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Lesson#36
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Employee Involvement
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Employee Involvement
Changing Michael Dell’s DNA
Dell Inc. is one of the world’s largest PC manufacturers, with a
marketing and manufacturing system that is
repeatedly studies and copied. Of the Fortune 500 companies,
Dell topped the list in 10-year total return to
investors. However, despite Dell’s success year after year,
Dell’s CEO and founder, Michael Dell, still
manages with the urgency and determination he had when he
started the company out of his college dorm
some 20 years ago. “I still think of us as a challenger.
I still
think of us attacking,” says Dell.
But not all is well in Camelot. A recent survey of Dell’s
employees revealed that half of them would leave if
they got the chance. Internal interviews of the subordinates of
Michael Dell and the firm’s president, Kevin
Rollins, revealed that they felt Dell was impersonal and
emotionally detached, and Rollins, autocratic and
antagonistic.
Michael Dell believes that the status quo is never good enough.
Once a problem is uncovered, it should be
dealt with quickly and directly. In the 1990’s, when the company
was rapidly growing, it recruited seasoned
managers from IBM and Intel. Some quickly bailed out because
they were not willing to work in Dell’s
demanding culture. An executive coach who has worked with
Michael Dell since 1995 says, “They need to
work a lot on appreciating people.”
Michael Dell, facing the results of the employee surveys, took a
page out of his own book. Fearing an
exodus of talent and a tearing apart of the company by
antagonized employees, Dell went before his
management team and offered an honest self-critique.
He acknowledged that he was shy and made him appear removed and
not caring.
He promised to build tighter relationship with his team. Within
days, a videotape of meeting was shown to
every manager in the company.
Like Dell, a growing number of today’s companies are not only
concerned but doing something about the
way they manage their employees. They recognize that empowered
employees are the difference between
success and failure in the long run. Faced with competitive
demands for lower costs, higher performance
and greater flexibility, organizations are increasingly turning
to employee involvement (El) to enhance the
participation, commitment, and productivity of their members.
Employee involvement is a broad term that has been variously
referred to as “empowerment”
“participative management,” “work design,” “industrial
democracy,” and “quality of work life.”
Empowerment is giving employees power to make decisions about
work. Firms that have transformed their
culture claim to have increased productivity and number of
clients, made each employee feel a sense of
ownership, and increased profits. OD interventions in this area
are, therefore, aimed at moving decision
making downward in the organization, closer to where the actual
work takes place, i.e. delegation of power.
The following major El applications are discussed in this
chapter: parallel structures, including cooperative
union—management projects and quality circles; high- involvement
organizations; and total quality
management. Two additional El approaches, work design and reward
system interventions, are discussed in
Chapters 16 and 17, respectively.
Employee Involvement: What is it?
Employee involvement is the current label used to describe a set
of practices and philosophies that started
with the quality-of-work-life movement in the late 1950s. The
phrase quality of work life was used to stress
the prevailing poor quality of life at the workplace. As
described earlier, both the term QWL and the
meaning attributed to it have undergone considerable change and
development. In this section, we provide
a working definition of EI, document the growth of El practices
in the United States and abroad, and
clarify the Important and often misunderstanding relationship
between EI and productivity.
A Working Definition of Employee involvement:
Employee involvement seeks to increase members input into
decisions that affect organization
performance and employee well-being. It can be described in
terms of four key elements that promote
worker involvement:
1. Power:
This element
of EI includes providing people with enough authority to make work-related
decisions covering various issues such as work methods, task
assignments, performance outcomes,
customer service, and employee selection. The amount of power
afforded employees can vary enormously,
from simply asking them for input into decision that managers
subsequently make, to managers and
workers jointly making decisions, to employees making decisions
themselves.
2. Information.
Timely
access to relevant information is vital to making effective decisions.
Originations
can promote El by ensuring that the necessary information flows
freely to those with decision authority.
This can include data about operating results, business plans,
competitive conditions, new technologies and
work methods, and ideas for organizational improvement.
