The impact of representative employee participation on organisational performance

Research on the impact of representative employee participation on firm performance has hitherto been confined to single country studies, notably Germany. Comparative country studies are rare. In the present paper the basis is laid for international comparative research, by reviewing the strengths and weaknesses of the (theoretical and empirical) literature and examining the distinctive features of four neighbouring countries with respect to their industrial relations systems. We show that Belgium, Germany, the Netherlands and the United Kingdom, despite the implementation of the EU Directive on Information and Consultation rights, display a large variation in their institutional setting, resulting in very different characteristics regarding worker involvement at establishment level. Depending on the country at issue, works councils or joint consultative committees exert influence in very different degrees, and also the power of trade unions differs substantially. The existing theoretical framework that dominates empirical work does not take these differences sufficiently into account. Moreover, existing empirical work primarily focuses on the effects of the mere presence of a worker representation body on organizational outcomes, not taking into account differences in the actual functioning of these worker bodies. The underlying study demonstrates that variances in (formal and informal) rights and in group dynamics will greatly impact the effectiveness of any form of employee representation. This ultimately leads to the construction of our adjusted comparative model, which does aim to take all these differences into account, when explaining the relationship between worker involvement and organisational performance.