Employee Participation and High Performance Working in the UK - Case Study Example

Name: xxxxxxxxxx Course: xxxxxxxxxx Institution: xxxxxxxxxx Title: Employee participation and High Performance Working Date: xxxxxxxxxxxxx Employee participation and High Performance Working Introduction Employee involvement is a concept that involves creating a work environment whereby employees can take part in decision making and other activities revolving around their work. Employee involvement is not a tool or a goal, rather it is a leadership and management philosophy that is employed to facilitate work improvement and the overall success of an organization. In the past decades there have been major developments in employee involvements particularly in Britain. Over the years, a key feature in the British work environment has been the increasing number of workplaces and organization with employee- employer- trade union relationships working under the notion of cooperation and partnership. These involvements can be attributed to the increased international exposure and privatization of organizations (Oxenbridge & Brown 2004). Over time, there has also been an increase in the recognition of how employment relationships are structured to facilitate the success of companies. Research studies have established that there is a direct relation between employee involvement programs and high performance work systems. High performance work organizations accentuate on achieving success through the contribution of each member with the workforce (Sesil 1999). This paper seeks to give an overview of the developments in employee involvements in Britain for the past 25 years. This paper will identify the main changes in employee involvements with regards to the kind of changes and focus that took place within the past 25 years in Britain. Furthermore, this paper will depict the factors that influenced and contributed to these developments and changes. Moreover, this paper will critically examine the concept of “high performance working” and how it has developed in the United Kingdom. In addition, this paper will discuss why not all organization use or have not been able to use this approach. Developments in Employee involvements in Britain According to Ramsay (1977), employee involvements did not evolve from humanization of capitalism as most people perceive, rather it occurred cyclically over time. These cycles can be trace back to the past century and it has been proved that they correspond to the era when management authorities were facing major challenges. Employee involvements can be seen a means used to secure the compliance within the labour force. Ramsay observes that the framework of common goals in employee involvements is untenable, in practice the effectiveness of this approach particularly in Britain has been severely characterized by structural conflicts. There is evidence that since the mid-1990’s British unions have made increased efforts to organize and recruit new members. To a certain degree, these efforts could have originated from the organizing models in the United States and have a as a result influenced trade unions and labour movements in Australia, Canada and even Britain. Employee involvements in Britain has over time takes place in three main phases as explained by Levine and Tyson (1990).In reference to Levine and Tyson (1990) there exits three main kinds of employee involvements, they include representative, substantive and consultative. Representative participation involves employees serving as formal representatives in boards such that they are able to represent and express views on behalf of other employees. Substantive participation necessitates employee having control over process in work and thus they are bale to make direct impact on their work environment. Consultative participation involves employee providing input pertaining to their work however not in a formal platform such as board (Levine &Tyson 1990). In most industries in Britain, employers have increasingly tried to gain knowledge on ways of enhancing productivity amongst their employees. This has caused some of these employers to put into place various employee involvements and participation programmes geared towards finding how the involvement of employee can be used to enhance a company’s productivity. With time, a good number of British industries witnessed decentralization of decision making, in this case the management of pushed management tasks and decisions to the lower levels of organization. These efforts were attributed to the belief that there are tasks and decision that employees can carry out better than the senior leaders in the organization. The concept of employee relationships in Britain has over time been seen as a platform whereby reciprocal obligations and rights between the employer and the employee are safe guarded. The employment relationship continues to be the main way in which employees can assert their benefits and rights with regards to social security and labour law. The profound changes that have occurred in the Britain’s corporate world, particularly in the labour markets have contributed to the rise to employment relationships characterized by mutual cooperation. This has in turn increased the pool of information that is available pertaining to employment relationship and the extent in which workers are protected by labour laws (Auer & Cazes 2000). The law in Britain has played a very negligible role as compared to legal institution in other countries. The nature of British systems