European Company Survey Research Articles

Does the Technological Transformation of Firms Go Along With More Employee Control Over Working Time? Empirical Findings From an EU-Wide Combined Dataset

ABSTRACT We investigate the links between the technological transformation of firms and employee control over working time. We conduct EU-wide analysis at the meso-level by relating information from the European Company Survey 2019 (Eurofound and Cedefop) with the Labour Force Survey ad hoc module 2019 (Eurostat). This dataset allows analysing the technological transformation of firms as a relationship between three types of investments (in R&D, digital technologies and learning capacity of the organisation) that spur innovation outputs. We then study the consequences of the technological transformation on the spread of unfavourable working time arrangements, distinguishing between individual and organisation-oriented arrangements. Our model considers the direct effects of investments in Digital technologies adoption and use and Learning capacity of the organisation and the mediating role of firms’ innovation strategies. Results indicate that the Learning capacity of the organisation is directly associated with more individual-oriented working time flexibility, but entails higher organisation-oriented working time flexibility. The effect of Digital technologies adoption and use depends instead on firms’ innovation strategy: product innovation leads to more employee control over working time, while marketing innovation has the opposite outcome. Process and organisational innovations yield mixed consequences buffering employees from organisation-oriented working time flexibility in more time-constrained work environments.

Informal human resource management and innovation: Insights from European SMEs

This article explores the relation between informal human resource management practices and innovation performance in European small and medium-sized enterprises (SMEs). We use the resource-based view and the self-determination theory to develop hypotheses on how informal human resource management practices affect innovation performance. The research was based on data from the European Company Survey 2019. The sample consisted of senior managers in charge of personnel, working in SMEs across 28 European countries. Structural equation modelling showed that informal human resource management practices that satisfy employees’ needs for competence and autonomy positively contributed to innovation performance. Fostering employee needs for relatedness, however, negatively affected innovation performance. The study provides theoretical and practical implications, gives insights for managers and policy makers seeking to foster innovation in SMEs and identifies areas for future research.

Five decades of policymaking in the EU – background and overview of the current state of employee financial participation

Purpose Opinions drafted by the European Economic and Social Committee (EESC), and reports and studies by the European Parliament and 2014 and 2018 Resolutions on employee financial participation (EFP) emphasised the growing importance of EFP, particularly with respect to small and medium-sized enterprises. Against this background, the commission included the promotion of employee share ownership in its Action Plan to reform European company law and corporate governance and embarked on the 2013/14 Pilot Project. Based on the most recent data on the scope and impact of various EFP schemes in EU companies and the legal and regulatory changes in individual Member States, the aim of this article is to provide an overview of policymaking and the main trends of the dynamics of EFP over the last three decades.Design/methodology/approach We give an overview (1) of the analysis of the most recent rounds of different large-scale cross-country surveys (2015 European Working Conditions Survey, 2021 CRANET [Cranfield Network on International Human Resource Management], 2019 European Company Survey [ECS]) and (2) of the EU policy documents and legislative acts over the last three decades. We provide a tabular overview of the status quo in all 29 countries under consideration as of January 2024 to provide the reader with an Alta vista summary view of all forms of EFP practised.Findings The European Commission’s interest in EFP has grown substantially since the publication of the first PEPPER Report in 1991 and the Council Recommendation on EFP of 27 July 1992. Since then, the European Union has not only extended from 12 Members States to currently 27 but has also faced many complex and urgent challenges. Financial and other crises have endangered prosperity and cohesion on the continent and both, the financial crisis of 2008/09, and the coronavirus disease 2019 (COVID-19) pandemic 2020/21 have left their marks on “Social Europe”.Originality/value The European Commission’s interest in EFP has grown substantially since the publication of the first PEPPER (Promotion of Employee Participation in Profits and Enterprise Results) Report in 1991 and the Council Recommendation on EFP on 27 July 1992. Since then, the European Union has not only extended from 12 Members States to currently 27 but has also faced many complex and urgent challenges. Financial and other crises have endangered prosperity and cohesion on the continent and both, the financial crisis of 2008/09, and the COVID-19 pandemic 2020/21 have left their marks on “Social Europe”.

