High Performance Work Practices and Employee Voice: A Comparison of Japanese and Korean Workers

Using a unique new cross-national survey of Japanese and Korean workers, we report the first systematic evidence on the effects on employee voice of High Performance Work Practices (HPWPs) from the two economies which are noted for the wide use of HPWPs. We find for both nations that: (i) workers in firms with HPWPs aimed at creating opportunities for employees to get involved (such as shopfloor committees and small group activities) are indeed more likely to have stronger senses of influence and voice on shopfloor decision making than other workers; (ii) workers whose pay is tied to firm performance are more likely to have a stake in firm performance and hence demand such influence and voice; and (iii) consequently workers in firms with HPWPs are more likely to make frequent suggestions for productivity increase and quality improvement. As such, this paper contributes to a small yet growing new empirical literature which tries to understand the actual process and mechanism through which HPWPs lead to better enterprise performance.

[1]  Cheri Ostroff,et al.  The Anatomy of Employee Involvement and its Effects on Firms and Workers , 2000 .

[2]  Rosemary L. Batt,et al.  Work Organization, Technology, and Performance in Customer Service and Sales , 1999 .

[3]  Casey Ichniowski,et al.  The Effects of Human Resource Management Practices on Productivity , 1995 .

[4]  Takao Kato The Nature, Scope and Effects of Joint Labor-Management Committees in Japan , 2006 .

[5]  H. Chuma Is Japan’s Long-Term Employment System Changing? , 1998 .

[6]  Marcus E. Rebick,et al.  Japanese labour in the 1990s: stability and stagnation , 2000 .

[7]  Takao Kato,et al.  Worker discontent, voice, and EI programs in Japan: Evidence from the Japanese worker representation and participation survey , 2005 .

[8]  J. M. D. Cerio,et al.  Participation, cooperatives and performance: An analysis of spanish manufacturing firms , 2002 .

[9]  Thomas Zwick,et al.  Employee participation and productivity , 2004 .

[10]  Sandra E. Black,et al.  What's Driving the New Economy?: The Benefits of Workplace Innovation , 2000 .

[11]  Derek C. Jones,et al.  The Productivity Effects of Employee Stock-Ownership Plans and Bonuses: Evidence from Japanese Panel Data , 1995 .

[12]  Derek C. Jones,et al.  The Scope, Nature, and Effects of Employee Stock Ownership Plans in Japan , 1993 .

[13]  P J Arnesen The Auto industry ahead : who's driving? , 1989 .

[14]  Takao Kato,et al.  The Productivity Effects of Participatory Employment Practices: Evidence from New Japanese Panel Data , 2002 .

[15]  A. Bartel Human Resource Management and Organizational Performance: Evidence from Retail Banking , 2004 .

[16]  Derek C. Jones,et al.  Human Resource Management Policies and Productivity: New Evidence from An Econometric Case Study , 2006 .

[17]  H. Minsky,et al.  New Work Practices in Italy. Adoption and Performance Effects ♣ ♣ ♣ ♣ , 2002 .

[18]  J. Heywood,et al.  Teamwork, monitoring and absence , 2008 .

[19]  Hodaka Morita,et al.  Discrete Innovation, Continuous Improvement, and Competitive Pressure , 2007 .

[20]  David I. Levine,et al.  Reinventing the Workplace: How Business and Employees Can Both Win , 1995 .

[21]  Takao Kato The Recent Transformation of Participatory Employment Practices in Japan , 2000 .

[22]  Takao Kato,et al.  The Productivity Effects of Profit Sharing, Employee Ownership, Stock Option and Team Incentive Plans: Evidence from Korean Panel Data , 2010, SSRN Electronic Journal.

[23]  W. MacLeod,et al.  Multiskilling, Technical Change and the Japanese Firm , 1991 .

[24]  Sue Fernie,et al.  It's Not What You Pay it's the Way that You Pay it and that's What Gets Results: Jockeys' Pay and Performance , 1999 .

[25]  Jon Gant,et al.  Social Capital and Organizational Change in High‐Involvement and Traditional Work Organizations , 2002 .

[26]  Johngseok Bae,et al.  The impact of globalization on HRM: the case of South Korea , 2001 .

[27]  Roderick D. Iverson,et al.  High-Performance Work Systems , 2008 .

[28]  T. Eriksson The effects of new work practices: Evidence from employer-employee data , 2003 .

[29]  D. Wells,et al.  Choosing Sides: Unions and the Team Concept , 1988 .

