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Challenging the structures and values of traditional organizations, locating the right mix of power, information, rewards, and knowledge (also known as PIRK) at all levels, encouraging employee commitment to the success of the organization, and utilizing an employee-centered approach as opposed to a control-oriented approach to management
The concept of the high-involvement organization stems from the principles of employee involvement. The creation of a high-involvement organization is the result of a change in the entire design of the organization through implementation of employee involvement strategies. Employee involvement was introduced as a new philosophy of organizational management at a time when mass acceptance of the traditional bureaucratic style began to erode (Lawler, 1986). Used interchangeably with the terms “empowerment” and “participative management”, employee involvement has replaced the phrase “quality of work life” that originated in the 1950s. The goal of employee involvement is to enhance organizational performance and workers’ well being through increasing decision-making power at all levels of the organization. (Cummings & Worley, 2001). Workers are involved in reaching business goals. This is based on the belief that employees will take more pride and interest if they are allowed to make meaningful contributions to their work and influence decisions made about it (Aubrey & Felkins, 1988).
The high-involvement organization is one of the major applications of the philosophy and practices of employee involvement (Cummings & Worley, 2001). Some of the hallmarks of the high-involvement model are as follows: challenging the structures and values of traditional organizations, locating the right mix of power, information, rewards, and knowledge (also known as PIRK) at all levels, encouraging employee commitment to the success of the organization, and utilizing an employee-centered approach as opposed to a control-oriented approach to management (Lawler, 1986; Lawler, 1991; Lawler, 1992). Each of these key characteristics will be discussed in more detail.
Values and Structure of the Traditional Approach vs. the High-Involvement Approach
The high-involvement approach is devoted to the belief that value must be added at all levels of the organization. Value is added by allowing individuals more autonomy; they control their own work, thereby reducing the need for many layers of management (Lawler, 1991). In the traditional paradigm, the assumption was that organizations should add value primarily at the top because that was where all key decisions were made. A tall hierarchy was advocated in order to properly control employees. In the new paradigm, a flatter organization is required in which work is organized around small groups that have their own customers and accountability (Lawler, 1996).
Because there are fewer layers of management, power distance is much smaller in than in traditional organizations. Influence and decision-making are shared among individuals who are otherwise unequal, provided managers are willing to distribute the power that is typically associated with upper level positions (Kim, 2002). The flatter structure also facilitates communication between managers and their subordinates. Important business information is more easily communicated because there are less hierarchical layers to penetrate. Furthermore, job expectations and objectives seem to be communicated to employees more effectively with fewer managerial layers. Since it has been shown that task clarity and an understanding of organizational objectives are a significant determinant of job satisfaction, effective communication appears to be an important advantage of participative management (Kim, 2002).
Power, Information, Rewards and Knowledge
When employees are given the appropriate combination and amount of PIRK, which are the four key elements that promote employee involvement, the organization is on the verge of creating a high-involvement organization. The idea is to ensure that significant amounts of PIRK are located at all levels of the organization, and is moved down through the ranks to the lowest level. The farther these elements are moved downward throughout the organization, the greater the employee involvement. When employees are given the power to make decisions about work that impacts the organization, up to date information about the company in order to make effective decisions, an opportunity to build upon existing skills and learn new skills, and rewards that that are linked to performance outcomes, they are involved in their organization. This, according to Lawler (1986,1992) will yield employees that care more about their workplace and that put more effort into helping their business succeed.
Encouraging Employee Commitment to the Success of the Organization
The high-involvement approach encourages employee commitment to the success of the organization. Employees are more motivated to make a business successful if they are involved in their organization. According to Lawler, (1991) “over the last four or five decades, most large corporations have lost a sense of employee involvement. If employees do not understand the business that they are a part of, they will not care about the business, and their behavior reflects that.” People who do not have psychological and financial ownership in their company don’t put in the extra effort required to help the business succeed (Lawler, 1991). Again, the degree to which an employee is given PIRK is a large determinant of their involvement in the organization, and therefore also a determinant of their commitment or loyalty.
The Employee-Centered Approach vs. the Control-Oriented Approach
The high-involvement model challenges the assertion of traditional management that the best way to direct and control people’s behavior is through bureaucratic rules, regulations, and reward systems (Lawler, 1992). Traditional organizations are often characterized by tight supervision, centralized top-down decision making, inflexible work, little or no accountability on the part of the workers, and low levels of employee commitment (Lawler, 1992). Workers are not encouraged to think, or offer insight or opinions, but to simply perform the tasks assigned to them. According to the philosophy of the newer paradigm, an employee-centered approach as opposed to a control-oriented approach to management is much more effective and mutually beneficial. The focus is on the employee and how their jobs can be re-engineered to be more challenging, rewarding, and clearly linked to business outcomes. People at all levels think for themselves, make work-related decisions, and are held accountable for their work, furthering commitment to the organization (Lawler, 1986).
Interestingly, although this involvement-oriented approach to organizing and managing seems like a highly effective alternative to traditional management (the control-oriented approach), it has only recently shown to have any significant impact on organizations (Lawler, 1992). Although the concept of employee involvement is not a new one, for decades it seemed as if theorists who advocated high-involvement were talking, but the message was not being received. For the greater part of the 1900’s, the bureaucratic approach to management dominated organizational theory.
Modern organizational theory began at the end of the 19th century. Classical organization theory, the bureaucratic approach as articulated by Max Weber was the first cohesive theory of how organizations were structured. Bureaucratic structure fundamentally is the exercise of control on the basis of knowledge (Smithers, 1998). Weber believed that the demands of a mass society, linked to a technologically sophisticated economy, would necessarily lead to an enormous degree of coordination and management (Glassman & Murvar, 1984). The problem he addressed was how large organizations function more systematically. He asserted that domination is exerted through administration and that legal domination requires bureaucracy.