3. Knowledge and skills.
Employee involvement contributes to
organizational effectiveness only to the
extent that employees have the requisite skills and knowledge to
make good decisions. Organization can
facilitate El by providing training and development programs for
improving members’ knowledge and
skills. Such learning can cover an array of expertise having to
do with performing tacks, making decisions,
solving problems, and understanding how the business operates.
4. Rewards.
Because
people generally do those things for which they are recognized, rewards can have
a
powerful effect on getting people. Involved in the organization
meaningful opportunities for involvement
can provide employees with internal rewards, such as feelings of
self-worth and accomplishment. External
rewards, such as pay and promotions, can reinforce El when they
are linked directly to perform outcomes
that result from participation in decision making.
Those four elements power information, knowledge and skills, and
rewards contribute to El success by
determining how much employee participation in decision making
is possible in organization. The farther
that all four elements are moved downward throughout the
organization, the greater the employee
involvement. Furthermore, because the four elements of El are
interdependent they must be changed
together to obtain positive results. For example, if
organization members are given more power and
authority to make decisions but do not have the information or
knowledge and skill to make good
decisions, then the value of involvement is likely to be
negligible. Similarly, increasing employees’ power
information, and knowledge and skills but not linking rewards to
the performance consequences of changes
gives members little incentive to improve organizational
performance. The El methods that will be
described here vary in how much involvement is afforded
employees. Parallel structures, such as unionmanagement
cooperative efforts and quality circles, are limited in the
degree that the four elements of EI
are moved downward in the organization; high-involvement
organizations and total quality management
provide far greater opportunities for involvement.
How Employee Involvement Affects Productivity?
An assumption underlying much of the El literature is that such
interventions will lead to higher
productivity. Although this premise has been based mainly on
anecdotal evidence and a good deal of
speculation, there is now a growing body of research findings to
support that linkage. Studies have found a
consistent relationship between El practices and such
productivity measures as financial performance,
customer satisfaction, labor hours, and waste rates.
Attempts to explain this positive linkage traditionally have
followed the idea that giving people more
involvement in work decisions raises their job satisfaction and,
in turn, their productivity. There is growing
evidence that this satisfaction- causes-productivity premise is
too simplistic and sometimes wrong.
A more realistic explanation for how El interventions can affect
productivity is shown in Figure 47.El
practices, such as participation in workplace decisions, can
improve productivity in at least three ways.
First
, such
interventions can improve communication and coordination among employees and
organizational departments and help integrate the different jobs
or departments that contribute to an
overall task.
Second
, El
interventions can improve employee motivation, particularly when they satisfy
important
individual needs. Motivation is translated into improved
performance when people have the necessary skills
and knowledge to perform well and when the technology and work
situation allow people to affect
productivity. For example, some jobs are so rigidly controlled
and specified that individual motivation can
have little impact on productivity.
Figure 47
Third
, EI practices
can improve the capabilities of employees, thus enabling them to perform better.
For
example, attempts to increase employee participation in decision
making generally include skill training in
group problem solving and communication.
Figure 48 shows the secondary effects of EI. These practices
increase employee well-being and satisfaction
by providing a better work environment and a more fulfilling
job. Improved productivity also can increase
satisfaction, particularly when it leads to greater rewards.
Increased employee satisfaction, deriving from EI
interventions and increased productivity ultimately can have a
still greater impact on productivity by
attracting good employees in join and remain with the
organization.
In sum, El interventions are expected to increase productivity
by improving communication and
coordination employee motivation, and individual capabilities.
They also can influence productivity by
means of the secondary effects of increased employee well-being
and satisfaction. Although a growing body
of research supports these relationships, there is considerable
debate over the strength of the association
between El and productivity. Recent data support the conclusion
that relatively modest levels of Ph
produce moderate improvements in performance and satisfaction
and those higher levels of El produce
correspondingly higher levels of performance.
Employee Involvement Application:
This section describes three major El applications that vary in
the amount of power, information,
Knowledge and skills, and rewards that are moved downward
through the organization (from least to most
involvement): parallel structures, including cooperative
projects and quality circles; high-Involvement
organizations and total quality management.