GVC embeddedness and innovation performance – an analysis across 28 European countries

PurposeThis study has the following aims. First, it tries to clarify the relationship between global value chain (GVC) participation and innovation performance. To date, research generated mixed results. Secondly, it explores a novel way of investigating GVC participation by focusing on the sectoral level in which organizations operate using the concept of GVC embeddedness, which has not been investigated to date.Design/methodology/approachData from two sources are combined. The European Company Survey of 2019 provides data about the innovation performance of organizations. These data include measures about production and process. At the sectoral level, these company-level data are combined with data from the Trade in Value Added from the Organization for Economic Cooperation and Development. In total, more than 20,000 companies were investigated, which operate in 15 sectors in 28 countries. This three-level structure is analysed using multilevel ordered probit analyses.FindingsThe results show that forward participation and backward participation at the sectoral level are positively related to product innovation and process innovation. The probability of not being engaged in innovation is reduced through GVC embeddedness. And, the probability of generating incremental and radical innovations (both regarding products and processes) increases if GVC participating at the sectoral level is higher.Originality/valueThis study is the first to relate sectoral GVC embeddedness to the innovation performance of organizations.

Collective bargaining and technological innovation in the EU15: An analysis at establishment level

AbstractIn this paper, we study the relationship between unionisation and workplace innovation in a cross‐country and multisectoral approach. This is an important and controversial issue in the industrial relation literature; however, the empirical literature on the links between innovation and unionism is rather scarce and results are mixed and ambiguous, both in theory and in empirical practice. The European Company Survey (Eurofound), with data for establishments in 15 European Union countries, is used employing a probit model. Our results contribute to the debate by showing that the adoption of technology not only increases when the company performs collective bargaining but also when the relationship between wage bargaining and innovation adoption is not linear, being more significant in cases where bargaining occurs at the regional/national level.

Worker commitment and establishment performance in Europe

AbstractUsing a cross section of matched data from the employee and management questionnaires of the European Company Survey for 28 nations, this paper investigates the determinants of worker commitment and the potential contribution of commitment to establishment performance. An index of worker commitment is constructed from employer perceptions of the motivation of workers and their retention and absenteeism propensities, while the determinants of commitment are fashioned from observations taken from the worker representation side, ordered along dimensions such as perceived organizational trust and involvement. The commitment index is then linked to establishment performance outcomes. Key findings from the commitment equation are the positive role of trust in management, the quality of information exchanged, and the degree of worker representation influence in respect of major decisions taken by management. In turn, commitment emerges as a key correlate of establishment financial performance and labor productivity growth. Our supplemental sensitivity analysis is supportive of the interpretation of commitment as a driver of performance.

Sustainable HRM, training for employability and organizational outcomes: the moderating role of competitive intensity

PurposeThe present study connects the literature on sustainable HRM with that on employability to investigate the relationship between sustainability-oriented human resource actions and organizational outcomes. More specifically, this study explores how training for employability affects the employer–employee relationship and employee retention. Furthermore, this study considers competitive intensity as a potential moderator in these relationships.Design/methodology/approachThe analyses draw on the fourth European Company Survey (ECS 2019) with a sample of 21?869 firms with more than ten employees. Two separate logistic regression models were used to test the hypothesis.FindingsThe results show that training for employability contributes to improving the employer–employee relationship and that competitive intensity positively shapes this relationship. Contextually, training for employability reduces the overall employee retention of the firm.Originality/valueAlthough this study supports the potential win–win nature of employability support, especially for companies that operate in competitive markets and an uncertain environment, it also highlights the existence of paradoxical sustainability tensions that should be managed by employers.