It was bureaucracy that was the most logical and rational structure for large organizations. Organizations utilizing this type of structure have six core characteristics; clearly defined and specialized functions; well defined authority hierarchy; formal rules and procedures; impersonality; employment decisions based on merit and emphasis on written records. Bureaucracy as an organizational form subjects the individual to an oppressive routine and limits individual freedom (Fry, 1989). These multi-layered tall hierarchies have power, information, rewards and knowledge seated at the top where control is exercised by only a few individuals; very little, if any, of these components filtered down to the lower levels of the organization (Schultz & Schultz, 1990).
Captured under the umbrella of classical organization theory is the work of Henri Fayol. His special contribution is to the understanding of organizational functioning or administration. Henri Fayol is considered the founding father of the field of management. He was the first to identify managerial functions and developed guidelines for managers to follow. These guidelines form fourteen principles for effective management that are still influential as a framework of understanding the organization of many organizations (Scott & Mitchell, 1972). His managerial functions of planning, organizing, commanding, coordination and control determined how power, information, rewards and knowledge allow the bureaucratic structure to be implemented by management. The fourteen principles of operation are more psychological in nature than Weber’s organizational structure, and deal primarily with the administration of organizations. Of particular concern are his concepts of subordination of individual interests to the general interests, scalar chain and centralization. These principles perpetuate maintenance of power, information, rewards and knowledge at the upper echelon of the organization. However, there is a softening of the harsh and rigid adherence demonstrated by Weber. These components of Fayol’s theory tend to subjugate the workers to management. Employers viewed their workers as tools rather than resources. The chief characteristic of lower employees pertains to their technical function while the chief characteristic of higher employees (management) is administrative (Gulick & Urwick, 1937).
Thus the emergence of management and organization theory took place in two forms; one, Fayol’s contribution of the principles and elements of management; and two, Weber’s search for a blueprint of rationalized structural arrangements for the purpose of organizational efficiency. Both Fayol and Weber attempt to present schemes for coping with large-scale organizations. Fayol stressed education for management rather than technical training, the importance of planning and organizing, and the ongoing phases of command, coordination, and control. Weber sought to establish a rational-legal basis for authority by tradition and charisma, and to present orderly arrangements for the selection of personnel and execution of activities (Smithers, 1998).
In the early 1900’s Taylor built upon this bureaucratic philosophy of how organizations should be managed. Scientific Management was Taylor’s way to achieve greater efficiency in the management of public business. It was based on the principle that productivity is maximized when work of low-level employees is specialized, standardized and simplified (Fry, 1989). Employees concentrated on doing and not thinking. This was still the domain of management. Taylor’s approach to Scientific Management constituted a harsher critique of management than of the workers. He felt that management was the basic cause of inefficiency, since it had not assumed its fair share of responsibility for the design of performance of work. Workers “soldiered” because management had not performed its functions properly (Brown, 1954). His theory of management gained widespread acceptance because there were no other competing management models. The control-oriented approach remained popular for many decades.
The Hawthorne studies conducted by Elton Mayo in the 1920’s received a great deal of attention. It started out as industrial engineering research that yielded unexpected results. It uncovered the influential role of upward communication and feedback as important activities and highlighted the role of social norms and informal channels of communication (Manning & de Gruyter, 1992). These components had a profound effect on worker productivity with an impact greater than external variables such as technology. This study fostered the human-relations movement, which dealt with the human aspect of organizations. It has also been referred to as the neoclassical school because it was initially a reaction to the shortcomings of the classical approach to management (Brown, 1954). There is a shift of philosophy as to where power, information, rewards and knowledge should rest. Increasingly researchers are concerned with building the underlying psychological processes necessary to achieving goals through coordination and controlling effort; moving to a broader plane for a solution that would call for much more creativity and imagination than was previously witnessed in business life (Pitcher, 1981).
In 1939, Lewin and his colleagues, Lippitt and White, interested in the development of an empirically verifiable theory, conducted research on the effect that leadership styles had on group members’ behavior. Of the three styles that they identified, democratic, autocratic and laissez-faire, democratic leadership was the most effective; beyond what could be accounted for by individual differences. Additional experimentation done by Lewin testing goal-setting and social climates had profound impact on the field of group dynamics. His research brought about a transformation in thinking away from personality taxonomies and the measurement of attitudes to a concern with the functional relationships between shared human characteristics and organizational social settings. Thus we see a more scientific approach to organization theories (Kimble & Schlesinger, 1985).
The human resources school represents a substantial progression from the human-relations movement. The behavioral approach did not always increase productivity. Thus, motivation and leadership techniques become a topic of great interest. The human resources school understood that employees are very creative and competent and that much of their talent was largely untapped by management. The general characteristics of human resources theory show a filtering down of power, information rewards and knowledge to lower levels, but were not inclusive of all organizational levels. Decisions are made at low levels due to participative management initiatives. There is more communication, especially upward and horizontally. There is more openness and trust. Individual and organizational goals are often shared. There is greater recognition and responsibility, and more opportunity for creativity. There is a major paradigm shift as theories are critically analyzed in terms of organizational functioning, taking the human component into consideration, which led to the system design approach.
The “system” is defined as an organized, unitary whole composed of two or more interdependent parts or subsystems where the whole contains identifiable boundaries from its environment. Boulding presents a classification that represents an integration of the levels of several systems theorists. Levels of organizations include static structure or the anatomy of a system; the open system or level of systems that exhibit the ability to rejuvenate, grow and reproduce; and the transcendental systems which exhibit systematic structures whose components are not quantifiable (Scott & Mitchell, 1972). The systems approach allows researchers to address questions such as the identification and interdependence of the systems strategic parts as well as the main processes in the system that link the parts and facilitate their adjustment to each other. Changes in one part of the system affect the other parts as well as the whole. It is customary to note that systems theory represents the merger of many ideas from scientific management and from human-relations movement. It is project-based, and it also strives toward synergism, where the whole is greater than the sum of its parts, through humanistic management of at least the internal environment (the informal organization of workers).
Much of systems theory resembles the scientific method: a hypothesis is formulated, a controlled experiment is designed, and data is collected and analyzed. The purpose is to maintain the use of science in management to obtain “real time” results that can be used instantaneously to affect control in the organization. For managers, this means implementing the following objectives: defining the company as a system, establishing system objectives (performance criteria), identifying wider systems such as the environment, creating formal subsystems and integrating those subsystems with the whole (Khandwalla, 1977).
