1 1 9. Employee Involvement as a Strategic Device of IR Strategy Professor Debi S. Saini ([email protected]) Management Development Institute, Gurgaon 2 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: 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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• 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
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)