The role of human resource management practices on the results of digitalisation. From Industry 4.0 to Industry 5.0

PurposeThis article aims to analyse the impact of data analytics and robots on firms' performance across Europe.Design/methodology/approachThis paper aims to examine the impact of data analytics and robots on companies' performance, multilevel models are estimated. Empirical research is based on the fourth round of the European Company Survey 2019.FindingsThe main findings show that human resource management practices (HRMP) are relevant to explain firms' profits. Therefore, human resource practices and technology are complementary resources to achieve higher results. A positive and significant relation between profits and the use of data analytics to monitor employee performance was found. In addition, positive and significant relations between human resource practices and profitability were obtained.Practical implicationsFrom a practical perspective, this article helps to understand the role of technological and human factors in profitability, and it emphasises the relevance of human resource strategies and technology to accomplish business outcomes.Originality/valueThis study’s findings reinforce the concept of Industry 5.0 which highlights the role of humans in the digitalisation process.

Inclusiveness as a key determinant of work engagement: evidence from V4 countries

Research background: There is currently a need for empirical research regarding the validity of specific work environment model elements supported by strong statistical evidence. The amount of research conducted in this field has been particularly limited in Central-Eastern Europe. The desire to fill in these gaps was at least in part responsible for the uniqueness of the research approach and its differences from previous similar studies. Purpose of the article: The purpose of this study was to examine factors affecting employee engagement and to examine their relationship with each other using Visegrad countries as an example. Methods: The initial data is taken from the fourth European Company Survey (2019) for management respondents. After data cleaning, the sample sizes for Czechia, Hungary Poland, and Slovakia are N(CZ)=904, N(HU)=682, N(PL)=511, and N(SK)=361, respectively. As a result of the exploratory factor analysis (EFA), the following five dimensions were identified for this research: (1) inclusiveness, (2) empowerment, (3) work autonomy, (4) organizational learning environment, and (5) work engagement. An analysis of structural equation modeling (SEM) was conducted to determine the links that exist among these dimensions of a constructive work environment. Findings & value added: The structural model indicates that inclusiveness and empowerment have a significant positive impact on work engagement in all the countries examined. Inclusiveness was the strongest predictor of work engagement, followed by empowerment. Both of the two other predictors in the model (workplace autonomy and organizational learning environment) generally had less or no effect on employee engagement. The present study extends recent literature on work engagement by empirically validating the influence of workplace environment-related factors, as well as providing useful organizational policy recommendations for managers.

Modeling Organizational Performance with Machine Learning

Identifying the performance factors of organizations is of utmost importance for labor studies for both empirical and theoretical research. The present study investigates the essential intra- and extra-organizational factors in determining the performance of firms using the European Company Survey (ECS) 2019 framework. The evolutionary computation method of genetic algorithm and the machine learning method of Bayesian additive regression trees (BART), are used to model the importance of each of the intra- and extra-organizational factors in identifying the firms’ performance as well as employee well-being. The standard metrics are further used to evaluate the accuracy of the proposed method. The mean value of the evaluation metrics for the accuracy of the impact of intra- and extra-organizational factors on firm performance are MAE = 0.225, MSE = 0.065, RMSE = 0.2525, and R2 = 0.9125, and the value of these metrics for the accuracy of the impact of intra- and extra-organizational factors on employee well-being are MAE = 0.18, MSE = 0.0525, RMSE = 0.2275, and R2 = 0.88. The low values of MAE, MSE and RMSE, and the high value of R2, indicate the high level of accuracy of the proposed method. The results revealed that the two variables of work organization and innovation are essential in improving firm performance well-being, and that the variables of collaboration and outsourcing, as well as job complexity and autonomy, have the greatest role in improving firm performance.