Systems theory focuses on the internal environment and what actually happens within the organization. Contingency theory, an outgrowth of systems design focuses on both the internal and external environments and their impact on management practices. The variables this theory considers are: the size of the organization, how it adapts to the environment, differences among resources and operations activities, managerial assumptions about employees, strategies and technology. The main idea of contingency theory is the interrelationship between organizational structure and function, taking into account all aspects of all the components. Contingency theory states there is no universal or one best way to manage. The design of an organization and its subsystems must fit with the environment. Effective organizations not only have the proper fit with the environment but also between its subsystems and the needs of an organization which are better satisfied when it is properly designed and management style is appropriate both to the task undertaken and the nature of the work group. These features allow a richer model of human characteristics to be integrated into more adaptable organizational structure.
Contingency theory was an outgrowth of studies conducted by several prolific researchers. Joan Woodward studied approximately 100 British manufacturing firms. She determined that performance could be maximized when there was a match between the organizational structure and the type of production technology. Small-batch production, such as specialized electronic components or units, require a moderate span of control with about 20-30 workers reporting to a supervisor, and a short chain of command. Large batch companies, or mass-production organizations, such as automobile assemblers, require a large span of control with about 40-50 workers, and a fairly long chain of command with several levels of organizational hierarchy. Finally continuous process manufacturing, such as oil refining, require a small span of control and a very long chain of command. This research on the analysis of technical variables supports the idea that to understand the relationship between technology, managerial control and organizational behavior in batch production, technology must be viewed as a multidimensional concept. Specific parameters of technology may determine the structure of the organization (Woodward, 1980; Woodward, 1993). This research leads to the assumption that power and influence is contingent upon the type of technology around which the organization is structured.
Lawrence and Lorch’s classic 1967 study, especially the six companies in the plastics industry, highlight their argument that in complex environments different subunits within a given type of organization deal differently with external demands. As a result, organizations create differing structural features, such as values, attitudes, and orientations. However, in order to function as a whole, these subunits must become integrated or collaborate in order to further the organizations’ goals (Dalton & Lawrence, 1970). In highly differentiated organizations, integration of activities becomes very important. Organizations try to achieve this unity of purpose by using a number of mechanisms: by designing a chain of command; by having integrating committees or liaison individuals and groups; by setting up standard operating procedures; or by training managers in human relations (Pollard, 1978).
The novel aspects of the Lawrence and Lorsch model is not that organizations are differentiated or that they need to have their activities properly coordinated, but that the organization, in order to be effective, needs to be both differentiated and integrated and that the degree of each of these components depends on the degree of diversity in the task environments of the organization’s different departments (Dalton, Lawrence & Lorsch, 1970).
Burns and Stalker examined 20 British firms in the electronics industry. They identified two radically opposite management styles, which they called the organic style and the mechanistic style. The organic style is characterized by a highly flexible and informal organization, with individuals communicating not only with their immediate superiors, subordinates, and colleagues, but also with anyone else in the organization with which they have a task-related need to communicate (Pollard, 1978). Formal authority is not nearly as important as situational authority. In other words, the degree of influence a person has in a given situation depends on what contribution that person can make to the solution of the problem rather than to formal rank in the organization. Duties and responsibilities, too, are constantly reshaped by situational demands. The awareness of organizational goals permeates not only the upper echelons but also the rank and file. Burns and Stalker observed a tendency for firms facing rapid technological and market change to practice this style. They felt that this style is appropriate to unstable conditions in which novel problems continually arise. In such conditions, specialists must continually interact and readjust their plans. This becomes possible if management philosophy encourages vertical and horizontal interactions that ignore departmental boundaries and channels of communication (Pfeffer, 1997).
The mechanistic style has many of the elements of bureaucracy: strictly defined duties, responsibilities, and authority; highly structured channels of communication; a highly formalized authority. In addition, it has some of the elements of traditional management, such as high visible status differences between the upper and lower echelons of management and a great deal of insistence on personal and departmental loyalty. Burns and Stalker observed a tendency for firms in technologically static parts of the electronics industry to us this management style (Von Glinow & Mohrman, 1990).
The organic and mechanistic styles are ideal types. In actuality organizations are likely to show different combinations of elements of the two styles. There are few organizations that use purely one style or the other.
Karl Weick put yet another spin on contingency theory, focusing on the activity of organizing rather than the structure of organizations. The activity of organizing is directed toward removing equivocality from the informational environment through communication. Information has many levels of meaning due to ambiguity, complexity, and obscurity. The individual’s purpose of communication in an organization is to reduce the equivocality of particular information. Organizing processes encompass three factors; enactment, responding to information created, selection, evaluating previous actions choosing those that should be repeated, and retention, storing the initial information, the action taken and the evaluation of the action. Implementation of these activities is supported by the assembly rule in which the communicator determines the criteria on which they decide what behavior cycle to perform, remove equivocality from the information input and through behavior cycle the actions undertaken are in accord with the assembly rule.
Based upon the organizing processes, Weick built a model of organizing. The unobtrusive control theory explains how organizations exert power over their employees by using corporate identification to foster conformity to company decision-making patterns. Through identification with the organization, individuals link themselves to elements in the social scene. This affects a variety of work attitudes, behaviors and outcomes. The individual who is inclined to identify with an organization will be open to persuasive communication from various sources within that organization; therefore the organization can communicate decisional premises with relative ease to those individuals. Finally through account analysis, clusters of terms and representative anecdotes describe the goals, values, mission, policy and procedures of both the organization and the individual’s goals.
During the era in which Weick introduced his model, criticism of the bureaucratic approach to managing and organizing became increasingly evident. The 1960s marked initial experimentation with employee involvement. AT&T was among the first companies to implement an application of employee involvement. They introduced a job enrichment program that expanded jobs so that employees had more responsibility and authority (Lawler, 1986). Although this represented a small step in moving away from the traditional model, widespread change did not occur. Actually, the control-oriented approach had reached its greatest popularity during this decade. The U.S. was at the peak of its economic power, and many Americans saw no reason to change what they thought had been working well for so long. Most people attributed American’s competitive advantage to the traditional style of organizing and managing. Participative management (or employee involvement) was not well received as a new and improved style of running an organization. The concept of participative management was treated as an interesting academic theory that stimulated ideas and seemed logical, but not as an idea that could be realized by application to real world business settings (Lawler, 1986).
