Do high-involvement work practices affect employee earnings in union and non-union settings in the Irish private sector?

Pages425-440
Published date05 March 2018
DOIhttps://doi.org/10.1108/PR-10-2016-0269
Date05 March 2018
AuthorThomas Turner,Christine Cross
Subject MatterHR & organizational behaviour,Global HRM
Do high-involvement work
practices affect employee
earnings in union and
non-union settings in the
Irish private sector?
Thomas Turner and Christine Cross
Kemmy Business School, University of Limerick, Limerick, Ireland
Abstract
Purpose The link between human resource practices and earnings for workers is a notable research lacuna
and the purpose of this paper is to address this relationship using a matched data set covering all employees
and employers in the Irish private sector.
Design/methodology/approach The analysis is based on the National Employment Survey (NES) (2008).
The survey provides measures of individual characteristics such as union membership, collective bargaining
coverage, sector, occupation, age, sex and educational attainment. It also provides data on individual
employee earnings including overtime and shift allowances, together with weekly hours worked.
The particular benefit of the NES is that it is a large-scale matched employer-employee survey.
Findings The results indicate that extensive use of high-involvement practices measured in this study is
positively associated with higher earnings for both lower and higher earning employees. The authors also
find that for employees covered by a collective agreement, the positive effects of high-involvement work
practices are complementary with a union earnings premium.
Research limitations/implications Some caution is required in the interpretation of the results given
the cross-sectional nature of the data. With cross-sectional data it is difficult to establish definitive causal and
directional linkages between high-involvement measures and levels of earnings and earnings inequality.
Practical implications For trade unions and their members, the results imply that the involvement
practices as measured in this study are unlikely to substitute for the earnings premium associated with
collective bargaining coverage. For human resource, increasing the earnings of low-paid employees may
carry relatively marginal costs but the benefits maybe considerable in the form of employee engagement,
increased effort levels and productivity gains.
Originality/value This study extends the literature on the outcomes of high-involvement practices for
employees and firms by addressing their association with employee earnings particularly at the lower end of
the wage hierarchy.
Keywords Quantitative, Earnings, High-involvement practices, Lower paid workers, Unionization
Paper type Research paper
Introduction
The reduction of a union presence in many parts of the economy (Ebbinghaus and Visser,
2000; Verma and Kochan, 2004) means that managerial discretion over employee earnings
are increasingly the preserve of management and the human resource function. Indeed,
the provision of employee voice and the eliciting of employee preferences are more likely
to be management sponsored through tailored practices such as employee involvement
and employee representative structures. Such practices and structures are often
integrated into a broader suite of human resource management applications under the
rubric of high performance work systems (HPWPs) that include innovativework
practices such as job design, semi-autonomous groups/teams and extensive training of
employees; employee involvement schemes such as quality circles, suggestion
systems, consultation and information sharing and merit-based reward systems
(see e.g. Huselid, 1995; Youndt et al., 1996).
Personnel Review
Vol. 47 No. 2, 2018
pp. 425-440
© Emerald PublishingLimited
0048-3486
DOI 10.1108/PR-10-2016-0269
Received 5 October 2016
Revised 10 April 2017
Accepted 4 June 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0048-3486.htm
425
High-
involvement
work practices
While there has been significant interest on the outcomes of such practices for employees
in the areas of skill acquisition, career opportunities and job commitment and for firms such
as organisational effectiveness, productivity and profitability, this attention rarely included
the impact on employee earnings (Applebaum et al., 2000; Batt, 2001). The association
between the application of human resource practices and earnings for workers is a notable
research lacuna in this literature, given that earnings are likely to be considered an
important outcome for workers. The potential for human resource practices to increase
earnings could be of particular significance for low earners given the prominence of low
wage work and wage inequality in many countries (Bosch, 2009; Van Reenan, 2011).
Yet, human resource academics and practitioners appear to have shown limited interest in
the association between human resource practices and the earnings of employees.
A perennial critique of the human resource function is that despite its avowal to represent
all the stakeholders in the organisation, owners, shareholders and employees, in practice, the
concerns of owners and shareholders are normally a priority. Consequently, apart from
senior managerial and professional jobs, concern with the level of employee earnings
receives less attention.
Using a 2008 national matched survey of employers and employees from Ireland, we test
for an association between measures such as employee involvement, consultation and
reward mechanisms and levels of earnings among workers both above and below median
earnings in the private sector in Ireland. For workersbelow median earnings wages are
likely to figure highly in any valued outcomes at work. In the past, the use of sophisticated
human resource practices was commonly associated mainly with large profitable firms
particularly multinationals in high technology and financial sectors of the economy
(Foulkes, 1980). However, in the twenty-first century such HR practices are now considered
to be critical to the performance of medium and small enterprises across all economic sectors
including low-pay sectors such as retail, hospitality and the fast food industry (Lacoursiere
et al., 2008). A central contribution of this paper is to examine whether the use of specific
human resource practices delivers an earnings premium to employees, particularly those in
the bottom half of the wage distribution. As the data used here come from a cross-sectional
survey, our paper is intended as a descriptive and exploratory comment on the association
between specific human resource practices and employee earnings. In addition, we examine
whether such practices have a similar impact on the earnings of employees who are covered
by a collective agreement compared to employees without coverage. Employees in the
public sector are excluded from this analysis as the majority of workers below median
earnings are in the private sector and the application of human resource practices such as
performance-related pay and profit sharing have limited coverage in the public sector.
We begin by addressing the definitional issues regarding the generic concept of HPWPs,
second, the theoretical relationship between human resource practices and earnings, third,
the survey and methodology used in the paper and fourth, the results are outlined.
Finally, the findings and implications of the paper are discussed.
High-involvement work practices and theoretical links to earnings
In general, there is no single agreed definition of what specific human resource practices
constitute a HPWP.In the absence of a consensus in the literature a wide varietyof terms are
used to describe these systems including HPWPs,high-involvement work systems
(HIWS),high commitment management,high-involvement management,employee
involvementand so on (Handel and Levine, 2004; Butler et al., 2004; Bryson et al., 2005).
Indeed, studiesof HPWPs vary significantly as to the practicesincluded and sometimes even
as to whether a practice is likely to be positively or negatively related to high performance
(Becker and Gerhart, 1996, p. 782). Thus, there are issues regarding the appropriate human
resource practices or combinationwhen testing for a relationshipbetween these practices and
426
PR
47,2

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT