Employee involvement in human resource management

It is quite possible to run a successful business without involving employees in manage­ment activities to any meaningful extent, but the chances of sustained sucess are higher when employees are involved. The same is true of organisations in the public and volunt­ary sectors. Objectives are more effectively and efficiently achieved if employees have some say in decision-making, especially as it affects their own areas of work. This is for two principal reasons:

  • Managers may be paid more than their staff, have bigger offices and drive more expen­sive cars, but that does not mean that they always know best. There is no fount of wisdom exclusive only to managers. Ultimately it is for managers to make decisions and to be held accountable, and these can be tough to make. But the chances that they will make the right decision are enhanced if they listen to the views of others and allow their own ideas to be subjected to a degree of scrutiny and constructive criticism. Moreover, involvement allows managers to tap into the ideas and sug­gestions of staff. The best new ideas often originate from people lower down organisational hierarchies because they are closest to the operational coalface and often to customers.
  • Employees like being involved. They appreciate having their opinions listened to and acted upon, particularly in matters that directly concern their day-to-day activities. The chances of their being positively satisfied with their work are thus greatly improved if they are genuinely able to be involved. The knock-on effects include lower staff turnover, lower levels of absence, the ability to attract more recruits and higher levels of performance. The effective management of change is especially enhanced by employee involvement because people are always happier to support what they helped to create.

Employee involvement activity comes in many different forms. It can be formal or informal, direct or indirect, one-off or sustained over time, central to an organisation’s core business or relatively peripheral. In recent years the number and extent of such programmes has increased. This is partly due to the requirements of the law and partly because they have a part to play in many of the more common, contemporary human resource management initiatives we have discussed elsewhere in this book – becoming an ‘employer of choice’, 360-degree appraisal, employee engagement, knowledge man­agement and total quality management (TQM) programmes.

Our aim in this chapter is to discuss the major forms employee involvement takes, to set out the legal obligations, explore the difficulties that can be experienced in the implementation of initiatives and to evaluate their contribution to the achievement of an organisation’s objectives.

1. TERMINOLOGY

A variety of labels are used to describe employee involvement initiatives singly and collectively. While some writers have sought to make distinctions between them, there is no generally accepted usage. Hence you will read not just about ‘involvement’, but also about ‘employee participation’, ‘industrial democracy’, ‘empowerment’ and, in the most recent literature, about ‘employee voice’. Each of these terms differs subtly and suggests a different perspective, but all to a greater or lesser extent are used to describe a situation in which employees are given, gain or develop a degree of influence over what happens in an organisation. The extent and nature of that influence, however, varies considerably.

Marchington and Wilkinson (2000, p. 343) helpfully distinguish between the major categories of involvement with their ‘escalator’ model. The focus here is on the extent of influence. At the bottom of the escalator are organisations where there is no involve­ment at all, managers taking all decisions without taking any meaningful account of what employees might think. By contrast, at the top of the escalator are organisations or parts of organisations which are controlled by employees rather than by a distinct group of managers. Employee control is very rare in the UK at the level of the organisa­tion, although there are one or two examples of companies which are communally owned and run by staff in a partnership arrangement. However, a substantial degree of control is much more often exercised by employees at the level of an individual depart­ment or team within a larger organisation.

In between ‘no involvement’ and ‘employee control’, there are three further stages, each in turn representing a deepening of the extent of involvement. The first is ‘communication’, signalling a very limited degree of involvement. At this stage employer and employees simply exchange information. Managers disclose defined classes of information, ensuring that employees are aware of the decisions they are taking, the economic situation and their objectives. Employees are also given an opportunity to respond, to voice concerns or put their own ideas forward. But decision making remains exclusively in the man­agement realm. The next step up the escalator is ‘consultation’. Here information is exchanged, often through formalised channels. Decision making is still the responsibility of managers, but full and proper consideration is given to the views expressed by staff (or their elected representatives) before key decisions are taken. Finally, a further step up the escalator takes us to co-determination or joint decision making. This is relatively rare in a formal sense in the UK, although it happens informally all the time. But it is very common indeed in Northern European countries where the law requires the agree­ment of a works council before significant decisions affecting employment can be taken.

At each of these stages involvement initiatives can be either direct or indirect in nature. The term ‘direct involvement’ relates to situations in which managers enter into a dialogue with, consult with or co-determine decisions with employees as indi­viduals. People thus have a direct input in some shape or form. By contrast, the term ‘indirect employee involvement’ refers to a situation in which employers take account of employee views through the filter of a representative institution. This may be a trade union, or it may be another kind of body such as a works council, a working party or a consultative committee. Either way, direct involvement is restricted to representatives of the workforce as a collective group.