With the introduction of the 1970s, we saw increasing criticism of the traditional model, further and more extensive experimentation, learning, and most of all debate about the effectiveness of different approaches to management (Lawler, 1986). One important initiative, that stimulated a national debate, was a book titled Work in America that was published in 1973. The Department of Health, Education, and Welfare under Elliot Richardson commissioned the writing of a major report that was ultimately published as this book. Work in America made a very powerful argument for changing the nature of bureaucratic organizations in the U.S. It highlighted the significant negative consequences of bureaucracy work life on employees, and sensitized people to the alternatives to this type of work environment. Additionally, initiatives to encourage experimentation with quality-of-work-life projects began. Several companies built new design plants influenced by the idea of participative management. One of these companies, the Topeka, Kansas General Foods plant, became the object of considerable press attention because it moved beyond experiments in job design to changes that occur in the work of lower-level employees. The emphasis was on moving PIRK down to the lowest levels.
This new design generated an abundance of strong feelings and reactions. It was not received well by the majority American managers nationwide. The new plant was frequently written about in business journals and newspapers, being called “democracy gone wild” and “a form of communism”. Despite studies showing that this new General Foods plant was significantly more effective than comparable plants after their new design, the traditional control-oriented approach once again survived and prevailed as the dominant management philosophy of the decade. Critics of the involvement-oriented approach questioned whether people really wanted more involving work. They suggested that many people prefer unchallenging work so that they can devote their efforts more fully to lead an exciting personal and social life (Lawler, 1986).
In the 1980s, American companies began to fall behind foreign competitors in a number of industries. Even the most successful companies were lagging. Competitive advantages and the superior performance of these companies was lost (Lawler, 1986; Lawler, 1992). Managers finally began to be receptive to the message that perhaps they needed to change their approach to organizational management. Until this point in time, there had been no compelling reason to change the way organizations were managed, as American companies were admired worldwide for their success. With the decline in organizational performance, American managers began to perceive the slow growth in productivity and poor managerial performance as a threat to our economic well-being. Adding to this concern, in 1985, a highly critical article written by Robert Reich, pointed out that American’s top corporations had been performing poorly for several years. He included alarming statistics and attributed the concentration of power and rewards in the hands of top management as the cause for the shocking decline in the performance of American companies. This revelation reversed the negativism of the 1970s, and managers and business people gradually became more receptive to different approaches to management that abandoned the basic premises of the traditional model (Lawler, 1986; Lawler, 1992).
From the 1990s until today, the involvement-oriented approach has slowly become more accepted and adopted in organizations. In many ways, however, it is not yet a mature approach. The practices and policies that are needed to support it have not been developed as completely as in the control-oriented approach (Lawler & Mohrman, 1989). Only recently has it been advocated to broaden the scope of high-involvement management to the entire organization. An organization that utilizes and supports a participative/high-involvement management approach is significantly different from one that is transformed into a high-involvement organization (Lawler & Mohrman, 1989). As previously mentioned, creating a high-involvement organization requires the creation of new work systems, policies, procedures, organizational design; in essence, the creation of an entirely new type of organization (Lawler, 1992). Until recently, most of the change programs were aimed only at changing management behavior or at work design. The creation of a high-involvement organization requires an entire systems approach as opposed to implementing isolated changes. For example, changing an organization’s reward system or changing a particular job’s design may result in increased employee involvement, but this alone cannot constitute a high-involvement organization (Lawler, 1992).
Also stemming from the 90s is the concept of the high-involvement organization as workplace democracy. Writers began to discuss the gross inconsistency in American organizational practices and our values as a democratic society (Cheney, 1995). Although most of the institutions in the U.S. are committed to democratic decision-making, freedom of speech, and individual rights, the control-oriented model, most often used by organizations, is based on a completely opposite set of principles (Lawler, 1992). In other words, there exists a huge philosophical gap between our societal values and political practices and the reality of how most organizations are managed. Many business leaders still believe that the highest level of organizational effectiveness can be achieved only by practicing a form of management that is run most closely to that of an autocracy. For decades, society somehow exempted work organizations from democratic, participative, and egalitarian principles, and was willing to give up certain democratic rights when they entered the workforce (Lawler, 1992). In many organizations, employees had little or no decision-making power, and were discouraged from voicing opinions, offering suggestions or making any contribution not specifically assigned to them. This came to be accepted as a norm, and was not questioned. Today, this attitude is changing, as many people are uncomfortable with being in an autocratic-style work environment while other features of their lives are democratic.
G. Cheney is one writer who was particularly interested in the topic of organizational democracy. He referred to the fact that the principles of democracy are rarely applied to the workplace as “one of the greatest ironies of the modern world” (Cheney, 1995). His definition of organizational democracy is: A system of governance which truly values individual goals and feelings as well as typical organization objectives which actively fosters the connection between those two sets of concerns by encouraging individual contributions to important organizational choices (Cheney, 1995). Accordingly, the degree to which an organization is democratic is determined by the extent to which employees are participating or involved, as demonstrated by the latter part of the definition. Employee participation, in turn, is largely a function of having the right mix of PIRK. Since effectively implemented high-involvement organizations locate PIRK at every level, this type of organization can bridge the philosophical gap between the values of modern society and our workplace practices. It reflects what we stand for as a democratic society, more accurately than a bureaucratic organization.
