"The nature of employee financial participation: evidence from the Australian workplace"

Abstract

In this paper employee financial participation (EFP) is investigated in the context of the enterprise bargaining principle. It is argued that employee financial participation should be seen as a logical consequence of the decentralisation of the industrial relations system. This is the case as the rationale for enterprise bargaining has been the need for workplace reform and demand for increased productivity at the enterprise level. Employee financial participation on a collective basis can also materially afford employees opportunities to participate at a high level in the decision-making processes of an organisation. Employee financial participation will be also be assessed in the context of (strategic) human resource management (HRM). The type of business strategy and consequent HRM taxonomy will have a congruent type of EFP implemented in the workplace. The industry incidence and the contingencies of employee financial participation are considered. Specifically the context in which companies implementing these strategies are assessed, for example, does employee financial participation exist within the context of other innovations. The literature suggests that the implementation of an employee financial participation scheme is not an isolated event and will co-exist with other best practice initiatives such as team based work. Conversely, it is also possible that such strategies could exist alone and at the expense of other workplace innovations (Mathews 1994), which mirrors the archetypical human resource practices that are aligned with different types of competitive business strategies as defined by Schuler and Jackson (1987). The enterprise agreements used in this investigation draws upon agreements (EBAs) held on the Australian Centre for Industrial Relations Research and Teaching (ACIRRT) database (Agreements Database and Monitor: ADAM). From a total of 3747 state and federal agreements, it was found that 147 had an employee financial participation component (3.9%). The contents of these 147 enterprise agreements were analysed to ascertain whether there were any other best practice initiatives present. Further, the industries in which these strategies could be found was examined and the level of union involvement in the agreements was assessed.