has been generally molded by trade unions and employees rather than the enactment of laws.”Voluntarism” has been the prevailing philosophy whereas as “collective laissez-faire” has been considered as the process of resolving issues with regards to employee relations. The law has been regarded as the last resort mechanism that can be used when other means have failed to address these issues (Marchington, Wilkinson & Sergeant 2002). From the early 1990s, companies in Britain have undergone major reforms geared towards fostering mutual and collaborative workplace relations. As a result more and more trade unions were established to in order to facilitate mutual and collaborative workplace relations. The increase of globalization, changes in the domestic market and the influence of international companies among many other factors further influenced the growth of trade unions. Other factors that contributed to the increase and growth of trade unions in Britain during this period include the range of the available legal support required for union membership in the workplace. The scope of statutory provisions depicted by legislations supported employee involvements in the workplace. For example, modern policies that were enacted by the conservative administrations aimed at strengthening the power of trade unions and establishing platforms whereby employees could have a say or get involved in issues revolving around the organizations that they work for. Over time, trade unions were able to attain political powers and as a result able to influence policy formulation and political decisions that were in favour of employee involvement in organizations (Heery 2002). High Performance Working in the UK A High Performance Work System (HPWS) is a form of organization that involves managerial practices aimed at enhancing the involvement, commitment and competency of the employee (Tomer 2001). HPWS organizations are also commonly referred to as high commitment or high involvement organizations. A HPWS entails a human resource management approach aimed at greater employee involvement and skill development at all levels in the organization (Becker and Huselid 1998). High performance working, in essence, seeks to deliver high performance through its emphasis on people or the employee by developing their personal skills as individuals (den Hartog and Verburg, 2004). HPWS thus seeks to achieve organizational excellence driven by a higher degree of employee commitment, increased levels of employee involvement and employee empowerment as opposed to traditional human resource approaches which are premised employee control (Kling 1995). High performance work systems can be used as an illustration of the role of human capital in providing an organization with competitive advantage (Ashton and Sung 2002). The HPWS can thus be considered as a concept of the resource based view of the firm in which firms seek their competitive advantage through their human resource or employees (Pfeffer 1998). Product markets are constantly undergoing rapid changes and this places demands on firms to seek new sources of competitive advantage besides traditional sources such as technology, quality management and economies of scale. There has also been a decline in command organizational structures and contemporary human resource practices are built on ensuring skilled and motivated workforce as the main drivers of competitive advantage (Pfeffer 1998). The practices involved in HPWS are commonly referred to as High Performance Work practices or HPWPs. However, the set of managerial practices employed in HPWS or HPWP in the UK varies from company to company and as such different authors have come up with different characteristics for HPWS organizations (Sparham and Sung 2007). Some of the most common practices involved under HPWS include motivational contingent pay, increased employee involvement in decision making and employee development through initiatives such as employee training. According to Pfeffer (1998), there are seven characteristics of a HPWS organization. The first characteristic is employment security where employees feel that their jobs are secure or do not face risk of abrupt termination. Secondly, the organization hires new personnel through a selective process which is non disruptive to the workplace. Third, the decision making process in the organization is decentralized through implementation of the decisions of self managed teams as the basic principle of organizational design. Fourth, compensation, wages or pay is contingent on performance or output within a framework of performance systems which appraise, review and evaluate employee’s performance and rewards them accordingly through mechanisms such as performance bonuses. The fifth characteristic is that the organization devotes substantial resources towards training and retraining of employees to increase their skill levels and work competencies. Sixth, the workplace is marked by relaxed restrictions or barriers in areas such as work dress, language, office arrangement, job titles and wage differentials across different levels. This is mean to create a relaxed and non intimidating work environment. Finally, organizational information such as financial reports and performance reviews are shared or disseminated throughout the organization among both higher level and lower level employees ((Pfeffer 1998). According to the UK Commission for Employment and Skills (2010), High performance working can also be categorized into four common sets of practices. The