The implementation of a high-involvement organization does not follow any specific structure as one would see in quality circles, or 360-degree feedback (Vandenberg, Richardson & Eastman, 1999). Instead, it relies heavily on the four features mentioned earlier known as PIRK. PIRK is extremely critical to the contribution for implementing an effective high-involvement program. The concept of PIRK is necessary at every level of the organization and Lawler (1986, 1992) defines these attributes as follows:
Power to act and make decisions about the work in all its aspects. There are various methods for decision-making styles; however in a participative style environment it should be possible for employees at all levels to make decisions. Such decisions are those that involve the day to day functions of the organization (that which is relevant to everyone’s job) and decisions made in a more participative manner, are more likely to be implemented to actually affect the operations of the organization. In addition to this, it is also important to look at those decisions continuously made by Human Resources in an effort to include a participative approach to issues that deserve employee input (i.e. salary, benefits, selection & training). Lawler (1992) made the following statement on how power may influence a company, “Power is the ability to influence what happens to an organization.”
Information about processes, quality, customer feedback, events and business results. Information is a necessary force in the organization, it is imperative that the flow be effective both upward and downward. A participative management style will ensure that upward flow is equally important as downward flow. This can be ensured through employee surveys. Information varies and with that so does its sensitivity. It is important to establish who should have access to particular information and how it will be conveyed. The main idea behind the information feature is to incorporate a strong communication system within the organization. The company should share valid data about the organization’s performance and future plans with all its employees, this includes individuals holding lower level positions. This information should be readily available and provided on a regular basis (Lawler, 1992).
Rewards are tied to business results and contribution. They can be particularly influential in a high-involvement organization. For example, intrinsic rewards can increase feelings of accomplishment and can directly affect the level of involvement an individual wishes to commit to the organization. Extrinsic rewards affect high-involvement organizations because opportunities, development, and pay would be competitive. In retrospect, it is likely that the increased commitment of an involved employee will produce greater results; hence the extrinsic rewards should be available. In any high-involvement organization it would be advisable to look at how the reward system is structured particularly ensuring that lower-level employees are rewarded based on organizational performance (Lawler, 1986). The rewards should be based on employee performance because this will facilitate aligning an employee’s interests with organizational effectiveness.
Knowledge of the work, the business and the total work system in implementing a high-involvement organization it is advisable to incorporate training.
This is important not just for an employee’s job, but also for other factors that are influential to his/her career development. In a high-involvement organization it is advisable to broaden employee knowledge, as they are now seen as contributors to the organization at various levels, not specific to their jobs. According to Lawler (1992), organizations should provide training that focuses on the following areas: decision-making skills, economics, problem analysis, and interpersonal skills. This type of training will enable employees participate in a much broader array of decision-making activities and will provide the individual with a better understanding of the company and how it works. By empowering employees with training they will be prepared to contribute in a variety of activities presented.
The combination of these four features is the foundation for implementing a high-involvement organization they are seen as interdependent of each other as Lawler (1986) stated:
Power without knowledge, information, and rewards is likely to lead to poor decisions. Information and knowledge without power leads to frustration because people cannot use their expertise. Rewards for organizational performance without power, knowledge and information can lead to frustration and lack of motivation because people cannot influence rewards. Information, knowledge, and power without rewards for organizational performance are dangerous because nothing will ensure that people will exercise their power in ways that will contribute to organizational effectiveness. (P.42)
With the four factors embedded in the foundation of the high-involvement organization plan, it is then that the components can be established. It is advisable to keep in mind that when implementing high-involvement organization there is no universally accepted approach. This suggests that there are indeed components of the high-involvement organization that should be implemented specific to the organization itself.
The organization’s structure is an important component to consider when developing a high-involvement organization. The organization structurally should be flat, in that there are fewer levels than the traditional organization may have. This is to encourage lateral growth among employees. A strategy conducive to a flat organization is a team-based structure. It is also necessary for the organization to be lean, there should be the right amount of jobs for the right amount of people and in turn, those people should “fit” their positions. If the organization is large it should look to create what Lawler has termed the “mini-enterprise”. That is breaking down the barriers of a whole organization into separate divisions in which the employees are able to see results more clearly. Management should encourage input and feedback from all employees at all levels (Lawler, 1986).
Job design is another component that can be beneficial to an organization developing an involved atmosphere. An important factor to consider under this component is the employees’ input on how their job is performed and accomplished. An individual will more likely be intrinsically motivated when they feel they have been an integral part of the decision-making process. In addition to this, it is also imperative that management recognizes that jobs that even with a team-based system jobs need to be individually enriched (Lawler, 1986).
An organization wanting to implement a participative style within their company should incorporate an information system that is open, inclusive, tied to jobs, decentralized and team-based. The main idea within this component is that information about how the organization is performing should be communicated to employees so that they may correct their behaviors and improve for the future. Employees also need extensive training to help them understand financial and performance results. This type of training will allow employees to understand and interpret business results. In addition, the organization should provide information so that individuals are capable of coordinating and managing themselves. The goals and standards should be set and based on input from each work area. This will promote increase performance and feedback (Lawler, 1992).
A high-involvement organization should provide an atmosphere where individuals are in charge of their own careers and thus are allowed to participate in managing it. This involves training employees on how to manage their careers and allowing them the flexibility to participate in formulating developmental plans for themselves. In addition, the organization should post job openings because this supports the idea of individuals taking responsibility for their career development. The long-term career development of employees is critical to the success of high-involvement organizations. Because high-involvement organizations are flatter and have fewer managers this type of organization should encourage horizontal movements. Most traditional organizations are based on a tall and vertical structure, therefore encouraging vertical moves. Horizontal moves are encouraged in high-involvement organizations because this allows employees to have a better and broader understanding of the organization. By encouraging and rewarding horizontal movement individuals learn about multiple functions and how the functions of a company are integrated (Lawler, 1992). This is beneficial to the company because when employees have additional knowledge of different areas of the company they will be better supervisors and managers when promoted in the future.
The selection process of a high-involvement organization should include a realistic job preview. This will ensure that the potential candidates are aware not only of all the facets of the job, but also of the type of organization in which they will become a part. A high-involvement organization is not a traditional style organization, and not all individuals are likely to embrace the idea. Including team players in the interview process is a way in which current employees and the candidate can get a feel for one another. A high-involvement organization will hire an individual not only to fill a position, but with growth potential in mind. The organization should convey this to the applicant.