[30]  Joonmo Cho Human resource management, corporate governance structure and corporate performance in Korea: a comparative analysis of Japan, US and Korea , 2005 .

[31]  Jed DeVaro Teams, Autonomy, and the Financial Performance of Firms , 2006, SSRN Electronic Journal.

[32]  Susan Helper,et al.  Complementarity and Cost Reduction: Evidence from the Auto Supply Industry , 1997 .

[33]  M. Kleiner,et al.  Who Benefits Most from Employee Involvement: Firms or Workers? , 2000 .

[34]  John T. Dunlop,et al.  Diffusion and Performance of Modular Production in the U.S. Apparel Industry , 1996 .

[35]  Y. Ohkusa,et al.  The Productivity Effects of Information Sharing, Profit Sharing, and ESOPs , 1997 .

[36]  Sandra E. Black,et al.  What's Driving the New Economy?: The Benefits of Workplace Innovation , 2000 .

[37]  D. Simester,et al.  Firm-Wide Incentives and Mutual Monitoring at Continental Airlines , 2001 .

[38]  J. Lawler,et al.  High-Performance Work System and Organizational Turnover in East and Southeast Asian Countries , 2008 .

[39]  Peter Cappelli,et al.  Do 'High-Performance' Work Practices Improve Establishment-Level Outcomes? , 1999 .

[40]  B. Hamilton,et al.  Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation , 2001, Journal of Political Economy.

[41]  Jeffrey R. Kling,et al.  High performance work systems and firm performance , 1995 .

[42]  Shared Modes of Compensation and Firm Performance , 2004 .

[43]  C. Belfield,et al.  The Impact of Financial Participation and Employee Involvement on Financial Performance: A Re-estimation Using the 1998 WERS , 2000 .

[44]  Sandra E. Black,et al.  How to Compete: The Impact of Workplace Practices and Information Technology on Productivity , 1997, Review of Economics and Statistics.

[45]  Takao Kato The End of Lifetime Employment in Japan?: Evidence from National Surveys and Field Research , 2001 .

[46]  Brian E. Becker,et al.  HIGH PERFORMANCE WORK SYSTEMS AND FIRM PERFORMANCE : A SYNTHESIS OF RESEARCH AND MANAGERIAL IMPLICATIONS , 1998 .

[47]  Takao Kato,et al.  Market Characteristics, Intra-Firm Coordination, and the Choice of Human Resource Management Systems: Evidence from New Japanese Data , 2007 .

[48]  Thomas Bailey,et al.  The Performance Effects of Modular Production in the Apparel Industry , 1996 .

[49]  Brian E. Becker,et al.  Methodological Issues in Cross‐Sectional and Panel Estimates of the Human Resource‐Firm Performance Link , 1996 .

[50]  Ju Ho Lee,et al.  Employee participation and involvement in korea: evidence from a new survey and field research , 2005 .

[51]  H. Chuma Employment Adjustments in Japanese Firms During the Current Crisis , 2002 .

[52]  Harry J. Paarsch,et al.  The Response of Worker Effort to Piece Rates: Evidence from the British Columbia Tree-Planting Industry , 1999 .

[53]  M. Conyon,et al.  Shared Modes of Compensation and Firm Performance: UK Evidence , 2001 .

[54]  Takao Kato,et al.  The nature, scope and effects of profit sharing in Japan: evidence from new survey data , 2003 .

[55]  I. Ōhashi On the determinants of bonuses and basic wages in large Japanese firms , 1989 .

[56]  Casey Ichniowski,et al.  Opportunity Counts: Teams and the Effectiveness of Production Incentives , 2001, Journal of Labor Economics.

[57]  Rhonda Mizrahi,et al.  Reinventing the workplace: How business and employees can both win , 1996 .

[58]  Derek C. Jones Advances in the Economic Analysis of Participatory and Labor-Managed Firms , 1987 .

[59]  Sandrine Labory,et al.  Flat Hierarchical Structure, Bundles of New Work Practices and Firm Performance , 2003 .

[60]  Edward E. Lawler,et al.  Creating high performance organizations , 2005 .

[61]  Charles Koeber,et al.  Manufacturing Advantage: Why High-Performance Work Systems Pay off , 1999 .

[62]  Martin M. Perline Kochan, Thomas A., and Paul Osterman, The Mutual Gains Enterprise: Forging a Winning Partnership among Labor, Management, and Government , 1995 .

[63]  D. Levine Participation, Productivity, and the Firm's Environment , 1990 .

[64]  Richard B. Freeman,et al.  What Workers Want , 2000 .