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Industrial Relations & Innovative Employees: From empirics to a roadmap for social dialogue

Guy Van Gyes Stan De Spiegelaere

HIVA-KU Leuven

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THE EMPIRICAL WORK: VIGOR - Project

• Intra- & inter-university cooperation– KULeuven:

• CESO Geert Van Hootegem• HIVA Guy Van Gyes

– UGent• Psychology Frederik Anseel• Sociologie Ronan Van Rossem

• 5 doctoral students + 3 affiliated researchers• IWT • 2009 -2013• www.vigorinnovation.com

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VIGOR – Project

1. Feedback & Innovative Work BehaviourUgent – Psychologie

2. Ambidexterity: realigning exploration en exploitation Ugent – Psychologie

3. Innovatie and networks in research teamsUgent – Sociologie

4. Innovation in SME’sUgent – Sociologie

5. Architecture of the work environment & creativeness KULeuven - Sociologie

6. Labour Regulation, work systems & innovative work behaviour KULeuven – HIVA

Labour regulation, work systems & innovative work behaviourHow are labour conditions related to employee innovativeness?

~ Outcomes of industrial relations

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Policy Context

Literature researchEmployee-level survey (+/- 1000) in 5 industries

Europa 2020:Competitivity

Innovation Labour Market Flexibility:Contractual, financial & temporal

Working smarter & better Working cheaperVigorHIVA

Two ideal types of innovation

STI-innovation• Science, technology, innovation• Science and technology push (fundamental research)• Explicit, codified knowledge• What and why• Experiment• Separated process (R&D)

DUI-innovation• Doing understanding, interacting• Demand-pull, practical need

• Implicit, informal knowledge• How and who• Experience• Integrated business process

Source: Jensen et al.

Innovative Work Behaviour– Job insecurity

• Reduces the work engagement • Reduces the innovative work behaviour • Negative correlation with autonomy

Innovative Work BehaviourEngagement

Autonomy

Job Insecurity

Job Insecurity & Innovative Work Behaviour

Financial Rewards & IWB

Individual Performance Related Pay (PRP)- PRP => extrinsic motivation- Job => intrinsic motivation - IWB: intrinsic > extrinsic

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Financial Rewards & IWB

Collective Rewards & IWB- Free-rider- Actual influence

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Conclusion

• Labour conditions, industrial relations are important for enabling employees to innovate.

• Yet, labour organisation (job design, group design) is more important

• Plus, they shouldn’t be analysed in isolation!

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… to ideas on strategic renewal of workplace social dialogue

Linking empirics to state-of-the art

• Synthesis– Innovation study DG Enterprise of EC:

www.cordis.lu– Literature review for the Flemish Minister of Work

• No empirical research, borrowing from others• De Spiegelaere, S., Van Gyes, G.(2012). Employee

Driven Innovation and Industrial Relations. In: Høyrup S., Bonnafous-Boucher M., Hasse C., Lotz M., Møller K. (Eds.), Employee-Driven Innovation: A New Approach, Chapt. 12. Hampshire (UK):Palgrave Macmillan,230-245

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Roadmap of strategic renewal

• Institutions matter• Role of workplace employee representation• Conceptual difference• Institutional change• Actor transformation

1. Institutions matters ? Double speak from EU/OECD

To innovate: We need money (= low taxes and costs) and flexibility (=less rules)

Of course, you’ll have the usual credo

To innovate: We need a system of supporting institutions and rules,

because of

MARKET FAILURES

But there is another story (told by economists, picked up by OECD, EC DG Enterprise)

2. Key role of direct participation• PEOPLE THINK HARDER: Employee participation

creates greater commitment to the business goals. • MORE PEOPLE THINK: greater resources are directed

towards the improvement of products and processes. • MORE THINK BETTER extended flow of information

creates a greater potential for creativity. • THE ‘TOP’ CHANGES BETTER: provides top

management with more information, thereby decreasing the amount of sub-optimal decision making.

• THE ‘BOTTOM’ FOLLOWS EASIER: creates a culture where workers are more likely to support decisions.

3. Complementarities direct/indirect

• Direct participation: you’ll find it more in unionised settings

• Direct participation: it works better in unionised settings

• Direct participation: in non-unionised settings with direct participation, workers see it as a valuable alternative for union representation

A strong track needs strong sleepers

Research shows

Employee representation

• Roles to play: ‘Voice’ of involved workers– Conflict arbitrator– Bargaining expert– Neutral change agent– Feedback mechanism for management

• Conditions– No ‘hold up’ on gains from both sides– Employment security, no downsizing fear– Open, trustworthy management attitude– Necessary competences & information on ‘business’– High interactivity with rank and file (otherwise

alienation)

MORELESS

Employer TradeUnion Employer Trade

Union

Change management in a business strategy geared to innovation

Work organisation Labour conditions

Bargaining Dialogue

4. Conceptual difference: focus on ‘working smarter’ not ‘harder’

Conceptual difference

Dialogue on work Bargaining

Starting point Problem-driven Interest-driven

Goal Decision Contract

Climate Co-operative Competitive

Method Discussion Pressure

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5. On the move to new productivity coalitions?

• Fordist compromise: more with less– National sector bargaining as core instrument

to distribute productivity gains => maintaining aggregate national demand

– Workplace information and consultation rights: role in labour controle; safe and within standards; knowledge to use in higher-level bargaining => work rules; wage scales; job classifications; health/safety monitoring

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5. On the move to new productivity coalitions

• Post-fordist compromise: better not cheaper– Productivity gains based on ‘added-value’– Transnational bargaining to set ‘income floor’ to maintain

aggregate demand– Lower-level bargaining/ variable pay/rewards– Workplace representation:

• Knowledge activism (Hall et al., 2006): autonomous collection and strategic application of legal, technical, and medical knowledge as political tools

• Job classifying => Job design• Work according to rules => Learning organisation• Safety – Accidents – Environment => Psychosocial – Stress -

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In the end

• Still about governance of employment relationship

ECONOMIC EXCHANGE

POWER RELATIONSHIP