Profit‐sharing plans and affective commitment: Does the context matter?

This article analyzes the relationship between profit‐sharing plans (PSP) and affective commitment and how it is affected by the context of the PSP application. Overall, there is a positive relationship between profit sharing and commitment that is strongest in very small firms. The efficacy of a PSP in improving employees' affective commitment appears to be greatest in firms with low job‐related employee participation. Its application in workplaces where employees enjoy high levels of participation appears to have little impact and may even result in slight declines in affective commitment. © 2009 Wiley Periodicals, Inc.     

The effect of participative management on organizational performance: the case of Taiwan

The aim of this study is to investigate the impact of participative management on the behaviour of employees and the financial effectiveness of the enterprise. The analytical data are based on the survey of 308 Taiwan enterprises. Multiple regression results show that both suggestion system and labour-management committee have a positive impact on employees' behaviour in terms of turnover and absenteeism rates. Likewise, the quality control circle (QCC) and profit sharing have a positive impact on organizational effectiveness as seen in profit and revenue growth rates. However, employee stock-ownership plans and grievance-handling systems have negative effects on both performance indicators - employee behaviour and organizational effectiveness. The practical implications are also discussed.     

Characteristics of workplaces with financial participation: evidence from the Workplace Industrial Relations Survey

This article assesses the theory and evidence for the adoption and use of financial participation. It reports finding of a comparison of the characteristics of workplaces with profit sharing, employee share schemes and those with no schemes at all, using data from WIRS3     

Does contingent pay encourage positive employee attitudes and intensify work?

This article explores the relationships between three dimensions of contingent pay – performance‐related pay, profit‐related pay and employee share‐ownership – and positive employee attitudes (job satisfaction, employee commitment and trust in management). The article also examines a conflicting argument that contingent pay may intensify work, and this can detract from its positive impact on employee attitudes. Of the three contingent pay dimensions, only performance‐related pay had direct positive relationships with all three employee attitudes. Profit‐related pay and employee share‐ownership had a mix of negative and no significant direct relationships with employee attitudes, but profit‐related pay showed U‐shaped curvilinear relationships with all three employee attitudes. The results also indicated that performance‐related pay is associated with work intensification, and this offsets some of its positive impact on employee attitudes.     

A multi-level examination of quality-focused human resource practices and firm performance: evidence from the US healthcare industry

In today's business world, the role of quality has become ever more significant for organizations to compete in a global marketplace. Based on the quality management theory, this study empirically examines the relationship between quality-focused human resource practices (QHRP) and organizational performance outcomes. Data from 69 healthcare organizations indicate a strong support for this relationship. A Human Resource (HR) system focused on quality management was directly related to multiple dimensions of organizational performance outcomes (i.e., intangible – employee satisfaction and customer satisfaction – and tangible – profit). Specifically, two measures of QHRP, knowledge management and strategic management, were found to be positively related to the financial performance of firms implementing quality management. Process management is found to be negatively related to employee satisfaction. General Human Resources were positively related to both employee and customer satisfaction. Employee focus of the firms is also positively related to employee satisfaction. In addition, employee satisfaction is also related to both customer satisfaction and financial performance while customer satisfaction is found to be positively related to employee satisfaction. The findings indicate a generally strong positive relationship with the organizational performance outcomes. The results of this study are particularly important in showing HR's contribution to the organization's bottom line.     

Leadership,Creative Problem‐Solving Capacity,and Creative Performance: The Importance of Knowledge Sharing

This article presents two studies that examine whether leader supportive behaviors facilitate knowledge sharing and employee creative problem‐solving capacity, thereby enhancing creative performance. The findings from both studies indicate that leader supportive behaviors are directly and indirectly related, through both internal and external knowledge sharing, to employee creative problem‐solving capacity. In addition, creative problem solving was related to the two dimensions of creative performance—fluency and originality. However, a test of the mediation model indicated that creative problem solving only mediated the relationship between internal knowledge sharing creative performance and originality. These findings highlight the complex process by which leaders facilitate both internal and external knowledge sharing and employee creative problem‐solving capacity, thereby improving employee creative performance.     

The Impact of Profit Sharing on the Performance of Financial Services Firms*

abstract Relying on macro theories (agency and organizational control) as well as micro theories (goal setting and expectancy), this study investigates the impact of profit‐sharing plan (PSP) adoption on the value creation process of financial services firms. The study relies on a comprehensive methodological approach that is both quantitative, with a dual cross‐sectional/longitudinal (pre‐post) design that compares PSP adopters with a control group of PSP non‐adopter firms, and qualitative through interviews with some adopting firms’ managing directors. Results show that firms adopting a PSP enhance their profitability in comparison to both their own prior performance and to firms that are not adopting a PSP. Results also show that the adoption of a PSP: (a) positively influences only profit drivers that are under employee control; and (b) is more likely to have a long term, positive impact on external profit drivers than on internal profit drivers. Qualitative data from field interviews corroborate and enrich these quantitative findings.     