Training is an essential part of a high-involvement organization. The very essence of such an organization is its commitment to employee involvement, development and growth. In order for training to be effective it needs to have heavy commitment from all employees. It should look at educating employees on the economics of the organization. This allows for an employee to better understand how the business is run and what the bottom line is. While it is important during training to focus on job-related skills, it would also be beneficial to help develop the interpersonal skills of the employee (Lawler, 1986).
The reward system of a high-involvement organization should all be salaried and competitive with outside organizations. A skill-based system is ideal, in that it is possible for a team player to make more than his/her manager. Benefits should include flexible benefits, gain sharing and profit sharing. The former allows for flexibility for personal circumstances and the latter offers employees the chance to take ownership in their company (Lawler, 1986).
The personnel policies that gain commitment are those established by employees. Thus, it is advisable that when creating such policies input and feedback is gathered from all individuals affected (Lawler, 1986).
Finally, the physical layout of a high-involvement organization will reinforce a classless structure. An example of this would be ridding the parking lot of specified spots for upper-management. It is also important to encourage safe work practices and to educate employees on work place safety (Lawler, 1986).
Chevron attempted to utilize high-involving techniques to solve some of their pressing financial and employment issues as international competition began to eat away at their standing as an industry leader.
Chevron was a mini-enterprise oriented company with four business groups: Chevron Corporation, Chevron Chemical Corporation, Chevron Information Technology Company, and Chevron Shipping Company. Overall the company employed 34,000 people. Chevron was looking for a way to quickly bring about large-scale changes in the organization due to global competitive pressures and falling crude oil prices. Previously the company was forced to layoff several employees and to restructure their workforce (Flynn, 1996). The company was operating in a slow- to no-growth industry and had restructured its performance management system in 1991 to emphasize career enrichment (Caudron, 1994). By 1996 the company had instituted a new program where employees would move from areas in the company that had too many employees, to areas that needed employees. This was done to help curb more layoffs.
Chevron Corporation was the parent organization to the other three business groups. They had operations in 90 countries and were involved in such things as exploration and production, transportation, refining and retail marketing, and chemical manufacturing and sales.
Chevron’s three other units were broken down into smaller companies. Chevron Chemical Company employed approximately 5,000 people and was responsible for the supply of petroleum-based commodity and specialty chemicals to businesses. Chevron Information Technology (CIT) was the smallest of the three employing 1,300 people. CIT was the internal operating company, delivering a global IT infrastructure and differentiated custom IT solutions to Chevron businesses. Chevron Shipping Company was the shipping unit, responsible for shipping commodity for the other Chevron businesses. They employed 1,900 people worldwide.
Chevron needed a venue to put together large-scale change initiatives that would be quickly accepted. Traditionally large-scale change could take approximately three years to be fully accepted in an organization. Acceptance of change in an organization comes more quickly when employees are involved in the process, planning the change, coming up with solutions to company problems and putting the change initiative in place. With the help of Christian M. Ellise and Michael Norman, Senior Consultants at Sibson & Co., Chevron began using a forum called a Direct Participation Conference.
Direct Participation is a high-involvement approach to achieving change in a short time frame. The roots of the process are in the work of Fred Emery & Marvin Weisbord’s Search/Future Search Conferences. The process centers itself around large-scale conferences. The overall idea is to get a representative sample of the major stakeholders in the organization together in one place; this would be employees, vendors, customers and suppliers. The stakeholders work collectively to come up with solutions to company problems.
In planning a Direct Participation Conference senior management is responsible for deciding on the issues to be discussed and set boundaries for what can be changed. After the issues and boundaries have been set, senior management needs to communicate that the process is vital and must be taken seriously. In Chevron’s case this was done through personal telephone calls to chosen participants, face-to-face discussions, and personalized invitations to the conference. During the conference senior management must be present at the conference and participate as equals.
Once the grounds for discussion have been set, the Planning Team goes into action. Prior to the conference the planning team is responsible for framing the issues that will be discussed. The team makes necessary information available to all participants, develops and distributes contextual materials in information packets. The Planning Team is responsible for formally selecting the participants, ensuring that all aspects of organizational diversity are represented, both through the hierarchy and across the organization. The team also designs the tools to be used by conference participants and the conference activities. An important step is developing templates that participants use to capture outputs in a specific, detailed and consistent format. As long as the output is specific, detailed and consistent it is easier to communicate and to implement. During the conference the Planning Team acts as facilitators by keeping the process focused during the conference. This is accomplished by assisting to channel the discussions.
Technology is the most important aspect of the Direct Participation conference. Chevron instituted Interactive Polling, which gave participants graphically intensive information as they needed it. Interactive Polling also allowed facilitators to follow the progress of the conference and to recognize when a decision could inadvertently have an adverse impact on a given minority. Chevron would then take the results that came out of the conference, summarize it and convey the outputs to the entire organization the day that the conference ended. The following week more detailed reports would be released to the global organization.
Between 1996 and 1998 four conferences were held by each of the business groups. The company continued to hold conferences of this nature until approximately 2000, when Chevron merged with Texaco to become Chevron-Texaco. Below we will look at the outcomes of the four conferences held between 1996 and 1998. It is important to bear in mind that Chevron was not looking to become a high-involvement organization, but to involve their employees in a major change process. It was through the implementation of several high-involvement techniques, that Chevron attempted to address some of their organizational goals.
Chevron Shipping Company wanted to identify $5 million in annual employee-related cost savings at their 1997 conference. As a rule, the topic involving salaries was not placed on the table for discussion. They involved 150 mariners & shore staff, the people who actually work on the ships and in the docks. The Participants came up with 13 recommendations that would cut $1.9 million in costs, another $3.4 million in cost-saving ideas were identified that needed to be further reviewed by management. The group found savings that management could not have known about and avoided adverse impact on the Asian officers. They were able to identify these savings without cutting the popular spouse travel program.