first is performance management systems which are designed to assess, review or reward employees based on competencies and performance. The second categorization of practices is communication which entails activities aimed at enhancing the effectiveness of feedback from the employees and sharing organizational financial or performance information with employees. The third broad categorization is engagement which involves activities such as employee surveys and team building activities which are designed to make the workplace more enjoyable for the employee. Finally, HPWS ensure that their policies “stack up” or coordinate their human resource practices towards the realization of an overarching objective such as creating a great place to work such as Diageo’s philosophy or partnership at work as the United Welsh Housing Association’s goal (UK Commission for Employment and Skills, 2010). Their practices must be consistent with and engineered to realization of the company philosophy. HPWS, high commitment or high involvement systems have been empirically linked to better organizational performance (Becker and Huselid 2001). The high commitment and high involvement theories have been used to create a cause and effect relationship between the human resource practices involved in HPWS and firm or organizational performance (Sparham and Sung 2007). The high involvement theory proposes that the high performance human resource practices are mediating factors affecting the organization’s performance (Whitfield and Poole, 1997)). For instance, it has been argued that employee empowerment and contingency pay have fostered greater responsibility among employees and as a result workers work “smarter” (Sparham and Sung 2007). The high commitment theory posits that the performance of employees under HPWS is driven by a sense of loyalty and ownership thus contributing to a more skilled workforce, lower labor turnover and minimization of behaviors such as absenteeism (Collins and Smith 2006). High employee involvement systems also create trust and foster shared values and organizational goals among the employees of those organizations and have directly influenced positive financial performance for firms (Guest et al 2003). A demonstration of an organization which has successfully employed a HPWS in the UK is Southampton based Bacardi-Martini UK or simply Bacardi is a testament to the success of HPWS as evidenced by its ratings on surveys such as “The Sunday Times 100 Best Companies to Work For” or in the employee survey “My Company” (UK Commission for Employment and Skills, 2010).. In the latter survey, 87% of the employees at Bacardi expressed satisfaction at working for the company and reported a sense of dedication or allegiance to the firm while the company has consistently been in the top 10 for 15 years in the Sunday Times “100 Best Companies to Work For” survey (Kirby 2005). Bacardi’s HPWS is structured around the company values encapsulated under PACT- Productivity, Accountability, Creativity and Teamwork. PACT is an integral part of operations at Bacardi and all employees are expected to adhere to the values. Employees are inducted into PACT from the onset of their careers and constantly reminded of the importance of the PACT values to the success of Bacardi. Staff at Bacardi have subsequently offered their support for PACT with 92 percent of company employees reporting a clear understanding of company values in a Sunday Times survey (Kirby 2005). PACT establishes a framework of standards or critical success factors against which every employee at Bacardi is evaluated regardless of their position, function or responsibilities in the organization. Some of the features of Bacardi’s HPWS under PACT include employee training where employees lacking experience in certain aspects are cross trained to gain relevant experience from different departments. Employee surveys are often used as the basis of plans of action in the organization. In addition, employees are placed under a one tier benefit scheme where they receive the same benefits across all job levels from top management to maintenance staff. Some of the benefits include a non contributory pension scheme and health insurance for all permanent employees and their immediate family members. The firm’s employees enjoy perks or benefits such as free meals and drinks from the company restaurant, Christmas gift packs, regular staff parties, an inbuilt gym and fitness facilities and a concierge service. These measures are undertaken on the premise that healthy, motivated employees in good spirits who feel that their contribution is accorded due consideration or that they can make a real difference are more likely to be productive and deliver higher performance and output (Kirby 2005). However, despite the successes of HPWS, empirical evidence has proven that HPWS also portend negative effects for organizations. The HPWS paradigm has been critiqued for its potential to lead to work intensification at the expense of the employee (Sparham and Sung 2007). Ramsay et al (2000) analyzed the potential effects of HPWS through the labour process model. The critique of the HPWS argues that high levels of employee participation create high expectations and as a result leads to gradual work intensification and the attendant job insecurity and work related stress (Berg 2002). The benefits of HPWS, when not properly implemented and monitored, are realized at the expense of the employee. The employee faces increased responsibilities as a result of the higher levels