New European survey focuses on workplace innovation and employment
The results of a new survey sponsored by the European Foundation for the Improvement of Living and Working Conditions, presented in September 1997, indicate that since the beginning of the 1990s, Europe has seen a significant increase in a variety of new forms of work organisation with strong direct participation of employees.
In a globalised market, new forms of work organisation and workplace partnership are increasingly becoming a prerequisite for competitiveness and employment in high-wage economies. In Europe, there has been a significant increase since the beginning of the 1990s in a variety of new forms of work organisation with strong direct participation of employees. In four out of five workplaces in Europe management either encourages employees to make their views known on work-related matters - via "continuous improvement" programmes, for example - or gives employees increased responsibility to organise their jobs - via semi-autonomous work-groups, for instance. However, Europe still lags significantly behind its main competitors in the USA and Japan in terms of the scope and integration of different organisational change measures.
These are among the first findings drawn from the "Employee Direct Participation in Organisational Change" (EPOC) survey, covering the views of management in nearly 6,000 establishments in 10 European countries, sponsored by the European Foundation for the Improvement of Living and Working Conditions. The preliminary results were presented at a joint conference organised by the European Commission and the Foundation on the Swedish and European experience of organisational development, which took place on 29 September 1997 at the Council for Swedish Work Life Research. The context of the conference was the April 1997 Commission Green Paper on Partnership for a new organisation of work, a new policy initiative to promote flexibility and competitiveness of companies and increased employment security of employees (EU9707134F).
The survey results are seen by the authors as "a cause of both optimism and concern for those at the European Commission, who see innovative organisational development as an integrated part of a new European employment strategy". Below we set out some of the main findings of the report on the results of the survey - New forms of work organisation. Can Europe realise its potential?- prepared by the EPOC Research Group and sponsored by the Foundation.
Grounds for optimism
Optimism is based most importantly on the fact that the managers responding to the EPOC survey believe that direct participation in organisational change works. Each of the forms of direct participation was viewed as having "positive effects on a range of key indicators of economic performance, such as quality, output, costs and through-put times, on absenteeism and sickness, and on reductions in the number of employees and managers". For example, 56% of managers saw a significant cost reduction as a result of group-work, while 94% saw quality improvements. Overall, the verdict of respondents on direct participation was that it had been very successful in improving the economic performance of the enterprise.
The authors see the EPOC survey results as having some extremely significant implications for practitioners, in particular. Practising one form of direct participation intensively seems to be better than practising several forms to a limited extent. Direct participation measures such as suggestion schemes, "speak-up schemes" and project groups, are "as important for good economic performance and for reductions in labour costs as group-work, which has dominated the policy debate". The key message is that the greater the responsibility given to employees, the better and more sustainable are the economic results.
A number of "ingredients of success" are identified. One is qualification and training: the better employee qualifications and vocational training are, the more likely that direct participation will be successful in achieving its various benefits. Similarly, direct participation is more likely to be successful if there is training of employees and managers for such participation. Training in social skills, and not just vocational training, is very important and needs to embrace managers as well as employees.
A second ingredient in success is the involvement of employee representatives in the introduction of direct participation. The survey results confirm the importance of such involvement in the regulation of direct participation, in order to improve both the quality of the participation itself and its economic and social effects. Far from being a "barrier to progress", it seems that employee representatives and trade unions in Europe are "agents of change", according to the report. The greater their involvement, in terms of both form and extent (and this applies particularly to negotiation and joint decision-making), the more positive were the indicators on business performance.
Causes for concern
As well as giving grounds for optimism, however, the results of the EPOC survey are also seen as raising several causes of concern. A significant minority of workplaces in the EPOC survey - one in five - do not practise any form of direct participation. More importantly, many of those that do are pursuing a partial approach. Relatively few - around one in seven - report having an integrated approach. The scope of much of the direct participation which is practised by the European enterprise is also "rather limited". Indeed, when the total population of workplaces in the survey is taken into account, the proportion with high scores for the scope of participation reaches more than 10% in the case of one form of direct participation only, that of individual delegation within some form of "job enrichment".
Although it is difficult to make comparisons with other surveys because of their different nature and extent, it seems that there has been an increase in the incidence of direct participation in Europe in recent years. Yet it is a moot point whether Europe has closed the gap with Japan and the USA which was identified in a previous EPOC literature study. This is especially so in the case of Japan where group-work, for example, was found to be practised by more than 90% of large companies in industry and more than 80% in services. A comparison of the prevalence of integrated forms of group-work show the USA at 41% (1994) and Europe at 16% (1996). Thus the coverage in the USA is two and a half times higher than the European average. Sweden has the highest rate in Europe, with 31% of all establishments where more than 50% of the workers are working in teams.