Figure 48
Parallel Structures:
Parallel structures involve members in resolving ill-defined,
complex problems and build adaptability into
bureaucratic organizations. Also known as “collateral
structures,” “dualistic structures,’ or “shadow
structures,” parallel structures operate in conjunction with the
formal organization. They provide members
with an alternative setting in which to address problems and to
propose innovative solutions free from the
formal organization structure and culture. For example, members
may attend periodic off-site meetings to
explore ways to improve quality in their work area or they may
be temporarily assigned to a special project
or facility to devise new products or solutions to
organizational problems. Parallel structures facilitate
problem solving and change by providing time and resources for
members to think, talk, and act in
completely new ways. Consequently, norms and procedures for
working in parallel structures are entirely
different from those of the formal organization. This section
describes the application steps associated with
most parallel structures; discusses two specific applications
cooperative union-management projects and
quality circles; and reviews the research on their
effectiveness.
OD in Practice: A Work-out Meeting at General Electric Medical
System Business
As part of the large-scale change effort, Jack Welch and several
managers at General Electric devised a
method for involving many organization members in the change
process. Work-Out is a process for
gathering the relevant people to discuss important issues and
develop a clear action plan. The program has
four goals to use employees’ knowledge and energy to improve
work, to eliminate unnecessary work, to
build trust through a process that allows and encourages
employees to speak out without being fearful, and
to engage in the construction of an organization that is ready
to deal with the future.
At GE Medical Systems (GEMS), internal consultants conducted
extensive interviews with
managers throughout the organization. The interviews revealed
considerable dissatisfaction with existing
systems, including performance management (too many measurement
processes, not enough focus on
customers, unfair reward systems, and unrealistic goals), career
development, and organizational climate.
Managers were quoted as saying:
I’m frustrated. I simply can’t do the quality of work that I
want to do and know how to do. I
feel my hands are tied. I have no time. I need help on how to
delegate and operate in this new culture.
The goal of downsizing and delaying is correct. The execution
stinks.
The concept is to drop a lot of ‘less important” work. This just
didn’t happen. We still have to know all the
details, still have to follow all the old policies and systems.
In addition to the interviews, Jack Welch spent some time at
GEMS headquarters listening and trying to
understand the issues facing the organization.
Based on the information compiled, about fifty GEMS employees
and managers gathered for a five-day
Work-Out session. The participants included the group executive
who oversaw the GEMS business, his
staff, employee relations managers, and informal leaders from
the key functional areas who were thought to
be risk takers and who would challenge the status quo. Most of
the work during the week was spent
unraveling, evaluating, and reconsidering the structures and
processes that governed work at GEMS. Teams
of managers and employees addressed business problems.
Functional groups developed visions of where
their operations were headed. An important part of the teams’
work was to engage in “bureaucracy
busting” by identifying CRAP (Critical Review Appraisals) in the
organization. Groups were asked to list
needless approvals, policies, meetings, and reports that stifled
productivity. In an effort to increase the
intensity of the work and to encourage free thinking, senior
managers were not a part of these discussions.
At the end of the week, the senior management team listened to
the concerns, proposals, and
action plans from the different teams. During the presentations,
senior GEMS managers worked hard to
understand the issues, communicate with the organization
members, and build trust by sharing
information, constraints, and opportunities. Most of the
proposals focused on ways to reorganize work and
improve returns to the organization. According to traditional
Work-Out methods, managers must make
instant, on-the-spot decisions about each idea in front of the
whole group. The three decision choices are
approval; rejection with clear reasons; and need more data, with
a decision to be made within a month.
The five-day GEMS session ended with individuals and functional
teams signing close to one
hundred written contracts to implement the new processes and
procedures or drop unnecessary work. The
contracts were between people, between functional groups, and
between levels of management, and
organizational contracts affecting all members. One important
outcome of the Work-Out effort at GEMS
was a decision to involve suppliers in its internal email
network. Through that interaction, GEMS and a key
supplier eventually agreed to build new-product prototypes
together, and their joint efforts have led to
further identification of ways to reduce costs, improve design
quality, or decrease cycle times.
