Information, Consultation and Discretion
Gifford J, Neathey F, Loukas G
Report 427, Institute for Employment Studies, December 2005
a study supported by the Research Networks
This report is based on a review of the literature, together with case studies of involvement arrangements in place in five organisations. The research took place in the context of the introduction of the Involvement and Consultation Regulations in April 2005. Under this legislation, all UK organisations with 150 or more employees which do not have information and consultation arrangements that are acceptable to their workforce can be required to revise their provisions. The Regulations will apply to organisations with 100 or more employees from April 2007 and 50 or more from 2008.
Information and Consultation Regulations
Although the new regulations include a default information and consultation model, they effectively encourage employers and employees in individual organisations to agree on arrangements which best suit their local circumstances. For this reason IES set out to explore the experience of organisations which already had in place employee involvement machinery, in order to determine lessons for other employers and employees.
The case study organisations were all companies with well-established employee involvement structures and as such they did not consider that the new regulations would have much impact on their own arrangements. However, there was general consensus that the Regulations offered other organisations the opportunity to reap the benefits of a more involved workforce – benefits which each of the case study companies had already experienced.
The participating organisations were:
- Case Study A: a food manufacturing plant that is part of a UK multinational enterprise
- Case Study B: the UK branch of a multinational pharmaceutical
- Case Study C: the UK branch of a multinational bank
- Case Study D: a UK supplier of products and services to the hospitality and leisure market
- Case Study E: a UK financial services company.
A range of measures for informing employees was in place in the case study companies. Methods of downward communication typically included a mixture of cascaded briefings, the use of employee representatives and direct face-to-face communication from senior management. Other methods of communicating to employees included informal networking and written commun-ications such as newsletters, and information posted on notice boards or distributed by electronic means.
A number of issues arose from the research that organisations introducing information structures might want to consider. These included:
- the timing of information and the value of informing employees of plans and forthcoming changes as early as possible
- the need to distinguish material being supplied for information from that over which employees were being consulted
- the importance of lateral (across the organisation) alongside vertical communication.
Consultation and joint decision making
Structures for consulting with employees and their representatives and for involving them in decision making fell into the following categories:
- general consultation committees – here, a range of business and other issues were discussed with employee representatives before management made a final decision
- joint working groups, usually focusing on a particular issue and where the employees involved could have considerable influence on the outcomes
- direct consultation, allowing individual employees to make their views known on particular issues – this was typically achieved via face-to-face upward methods of communication between managers and employees or employee opinion surveys.
Several of the case study organisations were seeking to empower employees by giving them greater discretion in decisions relating to their jobs. This form of involvement was found to be different in several important ways from the others described.
- It was more about cultural change, organisational practices and workforce structure than the establishment of employee involvement groups or schemes.
- It was not part of employee involvement strategy in all case study organisations.
- Even in organisations where increased employee discretion was given a high profile, it was normally only seen as an appropriate form of involvement for certain employees.
Organisations seeking to increase employee empowerment typically did so in order to increase efficiency by maximising the contribution of individual employees to the company. In addition, increasing discretion was seen as a way of improving job satisfaction and increasing the skills sets of employees.
Rationale and drivers of employee involvement
Most of the case study organisations had a long-standing tradition of high involvement management and were sufficiently convinced of the benefits not to conduct any systematic evaluation of impact. Nonetheless, they perceived various impacts of employee involvement, including:
- improved organisational performance, for example, as measured by reducing waste
- improved employee commitment to the change necessary for company survival and growth
- building employee relations based on a culture of openness and trust; one organisation in particular had experienced employee involvement as a way of avoiding acrimonious employee relations
- motivating employees and maximising their contribution to the organisation.
Employees’ desire for involvement
A number of employee representatives were interviewed for this research and these were generally highly satisfied with the involvement arrangements in their companies. They also felt that involvement was valued by employees in general although there was considerable variation between individual employees in their commitment to, and interest in, involvement.
Employee involvement and industrial relations
All the case studies were of companies that were trying to move away from a ‘traditional’ reactive role for trade unions, to one where representatives were actively involved in the development of business plans and strategy. Trade unions were recognised in at least part of all the companies involved in this study and were seen as integral to the involvement and consultation processes. In contrast to other case study research, the trade unions at these organisations felt neither marginalised by the employee involvement initiatives, nor compromised in their roles as employee representatives by partnership working. In most cases employee involvement was seen to confirm and strengthen the role of trade unions within the organisation.
While in three cases, all the representatives involved in formal indirect consultation structures were trade union members, two companies had both union and non-union representatives. The reason for this was to ensure representation of non-unionised staff. This arrangement was accepted by the union representatives.
The research identified a number of factors that contributed to the success of employee involvement initiatives.
- Leadership – the case studies showed the value of having a senior level champion of employee involvement in the organisation. It was also found to be important for other managers to lead by example in involving their employees. Finally, the need for employee representatives to be the effective leaders of those that they represented was also highlighted.
- Consistency -several respondents stressed the importance of a cohesive and consistent approach to employee involvement which needed to be embedded in the general HR approach of the company.
- Trust and openness – the importance of trust, and the time involved in fostering trust between the parties was a common theme. Honesty in communications, even when the content was unpalatable, was seen as crucial in maintaining this trust.
- Quality of individual relationships – the success of consultation and partnership groups was seen as strongly linked to the quality of the relationships between those involved.
- Training – employee involvement presents considerable challenges to those involved and a number of respondents stressed the value of training both employee and management representatives in the issues to be addressed and in new ways of working.
Employee Involvement: Information, Consultation and Discretion, Gifford J, Neathey F, Loukas G. Report 427, Institute for Employment Studies, 2005.
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