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The goal of this study was to identify the determinants of direct employee participation in organizations across Europe. Some factors were predicted to be related to levels of participation in general, namely, competition, sector, the pursuit of a differentiation strategy based on either quality or service, and indirect participation. Two additional factors were expected to be differentially related to two forms of direct participation: consultation and delegation. These factors were organizational size and the pursuit of a cost leadership business strategy. The hypothesized relationships were contrasted using data from the EPOC survey, a representative survey of over 5,700 organizations located in 10 European Union countries. The results supported 11 of the 14 predicted relationships.

A currently popular approach to Human Resource Management involves the use of “high performance work systems” (Huselid, 1995, Jackson & Schuler, 1995 and Pfeffer, 1994). Studies have shown a positive relationship between these systems and a variety of indicators of firm performance. One of the HR practices that is often included in the description of high performance work systems is that of employee involvement or participation. There is a growing consensus among HR researchers and professionals that participative management can enhance employee motivation, commitment, productivity and job satisfaction (Cotton, 1993). While there is a great deal written about the potentially positive effects of employee involvement, there is less known about the factors that determine the amount and/or type of participation that organizations adopt. In this paper, we propose a number of hypotheses regarding the determinants of level of employee involvement across organizations. The factors expected to affect general levels of participation include competition, sector, the pursuit of a differentiation strategy based on either quality or service, and indirect participation. We further hypothesize that two factors influence the differential adoption of consultative vs. delegative participation. Specifically, organizational size and the pursuit of a cost leadership business strategy are expected to be differentially related to the two forms of direct participation. Most of the hypotheses are based on the theoretical arguments proposed by two different models of participation: affective and cognitive models. The hypotheses are contrasted using data collected from 10 European countries in a very comprehensive survey called “Employee Direct Participation in Organisational Change” (EPOC, 1997). Conclusions are drawn regarding the factors found to affect level and type of direct employee participation and the direction of these influences.

This study makes a number of contributions to the employee participation literature. First, it presents several hypotheses regarding the determinants of employee participation, as opposed to the more typical focus on the outcomes of employee participation. Second, it contrasts these hypotheses using data from over 5,000 organizations across 10 European countries, thus adding to the scant number of empirical studies that have explored the factors that influence amount of employee involvement. A third contribution of this study is that it distinguishes among factors that affect levels of participation in general and those which affect two specific forms of participation differentially, namely consultative and delegative participation. In doing so, it follows the suggestions of Cotton et al. (1988) and Black and Gregersen (1997) that participation should be studied as a multidimensional construct. Although most factors were related to amount of participation in general, one was found to have a differential relationship with participation according to the form participation it takes. Organizational size was positively related to consultative participation, yet negatively related to delegative participation. Also, the pursuit of a service strategy and level of indirect participation were found to be positively related to consultative participation, yet neither was related to delegative participation. These findings demonstrate the importance of measuring different types of participation in order to be able to discover possible differences such as this. A few final issues that merit mention are the fact that the EPOC survey only assessed direct forms of participation, thus the factors that influence the use of other forms of indirect participation could not be tested here. Also, the response rates for some of the countries were low. Notably, the rates for France, Italy and Spain were all below 15%. These low response rates could affect our results in two possible ways. First, the estimates of levels of participation in these countries may be biased. If so, we expect the bias to be positive for the following reason. Research shows that survey response rates are lower for issues that are not salient or of interest to potential respondents (Roth & Bevier, 1998). Thus, the firms that are less likely to respond are those that have not considered the possibility of introducing participation. On the contrary, the firms that are more likely to respond are those that do use participation or have at least considered the possibility of introducing participation. As a consequence, we expect the levels of employee participation to be greater among respondents than among non-respondents. If this is so, the EPOC survey results would overestimate levels of participation, especially in the countries with the lowest response rates. Countries such as Italy or Spain, which already have low levels of participation according to EPOC, would have even lower levels of participation if one corrected for this bias. A second possibility is that low response rates bias our estimates of the determinants of participation. This problem would be more important than the first one, because the focus of this study is on the factors that influence direct participation. However, we do not expect our findings regarding the determinants of participation to be strongly affected by the low response rate in some countries. If non-respondents are, as we expect, firms with little interest in participation, than their potential responses would not be very informative about the determinants of participation. Ideally, the respondents should be firms that have at least considered the possibility of introducing direct participation. A final caveat is to remind the reader that the data for this study was obtained using a cross-sectional research design. This type of design can be problematic in testing for causality due to the fact that all of the variables are measured at the same time. However, the nature of the variables in this study makes causal claims less problematic. That is, we feel it is unlikely that factors such as sector, strategy, organizational size, or competition are caused by participation. It may be argued that direct participation determines indirect participation, however, since indirect participation is often regulated, it is more likely that the causal direction goes from indirect to direct participation, as well. In summary, the current study provides empirical evidence regarding the factors that influence amount and type of direct employee participation. The factors that were shown to have the strongest impact on general levels of employee involvement were: competition, sector, and both the pursuit of a differentiation strategy based on quality and a cost leadership strategy. All of these, except for the pursuit of a cost leadership strategy, affected employee participation positively. Indirect participation and the pursuit of a differentiation strategy based on service were both positively related to consultative participation but had no relationship with delegative participation.