Academic research into employee involvement often encompasses payment arrange­ments such as profit sharing and employee share ownership schemes which are referred to as types of ‘financial participation’. These help to develop a community of interest between employers and their staff and can lead to situations in which individual employ­ees cast votes at annual general meetings. We will discuss them in Chapter 29. The remainder of this chapter will focus on the major information-sharing, consultation and co-determination initiatives.

2. INFORMATION SHARING

According to the 2004 Workplace Employment Relations Survey formal systems of com­munication between managers and employees are present in the vast majority of UK organisations (Kersley et al. 2006, p. 135). In many cases, however, the communication is carried out at the local level (e.g. line managers meeting with employees individually), there being no formal mechanisms provided for more senior managers to communicate directly with their staff or vice versa. Moreover, where a degree of formality is reported it can be limited simply to the posting of important data on noticeboards or ad hoc circulation of information by e-mail. As a result, a substantial minority of UK employees are reported to believe that they are not kept informed about what their companies are doing (45 per cent) or are not even given sufficient information to do their jobs effectively (35 per cent) (ORC International 2004, cited by IRS 2005a).

The extent to which the disclosure of information by managers can be regarded as a form of employee involvement is debatable. After all, merely being told about an organisation’s plans or its financial results does not in any way give employees influence. Nonetheless it can help to make employees feel a sense of involvement or at least of inclusion in the circle of those ‘in the know’. It also enables employees, either individually or collectively, to exercise informal influence locally, simply because they are in a position to develop and articulate credible alternative approaches to those their immediate line managers would otherwise impose. Alternatively they are in a position to help improve or refine their strategies. It is often rightly stated that ‘knowledge is power’ and it there­fore follows that spreading relevant knowledge beyond the ranks of management to employees is an empowering activity. This is why managers will frequently hold back information from their staff while also letting it be known that they are doing so. Except in a crisis situation in which there is a need to promote calm and keep everyone focused on their jobs, often no conceivable damage would be done to the organisation by disclosing the information; labelling it ‘confidential’ and refusing to disclose it serves to enhance managers’ own sense of personal authority and power.

However reluctant line managers may be to share information to which they are privy, there is substantial evidence to back up the view that regular, extensive informa­tion sharing has positive outcomes for organisations. This occurs because it improves levels of commitment among staff (see Peccei et al. 2005) and because in a practical sense it helps everyone to clarify what their role is in the wider organisation. It thus enhances communication and coordination across divisions. It also helps to prevent false under­standing developing among staff thanks to the inevitable ‘rumour mills’ that operate in all organisations.

Two-way communication, by contrast, especially when it takes the form of a formal exercise, clearly falls into the category of employee involvement. Staff are being asked to respond to a suggested new approach, asked their opinion, being invited to make suggestions for improvements or given an opportunity to point out flaws in current systems or management thinking. Provided the exercise is not merely cosmetic, and that the views of staff are given serious consideration, influence is gained. The following are some of the most common methods of information sharing.

2.1. Team briefing

Team briefing is an initiative that attempts to do a number of different things simul­taneously. It provides authoritative information at regular intervals, so that people know what is going on, the information is geared to achievement of production targets and other features of organisational objectives, it is delivered face to face to provide scope for questions and clarification, and it emphasises the role of supervisors and line managers as the source of information:

Team briefings are often used to cascade information or managerial messages throughout the organisation. The teams are usually based round a common production or service area, rather than an occupation, and usually comprise between four and fifteen people. The leader of the team is usually the manager or supervisor of the section and should be trained in the principles and skills of how to brief. The meetings last for no more than 30 minutes, and time should be left for questions from employees. Meetings should be held at least monthly or on a regular pre-arranged basis. (Holden 1997, p. 624)

With goodwill and managerial discipline, team briefing can be a valuable contrib­utor to employee involvement, as it deals in that precious commodity, information. Traditionally, there has perhaps been a managerial view that people doing the work are not interested in anything other than the immediate and short term and that the manager’s status partly rests on knowing what others do not know. For this reason all the managers and supervisors in the communications chain have to be committed to making it a success, as well as having the training that Holden refers to above.