Work-Out at GE has been very successful but hard to measure in
dollar terms. Since 1988,
hundreds of Work-Outs have been held, and the concept has
continued to evolve into best practice
investigations, process mapping, and change-acceleration
programs. The Work-Out process, however,
clearly is based on the confrontation meeting model, where a
large group of people gathers to identify
issues and plan actions to address problems.
Application Stages:
Parallel structures fall at the lower end of the EI scale.
Member participation typically is restricted to
making proposals and to offering suggestions for change because
subsequent decisions about implementing
the proposals are reserved for management. Membership in
parallel structures also tends to be limited,
primarily to volunteers and to numbers of employees for which
there are adequate resources. Management
heavily influences the conditions under which parallel
structures operate. it controls the amount of
authority that members have in making recommendations, the
amount of information that is shared with
them, the amount of training they receive to increase their
knowledge and skills, and the amount of
monetary rewards for participation. Because parallel structures
offer limited amounts of EI, they are most
appropriate for organizations with little or no history of
employee participation top-down management
styles and bureaucratic cultures. Parallel structures typically
are implemented in the following steps:
1.
Define the
purpose and scope.
This first step
involves defining the purpose for the parallel structure
and initial expectations about how it will function.
Organizational diagnosis can help clarify which specific
problems and issues to address, such as productivity,
absenteeism, or service quality. In addition,
management training in the use of parallel structures can
include discussions about the commitment and
resources necessary to implement them; the openness needed to
examine organizational practices,
operations, and policies; and the willingness to experiment and
learn.
2.
Form a steering
committee.
Parallel structures
typically use a steering committee composed of
acknowledged leaders of the various functions and constituencies
within the formal organization. This
committee performs the following tasks:
• Refining the scope and
purpose of the parallel structure
• Developing a vision for
the effort
• Guiding the creation and
implementation of the structure
• Establishing the linkage
mechanisms between the parallel structure and the formal organization
• Creating problem-solving
groups and activities
• Ensuring the support of
senior management
OD practitioners can play an important role in forming the
steering committee. First, they can help develop
and maintain group norms of learning and innovation. These norms
set the tone for problem solving
throughout the parallel structure, second, they can help the
committee create a vision statement that refines
the structures purpose and promotes ownership of it. Third, they
can help Committee members develop
and specify objectives and strategies, organizational
expectations and required resources, and potential
rewards for participation in the parallel structure.
3.
Communicate
with organization members.
The
effectiveness of a parallel structure depends on a
high level of involvement from organization members, and
Communicating the purpose, procedures, and
rewards of participation can promote that involvement. Moreover,
employee participation in developing a
structure’s vision and purpose can increase ownership and
visibly demonstrate the “new way” of working.
Continued communication concerning parallel structure activities
can ensure member awareness.
4
. Form employee
problem-solving groups.
These groups
are the primary means of accomplishing the
purpose of the parallel learning structure. Their formation
involves selecting and training group members,
identifying problems for the groups to work on, and providing
appropriate facilitation. Selecting group
members is important because success often is a function of
group membership. Members need to
represent the appropriate hierarchical levels, expertise,
functions, and constituencies that are relevant to the
problems at hand. This allows the parallel structure to identify
and communicate with the formal structure.
It also provides the necessary resources to solve the problems.
Once formed, the groups need appropriate training. This may
include discussions about the vision of the
parallel structure, the specific problems to he addressed, and
the way those problems will he solved, As in
the steering committee, group norms promoting openness,
creativity, and integration need to be
established. Another key resource for parallel structures is
facilitation for the problemsolving
groups. Although this can be expensive, it can yield important
benefits in problem-solving
efficiency and quality. Group members are being asked to solve
problems by cutting through traditional
hierarchical and functional boundaries. Facilitators can pay
special attention to processes that require
disparate groups to cooperate. They can help members identify
and resolve prob1em-solving issues within
and between groups.
5.
Address the
problems and issues.