21st‐century models of employee representation: structures,processes and outcomes

The 2004 Workplace Employment Relations Survey allows further exploration of the fate or workplace‐based forms of employee representation charted by earlier surveys. We describe the occurrence and diversity of representational forms, union, non‐union and ‘hybrid’, and the structural characteristics of workplaces where they are found. We go on to analyse a number of structural and processual differences and differences in outcomes. In particular, we try to estimate the effects of different forms for outcomes such as wage dispersion, procedural ‘fairness’ and productivity. The data show that ‘hybrid’ systems of union and non‐union representation are associated with the best outcomes, therefore, notwithstanding the continuing decline in the diffusion of the ‘traditional’ union‐based model of workplace representation, union presence is still a prerequisite for effective representation, while ‘pure’ non‐union forms serve neither employee nor employer interests.     

How reward satisfaction affects employees’ turnover intentions and performance: an individual differences approach

We challenge the assumption that satisfaction with rewards has the same effect on the behaviour and attitudes of every employee, and hypothesise that there are individual differences in the effects of (satisfaction with) financial, material and psychological rewards on turnover intentions and task performance. Survey data from 179 employees are combined with supervisor‐rated task performance data and analysed with cluster‐wise regression analysis. As for task performance, no employee types or individual differences were found. However, we identified three different employee types revealing a unique relationship pattern between satisfaction with financial, material and psychological rewards and turnover intentions. These employee types also differed in socio‐demographic characteristics and work values. Our findings illustrate that to be able to fully understand the underlying relationship between rewards and employee outcomes, scholars need to adopt an individual difference perspective and methodology. Implications for practice, limitations and opportunities for future studies are discussed.     

The implications of direct participation for organisational commitment,job satisfaction and affective psychological well‐being: a longitudinal analysis

The article examines the implications of direct participation for employees' organisational commitment, job satisfaction and affective psychological well‐being. It focuses on both task discretion and organisational participation. Applying fixed effect models to nationally representative longitudinal data, the study provides a more rigorous assessment of the conflicting claims for the effects of participation that have hitherto been based primarily on cross‐sectional evidence. Further, it tests a range of mechanisms by which direct participation leads to improved employee outcomes. Contrary to the critical literature, it shows that even after controlling for unobserved individual heterogeneity, both forms of direct participation have positive effects for employees' organisational commitment and well‐being. The effects of task discretion are primarily direct, reflecting the intrinsic importance of personal control over the job task; in contrast, those of organisational participation derive to a greater extent from its indirect effect on the quality of working conditions.     

A multilevel examination of skills‐oriented human resource management and perceived skill utilization during recession: Implications for the well‐being of all workers

This article examines whether organizations can enhance employee well‐being by adopting human resource management (HRM) practices strategically targeted to improve skill development and deployment in a recessionary context. Employee skill utilization is proposed as the mediating mechanism between HRM practice and well‐being. The role of workplace skill composition is also examined as a boundary condition within which HRM differentially impacts employee outcomes. Using a nationally representative survey of UK workplaces (Workplace Employment Relations Survey 2011) and matched management and employee data, the analysis focused on organizations that had implemented some recessionary action following the 2008–2009 global financial and economic crisis. The findings show that human capital enhancing HRM and enriched job design positively influenced both job satisfaction and work‐related affective well‐being through increased employee skill utilization. Organizations with predominantly high‐skilled workforces were more likely to adopt these skills‐oriented HRM practices. Nevertheless, the effects of HRM on employee outcomes via skill utilization applied across organizations, regardless of workforce skill composition. The findings demonstrate employee skill utilization as a driver of HRM outcomes and the sustainability of “best practice” HRM arguments across all skill levels, even in the face of recession.     

Pay knowledge,pay satisfaction and employee commitment: evidence from Finnish profit‐sharing schemes

Knowledge of the pay system has been identified as one of the key elements affecting the success of the reward system. In this paper, the aim is to study how communication, performance feedback and membership length are related to profit‐sharing knowledge, and how profit‐sharing knowledge is related to profit‐sharing satisfaction and organisational commitment. The data is collected from Finnish personnel funds, which are deferred profit‐sharing schemes. Survey data from over 753 employees in 30 companies in different sectors were used. In studying the antecedents of profit‐sharing knowledge, we found strong evidence that better profit‐sharing communication and higher membership length increase profit‐sharing knowledge. Furthermore, we find strong evidence that the relationship from profit‐sharing knowledge to commitment is mediated by profit‐sharing satisfaction. We discuss the implications for management.     

Flexible Working,Individual Performance,and Employee Attitudes: Comparing Formal and Informal Arrangements

In the context of a wider trend to individualize human resource management, this article examines the relationship between flexible working arrangements and individual performance. Drawing on a range of theories, this article also examines potential indirect effects on employee performance via job satisfaction and organizational commitment and analyzes whether these relationships vary according to whether the arrangement was set up through a formal process or negotiated informally between the employee and his or her line manager. Extant research has tended to focus on formal arrangements, however, informal arrangements are widespread and may better accommodate work‐life preferences, thereby potentially fostering more positive attitudes from employees. Survey data from 2,617 employees in four large organizations with well‐established flexible working policies are analyzed. Results from structural equation models show average positive indirect effects from informal flexible working, but also negative direct effects from formal flexible working. When two forms of flexible working amenable to being set up by both formal and informal means are examined separately, formal arrangements for flexibility over working hours are found to be negatively associated with performance, but also a source of greater job satisfaction; informal remote working arrangements have positive indirect effects via organizational commitment and job satisfaction on worker performance. © 2016 Wiley Periodicals, Inc.     

