John GearyClass 4

International HRMOctober 2nd, 2013

Employee voice: definition and alternatives

The context of employee voice in Ireland

Incidence and nature of arrangements for employee voice

The state of the unions

What do workers say: what form of voice do they want?

Employee voice in MNCs – what of the likely influence of new legislation

A say in decisions which affect their work and employment

→ Opportunity to influence management decision-making, to voice their interests

Opportunity to voice grievances and concerns

Inordinately complex issue and one which gives rise to much debate

Different views. One view = pluralist persepctive:

employers and employees have different interests and concerns → there is the potential for conflict

as such workers deserve a say and a voice (‘right’ to question/challenge management)

to ignore this risks conflict, confrontation & adversarialism

from such regulation and proceduralisation comes stability, integration and economic prosperity

Another view unitarist perspective: informed by a view of the enterprise as a unified entity, a ‘team’, everyone has the same interests and goals • Conflict is unnecessary, a consequence of misunderstanding, or perhaps mischief!→ Illegitimate

• Emphasis – management leadership = management should be allowed to manage as they best see fit → Employees - defer to the wisdom & skill of management

A variety of forms: (i) no role for independent representation; (ii) otherwise yes, where such bodies can be trusted to act ‘responsibly’; (iii) or management are best placed to develop voice policies – ‘direct voice’

Representative or indirect voice (collective mechanisms):

- union-based = collective bargaining, grievance systems, etc.

- employee-based = works councils, joint consultative committees, etc.

Direct voice (individual mechanisms):

- company-based = employee involvement and participation (open door policy, grievance/appeal procedures, appraisal review process, team working)

Types of Managerial Voice Policies in Attaining Employee Consensus

Direct Voice Indirect Voice Scope of Consensus

1. Unilateral Management

2.Worker Participation Involvement

3. Negotiated Management

4. Representational Involvement

Persuasion (consensus as compliance)

Direct active involvement (consensus as shared goals)

Recognition of rights and power (consensus as exchange)

Procedural strategic participation (consensus as joint management)

Source: Adapted from Regini (1995)

Ireland ‘atypical’ in a European context in not possessing a general, permanent, and statutory system of employee I&C

Employee voice – conventionally understood as union voice

Since mid 1990s – 2008 employee voice promoted in social partnership programmes under the more general rubric of ‘partnership and involvement’

- no unitary model canvassed - list of possible areas proposed - rationale for approach adopted

New EU legislation: European Works Council Directive and the Employee Information and Consultation Directive

increased emphasis on direct forms of voice

soft forms of voice (newsletters, meetings, attitude surveys, ombudspersons, open-door)

increased emphasis on new forms of work organisation (e.g. team working)

increased emphasis on direct employee involvement in introducing change

new unionism and workplace partnership

general preference for direct employee involvement

involvement very much on management’s terms

well understood, long vintage in management literature

if it fails can be rescinded / allowed to atrophy

Roche and Geary (2000): ‘exclusionary’ approaches to handling change predominated over ‘inclusionary’

Where adopted, employee involvement and participation confined in the main to operational issues

Survey evidence (NCPP/ESRI/UCD, 2003 and 2008) indicates that multi-stranded voice arrangements cover a small % of workforce

Employers claim a high incidence of voice but employees less convinced of scope and depth

Geary (2007) significant ‘representation gap’

Unions = traditional employee voice mechanism

Union density peaked in the early 1980s – 62%, currently estimated to be 33%

Reasons - (See Lecture 1)

Shift in structure of employment from sectors where unions have been strong traditionally to expanding sectors

Shifting postures of development agencies and Irish public policy

Non-unionism has become strikingly evident among US firms (see notes for lecture 2 )

General hardening in employer opposition to union organization in the private sector

Union members positively disposed towards unions, value being members and generally committed

Mechanisms that seek to provide for justice and fairness - presence of formal voice mechanisms – not very widespread, particularly in non-union companies

Willingness among non-union workers to join unions is striking: - ⅔ would join if asked and IF their employer supported union

organisation

- in the absence of such support workers see little practical benefit in joining or are fearful of the consequences if they do (figure drops substantially - 28%)

- that so many employees, even in the absence of employer support, would be prepared to join a union suggests that there remains among employees a significant unsatisfied and unrealized demand for union voice = a significant “representation gap”

Employees want more voice

Many would like the option of joining a union

Non-union employees – go directly to management with problems and grievances

Unionised employees – union voice in particular with regard to pay, unfair treatment and job security issues (equivalent % for non-union employees is 10%)

But both groups likely to go to management directly in regard to training and promotion

An EU question - should employees be given a say and of what form?