There is one finding of the EPOC survey which is especially deserving of comment. It is that only a very small proportion (around 2%) of organisations in the 10 EU member countries were pursuing what, for many commentators, has come to be regarded as the near-ultimate form of work organisation: the "Scandinavian" model, which is defined, for present purposes, as high-intensity group-work, plus a qualified workforce, plus high training intensity. This is particularly surprising given that their respective sponsors judged the "Scandinavian" model to be more successful than the so-called "Toyota" equivalent (low-intensity group-work, plus medium or low employee skills, plus low training intensity). The finding is at one, however, with the results of asking managers which, in their opinion, was the most important form of direct participation. In most countries, the consultative forms were regarded as more important than delegation. Indeed, many managers who practised group-work did not necessarily regard it as the most important form.
Other areas of concern highlighted by the report involve the ingredients which managers themselves identified as important for the success of direct participation. One is training. Around half the workplaces in the EPOC survey, with one or other of the group forms of direct participation, offered no training in the social skills required for such participation. Another is regulation: there was no employee representative involvement of any kind in the introduction of direct participation in around a quarter of the workplaces. Employee representatives were not even present in many workplaces. Most surprisingly, employees themselves were not involved in the introduction of direct participation in one in 10 workplaces, and received only limited information in another 10% of workplaces.
The policy challenges
The report seeks to address the challenges confronting policy-makers in the area and takes as its starting point the European Commission's Green Paper on work organisation. The Green Paper suggests that the policy challenges can be summarised in one question: "how to reconcile security for workers with the flexibility which firms need?"
For the authors, the EPOC survey results confirm that the Green Paper's summary point - the need to reconcile security for workers with the flexibility of firms - is likely to be an especially sensitive issue. Many of the workplaces introducing direct participation in the EPOC survey (around a third) reported that one of the effects was a reduction in the number of employees in general and managers in particular - and the more extensive the practice, it seems, the more likely they were to report such developments. In half of these cases, however, any short-term reduction seems to have been compensated, or over-compensated, for by stable or increased employment in the medium term. Furthermore, and most fundamentally, the workplaces without direct participation were more likely to report a reduction in medium-term employment than those with such participation.
The Green Paper's emphasis on qualification and training is important here: providing employees with opportunities to acquire knowledge and skills, so that they can find alternative employment should the number of jobs be reduced in their present workplace, is seen as one of the key ways of helping to reconcile security and flexibility.
With regard to the means of bringing about change suggested by the Green Paper - the building of a partnership for a new organisation of work - the report states that at workplace level, direct participation has greater effects and is more successful where employee representatives are involved in its implementation. One implication is that, if they want to maximise the effects of changes in work organisation, policy-makers will have to address the representation "gap" that exists in many workplaces in EU member countries. A significant minority of respondents (around a third), to the EPOC survey results suggest that there is no employee representation at workplace level. It is in this connection that the European Commission's 1997 proposals for information and consultation within the national framework (EU9711160N) take on a particular significance. Some progress on these issues would seen to be a prerequisite for the successful promotion of new forms of work organisation
However, the EPOC survey results, along with the findings of its literature and social partner reviews, suggest that it is not just the workplace which is important. The wider context is also significant. The Netherlands and Sweden stand out on a number of counts: the incidence, scope, intensity and effects of direct participation. It is difficult to escape the conclusion that this reflects the wider context of support. Replication of this context at the EU level is not going to be easy - the interest in new forms of work organisation in both countries is long-standing and is rooted in a wide variety of institutional arrangements. Even so, two features of their experience would appear to be especially relevant: an over-arching understanding or framework agreement between the social partners giving legitimacy to the project; and major public campaigns of practical support such as that run by the Swedish Work Life Fund in the first half of the 1990s. At the very least, careful study of the recent experience of these countries, taking account of the failures as well as the successes, could pay handsome dividends.
The EPOC project
The EPOC project, a major investigation of the nature and role of direct participation, was launched by the Foundation in 1992. Activities so far have included: work on the concept of direct participation; a study of the attitudes of the social partners throughout Europe; an appraisal of available research in the USA, Japan and EU; round tables and conferences of social partners and government representatives; and now a representative postal survey of workplaces in 10 EU countries, aimed at filling the information gap identified in the earlier social partner and literature studies.
The main points of the methodology of the survey, conducted in summer and autumn 1996, were as follows:
- 10 countries were involved - Denmark, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden and the United Kingdom;
- respondents were workplace general managers or the manager he or she felt was the most appropriate;
- the focus was the workplace's largest occupational group;
- the size threshold was 25 employees in the case of the smaller countries and 50 in the case of the larger;
- the total number of respondents was almost 5,800; and
- the overall response rate for the 10 countries was almost 18% - with a range between 9% (Spain) and 39% (Ireland).
The report on the survey results is entitled New forms of work organisation. Can Europe realise its potential? It was prepared by the EPOC Research Group and sponsored by the Foundation, and the contributors were Keith Sisson (editor), Alain Chouraqui, Dieter Fröhlich, Adelheid Hege, Fred Huijgen, Hubert Krieger, Kevin O'Kelly, Ulrich Pekruhl and Georges Spyropoulos. For further information, contact the Information Centre, European Foundation for the Improvement of Living and Working Conditions, Wyattville Road, Loughlinstown, Co. Dublin, Ireland, tel: 353 1 204 3100, fax: 353 1 282 6456, e-mail: firstname.lastname@example.org.