Employee involvement is the missing piece of the productivity puzzle

Posted by pt91 at Feb 03, 2016 03:10 PM |
New report includes University of Leicester research on the ‘human factor’ in management

Issued by the Involvement and Participation Association on 1 February 2016

A new report released by the Involvement and Participation Association (IPA) argues that effective employee involvement at work is essential to boosting productivity in the UK.

With contributions from leading experts including Professor Stephen Wood of the University of Leicester, Sir Brendan Barber of Acas, Peter Cheese of CIPD, the TUC, the EEF, employers and academics, the publication shows that employee involvement could represent the missing piece in the productivity puzzle.

Productivity is a measure of the economic output per unit input. Productivity growth has stalled since 2007 when the economy was rocked by the financial crisis and the subsequent recession. Whilst a slow-down in productivity is common during a recession, the duration of the stall is unprecedented. Despite the return to growth and the strong recovery in employment, productivity in the UK is barely higher than it was seven years ago, and there is a growing gap with other advanced economies. The average worker in France and Germany now produces more in four days than the average UK worker does in five days.

The stall in productivity is a real cause for concern. Productivity is an essential indicator of the health of an economy and a key determinant of wages and living standards. Working people in the UK have faced the longest squeeze on incomes in over a century, with median real wages remaining 8% below their 2007 peak.(i)

The IPA report ‘Involvement and Productivity – The missing piece of the puzzle?’ examines the wealth of evidence linking employee involvement to productivity. The evidence – from large surveys, behavioural experiments, academic studies, and from employers themselves – demonstrates that when employees have a voice in decisions over their job and the wider organisation, productivity is higher.

Professor Wood said: “Employee involvement offers a means of increasing productivity directly, for example, through increasing employee motivation and better organization and indirectly through its effects on other outcomes and particularly quality and safety; it achieves the fundamental tenet of lean production, that quality and productivity are not in opposition to each other.

“As I argue in the report to explain and address the ‘unprecedented’ stall in productivity we need to pay much more attention to the neglected human factor.”

As the report shows, the UK performs poorly on involvement at work. Just one employee in three say their managers allow them to influence decisions at work.(ii) Employers in the UK are less likely to adopt High Performance Working practices which include extensive employee involvement.(iii) The UK comes second bottom of an index of employee participation in the EU, beaten into last place only by Lithuania.iv British employees have less of a say at work than their counterparts in Europe.
Last year the Government released ‘Fixing the foundations’, their plan to boost productivity and create a more prosperous nation. However, it had little to say about the workplace and employee involvement.

Nita Clarke OBE, Director of the IPA and Co-Chair of the Engage for Success Taskforce said: ‘The evidence linking employee involvement to productivity is incontrovertible. Employers who involve and engage their staff, who give them a say over both how they do their day job and over wider organisational decision-making tend to be more productive and more successful. Many employers are well aware of this and involve their staff effectively at work. We need to help the rest learn from the best.’

Joe Dromey, Head of Policy and Research said: ‘Whilst the growth in jobs in recent years has been impressive, the unprecedented stall in productivity is deeply concerning. Without strong and sustainable growth in productivity, we won’t have strong and sustainable growth in living standards. Without boosting productivity we won’t be able to compete in the ‘global race’. It’s welcome that the Government have started to pay attention to this problem. But any attempt to tackle the productivity puzzle – by employers and by the government – must recognise the importance of employee involvement and voice at work.’

END

Notes for Editors:

  • The IPA is a charity that aims to promote involvement and participation at work.
  • The report is available here - http://www.ipa-involve.com/resources/publications/involvement-and-productivity/

i Resolution Foundation analysis of ASHE data – www.resolutionfoundation.org/data/median-employe-eearnings
ii 34 per cent of employees in the latest Workplace Employee Relations Study said that their manager was good or very good at allowing them or their representatives to influence decisions at work.
iii Stone (2011). International approaches to high performance working. UKCES Evidence Report no. 37. London: UKCES
iv ETUI Employee Participation Index

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