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9. Employee Involvement as a Strategic Device of
IR Strategy
Professor Debi S. Saini([email protected])
Management Development Institute, Gurgaon
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HRM and Employee InvolvementObjectives 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: Nature–merits–determinants of Success
• Team working/suggestion scheme /attitude surveys & EI
• QCs: Nature––merits––prerequisites; TQM: Nature––features––themes
•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: Control—Discipline—Sanctions—Direction
• 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
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Employee Participationand
Involvement: Historical
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Michael Salamon’s 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
• Thatcherism—Globalization—Comptt.
• 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.
• 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
Confucius551 to 479 B.C.
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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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Natureof
Employee Involvement
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Meaning of EI and EPEmployee 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
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Meaning of EI and EP
Employee Involvement
• EI is a strategic device used by management
in promoting employee commitment
& the cooperationof the workforce
through information given directly(not representatives)
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High
Medium
Low
Levels of Employee Participation/Involvement
High involvement: Complete decision making power with employees
Full consultation: Employees offer recommendations (e.g., QC, Work organization)
Selective consultation: Employees give information, but don’t know the problem
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Employee Involvement&
Engagement:What Does Research Say?
Cummings & Worley, 8e (c)2005 Thomson/South-Western 15-14
EI and Productivity
EmployeeInvolvementIntervention
ImprovedCommunicationand Coordination
ImprovedMotivation
ImprovedCapabilities
ImprovedProductivity
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Types of Employee Involvement
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Types of Employee InvolvementDownward communication––top-down
I. In-house journals/company newsletters
II. Team-briefing sessions
Upwards problem-solving formsIII. Team Working
IV. Suggestion schemes & problem-solving groups
V. Attitude surveys
VI. QCs
VII. TQM
Communication is key
The synergy of team
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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)
• 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
Unilever House, London
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II. Team Briefing
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II. Team Briefing (TB)Concept of TB
A device to involve everyone in the organizationlevel by level in face to face meetingsorganized by line managersto present, receive, discuss informationapproved by top managementon a regular basis by providing a two-way communication
• Aimed to replace casualism, & inject order in system
• It was viewed as productivity breakthrough of 1990s(Fortune magazine)
A Team-briefing session
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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:
––Coversall 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) contd…
Subjects:––Explains new and changed policies––Explaining co. plans––Telling progress in aspects of organizational functioning––People: appointments, personnel matters––Feed back to top––Provides 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 say––Duration 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 onproblem-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
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IV. Suggestion Schemes
Creative ideas needed
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IV. Suggestion SchemesConcept: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
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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
Employee Suggestion Scheme at Maruti-Suzuki
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•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 satisfaction––job specification––Co. 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
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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:––Meeting––team 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 1980’s, 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
Source: www.freequality.org/beta%20freequal/fq%20web%20site/Training/ Classes%20Spring%202002/Quality%20Circles.ppt
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VII. Total Quality
Management
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Definition of Total Quality Management contd…
A total company wide effort
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: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 involvedin the continuous improvement of production (of goods/services)It is a combination of quality & mgt. toolsaimed at increasing business & reducing lossesdue to wasteful practices.
• Some who are known to have implemented TQM:• –
Ford Motor Company––Phillips Semiconductor, Motorola––Toyota Motor Company.
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What does TQM Pre-suppose?
• It is a concept that presupposes thatEveryone in organization understands
The expectations of the customerAnd 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
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Factors Impacting Working of EI
1. Mgt’s willingness to concede some prerogatives
2. Training of mgrs/WM in group-working skills––Presentation––Leadership––Assertiveness––Problem-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
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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 InvolvementIn
Delta Airlines
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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
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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: StructureTop-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
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EI Program contd.
Lower-Level: Base councils
• Elected representatives
• Handle base level issues
• They form Continuous Improvement Teams
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Costs Invloved
• Employee/Management Time
• Slower/Constrained Decision Making
• Higher Labor Cost
• A kind of Unintended Collective Bargaining
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Benefits• Energizes the Employees
• Organizational Alignment/Coordination
• ProductionEfficiency/Quality
• Communication/ Information Flow
• Organizational Change
• Management/Employee Development
• A proactive way of managing employee relations
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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