Innovation

This report is based on the fourth edition of the European Company Survey (ECS), which was carried out jointly by Eurofound and Cedefop in 2019. It describes a wide range of practices and strategies implemented by European companies in terms of work organisation, human resource management, skills use and skills development, and employee voice. The report shows how these practices are combined and how the resulting ‘bundles of practices’ are associated with two outcomes beneficial to employees and employers: workplace well-being and establishment performance.

The analysis finds that the establishments that are most likely to generate this win–win outcome are those that combine a high degree of worker autonomy, a balanced motivational strategy, a comprehensive training and learning strategy, and high levels of direct employee involvement in decision-making, as well as offering managerial support for these practices. To boost the adoption of employee-oriented practices – particularly in relation to autonomy, skills and employee involvement – managers should be offered appropriate support, as they play a key role in the decision to initiate workplace change. They are also crucial to its success, as they must continuously support the workplace practices implemented.

How do organisations get the best out of their employees? Research on human resource management has found that a key practice is employee involvement: enabling employees to make decisions on their own work and to contribute to organisational decision-making. A high degree of employee involvement creates work environments that are highly motivational and that emphasise skill development. And this is the type of work environment that organisations need to meet the demands for innovation and adaptability to technological change in a knowledge-driven economy. This policy brief examines the empirical evidence that workplaces where employee involvement is high are more successful in developing the capacity for high performance in workers than workplaces with lower levels of involvement. It examines the influence of work organisation on two factors contributing to performance: work engagement and skill development.

Innovation is an important driver of improved competitiveness, productivity and growth potential. This report explores which workplace practices have the strongest links to innovative company behaviour, looking at innovation in the form of new or significantly changed products or processes, new or improved marketing methods, and organisational change. It also explores links between innovation and company performance and workplace well-being, and examines the role of social dialogue in enhancing performance, well-being and innovation. The use of monitoring instruments for internal quality and external developments turned out to be among the strongest determinants of overall innovation; the degree of workers’ autonomy was another important factor. The probability of innovation is boosted when strong work organisation structures are combined with direct employee participation – for instance, involvement in solving problems or improving the quality of production.