A COMPARISON OF FORMS OF DIRECT EMPLOYEE INVOLVEMENT AND

COLLECTIVE REPRESENTATION IN TERMS OF WHAT VALUE THEY DELIVER TO THE EMPLOYEE.

HRM09104 Managing the Employment Relationship

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Charlotte Ates Monica McKinley (Lecturer) Wednesday 20 October 2010 1,096

Direct employee involvement and Collective Bargaining

Contents
Table of Contents
Introduction ................................................................................................................................ 3 General Background .................................................................................................................. 3 Employee Participation and Employee Involvement .................................................................. 4 Direct Employee Involvement Quality Circles ......................................................................... 6 Indirect Collective Representation Joint Negotiating and Consultative Committee ................. 6 Conclusion ................................................................................................................................. 7 References................................................................................................................................. 8 Appendices ................................................................................................................................ 9 Appendix 1 The Psychological Contract ............................................................................... 10 Appendix 2 Harvard model of HRM ...................................................................................... 11 Appendix 3 The 10 C model of HRM .................................................................................... 12 Appendix 4 Creating an engaged workforce (CIPD 2010) ................................................... 13

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Introduction
This paper will present a comparison of one form of direct employee involvement (EI) to one form of indirect collective representation from the employee perspective. Following a general background to modern HRM it will define current understanding of employee participation (EP), EI and collective representation with reference to the underpinning theories. It will progress to a comparison of a direct form of EI (quality circles) and an indirect form of collective representation (Joint Negotiating and Consultative Committee, trade union based) in terms of the value these offer the employee.

General Background
The relationship between employer and employee has undergone a profound change in recent decades. The view has emerged that the management of people gives an organisation competitive advantage. This is driven by a number of factors the rise of consumerism, globalisation, market economies and the need to be more focussed on quality. Much of the development in employee relations arises from the concept or philosophy of the psychological contract (Schein 1965) (see Appendix 1) Modern theories of HR and HRM suggest that the goal of the organisation should be to achieve high levels of employee commitment and loyalty and that the most effective methods of achieving that goal is through EP and E!. The Harvard model (Beer et al 1984) (see Appendix 2) suggests that EI is pivotal to achieving engagement. The 10 C framework described in Human Resource Management in a Business Context (Price, 2003) (see Appendix 3) also places employee commitment as central aim of effective HRM. According to Creating an Engaged Workforce (CIPD, 2010) (see Appendix 4) Engagement is clearly associated with high levels of performance, reduced intent to quit and raised levels of personal well-beingemployees need to be given opportunities to express their views and to know that their opinions will be taken seriously.* The prevailing view is shown to be that to engage the commitment of employees, employers need to understand and fulfil expectations through processes that support EP and EI.

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Employee Participation and Employee Involvement
According to the Chartered Institute of Personnel and Development EP is defined as a process of EI designed to provide employees with the opportunity to influence and take part in decision making on matters which affect them whereas, EI is designed to engage the support, understanding and optimum contribution of all employees and their commitment to its objectives. (CIPD, 2010) A clear distinction is made by Bratton & Gold who state that EP involves workers exerting a countervailing and upward pressure on management control, which need not imply unity of purpose between managers and non-managers. EI is perceived to be a softer form of participation, implying a commonality of interest between employees and management, and stressing that involvement should be directed at the workforce as a whole rather than being restricted to trade union channels. (Bratton & Gold, 2003) It is this definition which most closely matches my perspective of employment relations and one which informs the comparisons. It is therefore important to consider the imbalances of power to influence decision-making and how these can be addressed. Direct EI is where individual employees are involved in decision-making processes that affect their everyday routines. Examples include briefing groups, quality circles, and teams. In contrast, Indirect EI describes where representatives of employees participate in the decisionmaking process. Examples include Joint Consultative Committees, European Workers Councils and worker directors. (Leat 2007) Evaluation and analysis of forms of EI should examine the power dynamic of the employment relationship. A framework for analysis looks at depth, level, scope and form as shown in the diagram overleaf:

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DEPTH degree of ability to influence decision-making

Work councils and worker directives Joint Negotiating and Consultation (Collective bargaining)

L e v e l in O r g a n is t io n Communication

Self-managed teams Cross-functional teams Consultation

Make decisions

Participation
Quality Circles Problem-solving groups

Financial Involvement

No decisionmaking

D IR E C T

F o rm s o f E I

IN D IR E C T

Figure 1 Dimensions of EI Bratton & Gold

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Direct employee involvement and Collective Bargaining

