Employee Participation in Decision Making

A second benefit from employee involvement is that workers pick up information about workplace risk. Workers getting more information concerning job risk and the firm s safety efforts will help reduce uncertainty in their minds and thus increase the value of the employment experience for risk-averse workers. This lowers emplo5nnent costs and may improve worker productivity to the extent that safety behaviors depend upon workers attitudes and improved morale leads to higher productivity. 

Another psychological benefit for w orkers of having meaningful involvement in planning the firm s safety policy is that they begin to take ownership of safety outcomes, increasing their commitment to the program s successful implementation. This would also be expected to improve safety. 

We measure this participation effect both through a numerical count of the t5 es of decision-making activities the firm allows its workers to participate in (the extensive participation margin) and the degree of participation in those activities (the intensive participation margin). We expect greater involvement in either dimension will improve safety outcomes. 

Another control variable measures the extent of information sharing that the firm engages in with workers concerning company finances, human resource plarming, and workplace safety. Again, for reasons discussed in this section, we anticipate that as information sharing by the firm increases, safety will increase. 

Regression analysis takes into account the influence of other factors included in the model. Definitive interpretation of prior research is hobbled in two ways 1) one or more of the key HRM practices is omitted from examination (no prior study ineludes employee participation in both decision making and financial returns as well as measures of management safety culture), and 2) the variables are often examined in a univariate, rather than a multivariate, framewoik. 

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Rooney (1992) finds that employee participation in decision making lowered the incidence of one or more Occupational Safety and Health Administration (OSHA) reportable injuries in his sample of 85 firms, although his analysis excludes firm characteristics and workers average wages. 

Park merges Minnesota workers compensation claims with survey data from the Minnesota Human Resource Management Practice file, developed at the Industrial Relations Center at the University of Minnesota. He finds that employee participation in decision making lowers the injury claim rate, as our model suggests, but that the reduction is not statistically significant. 

Employee participation in decision making may help to diminish the Ifee rider potential by increasing workers involvement and lowering the incentive for workers to engage in opportunistic behaviors if employees financial participation increases peer monitoring pressures, for example, Ifee riding may be reduced. 

This study goes beyond much of the earlier research and— following the approach of Hunt and Habeck (1993) and Hunt et al. (1993)—seeks to estimate the role of HRM practices in the determination of workers compensation costs in a multivariate framework. It uses a workplace safety model that incorporates a wider variety of HRM practices than has been previously employed. In particular, it analyzes the impact of the three important dimensions of HRM practices on safety employee participation in decision making, employee participation in financial returns, and the firm s management safety culture. In addition, this is the first study to consider file effect of each of these factors on claim frequency and claim severity, and to ask whether any observed change is file result of changes in technical efficiency or moral hazard (principal-agent) incentives. 

As workers and managers get more involved with firm safety (and as HRM practices increase within a firm), we generally expect that workers compensation costs will fall. Although participation in employee-owned firms yields inconclusive evidence, prior research on employee participation in decision making—aside from employee owner-... 

Aggregate data Table 3.2 revisited. While the most credible information on claim duration comes from the analysis of individual claim durations in Tables 3.3 and 3. 4, the middle and right columns in Table 3.2 provide some alternative estimates on how HRM policies affect claim duration. The middle column of Table 3. 2 corresponds most closely to the expected cost analysis given in Table 3. 6, below, but is not always consistent with those results increases in Employee Participation in Decision Making, Employee Participation in Financial Returns, and Management Safety Culture reduce expected losses, as they do in... 

Increases in any of our three main HRM practices— epdm. Employee Participation in Decision Making epfr. Employee Participation in Financial Returns and mgtcult, the level of management involvement in the safety processes of the firm—all lead to substantial reductions in workers compensation costs per employee. In Table 3.6, we measured per-employee safety gains both as a unit change in each of these indices and as a change to the Tjest practice levels. 

Employee involvement and participation in decision making (design, purchasing, and implementation of hardware and software)... 

Habeck, Hunt, and VanTol (1998), Habeck et al. (1998), Hunt and Habeck (1993), and Hunt et al. (1993)—extending the earlier research of Habeck (1993), Habeck, Leahy, and Hunt (1988), and Habeck et al. (1991)—relate the disability outcomes of 220 Michigan firms to those firms HRM practices. This research is the first serious analysis of how management safety culture affects injury claims. In addition to collecting survey information for the 220 firms, Hunt et al. (1993) held extensive interviews with 32 of the 220 firms and find a qualitative difference in those firms that engage in what the researchers call a participative culture. In other words, they find a qualitative difference between firms that facilitate employee involvement in decision making and those where the employees do not participate in the firm s decision making. 

Petersen discusses the concept of limited empowerment versus total empowerment. Limited empowerment suggests we live within some ground rules. We all play with the same rules that make the game fair and safe. Most football rules are, in fact, safety rules, and most teams find them easy to follow. Limited empowerment means management establishes some ground rules for everyone to follow (Petersen, 2001, p. 63). Employees are empowered within this framework to participate in decision making for improving safety performance. 

Other work-related factors that can be perceived as stressors and lead to distress and eventual burnout include role conflict or ambiguity imcertainty about one s job responsibilities responsibility for others a crowded, noisy, smelly, or dirty work environment lack of involvement or participation in decision making interpersonal conflict with other employees and insufficient support from coworkers (Maslach, 1982). 

Unlike the Rooney (1992) and Grunberg, Moore, and Greenberg (1996) studies. Park (1997) distinguishes between decision-making participation and financial-returns participation in his study of Minnesota workers compensation claims. Unexpectedly, Park found that employee participation in financial returns increased the injury rate, as did the interaction between financial returns and decision making. That is, as employee participation in the firm s financial returns rose, so did the injury rate, and the injury rate rose even more in firms with employee participation both in the firm s financial returns and in the firm s deci-... 

EPDM Number of employee participation programs in decision-making process... 

EPDEG Score of the degree of employee participation in company s decision-making... 

Park, Yong-Seung. 1997. Occupational Safety Effects of Employee Participation Plans in Decision-Making and Financial Returns. PhD diss., Carlson School of Management, University of Minnesota. 

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