EU European Works Council and EU Information and Consultation Directives

The transposition of EU directives into national legislation – especially in Ireland – has been an attempt to reconcile and accommodate the two positions outlined in slides no. 4 and 5

Defining the terms I&C:

Information = transmission by the employer to the employee/employee representatives of data in order to enable them to acquaint themselves with the subject matter and examine it

Consultation = exchange of views and establishment of dialogue between either or both one or more the employees, their representatives and the employer

Rationale = participation deficit - create common EU legal framework for transnational I&C within MNCs

Key features:

Applies to all member states, implemented Sept. 1996 (revised 2009)

requires ‘Community-scale’ undertakings (with 1000+ employees within the EU, with 150+ in at least two countries) to set up an EWC

scope for negotiation of company-specific arrangements

competence restricted to transnational issues

annual info meeting with central management and consultation on proposals with serious consequences for employees

costs to be met by the company

one employee representative from each country in which firm operates and additional members in proportion to the size.

Currently thought to operate in about 1,000 MNCs, but this is only about 40% of eligible companies

Coverage is highest in Scandinavian countries and Belgium, 41% for Italy, but low in Germany (23%) Spain (18%) and Ireland (10%)

Wide variation in practice from token organs to proactive participants in change management negotiating joint agreements and joint texts.

Advanced form of EWC = VW. In other cases, thought to be 19 (EF 2008) written agreements on restructuring, i.e. dealing with pay, avoidance of compulsory redundancies, and retraining and development

Such strong EWCs seem to exist where there are strong unions or works councils in the home country of the MNC; good links between the EWCs and local employee representative structures (national level representative structures = springboard to EWC); strong cross-national organisational structures which exist apart from the EWC; existence of a European management organisation; positive management orientations; and firms with internationally integrated operations

Consultation prior to decisions being taken is rare. In those few cases where there was consultation usually with regard to implementation and not the definition and content of the decision

Most agreements with respect to EWCs adopt the terms of the directive and limit consultation to “the exchange of views and the establishment of dialogue” and few such agreements (10%) allow for more in-depth consultation

Management generally do not see EWCs as slowing or impeding decisions and seen as useful when implementing decisions

First EU law - generalise obligation on employers to inform and consult employees

Dir. – minimum standards freedom to adapt to local circumstances and traditions

Mechanism to enhance employee voice in management decision-making and to improve organisational effectiveness

“A fail-safe protection for employees”. Touted also as “a modern business tool” by the EU Commissioner in 2001. “Many businesses already involve employees in (managing change)”

Irish echo: “an exciting opportunity for organisations to use partnership-style approaches to better anticipate & manage change in the workplace… Effective I&C practices can also serve as a catalyst for the development of innovative working practices, culture change and new forms of work (NCPP)

Independent research evidence would confirm same → employers should have little to worry about then?

I&C Directive

Widespread indifference among employers and unions as to the effects of the directive following transposition in the UK and Ireland

Very few employees have organised (or been able to organise) themselves to exercise this right

The design of the ‘trigger’ mechanism and the primacy of voluntary agreements has weakened the effect of the legislation

However some evidence that MNCs based in the UK and Ireland did move to establish some employee voice mechanisms in ‘fear’ of the potential of the legislation

New forms of employee voice: opportunities and fears

EWCs Directive – international dialogue with employee representatives; or,

– cross-national employee representation leading to ‘benchmarking’ and European collective bargaining

I&C Directive – works councils – stepping stone to union organisation – stronger trade unions – exaggerated fears?