Recruitment Process’ Characteristics as Presented in the European Company Survey – European Union vs Romania 2019 Data

Recruitment Process’ Characteristics as Presented in the European Company Survey – European Union vs Romania 2019 Data

Correlation Analysis of Factors Affecting Firm Performance and Employees Wellbeing: Application of Advanced Machine Learning Analysis

Given the importance of identifying key performance points in organizations, this research intends to determine the most critical intra- and extra-organizational elements in assessing the performance of firms using the European Company Survey (ECS) 2019 framework. The ECS 2019 survey data were used to train an artificial neural network optimized using an imperialist competitive algorithm (ANN-ICA) to forecast business performance and employee wellbeing. In order to assess the correctness of the model, root mean square error (RMSE), mean absolute percentage error (MAPE), mean square error (MSE), correlation coefficient (r), and determination coefficient (R2) have been employed. The mean values of the performance criteria for the impact of internal and external factors on firm performance were 1.06, 0.002, 0.041, 0.9, and 0.83, and the value of the performance metrics for the impact of internal and external factors on employee wellbeing were 0.84, 0.0019, 0.0319, 0.83, and 0.71 (respectively, for MAPE, MSE, RMSE, r, and R2). The great performance of the ANN-ICA model is indicated by low values of MAPE, MSE, and RMSE, as well as high values of r and R2. The outcomes showed that “skills requirements and skill matching” and “employee voice” are the two factors that matter most in enhancing firm performance and wellbeing.

How representative are social partners in Europe? The role of dissimilarity

AbstractSocial partners (trade unions and employers' associations [EA]) and their representativeness can shape labour institutions and economic and social outcomes in many countries. In this paper, we argue that, when examining social partners' representativeness, it is important to consider both affiliation rates and dissimilarity measures. The latter concerns the extent to which affiliated and non‐affiliated firms or workers are distributed similarly across relevant dimensions, including firm size. In our analysis of the European Company Survey, we find that affiliation density and dissimilarity measures correlate positively across countries, particularly in the case of EA in which we focus. This result also holds across EA when we use more detailed, firm population data for Portugal. We conclude that higher affiliation densities do not necessarily correspond to more representative social partners as they can involve greater dissimilarity between affiliated and non‐affiliated firms.

Sustainable HRM, Training for Employability and Organizational Outcomes: the Employers’ Perspective

The present study builds a bridge between sustainable HRM and employability streams of literatures to investigate the relationship between sustainability-oriented HR actions and organizational outcomes. More specifically, the paper explores the effect of training for employability on employer-employee relationship and employee retention, and considers competitive intensity as a potential moderator in these relationships. The analyses draw on the fourth European Company Survey (ECS 2019) with a sample of 21,869 firms with more than 10 employees. Results show that training for employability contributes in improving the employer-employee relationship and competitive intensity positively shapes this relationship. Contextually, training for employability reduces the overall employee retention capacity of the firms. Thus, while the study provide support for the potential win-win nature of employability support, especially for companies that operate in competitive markets and uncertain environment, it also brings out the existence of some paradoxical sustainability tensions which should be managed by the employers.

AMO-enhancing practices, open innovation and organizations’ innovation in the European context: testing a mediation model

PurposeThe literature has recognized the key role of the human resource management (HRM) practices for enhancing firms’ innovative performance. At the same time, scholars have consistently demonstrated open innovation (OI) to be an effective approach for boosting companies’ innovative outcome. Nevertheless, academics have largely overlooked to investigate the complex relationship between HRM practices, OI and organizations’ innovativeness, while claiming further research on organizational antecedents on OI. Using the ability, motivation and opportunity (AMO) framework as analytical lens, this study investigates the direct and indirect relationship between AMO-enhancing practices and firms’ innovation capacity, hypothesizing a potential mediating role of OI.Design/methodology/approachDrawing from the European Company Survey 2019, a large-scale representative dataset of more than 20,000 establishments at European level and building on the “human-side” of OI, the study proposes two hypotheses regarding the relationship between AMO-enhancing practices and OI in fostering product and process innovation in European firms.FindingsThe results show that companies that invest in AMO-enhancing practices not only have higher probability to innovate, but also are more inclined to collaborate with external partners. Moreover, OI not only enhances the innovation capacity of the firm but also partially mediates the relationship between HRM and organizations’ innovativeness.Originality/valueThis is one of the first studies which empirically investigate how the AMO framework increases the likelihood of engaging in an OI process by firms, thereby, increasing their innovation capacity. The results shed further lights on both “the human side” of OI, as well as in the mechanisms linking HRM practices with innovation. Moreover, the analysis provides a deeper understanding about the organizational antecedents of the OI process, as well as corroborating the recent theoretical contributions on HRM and OI.