Employee representation and partnership in the non‐union sector: a paradox of intention?

Non‐union forms of employee representation have become increasingly prominent in UK workplaces in the last 15 years. In addition, partnership working has been encouraged by New Labour, the Chartered Institute of Personnel and Development, the Confederation of British Industry and the TUC as a route to higher commitment and higher individual and organisational performance. These trends have been further encouraged by recent European Union legislation. This article seeks to examine the implied linkages between non‐union employee representative mechanisms and partnership working and their influence on the effectiveness of employee voice as a conduit of high performance. The article is based on a case study organisation from within the UK finance sector, and data are drawn from semi‐structured interviews with managers and staff and a survey of employee attitudes. The article concludes that employers’ attempts to utilise a non‐union partnership framework for organisational gain are severely constrained by structural limitations on effective employee voice.     

Patterns,ideologies and strategies of non‐statutory employee representation in German private sector companies

Non‐statutory firm level employee representation (NSR), which in contrast to legally based works councils is composed of voluntary patterns, is by now only rarely recognised in German labour relations debate and research. Based on case studies, the article analyses the establishment, modes of operation and participation outcome of NSRs in German private sector companies. While previous NSR research in countries such as Britain and the United States mainly focused on employer‐initiated representation plans, the array of NSRs in German companies appears to be broader: Four types of NSRs are introduced, and a theoretical account is developed, which emphasises cultural–institutional arguments and actors strategies. Hence, it is argued that while NSRs appear to be instruments of management seeking to effectively organise company interest regulation, they strongly reflect cultural conditions and ideologies of non‐statutory employee representation.     

Gainsharing and knowledge sharing: the effects of labour–management co-operation

We compare patterns of employee knowledge sharing in the form of suggestions for reducing costs and improving productivity submitted as part of a gainsharing reward system in two organizations. Combining insights from recent studies that use employee risk sharing and organizational learning frameworks to understand how gainsharing programmes work, we propose that employees' willingness to share high-risk (second-order-learning) knowledge with management is affected by the degree of labour–management co-operation and trust. Specifically, we hypothesize that union support and involvement in gainsharing affects employee knowledge sharing by increasing employees' initial acceptance of the compensation risk associated with gainsharing and by facilitating employee willingness to take on additional compensation and employment risk over time. We test these hypotheses using time series data on employee suggestions and gainsharing performance at two locations with similarly structured gainsharing plans but different levels of labour–management co-operation. The results generally support our hypotheses. We conclude by considering the implications of these results for gainsharing design and implementation as well as the broader implications of the effect of HR practices on employee knowledge sharing and knowledge management in organizations.     

Financial performance and the long‐term link with HR practices,work climate and job stress

Using data front a large financial services organisation in the Netherlands, this article reports a longitudinal study at the business unit level. The study addresses the question of which longitudinal relations exist between survey data on perceived HR practices, work climate and job stress on the one hand, and prospective and retrospective financial performance on the other. Data from 223 business units were available for this study. Eight scales were selected from an employee survey answered by 18,142 respondents. These were aggregated to mean scores at the business unit level. Financial performance is operationalised by a yearly profits‐to‐costs ratio. Correcting for employee and business unit characteristics, the eight survey scales predict 22 per cent of the variance in business unit financial performance in the year after the survey.‘Co‐operation between departments’ appears to be the most important predictor. Equally strong evidence was friund for a reverse causation sequence: business unit financial performance in the year before the survey was a significant predictor for four out of eight survey scales, especially for ‘co‐operation between departments’ and ‘job security’. The results underline the importance of studying variance in HR and performance variables within large organisatiuns, and the possibilities of using employee surveys in this research context. Limitations and implications of the findings are discussed.     

Performance Pay and Productivity: A Note on the Moderating Role of a High‐wage Policy

Using panel data from German establishments, this study finds that performance pay is associated with increased productivity only when it is coupled with a high‐wage policy. This holds for individual‐based performance pay, group‐based performance pay, and profit sharing. Copyright © 2016 John Wiley & Sons, Ltd.     

Performance pay in Canadian and Australian firms: a comparative study

Based on data from 315 Canadian and Australian firms, this study examines the incidence of 13 specific forms of performance pay, along with factors that may affect their incidence. Overall, Canadian and Australian firms showed similar incidences of most forms of performance pay, with employee profit sharing the notable exception. Depending on the type and form of performance pay, various factors predicted the incidence of performance pay. As expected, firm size and unionization were among the most important predictors of individual and organizational performance pay, but neither factor predicted group performance pay. The results also indicated that high involvement firms in both Canada and Australia used more organizational performance pay than other firms, but not more group or individual performance pay. This study provides qualified support for convergence in international pay practices, but also highlights the continued importance of contextual and firm-level factors.