9.

Employee Involvement as a Strategic Device of IR Strategy

Professor Debi S. Saini (debisaini@mdi.ac.in) Management Development Institute, Gurgaon

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 as an instrument of 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 scheme 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

Employee Participation and Involvement: Historical

Michael Salamons Distinctions

Industrial Democracy: Worker control Employee Participation:
Influences decision making

EI: Engagement, understanding,

commitment & contribution
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EP & EI: Shift from Former to Latter

ThatcherismGlobalizationComptt.

Japanization in HRM used for cooperation

Shift from Collective bargaining to HRM

Also from EP to EI as a key SHRM 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.
Confucius 551 to 479 B.C.

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 general But EI helps

EI reflects: managerial strategies for productivity Not for building a participatory society
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Nature of Employee Involvement

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 face of employer resistance

(Hyman & Mason, 1995)

EP includes financial participation & profit sharing 10

Meaning of EI and EP Employee Involvement

EI is a strategic device used by management in promoting employee commitment & the cooperation of the workforce through information given directly
(not representatives)
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Levels of Employee Participation/Involvement

High involvement: Complete decision making power with employees

High

Medium

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

Low

Selective consultation: Employees give information, but dont know the problem
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Employee Involvement & Engagement:

What Does Research Say?

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EI and Productivity
Improved Communication and Coordination

Employee Involvement Intervention

Improved Productivity Improved Motivation

Improved Capabilities

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

15-14

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

Communication is key

The synergy of team

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)

Unilever House, London

Range: Amateur desk-top by WM to Glossy production Levers found it 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 18

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 A Team-briefing session

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 group at each level leader be properly trained and briefed

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II. Team Briefing (TB) Subjects:

contd

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 incharges
Once 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 [originated in Japan] Focuses on problem-solving in a Gr-working situation Teams vary in size: 7-10 It is a recent initiative in EI Not as widespread as TQM:
but its influence spreading

It requires task flexibility & job rotation Training in: team culture/inter-personal skills/communication 24

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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
Products of creative ideas 26

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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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Employee Suggestion Scheme at Maruti-Suzuki

Maruti-Suzuki has an employee suggestion scheme Received about 229,000 suggestions in 2010-11 Saved about Rs 1.6 B. in 2010-11 by implementing it Saved Rs 2 B. in 2009-10 It claims use of transparency at all levels
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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

32

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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

Popular in the 1980s, not as much today Potentially positive impact on productivity But incidentally, little effect on satisfaction

Many Problems led to Dilution of Their effectiveness

Inadequate training Not truly voluntary Indifference of management QCs are not really empowered to make decisions

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

VII. Total Quality Management

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Definition of Total Quality Management A total company wide effort

contd

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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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 who are known to have implemented TQM:

Ford Motor CompanyPhillips Semiconductor, MotorolaToyota Motor Company.

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What does TQM Pre-suppose?

It is a concept that presupposes that Everyone in 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

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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Working of Employee Involvement

41

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 (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
44

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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

Undermining of managerial prerogatives not tolerated

New technology, TQM, culture change are used for control

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Employee Involvement In Delta Airlines

46

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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 49

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

52

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EI Program contd.
Lower-Level: Base councils
Elected representatives

Handle base level issues

They form Continuous Improvement Teams

53

Costs Invloved
Employee/Management Time

Slower/Constrained Decision Making

Higher Labor Cost

A kind of Unintended Collective Bargaining

54

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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
55

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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