Team briefing gets easier once it is established as a regular event. The first briefing will probably go very well and the second will be even better. It is important that man­agement enthusiasm and commitment do not flag just as the employees are getting used to the process.

During economic recessions there is a boost to the team briefing process because so many managements have so much bad news to convey. When you are losing money and profitability, there is a great incentive to explain to the workforce exactly how grim the situation is, so that they do not look for big pay rises. Whatever the economic climate, team briefing continues to be used widely and was found to operate in a majority of organisations featured in the 2004 WER Survey. (Kersley et al. 2006, p. 135)

Sometimes, instead of cascading information down a management hierarchy, senior managers in larger organisations like to brief larger groups of employees about significant developments directly. Roadshows or ‘interactive executive sessions’ of this kind are common and are seen by managers as being almost as effective a means of passing information to employees as more conventional forms of team-briefing. (IRS 2005, p. 11)

2.2. Quality circles

Originating in Japanese firms, quality circles comprise small groups of employees (10-15 maximum) who meet regularly to generate ideas aimed at improving the quality of products and services and of organisational productivity. They can also be used as problem-solving groups and as a means by which employee opinion is transmitted to senior management. Some quality circles consist of staff who work together within a team or organisational function, others are cross-functional and focus on interdepart­mental issues.

These sorts of practice have several objectives, such as to increase the stock of ideas within an organisation, to encourage co-operative relations at work, and to legitimise change. These practices are predicated on the assumption that employees are recognised as a (if not the) major source of competitive advantage for organisations, a source whose ideas have been ignored in the past or who have been told that ‘they are not paid to think’. (Marchington 2001, p. 235)

Not only, therefore, are quality circles a potential source of useful ideas for improv­ing systems and saving costs. They also give people a welcome opportunity to contribute their thoughts and experience. A general positive impact on employee attitudes should thus result.

2.3. News sheets

Another common form of employee involvement occurs through the regular publication of in-house journals or news sheets either in paper or electronic form. On one level they simply provide a means by which information concerning finances, policy and proposed change can be transmitted by managers to employees. This is a limited form of employee involvement which does little more than improve the extent to which employees are informed about what is going on elsewhere in their organisations. This will engender a perception of greater involvement and belonging, but does not directly involve employees in any type of decision making. For that to occur the news sheet must be interactive in some way. It may, for example, be used as a means by which employees are consulted about new initiatives, or may provide a forum through which complaints and ideas are voiced.

2.4. Attitude surveys

Regular surveys of employee opinion are very useful from a management point of view, particularly where there are no unions present to convey to management an honest picture of morale and commitment in the organisation. In order to be effective (that is, honest), responses must be anonymous, individuals stating only which department they work in so that interdepartmental comparisons can be made. It also makes sense to ask the same questions in the same format each time a survey is carried out, so that changes in attitude and/or responses to initiatives can be tracked over time.

The major problems with attitude surveys are associated with situations in which they reveal serious problems which are then not properly addressed. This can easily lead to cynicism and even anger on the part of the workforce. The result is a poorer employee relations climate than would have been the case had no survey taken place. It is counter­productive to involve employees if their contribution is subsequently ignored, yet this appears to happen in many of the organisations where regular surveys are conducted. IRS (2005b) found that the main reasons employers in their sample gave for carrying out employee surveys were to ‘take the pulse of the organisation’ and to ‘demonstrate commitment to employee views’. Only a minority subsequently used the information gathered to shape decision making, even in the HR arena.

2.5. Suggestion schemes

A common system of formal bottom-up communication employed by organisations involves encouraging staff to make suggestions as to how practices and processes could be improved to make them more effective, efficient or safe. Employees are often best placed to observe in detail what happens operationally on the front-line because they have the greatest level of interaction on a day-to-day basis with customers, equipment and organisational procedures. Managers often only become aware of problems when their employees report them, and without such reports can have no opportunities for improving things. So it makes sense to encourage staff to put forward suggestions; and having a formal scheme enhances the chances that they will do so. IDS (2005a) describes several types of scheme and draws together from these examples some good practice points. IDS argues that employees should be be recognised financially or otherwise when they make a suggestion which is taken up, that systems for submitting ideas should be as uncomplicated as possible, that feedback should be given to all who submit ideas, that past suggestions should be revisited periodically and that schemes must be regularly publicised to remind staff of their existence. IDS also found that organisations are increasingly benefiting from schemes which operate electronically. Suggestions are sub­mitted via e-mail or a form placed on an intranet and filed systematically by an evaluator. Feedback is then given electronically and the successes of the whole scheme publicised regularly through e-mail bulletins sent to all staff.