Chevron Chemical wanted to redesign their performance systems to increase employees’ satisfaction of the process at their 1996 conference. They invited 180 employees, customers and suppliers. Conference participants were able to come up with specific recommendations for enhancing job selection, career development, performance management and recognition systems. These changes included adding a neutral, nonvoting member to job selection teams. The changes instituted from the conference led to a 20% increase in employee commitment and 50% improvement in satisfaction over the job selection process as measured through a company-wide employee survey. Prior to the conference, changes of this magnitude on employee commitment and satisfaction were unheard of.
In their 1998 conference Chevron Corporation wanted to develop a system to promote diversity and to measure diversity achievements. Two hundred employees from all over the globe participated in the conference where 15 strategies for increasing diversity were developed. In addition, key metrics including numerical targets for women & minorities for leadership roles, diversity plans that are part of all leaders’ performance evaluations, and improvement in the company worldwide employee survey with regards to diversity and inclusiveness.
Chevron Information Technology’s 1998 conference was designed to create a new strategy to ensure the continued delivery of value-added services. The company had restructured to remain competitive in the global market; however, employees were not buying into the change and remained confused and mistrustful of the company. In addition, the company also wanted to address some gender and race discrimination issues. One hundred employees and customers participated in the conference. Six action items were identified to bring about a better understanding of the new business strategy. A mentoring program was designed to help women and minorities obtain more leadership positions. Participants from this conference signed up to participate in ongoing groups after the conference.
Through these conferences Chevron added a participative council to set goals and standards on the company’s functioning. They were also able to add open, inclusive information systems. This is in addition to the mini-enterprise-oriented, team-based structure that the company already had in place. They also already had a process for enriching jobs (Caudron), they had career counseling available to employees and encouraged horizontal movement (Flynn), they had a team-based system for selecting employees (which was improved at one of the conferences discussed above). Chevron also had a heavy commitment to training and education at all levels (Messmer, 1996), a targeted rewards program (Wallsten, 1998). Through the horizontal moves within the company, Chevron was able to guarantee some stability of employment.
Chevron gave their employees power to make decisions about the work that they do and the personnel policies that govern their jobs. They provided information about what was going on in other areas of the company as well as what the issues were that needed to be addressed. They provided their employees with the intrinsic rewards of involvement in the process, and the knowledge to make good decisions as seen through the benefits that came out of the four conferences reviewed above.
Through the 1990’s a lot of literature was published highlighting Chevron’s successes. However, in 2000 Chevron merged with Texaco, since that time very little has been published about Chevron’s successes in managing their human capital. Prior to their merger Chevron was showing promise of being a true high-involvement organization. Hopefully the company can regain some of what they had in the past to continue to be a successful organization.
The high-involvement model has had an impact on many organizations based within the Unites States. However, there may be other factors that affect an organizations’ willingness to adopt high-involvement techniques as a more optimal organizational style. Research on other cultures and societies may cast a different light on the concepts of high-involvement techniques as a viable alternative to more traditional organizational models.
The combination of the high-involvement elements, PIRK realistically could not exist simultaneously. If all the elements exist, they would most probably differ in terms of their proportion within an organization. Thus, no two organizations would have the same amount of PIRK within their organizations, regardless of how similar their external environments. Organizations that operate in the same socio-political culture of one country will still differ because each organization boasts of their own unique corporate culture.
External socio-political culture has long been considered a factor in shaping corporate culture (Hofstede, 1980, Thorne et al., 2002, Bennett, 1999). Differences in the elements of PIRK in organizations within the same national culture make the differences between organizations in separate national cultures all the more salient. It is interesting to examine the principles of high-involvement in organizations situated within borders where the general population adheres to very different norms and attitudes.
Corporate culture can best be described as the set of norms and behaviors that employees within an organization adhere to collectively. Most managers base the importance of internal organizational culture on the idea that it represents the organization’s philosophy on how best to achieve high quality products and services. Contemporary viewpoints on the nature of quality per se go beyond the notion of a good product. Quality entails responsible customer service, and includes the representation of the ideas of employees’ at all organizational levels into the making of a product or service.
Today, every mature organization in the industrialized world links corporate culture to world-class quality. Worker empowerment has gained widespread attention in the industrialized world as a part of corporate culture. According to Rao, Raghunathan, & Solis (1999), a stable way to obtaining world-class quality is the empowerment and involvement of workers. Environments within organizations must foster full participation, quality leadership, and personal and organizational growth (Rao, et al., 1999). This idea is being accepted more and more by western nations where many organizations in these countries are open about employee involvement principles.
However, this is not the case in eastern countries such as China and India (Rao et al., 1999, Zellmer and Gibson, 2001, Hofstede, 1980). The high-involvement principles have not appealed to some eastern cultures; this may be attributed to their national attitudinal norms. More specifically, Hofstede’s (1980) main proposition sums up how this east-west disparity may be explained: Culturally influenced dispositional characteristics of a nation serve as guides to organizational behavior. Thus, national culture pervades the behavior of organizations, altering corporate culture from nation to nation, and from east to west. The east-west culture differences are adequately captured by Hofstede’s (1980) culture model, which can be applied to explain why high-involvement does not sound favorable to some eastern societies.
Hofstede (1980) makes known four main dimensions of culture: uncertainty avoidance, masculinity/femininity, power distance, and collectivism/individualism. Parallel to the four necessities of a highly involved organization PIRK can be drawn with these dimensions. Uncertainty avoidance is the degree to which people prefer rules, regulations, and controls as opposed to unstructured, risky, ambiguous, and unpredictable situations. Cultures with a high uncertainty avoidance tendency would significantly require the elements of information and knowledge in organizational operations. Masculine cultures are described by Hofstede (1980) as having a high need for personal achievement and material acquisition. Feminine cultures focus on personal growth and nurturing values representing ‘quality of life’ issues. There is more of a conspicuous inter-relationship between the other culture dimensions namely power distance and individualism/collectivism. The following sections focus on this inter-relationship.
Collectivistic cultures embrace a tight social framework (Hofstede, 1980). People expect other community members to cooperatively work alongside them at all times, whether good or bad. Individualist societies embrace a loosely knit social fabric where people guard their own self-interest and those of immediate families (Hofstede, 1980). Groups thus conflict with the concept of individual goal attainment. The individualist mindset suggests the need for the power and reward elements in order to obtain a high-involvement setting. The United States, Great Britain, and the Netherlands are examples of individualistic countries. Singapore, China, and India are examples of collectivistic countries (Bennett, 1999).
