contd

TB seen as a key ingredient of the new IR and HRM

Changed focus

In 1980s: bad news to convey;

Now: maintain initiative

Organization:

Covers all levels

between 4 to 15 in each gr.

run by immediate leader of gr. at each level

leader be properly trained and briefed

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II. Team Briefing (TB) contd

Subjects:

Explains new and changed policiesExplaining co. plans

Telling progress in aspects of organizational functioning

People: appointments, personnel matters

Feed back to topProvides for two-way communication

Timing & duration:

At least once a month for inchargesOnce in 2 months for others

But meet only if something to sayDuration be about 20-30 Mnts.

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III. Team Working

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B. Upward Forms of Communication

III. Team Working

Focuses on problem-solving in a Gr-working situation

Teams vary in size: 7-10

It is a recent initiative in EIoriginated in Japan

Not as widespread as TQM: but its influence spreading

It requires task flexibility & job rotation

Training in: team culture/inter-personal skills/communication

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IV. Suggestion

Schemes

Creative ideas needed

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IV. Suggestion Schemes

Concept:

A method providing established procedure

for submitting and evaluating ideas

with the aim to recognize those

giving meritorious ideas

without discouraging those

whose ideas are not accepted

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IV. Suggestion Schemes contd Features

Suggestion boxes used: Idea is to involve WM in co. progress

--Mgrs/team leaders also encouraged to give suggestions

Going to individual for details of suggestion

Often committee of mgt./WM reviews suggestions

*It decides size of award

*Often has final power to accept/reject suggestions

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V. Attitude Surveys

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V. Attitude Surveys (AS)

What is an attitude survey?

It is a questionnaire survey of employees

On a one-off or regular basis

Which is designed to discover their views

About a variety of factors connected with work

AS postulates that WM want their views implemented

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V. Attitude Surveys (AS) contd

Opinions are taken on a wide range of issues

Job satisfactionjob specificationCo. org. & mgt.

Used by large no. of orgs. Some use them very regularly: IBM

Enlightened orgs. make imp. changes in policy

Cussons (UK, soap mfrs.) introduced equal opportunity policy

Also, it did training program to tackle employee harassment

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I. Quality Circles

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VI. Quality Circles

What is a QC:

A voluntary group of employees

holding meetings

to search solutions

for work-related problems

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VI. Quality Circles

Members usually are from a single deptt., similar work

Usually 6-12 members + supervisor

Member trained in various skills: Meetingteam bldg.presentation skills

A QC may be a part of the TQM programme

QC implements its recommendation where practicable

When implemented, QC monitors the process

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VI. Quality Circles contd

Some basic features of decision-making by QC:

1. Members voluntarily select problems from own-work area

2. Members collect data, brainstorm, apply problem-solving skills

--Management is frequently invited as expert

3. A facilitator assists the QC

4. Solutions evaluated for cost-effectiveness; shown to mgt.

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Merits of QCs

1. Improve communication

2. Increase job satisfaction

3. Stimulate personal growth

4. Increase employees sense of involvement

5. Enhance leadership skills

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VI. Quality Circles contd

Popular in the 1980s, not as much today

Potentially positive impact on productivity

But incidentally, little effect on satisfaction

Many Problems that led Dilution of Their effectiveness

Inadequate training

Not truly voluntary

Indifference of management

QCs are not really empowered

to make decisions

Source: www.freequality.org/beta%20freequal/fq%20web%20site/Training/ Classes%20Spring%202002/Quality%20Circles.ppt

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VII. Total

Quality

Management

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VII. Total Quality Management

What is TQM?

It is a concept that presupposes that

Everyone in the organization understands

The expectations of the customer

And they meet customers expectations every time

Based on Presumption of two Achievable Results

Lower the cost of operations

Improve the quality

And thus attract the customer

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Definition of Total Quality Management contd

A total company wide effort

that includes employees, suppliers & customers

that seeks continuously to improve quality

of products and processes

to meet needs and

expectations of customers

(Dean & Evans, 1994)

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TQM: Customer Satisfaction is the Driving Force

Strives on customer satisfaction: Internal/external

Voice of customer provides functionality

Quality as customer wants

Planning to deliver as customer wants

Calls for continuous improvement (kaizen)

Which is aimed to satisfy customer

In manufacturing:

Involves checking quality at each stage

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What TQM is: Total = Quality involves everyone & all activities in the company.

Quality = Conformance to Requirements (Meeting Customer needs)

Management = Quality can and must be managed.

It is a process for managing quality,

a philosophy of perpetual improvement in everything we do.

It is a method by which mgt. & employees can become involved

in the continuous improvement of production (of goods/services)

It is a combination of quality & mgt. tools

aimed at increasing business & reducing losses

due to wasteful practices.

Some companies well known to have implemented TQM:

Ford Motor Company--Phillips Semiconductor,

Motorola--Toyota Motor Company.

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What does TQM Pre-suppose?

It is a concept that presupposes that

Everyone in the organization understands

The expectations of the customer

And they meet customers expectations every time

Based on Presumption of two Achievable Results

Lower the cost of operations

Improve the quality delivered

And thus attract the customer

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Features of TQM

Systemic thinking: integrated system of tools/techniques/trng.

Aims to promote attitudinal change

Broad definition of customer concept

Measurement to involvement: US & British

Employee involvementempowerment

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Features of TQM

Routine use of quantitative performance measures

Initially engg. approachelectronic surveillanceteam discussion

Done to assess quality of design (market research, benchmarking)

Corrective action by statistical process control

Belief in kaizen: to achieve zero-defecteliminate waste

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Features of TQM contd

TQM requires support of all

Senior management support to drive quality culture

Delegation to middle mgt. project teams (cross-functional)

WM in teams supplying zero-defect good to intl. customers

High trust with external suppliers

JIT & TQM go hand in hand

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Features of TQM

Systemic thinking: integrated system of tools/techniques/trng.