2. CONSULTATION

After information sharing, the next step up the ‘employee involvement escalator’ is con­sultation. Here employees are asked either directly, or through representatives to express views which management take into account when making decisions. Such processes fall short of negotiation or co-determination because there is no ultimate expectation of agreement if the views of staff and management diverge. In some organisations regular meetings are held to enable consultation to take place about a wide range of issues. In others consultation exercises take place irregularly and focus on specific areas such as organisational restructuring or policy changes. Consultation is generally regarded as a hallmark of good management. An employer who fails to consult properly, particularly at times of significant change, is likely to be perceived as being unduly autocratic. The result will be dissatisfaction, low levels of motivation, higher staff turnover and poorer levels of customer service. Moreover, consultation has important advantages as a means by which good ideas are brought forward and weak ones challenged.

In workplaces where unions are recognised it is usual for consultation to take place over a range of issues through permanent consultative institutions. The joint con­sultative committee (JCC) is the most common form, being a forum in which managers and staff representatives meet on a regular basis. In more traditional unionised organisations JCCs are kept distinct from negotiating forums – despite the fact that the membership is often the same. A clear divide is thus established between areas which are to be the subject of negotiation (typically terms and conditions of employment) and matters which are the subject of consultation such as health and safety or training. In recent years as partnership agreements have become more common (see Chapter 20), there has been a shift from negotiation towards consultation, the aim being to downplay the adversarial nature of the union-employer relationship and to widen the range of topics about which both sides can engage constructively.

JCCs are only found in 14 per cent of UK workplaces employing over ten people, but they are present in a majority of those employing over two hundred (Kersey et al. 2006, pp. 126-7). It is unusual for the very largest workplaces not to have some form of consultative forum which meets periodically, although in some multi-site corporations formal consultation with employee representatives is restricted to the corporate level and does not take place in individual workplaces. JCCs are four times as common in union workplaces than in those where unions are not recognised (Kersley et al. 2006, p. 127), suggesting that they are mostly still used in parallel with collective bargaining machinery. However, some researchers (e.g. Marchington 1989 and Kelly 1998) have argued that they are used in some workplaces as a substitute for collective bargaining or as a means of discouraging the development of a union presence. Managers in such workplaces believe that unions are less likely to gain support and request recognition if the employer keeps the staff informed of issues that affect them and consults with them before taking decisions. Consultative forums in non-union firms also provide a means whereby managers can put their case effectively without the presence of organised opposition.

From a management perspective, the great danger is that people come to believe that management is not genuinely interested in hearing their views or in taking them on board. Rose (2001, p. 391) refers to this approach as ‘pseudo-consultation’ in which managers are really doing little more than informing employees about decisions that have already been taken. Cynicism results because there is perceived to be an attempt on the part of managers to use consultative forums merely as a means of legitimising their decisions. They can say that consultation has taken place, when in truth it has not. Pseudo-consultation typically involves assembling employees in large groups with senior managers present. The management message is then put across strongly and a short time is given for others to respond. In such situations employees have no time to give proper consideration to the proposals and are likely to feel too intimidated to articulate criti­cisms. The result is often worse in terms of employee morale and engagement with the changes than would have been the case had no consultation been attempted.

Even where managers genuinely intend to undertake meaningful consultation, they can very easily create an impression that it is no more than a ‘pseudo’ exercise. It is therefore important to avoid the approaches outlined in the above paragraph. Employees should be informed of a range of possible ways forward (not just the one favoured by management) and invited to consider them in small groups. The results of their delibera­tions can then be fed back to senior managers and given proper consideration. In this way the appearance of pseudo-consultation, as well as the reality, can be avoided.

3. THE LEGAL DUTY TO CONSULT

In most Western European countries it has long been the case that employers must con­sult formally with representatives of their workforce about significant matters which affect employment prospects and practices. A legal requirement to consult at certain times has thus become a part of European employment regulation and has accordingly found its way into UK employment law. In this context the term ‘consultation’ means formally talking to employee representatives with a view to reaching agreement. There is no obligation on employers to negotiate or to conclude any formal deal, but an attempt must be made in good faith. The major examples are as follows.