of participation manifested in longer working hours (Whitfield and Poole 1997). This may also create work-home spillover as the employee struggles to match the workplace expectations and as a result the employee may experience work related stress. HPWS have also been critiqued for not being genuinely focused on the employee’s welfare but simply treat the employee as a means toward achieving the organization’s ends (Ramsay et al 2000). Some of the typical motivations behind implementation of HPWS are cost cutting measures or achieving lean, efficient production systems. These often imply negative consequences for employee welfare such as layoffs, pay cuts and overtime which often push employees to the limit. In summary, HPWS do not necessarily create a win-win situation for employers and employees in an organization as is ideally hypothesized (Sparham and Sung 2007). Some organizations in the UK have been reluctant to implement HPWS because of these argued negative effects or have not been able to successfully implement them for a number of reasons. . Managers of organizations under pressure to deliver performance through bottom lines are more likely to misinterpret the practices associated with HPWS as passing “fads” (Godard 2004). As a result of this misperception, they consider that all they have to do is adopt what “sounds good” without genuine concern for employee welfare or intrinsic satisfaction. In the event that some of these practices are introduced without consideration of employee satisfaction, HPWS will be viewed as exploitative practices due to their implications such as work intensification. The employees will not buy into the idea and may even passively or actively resist some of these practices. In summary, HPWS need to be implemented with increased employee involvement and welfare as the focus. If this is not the main consideration in introducing a HPWS, or if the organization’s managers take the “low road” to high performance, there is a real possibility of the benefits of implementing a HPWS being eroded or outweighed by the primal negative effect of work intensification and its attendant consequences such as work related stress (Sparham and Sung 2007). This explains why some organizations have not been able to replicate the success of firms such as Bacardi-Martini UK even after the adoption of high performance work system practices. Conclusion Employee involvement is a concept that involves creating a work environment whereby employees can take part in decision making and other activities revolving around their work. Over the years, a key feature in the British work environment has been the increasing number of workplaces and organization with employee- employer- trade union relationships working under the notion of cooperation and partnership. Employee involvements can be seen a means used to secure the compliance within the labour force. Ramsay observes that the framework of common goals in employee involvements is untenable, in practice the effectiveness of this approach particularly in Britain has been severely characterized by structural conflicts. From the early 1990s, companies in Britain have undergone major reforms geared towards fostering mutual and collaborative workplace relations. Consequently, more and more trade unions were established to in order to facilitate mutual and collaborative workplace relations. The increase of globalization, changes in the domestic market and the influence of international companies among many other factors further influenced the growth of trade unions. Research studies have established that there is a direct relation between employee involvement programs and high performance work systems. High performance work organizations accentuate on achieving success through the contribution of each member with the workforce (Sesil 1999). A High Performance Work System (HPWS) is a form of organization that involves managerial practices aimed at enhancing the involvement, commitment and competency of the employees (Tomer 2001). The HPWS can thus be considered as a concept of the resource based view of the firm in which firms seek their competitive advantage through their human resource or employees (Pfeffer 1998). The practices involved in HPWS are commonly referred to as High Performance Work practices or HPWPs. Some of the common practices involved under HPWS include motivational contingent pay, increased employee involvement in decision making and employee development through initiatives such as employee training. The high commitment theory posits that the performance of employees under HPWS is driven by a sense of loyalty and ownership thus contributing to a more skilled workforce, lower labor turnover and minimization of behaviors such as absenteeism (Collins and Smith 2006). A good example of an organization which has successfully employed a HPWS in the UK is Southampton based Bacardi-Martini UK or simply Bacardi is a testament to the success of HPWS as evidenced by its ratings on surveys. However, despite the successes of HPWS, empirical evidence has proven that HPWS also portend negative effects for organizations such as work intensification at the expense of the employees. Bibliography Auer, P., & Cazes, S., 2000, The resilience of the long-term employment relationship: Evidence from the industrialized countries. International Labour Review, Vol 139, No 4, pp 379-408. Ashton, D. and Sung, J. 2002 Supporting Workplace Learning for High Performance Working. ILO, Geneva. 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