A contradiction appears when analyzing east-west culture differences in relation to the probability of the prevalence of high-involvement organizational principles. According to Laroche (2001) individualists take care of themselves, having a flexible and independent working relationship with social groups. Collectivists on the other hand are expected to contribute to the community at large in order to receive group support. These culturally different norms have an impact on team participation dynamics (Laroche, 2001). Collective societies would naturally have a tendency, as good team players, to help teammates with suggestions to complete a task. Individualistic societies would naturally be expected to focus on individual duties and would typically complain to the team leader about how they would be individually affected if team members do not meet certain expectations (Laroche, 2001). A striking disparity is present because in collectivist societies, where one would think high-involvement is encouraged, high-involvement does not happen to occur (Rao, et al., 1999). In addition, in individualist cultures, there seems to be a rush toward high-involvement in terms of workforce empowerment and participation (Laroche, 2001). This goes against common knowledge of the individualist mindset being independent and free of collective responsibility.
One factor distinguishing cultural differences is that of hierarchy. In highly hierarchical countries, the boss is the boss is the boss. A command and control manner is highly prevalent where superiors give instructions and subordinates carry them out without question. Traditional bureaucratic organizational structures are common in highly hierarchical countries, mostly comprising of eastern collectivist cultures (Laroche, 2001). Since western organizations are getting flatter and leaner, hierarchy might be one factor explaining the apparent contradiction outlined above. Hofstede (1980) calls the degree of hierarchy in organizations ‘power distance’. It is the psychological distance between employees and their managers. Thus, highly hierarchical structures would lead to higher power distance while flatter organizations represent low distance between bosses and their subordinates.
The apparent contradiction may be explained in terms of how power distance affects organizations through their national culture. Although this premise is based on Hofstede’s (1980) model, a study by Bennett (1999) sheds light on why power distance could affect employee participation and involvement more than the individual/collectivism construct.
A firm conclusion from Bennett’s (1999) study is that there are two main factors contributing to employees’ attitudes toward their work: cultural values and situational characteristics. He notes that eastern cultures like China are more prone to align their attitudes with deep-seated values than are individualistic societies such as the U.S. On the other hand, Bennett (1999) reveals that Americans are more prone to align their attitudes with the demands of a situation. Bennett's (1999) research supports the idea of deep-seated cultural values playing more of a role in defining situations within eastern collectivist societies. Zellmer and Gibson (2001) state that collectivists generally view teams and groups as a social outlet rather than a problem-solving entity. Thus, team participation would not have much room in collectivist organizations even though they are a huge part of the national socio-political culture.
It is possible that power distance is more a function of deep-seated values that are not so easy to change. Power distance may also have filtered into the workplace from national culture, more so than the collectivist dimension, as a result of traditionally bureaucratic and hierarchical structures of organizations in eastern countries. There is a positive relationship between the degree of hierarchy in an organization and the amount of power distance within it (Hofstede, 1980, Bennett, 1999). Cultures high in power distance are characterized by greater reverence to the opinions of superiors. They also place greater value on the company and fellow employees (Thorne and Saunders, 2002). These traits may well be responsible for the lack of empowerment and involvement on the part of eastern collectivist employees. In addition, Zellmer and Gibson (2001) have suggested that the concept of teamwork participation varies from individualistic to collectivistic cultures. The team concept for the collectivist mindset is similar to what occurs naturally in eastern societies, while it is a significant shift for individualists because socially they are focused on the self. This further supports the assumption that eastern corporations have believed high-involvement to be unnecessary, and if extremely implemented would violate the traditional beliefs of deference to authority figures.
Thus, while deep-seated traditional values shape work behavior in the east, the west is more adaptable to the demands of current situations. Although individualist employees have a tendency to place greater weight on their own personal goals, they are more flexible in terms of doing what needs to be done to achieve a particular task (Bennett, 1999). With the need to attain individual fulfillment, western societies are better prepared to change their work habits. The result is that western individualist societies will agree to work together in teams for instance, and go against the tide of their national culture in order to achieve any required organizational goal.
The open-mindedness toward high-involvement principles in western societies can hence best be explained by the individualistic cultural trait of being able to ironically go against individualism itself. In other words, if the situation or task demands it, individualists would willingly become part of a team, empower their workers, and encourage employee involvement at all organizational levels. Individualists exhibit the tendency to define a team in terms of a task-oriented entity that is focused on a particular activity (Zellmer and Gibson, 2001). The individualist attitude toward teams may thus be moderated by a great concern for performing adequately. Changing habits would not interfere with the larger national culture of individualists. However, changing traditional habits would be equivalent to disregarding deep-seated beliefs, valued for generations, as far as collectivists in eastern nations are concerned.
According to Rao et al. (1999) world-class quality is hard to achieve without employee involvement and empowerment. However, trends in eastern societies that aim to achieve quality, have allowed them to adhere to their organizational norm of low participation and involvement. These trends are in the form of hierarchical leadership and national reward systems. More and more companies in the eastern hemisphere are employing never before seen reward and benefit programs to show employees appreciation for their work (Rao et al., 1999, Bennett, 1999). The reward element characteristic of high-involvement is slowly but surely creeping into the eastern organizational framework. Strong leadership has been an asset in the east because of the hierarchy in organizations (Bennett, 1999). According to Zellmer and Gibson (2001), charismatic group leadership is more prevalent in collectivistic cultures because they emphasize vision and emotion. Thus, this trend will continue.
No matter what the cultural context, organizations still have been slow to implement high-involvement principles. Uncertainty about positive effects of involving lower level employees has led to high internal resistance within companies. This is most probably due to the lack of data concerning the evaluation of the degree of PIRK that has been allowed to seep through the lower levels of organizations. If more research is conducted in these areas, it may lead to an interest in high-involvement principles within eastern as well as western corporations.
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