Direct Employee Involvement Quality Circles
Arising from the Japanese model of HRM , quality circles have been a popular method of EI since the 1960s. The 2004 WERS survey found that 21% (rising from 16% in 1998) of workplaces had groups of non-managerial employees involved in problemsolving and quality improvement. (Kersley et al 2005) Typically, small groups of employees (typically between 5 15) meeting voluntarily to identify and solve operational problems, reduce defects and costs. They tend to operate in the lower echelons of an organisation. (Leat 2007) In terms of depth, quality circles have little authority and largely exist to provide recommendations on changes to working practices. Their scope is limited to a particular area of operations where they may implement changes that do not require management approval. (Leat 2007) Employees are encouraged to feel a sense of ownership and of sharing in management objectives. Employees gain an increased sense of satisfaction in their work as they have the power to improve productivity and quality. Participation in Quality Circles may also lead to recognition by management of an employees skills and abilities and may potentially improve an individuals promotion prospects. According to Herzbergs 2 factor theory of motivation these will lead to greater motivation and job satisfaction. (Hertzberg 1968)

Indirect Collective Representation Joint Negotiating and Consultative Committee

This describes where groups of employee representatives (union or non union) meet with a senior management team. Collective bargaining is a means of reconciling conflicting interests between employee and employer and focuses largely on the formal contract of employment, that is, pay and working conditions. Discussions take place at top levels of an organisation and can involve sharing and exchanges of information on organisational matters and may include consultation on employment policies. These provide the opportunity for the employee voice to be articulated upwardly to an extent but are often perceived by employees as being ineffective. It can be said that both trade union and managements attitudes towards each other form obstacles to facilitating EI due to the divergence of interest and imbalance of power. Employees perception of union participation on their behalf in the introduction of flexibility is that it has led to work intensification and a rise in temporary contract workers. (Leat 2007)

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Conclusion
Employee engagement is a legitimate objective for management but the evidence shows that both the direct and indirect forms of EI described have limited success in achieving this. Quality circles have limited scope and depth and generate little sense of involvement or satisfaction. Collective bargaining, though set in a more robust framework is similarly constrained in its ability to influence decision-making. Neither address the imbalance of power between management and employee.

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References
Beer, M., Spector, B., Lawrence, PR, Quinn Mills, D and Walton, R, 1984. Managing Human Assets, Free Press, New York Price A, Human Resource Management in a Business Context (2nd edition) Thomson Learning; (10 Oct 2003) Bratton, J and Gold, J, Human Resource Management: Theory and Practice 3rd edition 2003 Palgrave McMillan CIPD Research Report: Creating an engaged workforce, findings from the Kingston Employee Engagement Consortium. January 2010 available from http://www.cipd.co.uk/subjects/empreltns/general/_creating_engaged_workforce.htm accessed on 10 October 2010 CIPD Employee engagement (revised July 2010) available from http://www.cipd.co.uk/subjects/empreltns/general/empengmt.htm?IsSrchRes=1 accessed on 10 October 2010 Herzberg, F "The Motivation-Hygiene Concept and Problems of Manpower", Personnel Administration (January-February 1964), pp. 37. Kersley, B Alpin, C, Forth, J, Bryson, A, Bewley, H, Dix, G and Oxenbridge, S 2005 Inside the Workplace First Findings from the 2004 Workplace Employment Survey (WERS 2004) Leat, M, Exploring Employee Relations, (2nd Edition) Elsevier Ltd, Oxford 2007 Schein, E.H. Organizational Psychology (3rd Edition) Prentice Hall: Englewood Cliffs, NJ, 1988. Seijts, G.H. and Crim, D. What engages employees the most or: the ten Cs of employee engagement. Ivey Business Journal. Vol 70, No 4. pp15. (2006)

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Appendices

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Appendix 1 The Psychological Contract
Schein described this contract as a set of unwritten set of expectations operating between employees and employers. Seen from the employees perspective this means the obligations, rights and rewards he/she is owed by their employer in return for their work and loyalty.

Figure 2 Psychological contract - iceberg model (Schein 1965)

The iceberg model illustrates how much is involved in the psychological contract that is not explicitly described in the formal employment contract.

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Appendix 2 Harvard model of HRM

Figure 3 Harvard Model of HRM

The Harvard Model places employee involvement as central to the HRM system.

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Appendix 3 The 10 C model of HRM

Figure 4 10 C model of HRM (Price 2005)

The 10 C model shows that to achieve employee commitment and meet the challenge of change that HRM must drive a comprehensive and coherent strategy with regards to management of people.

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Appendix 4 Creating an engaged workforce (CIPD 2010)

Meaningfulness of work Person to job fit Supportive work environment

Engagement
Voice, being able to feed voice upwards Management, communication and vision

Line management

Figure 5 Creating an Engaged Workforce CIPD

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