3.1. Redundancy

Where an employer proposes to make 20 or more people redundant there is an obliga­tion to consult when formal proposals are drawn up. Where a union or unions are recog­nised, consultation must be with their representatives. In non-union organisations the obligation is to consult with representatives chosen by all relevant sections of the affected workforce. The aim of the consultation is to find ways of avoiding redundan­cies and/or to mitigate the consequences. Consultation should take place over issues such as the proposed selection procedure, the method used to determine the pool of affected employees and the basis on which redundancy payments are to be calculated.

3.2. Transfer of undertakings

The same regulations covering redundancies apply in transfer of undertakings cases (namely, situations in which one organisation is taken over by another, usually as a

result of a sale). Consultation is a requirement placed on both the transferor and trans­feree companies. The duty to consult extends to representatives of employees whose work or conditions will be directly affected by the transfer. There is a more general duty to inform representatives of other workers about the reasons for the transfer and its longer-term implications.

3.3. Health and safety

Under the Health and Safety (Consultation with Employees) Regulations 1996 employers have a general duty to consult with worker representatives about all health and safety matters. Here too the obligation is to consult with trade union appointed safety representatives wherever a union is formally recognised. In other organisations employers can either consult with the workforce directly or set up a health and safety committee to which employee representatives are elected. There are specific duties to consult ‘in good time’ on the introduction of any measure (e.g. new technology or working arrangement) which substantially affects health and safety, and on procedural arrangements for managing health and safety issues.

3.4. Pensions

Recognised unions must be consulted where an employer proposes that its occupa­tional pension should ‘contract out’ of the State Earnings Related Pension Scheme (see Chapter 29). They also have the right to receive on request information concerning a pension scheme’s rules and membership numbers, as well as copies of its accounts and actuarial valuations.

3.5. Workplace agreements

Two recent pieces of legislation originating in Europe provide employers with the opportunity to determine their local application via workplace agreements. These are the Working Time Regulations 1998 and the Maternity and Parental Leave etc. Regulations 1999 (as they apply to parental leave). In both cases the basic rights are set out together with a ‘default scheme’ which contains more detailed rules on their applica­tion. However, employers are permitted to develop their own local rules to replace the government’s default scheme, provided these are agreed through a formal workplace agreement. Where unions are recognised this can be achieved using established collec­tive bargaining machinery. Otherwise the employer needs either to secure the explicit agreement of a majority of employees or to arrange for representatives to be elected to a consultative forum.

3.6. European Works Councils

Since 2001 European Works Councils (or an equivalent type of body) have to be set up in all ‘community scale undertakings’, defined as organisations which employ over 1,000 people in the European Union and including at least 150 in two EU states. The major requirements are as follows:

  • Councils must have between three and 30 members.
  • These individuals must be elected to the council by the workforce.
  • Council meetings are to be held annually and at such meetings the management are obliged to give reports concerning progress, prospects, the financial situation and plans relating to sales, production, employment, investment and/or the corporate structure.
  • Special meetings are to be held in ‘exceptional’ circumstances when, for example, large-scale redundancies or plant relocations are being contemplated.
  • Councils have the right to be informed and consulted about ‘any measure liable to have a considerable effect on employees’ interests’.
  • Only matters that are ‘community scale’ need be discussed. There is no legal require­ment to cover affairs affecting employees in only one EU country.

3.7. The Information and Consultation Regulations

A new EU directive extending information and consultation rights was agreed in March 2002, its aim being to extend some of the principles associated with European Works Councils to all workplaces employing 50 or more people. It has been introduced into UK law in three stages.

Since 2005 workplaces employing over 150 staff have had to comply. The requirement was extended to those employing over 100 in 2007 and to those employing over 50 in 2008.

The regulations require that workers in qualifying workplaces should regularly receive information from their employers and be consulted on all issues which affect their interests, these being defined as anything which affects employment prospects, changes in work organisation or substantial changes in terms and conditions of employ­ment. However, there is no need to negotiate, still less to establish, formal arrangements of this kind unless 10 per cent of the staff employed in a workplace formally request their establishment.

Employers and employee representatives are free to establish arrangements that suit local circumstances. Where there are existing consultation arrangements in place changes only need be introduced following a ballot of employees, following the same rules as exist currently for union recognition (i.e. a majority vote including at least 40 per cent of the electorate). The regulations set out the default arrangements that apply where management and workforce are unable to reach agreement about another system. The major features are as follows:

  • Appointment to an information and consultation committee is via election, a secret ballot of all employees being held.
  • The maximum number of representatives is 25, one person being elected for every 50 employees.
  • Management are required to provide information to the committee in three areas:
  • the recent and probable development of the undertaking’s activities and eco­nomic situation;
  • the situation, structure and probable development of employment; – and
  • about any threats to employment and decisions likely to lead to substantial changes in work organisation or contractual relations.
  • Management are required to consult the committee on items (b) and (c) above, namely employment and work organisation.

