Employee participation and outcomes: organizational strategy does matter
| DOI | https://doi.org/10.1108/ER-09-2014-0107 |
| Date | 03 August 2015 |
| Published date | 03 August 2015 |
| Pages | 604-622 |
| Author | Rhokeun Park |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations |
Employee participation and
outcomes: organizational
strategy does matter
Rhokeun Park
College of Business, Hankuk University of Foreign Studies, Seoul, Korea
Abstract
Purpose –The purpose of this paper is to investigate the mediating role of perceived organizational
support (POS) in the relationship between employee participation and organizational commitment, and
the moderating role of organizational strategyin those relationships.
Design/methodology/approach –The proposed hypotheses were tested bymultilevel analyses with
data fromsurveys of 1,105 employees and 49 managersin 49 companies located throughoutSouth Korea.
Findings –The results demonstrated that POS mediated the relationship between employee
participationand organizationalcommitment, and that participationpractices were relatedmore strongly
to POS and organizational commitment in companies with a prospector or analyzer strategy than in
companies with a defender strategy.
Research limitations/implications –Organizational-level variableswere measured by one manager
in each company. This study provides important implications regarding the fit between participation
practices and organizational strategy.
Practical implications –Managers in prospector or the most innovative companies should provide
employees with more opportunities to make decisions and to receive financial incentives for their
contributions.
Originality/value –This study is unique in thatit simultaneously examined the horizontalfit and the
vertical fit while focussing on individual employees’outcomes rather than organizational performance.
Keywords Organizational commitment, Participation, Perceived organizational support,
Exchange theory, Organizational strategy
Paper type Research paper
Introduction
Over the last few decades, most of the literature on strategic human resource management
(SHRM) has focussed on whether organizational strategy moderates the relationship between
HR practices and organizational performance (e.g. Cooke and Saini, 2010; Delery and Doty,
1996; Neal et al., 2005; Pena and Villasalero, 2010; Snow and Hrebiniak, 1980; Youndt et al.,
1996), but the moderating role of organizational strategy in the relationships between HR
practices and individual employees’attitudes has received little attention. Given that not all
employees in an organization are involved in certain HR practices, research focussing on
organizational performance might underestimate the effectiveness of HR practices. Moreover,
even individual employees with in the same organization may experience and interpret their
HR practices differently (Liao et al., 2009). Similarly, an organizational strategy can have
different impacts on each employee. Although employee attitudes toward the organization’s
strategy are an important factor in the success of an organizational strategy (Choi and Price,
2005; Richard et al., 2003), previous studies on SHRM have largely overlooked individual
employees’responses in this regard. Thus, further research is needed to examine the role of
organizational strategy in the relationships between HR practices and individual employees’
attitudes.
Employee Relations
Vol. 37 No. 5, 2015
pp. 604-622
©Emerald Group Publishing Limited
0142-5455
DOI 10.1108/ER-09-2014-0107
Received 19 September 2014
Revised 23 December 2014
9 March 2015
Accepted 31 March 2015
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
This work was supported by Hankuk University of Foreign Studies Research Fund of 2015.
604
ER
37,5
Another purpose of this study is to develop an internally consistent employee
participation index. Previous studies that have used a high-performance work practices
(HPWPs) index (e.g. Huselid, 1995; Liao et al., 2009; Neal et al., 2005) have included so many
practices in the index that some practices had no effects on outcome variables, and some
practices even had conflicting effects with other practices. For example, Cappelli and
Neumark (2001) found that, while self-managing teams and profit-sharing programs had a
positive effect on productivity, job rotation had a negative effect on that outcome.
Therefore, there is a need to develop an internally consistent index. In this study, employee
participation practices were selected among a variety of HR practices because they have
been identified as having high internal consistency by many previous studies on HPWPs
(e.g. Cappelli and Neumark, 2001; Huselid, 1995). Another reason that participation
practices were selected is because they are conceptually consistent: participation practices
provide employees with opportunities to participate in company performance procedurally
or financially. Following the concept adopted by Bakan et al. (2004), employee participation
in this study refers to the combination of decision-making participation and financial
participation. Decision-making participation (or employee involvement) includes HR
practices through which employees are able to provide input into decisions regarding how
job-relatedworkisperformed.Financial participation practices (or pay-for-performance
practices) refer to payment based on individual or group performance.
After developing an internally consistent employee participation index, this study
investigates how this index is related to organizational commitment. It has been widely
accepted that participation practices are a key component of high-commitment HR
practices (Cox et al., 2009; Walton, 1985). Then, this study examines whether perceived
organizational support (POS) mediates the relationship between participation practices
and organizational commitment, because POS has been considered to be a key va riable
that influences employee attitudes (Eisenberger et al., 1999; Rhoades and Eisenberger,
2002). Finally, the study investigates the interaction effects of employee participation
and organizational strategy on individual employees’outcomes, which has not been
examined in previous studies. The interaction analysis helps determine which of the
organizational strategies in Miles and Snow’s (1984) typology fits best with
participation practices.
This study extends the extant research and provides important contributions to
research on participation practices. First, this study proposes, using exchange theory,
a mechanism through which participation practices may affect organizational
commitment. Second, this study investigates the horizontal fit (or internal fit) among
participation practices andthe vertical fit (or external fit) between participation practices
and organizational strategies while focussing on individual employees’outcomes rather
than organizational performance. Finally, this study provides an implication that both
decision-making and financial participation may fit well with innovative organizational
strategy in contrast with results reported in some previous studies.
Theory and hypotheses
Participation practices
The adoption of participation practices implies that the organization values its
employees’input and recognizes their contribution to achieving company goals.
Specifically, decision-making participation provides employees with more opportunities
to utilize their human capital, which signals that the organization values the creative
input of its employees (Allen et al., 2003), which in turn is associated with positive
evaluations of organizational support (VanYperen et al., 1999). If the organization
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Employee
participation
and outcomes
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