New ways to organise work in more progressive European enterprises have been developing in recent decades. These include an increased use of employee involvement in the workplace. New forms of work organisation that involve employees’ input can be considered as taking three distinct, but inter-related, forms:
- Representative participation, through elected representatives to works councils or other in-company information and consultation structures, including European Works Council in transnational enterprise. Representative participation also includes the participation of elected employee representatives on the governing boards of companies, either a supervisor board in dual-tier systems or single-tier systems of corporate governance.
- Financial participation, whereby employees are entitled to a share in the equity of the company they work in through employee share ownership plans, either by way of direct employee share ownership or an internal jointly managed trust fund to administer shares allocated to employees (ESOT), or through a share in the annual profits.
- Direct participation, which allows employees greater scope to organise their work tasks and for greater self-manage either individually or through team working.
Direct participation
Direct participation and representative participation are complementary to each other, and are an integral part of better internal enterprise social dialogue that can contribute to building trust and commitment within the workforce.
Direct participation can be defined as:
Opportunities provided by management, or initiatives to which they lend their support at the workplace level, for consultation with and/or delegation of responsibilities and authority for decision-making to their subordinates either as individuals or as a group of employees, relating to the immediate work task, work organisation and/or working conditions[1]
Therefore, it is a system of work organisation that allows for the input of employees into the day-to-day operations of the enterprise. It can include both consultation and delegation arrangements in the workplace. These are:
- Consultative - when management put in place systems for employees to give their views on work-related issues, but management continue to have the right to decision-making;
- Delegative - when management give employees greater discretion and responsibility to organise and undertake their work tasks without reference back to management.
Both forms of direct participation can involve either individual workers or groups of workers. Individual consultation can be either through ‘face-to-face’ meetings with management or through ‘arms-length’ arrangements. Group consultation can be either on a permanent or a temporary basis. Examples of the types of direct participation are set out below:
Figure 1 Forms of Direct Participation:
| GROUP INDIVIDUAL CONSULTATIVE Regular review meetings between employee and immediate manger Employee attitude surveys Suggestions schemes Other internal arrangements that allow for employees to express their views, such as through social media, on-line discussion boards, company newsletters, notice boards, etc.
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DELEGATIVE Individual employees have the right and responsibility to undertake their work tasks without constant reference back to his/her manager |
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Temporary or ad hoc groups of employees who meet for a specific purpose for a limited period of time – such as project groups or task forces Permanent groups, such as weekly/ monthly meetings of a work team to deal with ongoing work related issues, fro example, quality circles |
Rights and responsibilities are given to group or teams of employees to carry out their common work tasks without reference back to management - also called ‘group work’ |
Introducing direct participation as a means of changing work organisation can be a challenge to traditional hierarchical management structures and requires a different type of management approach and a change in company culture. As employees are given greater scope to undertake work tasks and in decision-making the role of managers and supervisors will also change. These changes will also have a knock-on impact on other aspects of the employment relationship, such as internal flows of information on company performance, pay structures and how disputes are addressed and resolved. In the long term they also can influence the layers of management and supervisors, required improvements in working conditions and a greater emphasis on on-going training and improving skill levels.
The promotion of direct participation can be a competitive strategy for an enterprise, contributing to economic recovery within the EU and making European enterprises more competitive in the global marketplace by been more efficient, lowering production costs, allowing for greater innovation and providing for increased job satisfaction and commitment among employees.
In recent years the issue of workplace democracy has been subject to legislative and institutional innovation, in particular through the adoption and implementation of a number of EU Directives, which envisage enlargement of workers’ rights to information, consultation and corporate governance, and which most often upgrade opportunities for traditional employee representation via trade unions. Research suggests that in some Member States, especially those where new forms of representation have been applied late (after 2007-2010) the practical results in terms of expanding representation and industrial democracy have been quite modest, although some achievements have been witnessed. Problems have been identified relating to insufficient experience in alternative forms of representation (non-union) and ambiguous positions of the social actors - employers and trade unions in some countries and the insufficient development of a common legal framework on certain forms and rights, for example concerning representation at supervisory/management boards of companies and rights to participate in management decisions in general.
At the same time, a number of factors external and internal for businesses and social partners determine not only the expansion of industrial democracy, but enriching it with new or older but under-used forms. These factors include the necessary technical and technological changes (such as digitisation, robotics, etc.), accompanied by innovations in the organisation of labour in the traditional sectors and enterprises and the emergence of new industries and services and new forms of enterprise and employment.
Another group of factors is linked to the effects of the economic crisis and globalisation of the economy, the instability of a large number of companies and the uneasy predictability of their future development, job security and incomes.
In the context of financial and economic crisis, and the need for sustainable growth in European economies, there is a need to consider what the requisite sustainable forms of corporate governance and employee involvement might look like and to consider what role, if any; direct participation might play within this, as compared with more representative mechanisms. Increasing calls are being made for a more ‘responsible capitalism’ and a shift to more long-term and sustainable corporate forms. Sound corporate governance requires more effective worker involvement and participation, since firms are social organisations and employees are the stakeholders with the greatest interest in the longer-term success of the firm.
In practice, at enterprise level the traditional and relatively new forms of industrial democracy, although working well in terms of workers' rights, are not sufficiently useful in the context of company development, or at least do not exhaust the possibilities of influence of employees on business processes. Moreover, the introduction of new equipment and technologies as well as new forms of work organisation requires employee participation directly related to their work, i.e. direct employee participation.
The challenges of technological, economic and social development of the twenty-first century are an important prerequisite for expanding the direct participation of workers, which is the focus of many enterprise-level managers. So far, these aspects, in most cases, have no normative and institutional terms, i.e., the practices are "voluntary" in terms of individual employers and managers. On the agenda is the question to what extent the use of these forms respects and builds on the rights of employees, as well as how does it "fit" and enrich the existing system of industrial relations. The older studies on this subject and the practices from more recent times give argument to register as trends in the integration of direct participation in the existing system of industrial relations and employee representation/participation and the parallel existence along with older forms and also the attempts that employers use to utilise these forms to reduce the influence of trade unions and forms of representative industrial democracy.
These trends and facts are grounds to conduct further research and analysis of direct worker participation and to inform and educate trade union leaders, other workers' representatives, employers and managers on the main aspects and to look for the best practices and experiences, thus finding a balance between economic efficiency, social responsibility, the rights of employees and the existing industrial relations systems, that can be rationalised and used across countries, sectors and companies.
The composition of the participants in the project include representatives of countries where direct participation has been used for a long time (Ireland, Italy and the UK), countries that use it, but from a more recent period and in a limited aspect, and countries in which it is almost unknown except certain exotic attempts by representatives of subsidiaries of multinationals (Bulgaria, and Poland).
[1] Conceptualising Direct Participation in Organisational Change – The EPOC Project
European Foundation for the Improvement of Living and Working Conditions, Dublin (1994)