Once established, the committee itself determines how and in what way, if any, it wants to move away from the default scheme – this can be achieved if management and a majority of members agree. You will find further information and discussion exercises about the Information and Consultation Regulations on this book’s companion website www.pearsoned.co.uk/torrington.

4. CO-DETERMINATION

In the UK, important decision making in organisations is nearly always the preserve of managers. Decisions in the employment area are often taken after extensive and genuine consultation, or after negotiation with union representatives, but anything approaching serious co-determination with employees is very rare indeed. Nevertheless, it must be pointed out that at the level of the individual team, a degree of informal co-determination is common. Indeed, in recent years it has become more common as organisations have tended to de-layer, reducing the number of managers and levels of hierarchy. Increasingly employees and team leaders have found themselves ‘empowered’ to take decisions for themselves that once they would have had to refer to a manager. It is important not to overestimate the significance of this trend, as any discretion that is given operates within tightly defined boundaries. What gets done is still determined by managers, but there is greater flexibility about when and how exactly it gets done.

The limitations are well illustrated by the following findings from the 2004 Work­place Employment Relations Survey (Kersley et al. 2006, pp. 89-90):

  • 72 per cent of workplaces employ people to work in ‘formally designated teams’;
  • 83 per cent of these teams are given responsibility for products or services;
  • in 61 per cent of these teams members jointly decide how work is done;
  • in 66 per cent of these teams tasks are rotated among members;
  • in only 6 per cent of these teams are team members able to choose their own leader.

Elsewhere in Europe the extent of co-determination at the level of the team and of individual empowerment varies from country to country. In southern European nations such as France, Italy and Spain managers at the local level tend to guard their autonomy more tightly than typical British line managers. Co-determination at the local level over day-to-day workplace activities is thus rarer than in the UK. In northern Europe, by contrast, a far greater degree of team-based autonomy is common. The best-known examples of teams assuming responsibility and decision-making authority are in the Scandinavian countries. The approach involves organising a workforce into small groups of about a dozen members, who are mutually supportive and who operate with minimal supervision. Management set performance targets (often after consultation) and allocate tasks, but it is for the team itself to decide exactly how these are to be achieved. The team organises its own activities, appoints its own leaders and works out for itself how to overcome problems. Teamworking can thus be characterised as a form of worker control, even though it operates within heavily prescribed limits. Managers refrain from giving day-to-day supervision, but are on hand to give advice or more direct assistance where necessary. Disciplining staff, for example, is a task carried out by managers and not by team members. Teamworking is often associated with situations in which several regionally based teams compete with each other to meet or exceed performance targets. Team-based remuneration then accounts for a proportion of the total pay received.

While practice varies at the local team level across Europe, at the level of the organ­isation co-determination is a great deal more established and widespread in most countries than is the case in the UK. It occurs through two distinct mechanisms:

  • through the legal empowerment of works councils or enterprise committees
  • by reserving places on executive boards for worker directors

Both approaches are famously used in Germany, where co-determination over employment matters is standard practice in organisations of any size. In the UK most of the activities described in this book are the preserve of managers, while in Germany they are decided jointly between managers and workforce representatives. German managers cannot impose any decision relating to changing workplace rules, disciplinary pro­cedures, working hours, holidays, bonus payments, overtime arrangements, health and safety matters, training or selection methods without first securing the agreement of their organisation’s works council. Moreover, their autonomy to make decisions about any changes relating to the nature of the work their employees do or the physical environ­ment in which it is performed is subject to them first consulting with the works council and taking its objections and suggestions into account. In addition the law requires that managers share a great deal of financial and planning information with works councils that goes well beyond the employment sphere (Budd 2004, p. 129). Seats are also reserved on the supervisory boards of German companies for workforce representatives. In the case of companies employing more than 500 people, a third of the seats are reserved. Where over 2,000 are employed, half the seats are taken by worker representatives. You will find further information and discussion exercises about variations in the way employee relations is managed internationally on our companion website, www.pearsoned.co.uk /torrington.

Source: Torrington Derek, Hall Laura, Taylor Stephen (2008), Human Resource Management, Ft Pr; 7th edition.

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