Aims to promote attitudinal change

Broad definition of customer concept

Measurement to involvement: US & UK

Employee involvementempowerment

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Features of TQM Contd

Routine use of quantitative performance measures

Initially engg. approachelectronic surveillanceteam discussion

Done to assess quality of design (market research, benchmarking)

Corrective action by statistical process control

Later employee involvement envisaged

Belief in kaizen:

to achieve zero-defecteliminate waste

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Extended Meaning of TQM

Some companies have intertwined TQM with

employee recognition and care (e.g. QPL in China)

They believe that TQM can work better if

employee needs are taken care of

A happy employee can help

meet quality needs of customer

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What is Underscored in This Clip?

TQM aims to deliver Quality as per customer needs

QPL Ltd. Believes: Enthused employees deliver zero defect

TQM at QPLis built on the principle of employee recognition

Various needs of employees fulfilled:

From basic to exciting employee needs

AccommodationmealsSportsLeisure

So a joyful org. is seen as part of TQM

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Working of

Employee Involvement

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Reality of EI at Global Level: Lessons

Contradiction in mgrs projections & practices

Control is seen in upper realms of the hierarchy

Resistance against power shift to WM (National Pharma)

EP and even EI perceived as a power challenge

Japanese practices possible if workforce is compliant

And, also it works in situation of high-unemployment

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How To Overcome EI Challenges?

Cultural Differences

EI works better in low power-distance cultures (e.g.Japan)

Management Resistance

Solution: Educate/train managers

to become facilitators

Employee and Union Resistance

Unions see it as dilution of union rights/power

Solution: Promote trust and involvement

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Working of

Employee Involvement

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Factors Impacting Working of EI

1. Mgts willingness to concede some prerogatives

2. Training of mgrs/WM in group-working skills PresentationLeadershipAssertivenessProblem-solving

3. Provision of proper feedback mechanisms

4. Taking action to implement group decisions

5. Realize: Conflict helps developing initiative

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Reality of EI at Global Level: Lessons

Contradiction in mgrs projections & practices

Control is seen in upper realms of the hierarchy

Resistance against power shift to WM (German Pharma)

EP and even EI perceived as a power challenge

Japanese practices possible if workforce is compliant

And, also it works in situation of high-unemployment

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How To Overcome Involvement Challenges?

Cultural Differences Better in collectivist & low power-distance cultures

Management Resistance Educate/train mgrs to become facilitators

Employee & Union Resistance

Union see it as dilution of union rights/power

Solution : Policies of trust and involvement

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Working of EI at Global Level: Lesson contd

EI used only for efficiency of organization

Dilemma: how much power to give for creative energy

No undermining of managerial prerogatives tolerated

New technology, TQM, culture change used for control

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Employee Involvement

In

Delta Airlines

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Delta Airlines

A successful US airline

Has high level EI programs

It has one of the most advanced EI in the world

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Delta Air Lines: the 1980s

A top 100 employer

A classic high road non-union firm

There was no EI program initially

Enlightened Paternalism & Velvet Glove Command/Control

Very high employee loyalty

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Delta Air Lines: the 1990s

Chaotic comptt., turbulent markets, global expansion

New mgt. team:

--Paternalism is out, business partnering in

EI was adopted at first for non-strategic reasons

Has grown into a strategic HRM device: EI part of business model

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Delta EI Program: Structure

1. Top-Level: Delta Board Council (one)

2. Middle-Level:

Division Employee Councils (Five)

3. Lower-Level: Base councils (Many)

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Delta EI Program: Structure

Top-Level: Delta Board Council

Consists of 7 employees: each representing a business Division

Peer selected by employees, 2-year term

DBC attends BOD meetings, meets with CEO, CFO, EVPs

Undertakes Project assignments

Preview employee-sensitive communications/policies of Delta

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EI Program contd.

Middle-Level: Five Division Employee Councils

Flight Attendant Forum

Technical Operations Council

Airport Customer Service Forum

Cargo Partnership council

Reservations Sales council

These forums consist of employee-elected representatives

Deal with all issues affecting that division

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EI Program contd.

Lower-Level: Base councils

Elected representatives

Handle base level issues

They form Continuous Improvement Teams

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Costs Invloved

Employee/Management Time

Slower/Constrained Decision Making

Higher Labor Cost

A kind of Unintended Collective Bargaining

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Benefits Energizes the Employees

Organizational Alignment/Coordination

Production Efficiency/Quality

Communication/ Information Flow

Organizational Change

Management/Employee Development

A proactive way of managing employee relations

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EI at Delta: Features & Impact

Impacts the Bottom Line

Deals with core Part of Business

Has a Long-Run Focus

Trust and Mutual Gain

Empowerment & Problem-Solving

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EI at Delta: Features & Impact contd

Management Commitment

Early Bumps

Training as part of corrective measures

Cooperative ER and Union Avoidance

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What can be learnt from this session?

While EP is rooted in collectivism, EI is built on individualism

EI contributes to employee engagement

Newsletter & team briefing are imp. form of top-down form of EI

QCs are declining in their effectiveness for various reasons

TQM is becoming more as an EI instrument than control

Effective EI is resisted both by managers & trade unions

EI is likely to be more successful in low power-distance cultures