Generally, groups
in parallel structures solve problems by using an
action research process. They diagnose specific problems, plan
appropriate solutions and impalement and
evaluate them. Problem solving can be facilitated when the
groups and the steering committee relate
effectively to each other. This permits the steering committee
to direct problem-solving efforts in an
appropriate manner, to acquire the necessary resources and
support, and to approve action plans. It also
helps ensure that the groups’ solutions are linked appropriately
to the formal organization. In this manner,
early attempts at change will have a better chance of
succeeding.
6.
Implement and
evaluate the changes.
This step
involves implementing appropriate organizational
changes and assessing the results. Change proposals need the
support of the steering committee and the
formal authority structure. As changes are implemented, the
organization needs information about their
effects. This lets members know how successful the changes have
been and if they need to be modified. In
addition, feedback on changes helps the organization learns to
adapt and innovate.
Cooperative Union-Management Projects:
Cooperative union-management projects are one of the oldest El
applications of parallel structures. They
are associated with the original QWL movement and its focus on
workplace change, although more recent
approaches have broadened that focus to include productivity
improvement. Cooperative unionmanagement
projects are relatively new to OD in the United States, but such
dual involvement has a long
history in other countries, particularly the Scandinavian
countries. These interventions tend to have the
following structural characteristics:
Steering committee.
This top-level labor-management committee serves as the basic center for
planning.
It is created during the project start-up phase and comprises
key representatives from management, such as
a president or chief operating officer, and each of the unions
and employee groups involved in the project,
such as local union presidents. The steering committee’s mandate
is to begin activities directed at
improving both the quality of working life and the effectiveness
of the organization. Members are
encouraged to be open about the need for improvements in
productivity. Unionists are told that because
projects are jointly controlled efforts, they need not fear an
organization’s productivity motives. Indeed,
many unions distrust a management philosophy that does not
express concern for higher productivity or
the quality of its product or service.
Multiple-level committees.
Because the steering committee may not be able to
oversee all aspects of a
project, it often is necessary to establish more than one
labor-management committee at a number of
selected levels in the organization to reflect the differing
interests and knowledge. For example, the steering
committee can be amplified and assisted by working committees at
the plant, department, and shop-floor
levels. These lower-level committees deal with day- to-day
project activities.
Ad hoc committees.
In
many instances, labor-management committees initiate particular projects that
involve the workers and managers in a specific part of the
organization. At the same time, employees
themselves frequently initiate action toward a particular goal.
In such cases, an ad hoc committee is
established to bring about change. Such committees are charged
with a specific task and have a limited
lifetime.
External consultants.
External change agents act as third-party facilitators, offering guidance and
assistance to the labor-management committees and
prob1em-solving and teamwork training for all
participants. In most projects, the steering committee selects
the consultants.
External researchers.
In some projects, researchers are brought in to assess the overall results of
the
intervention. In those cases, separate roles for the change
agents and the evaluation researchers are created.
It is assumed that keeping these functions separate enables
consultants to be concerned with client needs
and researchers to do a more objective assessment of the
intervention.
Excellent descriptions of cooperative union-management projects
are available in the literature, featuring
longitudinal discussions of problems, successes, and partial
failures. The projects include a large
metropolitan hospital, a large international company called the
“National Processing Case,” and the Bolivar
plant of Harman International Industries. Union-management
cooperative projects have been carried out in
most industrial and public sectors in the United States. Both
managers and unionists realize that their fates
are positively correlated and that both parties must be jointly
involved in enhancing the quality of work life
and productivity. Almost every major union and corporation has
become involved in these efforts,
including UAW, Communications Workers of America, Ford, General
Motors, and AT&T.24
Application 7 presents an example of a cooperative
union—management program at GTE of
California.
Application 7: Union-Management Cooperation at GTE California
GTE of California (GTEC) and the Communications Workers of
America embarked on a cooperative
union—management project during the fall of 1984. This OD effort
was in response to the court-ordered
breakup of AT&T, which forced firms in the telecommunications
industry to rethink the way that they
conducted business. Over time, the deregulation of the industry
would remove the protective shield of
guaranteed returns on investment, monopoly territories, and
“cradle-to-grave” employment that had
characterized operations.
