Professor Stephen Wood argues that focusing on management practices that involve workers in workplace decisions could be the answer to the UK’s productivity crisis.
Increasing attention is being given to better management as part of the solution to Britain’s languishing productivity problem. Successive governments have attempted to increase productivity through programmes designed to increase skills in the workforce. While conservative governments have made use of labour legislation to weaken the trade union movement and increase management discretion. Yet the problem persists.
If the answer to low productivity lies in management practices, the question is: should we focus on performance management, with its targets, monitoring, and individualised performance-related pay, or on employee involvement which focuses on enhancing coordination and intra-organizational relationships?
Research on human resource management (HRM) practices, centred on high performance work systems and high-involvement management, shows that the impact of such practices on organizational performance is positive and potentially strong. So, we know that HRM practices are beneficial. But the research often conflates the two perspectives, or else neglects employee involvement management, making it difficult to tell if the performance premium stems from performance management techniques or employee involvement principles.
In a new evidence review, Stephen Wood (University of Leicester, UK) examines the variety in the studies and particularly in the treatment of employee involvement. He shows how the HRM scholarship has lost sight of the distinctiveness and potential benefits of employee involvement.
The distinction between high-involvement management and high-performance work systems matter as they have different foci, theories of performance, and policy implications. Equating the two neglects involvement management’s central point, that priority should be given to employee involvement in designing work organisations.
Job- or role-involvement management, often known as empowerment or enriched job design, is an approach to the design of high-quality jobs that allow employees an element of discretion and flexibility over the execution and management of their primary tasks. While organizational-involvement management entails workers participating in decision-making beyond the narrow confines of the job, in the wider organization or the business as a whole. Both have been increasingly neglected as the concept of high-performance work systems and performance management techniques have taken centre stage.
In contrast to employee involvement, performance work systems are conceived as a set of practices that complement each other and ostensibly cover all key aspects of personnel management: recruitment, selection, training, rewards, appraisal and motivation. Each practice should be best-in-class and fills a gap left by the others. The implication is that the more practices are used, the higher the performance effects; it is practices per se that create performance. This systems perspective is a technocratic methodology, based on treating the management practices as technologies which can be applied selectively to different groups in the organization.
In involvement management, the underlying principles or orientation yields the performance premium. It entails a deep philosophy, or set of principles, centered on the value of employee involvement, to which management is committed. This guides the design of practices, but these are only one manifestation of the approach; it will also influence reactions to key events, leadership behaviour, and day-to-day interpersonal relationships. For example, managements in an involvement regime may handle downturns in demand through short-time working or providing extra training rather than laying workers off.
In the high-performance work systems perspective, the practices define the system, and if managers follow it, they have little discretion. Yet, the large number of diverse practices in the studies of high-performance work systems effects on performance means which practices should be used when designing such a system is uncertain.
Under high-involvement management, the practices reflect the approach. The implications of involvement management are, at this stage, clearer. The principle should extend to the whole organization and the design of all elements of HRM, and not just job design. Managers have more discretion in the choice of practices. For example, involvement may entail idea-capturing, but this can be achieved through various methods, such as group-type quality circles, suggestion schemes, or surveys. Nonetheless. it requires a fresh look at longstanding practices.
For example, recruitment processes should involve employers soliciting job previews from applicants as well as their giving realistic job previews. Training and development needs to be focused on supporting the requirements of involvement, team working, creativity, and diagnostic skills, and built into day-to-day activities. Appraisal processes should include frequent feedback and be focused on development and not to ensure obligations are fulfilled or determine pay increases. And in engaging with staff, conventional attitude surveys need replacing with instruments designed through employee involvement processes.
The positive results in the studies mean we cannot identify which of the two perspectives will have greater effects on performance. Nonetheless choices have to be made since the two perspectives imply different routes for future policy. The involvement approach suggests that management should adopt a particular orientation and recruit and develop managers accordingly, ensuring that they have the ability to design and operate practices that reflect this orientation. It implies a need for a deep-learning approach to business education and training centred on developing dispositions and attributes.
In contrast, the performance systems perspective implies that a specific set of practices must be adopted. It is a literal, evidence-based approach, suggesting a formulaic methodology for the management of employees. The required education and training is a process of knowledge exchange alerting managers to best practices, a literal interpretation of evidence-based management
Because high-involvement management entails managers internalizing a value set and forensic design of practices to a high degree of specificity¸ the high-performance systems perspective may on the surface be easier for management to adopt. But the nature of involvement management is more assured and theoretically grounded. The benefits of job-level involvement on employee well-being and performance is well established across a range of literatures, including in medicine. And its underlying theory has a strong appeal: that above all else it changes, for the better, the way people connect what they do with what others do, develop shared understandings, and learn from each other. It enhances the relational coordination of the organization.
Improving management is not just a job for managements. Governments can do more to encourage the spread of employee involvement and revamping of performance management, both as employers and through publicising examples of good practice and influencing business education.
Professor Stephen Wood is Professor of Management at the University of Leicester
He is contractible on firstname.lastname@example.org
The review is published in
Wood, The HRM–Performance Research Stream: are we all on the same page? International Journal of Management Reviews, 2020
For the argument for high-involvement design, see S. Wood, High-involvement design: the time has come, London: IPA, 2019.
High-involvement design: the time has come is freely available to download on the IPA website.