BOLA : HRM and Employee Representation?

HRM and Employee Representation

We need to explore the theme which calls for "worker participation" through institutionalised schemes which may involve TU recognition. Such issues and the claims for various participation approaches must understood by politicians, corporate policy makers and - of course - by worker-citizens themselves.

HRM "participation through the job itself" model".

The HRM view of good delegation, empowerment, team working, quality circles, 360 degree appraisal, the learning company culture and even good old Herzberg's job enrichment - each offer scope for direct worker participation in decisions that affect them/me in "my job at a local level" where "I can influence what is going on."

Board level participation

One argument often heard, (who speaks it???) is for worker participation at Board level. This involves further institutionalisation extending a TU voice to the high, inner realms of organisational decision-making. For employee representatives to influence enterprise policy - this would have to be at points where strategic decisions are made. Questions now arise about

the "representativeness of the representatives".
their competences as strategic thinkers (perhaps this is an apologia for managers - who says that they are always so capable!!!)
ability to keep business commercial secrets/confidences - TUs also represent staff in other businesses.
If the strategic decision involves closures or investing in machinery to reduce staff - TU representatives face major dilemmas contradict their essential purposes

Such questions were raised in the consultative round of the UK Government's White paper on Industrial Democracy in the mid 1970s when the Bullock (1975) Committee of Inquiry on Industrial Democracy presented, to the then Labour adminstration (Tony Benn at the Board of Trade), recommendations for employee representation on the board of firms with over 2000 employees.

It is probably safe to say that UK companies then - and today - are little interested in bringing worker representatives onto the board. The 1975 proposals were cold-shouldered by TUs who saw that such involvement ran counter to their adversarial role.

There are problems in

widening the scope of TU rights in respect of commercial decision-making
there was major business and commercial scepticism about the value of enlarging union influence.
What is the problem that has to be fixed? Why force business people - large and small companies - to deal with TU representatives when the actual call for representation is thin.
why enlarge the scope for union recognition when - since the mid 1960 - the law itself has changed so substantially? It now offers protection for people who are dismissed or discrimiated against.

Worker directors on supervisory boards

In descriptive HRM compediums, the history of worker directors on supervisory boards of German corporations is typically referred to as having had positive benefits for German industry. Such supervisory boards are mandatory under German law whereas in the UK and US such schemes are be voluntary and ....... predictably worker directors are noticably thin on the ground.

I was around in the 1970s when in the UK there was much bru-ha about worker representation (trade union directors) on boards of companies (the Bullock report 2X plus Y) formula. This suggestion for national policy died a death. Yet HRM writers still talk of "positive benefits for German industry" and with European Directive X we are back to works councils - this time at corporate rather than "factory canteen level".

But just what decisions do worker directors on German supervisory boards REALLY get involved with? What is the evidence at all that they are anything more than just ornamental? The HRM compendium writers offer little data on this. It is almost as though they and their readers nod their little heads (on strings) and agree on "that sounds like a good idea". Can anyone throw light on this matter, suggest sources of evidence, point us in a non-rhetorical direction? If you look this up please write back to BOLA.

Problems of the worker director model

We must evaluate the rhetoric (theory???) which argues for worker directors (board-level representation of employees) is underpinned by normative models of employee participation and internal group representation and co-option. Such representation theory depicts elected worker directors who present the concerns of their constitutencies. But on what matters?

the pay of board members?
acquisition policy?
cost cutting?
product development?
financial management?
fending off a corporate take-over?

Proper representation of a constituency view requires a worker director to be assertive and challenging. The dnager is that with sich a member in the ranks that other executive and non-executive members will go into a huddle. Closet management reins anyway. Decisions are made away from Board meetings (behind closed doors) in dealing/negotiations between corporate coalitions.

Worker director will be in even less of a position than non-executive board members when it comes to making significant inputs into strategic decisions. Thus, behaviour that is judged effective under an interest group representation constituency perspective may in fact be ineffective from the point of view of overall impact on the board

Worker directors mustrely in data fed to them by other board members. A non-union worker director may be coopted onto the board by senior management.

Will they share the fiduciary responsibility of members of the board?
Will they be sucked into the values and imperatives shared by other board members (process of socialisation).

Membership of the "board club" may readily led to the worker director becoming separated even socially from his/her constituency interests and views. Such possibilities are evident from Members of Parliament who stay on the back-benches to represent their consitutents rather than be sucked in to the pragmatic decisions required by members of the Cabinet who are trying to run the country.

So the imagined worker director role carries role ambiguities, tensions and conflict - the notion of representative worker involvement at board level (union or non-union) is problematic. Union ambitions are also limited, maybe because of their reduced power base and traditional and value-based aversion to being tarred with the brush of decision-making with corporate-managers. These are practical limitations.

Worker Councils - Co-determination below Board Level

The EC 5th Directive on the Harmonisation of Company Law in the European Community, offers various participation scenarios - opposed weakly by the corporate sector.

The European approach is, for companies operating across European borders, to require an worker council (management representatives and recognised unions) if a certain % of employees want it. This council gives rights to employee representatives separate from the company's own decision making structures...rights to

to management information
to be consulted over matters affecting employees
a right of co-determination in specified areas.

Employee share ownership plans

This is another means of bringing about a form of employee representation. Employees do not have a decision-making forum. But, through such a small shareholding their capacity to exercise influence is thin to say the least.

More to follow - ........?