Under the new conditions, GTEC management and union leadership
believed strongly that the company’s
usual way of operating in the regulatory environment would need
to change. The traditional approach to
managing the business was characterized by centralized decision
making and work planning, lackadaisical
service orientation, and little cross- functional teamwork. The
advent of deregulation was coupled with
tremendous technological changes in information processing and
service delivery and a broadening of the
belief that workers should have more say in decisions that
affect them. The old way of managing produced
low morale and mediocre service in this changing environment.
Consequently, management and union
officials felt the need for improved adaptability and
productivity and a more customer-oriented workforce.
For some time, union leadership had been researching worker
participation and union—management
cooperation at its national office in Washington, D.C. This
research was limited, however, because no one
had implemented such interventions during a period of rapid
deregulation. At the same time, GTEC senior
management had been meeting with other telephone companies to
discuss how to meet the challenges
posed by deregulation, technological change, and increased
worker sophistication. These discussions
consistently pointed out that effective organizations in
deregulated environments were more decentralized
in their decision making. But, given decades of regulatory
tradition, the means to accomplish such an
organizational change were not clear.
Working with OD consultants from the University of Southern
California’s Center for Effective
Organizations, senior managers and union leaders began
discussing how to increase worker participation
and decentralize decision making without treading on traditional
collective bargaining issues. These
discussions resulted in a cooperative union—management
partnership called Employee Involvement. The
purpose of the El process was to improve employees’ quality of
working life and productivity. The group
of senior managers and union officials became the steering
committee for the project and developed a
vision of the El process and its objectives.
The steering committee established a parallel structure to guide
implementation of the El process with the
twenty-six thousand employees at GTEC. It comprised three area
coordinating committees responsible for
implementing the El process in their respective geographic
regions. Each coordinating Committee created
support committees for the functional areas in its region. The
support committees, in turn, established El
teams that would identify and solve work-related problems in the
different units of the company. Each
committee and team was staffed with both union and management
personnel as appropriate.
As part of the early implementation activities, all organization
members attended a two-hour
orientation meeting that described the goals, structure, and
implementation of the El process. This
orientation was conducted by both GTEC management and local
union presidents. In addition, a threeday
union—management training program was conducted for all
supervisors and union officials (local
presidents and stewards). During the first two days of training,
union leaders and GTEC managers were
trained separately in their respective roles and
responsibilities in the El process. On the third day, the
managers and union officials were brought together to discuss
how the implementation of El would
proceed in their particular departments. Members of the support
committees and employee involvement
teams attended a five-day training program focusing on
meeting-management skills, problem- solving
techniques, and group dynamics. They were also provided with
internal facilitators if needed.
Over the next several months, the El teams focused on
quality-of-work-life issues, such as the provision of
bottled drinking water, rather than on productivity-related
changes. Responsible Committees were
concerned about this limited focus and modified the process to
align it more closely with El’s productivity
objectives. For example, the problem-solving training was
changed to emphasize performance issues. In
addition, the composition and responsibilities of the different
committees were revised to increase senior
management and union leadership involvement and accountability.
At the organizational level, a new
incentive compensation system was initiated. This system
rewarded cross-functional teamwork and
generated many ideas for employee involvement. Finally,
facilitators were assigned permanently to
functional areas to focus on operating problems.
The El process produced many successes. One team, established in
early 985, worked for more than two
years to simplify the way field employees reported their time at
work. These efforts produced savings of
more than $3 million by increasing the amount of productive time
that employees spent in the field and by
consolidating several offices that had been used to collect,
collate, and report work-time Information.
Between 1987 and 988, an evaluation of the El process concluded
that the program had produced a net
savings (after the costs of training and dedicated personnel) of
more than $1 million. In 1991, GTEC
surpassed its competition in measures of customer satisfaction
for large- and medium-sized businesses to
become the benchmark for others. In addition, several cost
measures also decreased significantly. The El
program survived through two union contract negotiations and
massive corporate changes that reduced the
size of the work force by consolidating work functions and
business units and standardizing systems and
equipment.
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