How Representative are Social Partners in Europe? The Role of Dissimilarity

Social partners (trade unions and employers' associations) shape labour institutions and economic and social outcomes in many countries. In this paper, we argue that, when examining social partners' representativeness, it is important to consider both affiliation and dissimilarity measures. The latter concerns the extent to which affiliated and non- affiliated firms or workers are distributed similarly across relevant dimensions, including firm size. In our analysis of European Company Survey data, we find that affiliation and dissimilarity measures correlate positively across countries, particularly in the case of employers' associations. This result also holds across employers' associations when we use firm population data for Portugal. Overall, we conclude that higher affiliation rates do not necessarily equate to more representative social partners as they can involve greater dissimilarity between affiliated and non-affiliated firms.

The Incidence and Outcomes of Industrial Action: New Evidence from the 2019 European Company Survey

The Incidence and Outcomes of Industrial Action: New Evidence from the 2019 European Company Survey

Delving into the soft side of TQM: an analysis of the implications of employee involvement on management practices

PurposeSoft total quality management (STQM) is a requisite for the successful implementation of hard total quality management interventions. However, there is limited empirical evidence on the implications of adopting soft total quality management practices. Inter alia, little is known about the consequences of employee involvement in addressing organizational and management challenges. To fill this gap, the article investigates the effects of employees' involvement on their commitment to organizational excellence.Design/methodology/approachSecondary data were collected from the European Company Survey (ECS). A large sample of 15,958 European companies was involved in the analysis. A parallel mediation model was devised to investigate the effects of employee involvement on commitment to organizational excellence. Training and motivation were contemplated as mediating variables to investigate the indirect implications of employee involvement on commitment to organizational excellence.FindingsEmployee involvement contributed marginally towards establishing an increased individual commitment to organizational excellence. Training and motivation played a relevant and statistically significant mediating role, boosting the implications of involvement on commitment to organizational excellence.Practical implicationsEmployee involvement is critical for establishing an organizational climate conducive to organizational excellence. However, its implications should be contextualized in light of the mediating role of training and motivation. On the one hand, training is expected to increase employees' participation in the enhancement of organizational excellence. On the other hand, motivation fosters employee engagement in the improvement of organizational dynamics.Originality/valueThe article investigates the implications of employee involvement on commitment to organizational excellence in a large sample of European companies, emphasizing that soft TQM interventions should be implemented according to a systemic perspective in order to pave the way for a viable commitment to organizational excellence.

Human resource practices accompanying industry 4.0 in European manufacturing industry

PurposeRecent research has shown that the implementation of Industry 4.0 requires companies to (re)adjust their human resource (HR) policies. This article focuses on the relationship between Industry 4.0 and three HR practices: i.e. employee involvement, job design and skill development.Design/methodology/approachWe use data of the European Company Survey (ECS) (2019). This nationally representative survey in the EU28 gathers data on workplace practices among managers from establishments employing at least 10 employees. We focus on 5,609 establishments in the manufacturing sector.FindingsFirstly, employee involvement shows a strong positive correlation with Industry 4.0, irrespective of the digital technology used, country or firm size. Secondly, weak but significant correlations are found with increasing job complexity and skill development.Research limitations/implicationsResearch should engage in fine-grained analyses of the alignment between particular digital technologies and their respective HR practices.Practical implicationsOur results stress the importance of involving employees during the implementation of Industry 4.0.Originality/valueDespite frequent acknowledgement across Industry 4.0 roadmaps and maturity models, the predictions for HR practices are empirically incomplete and theoretically inconclusive.

Spanish non-financial corporations and the COVID pandemic: vulnerability, resilience and transformation

Purpose This paper aims to assess the vulnerability and resilience of the Spanish non-financial corporations (NFC) to the shock from the COVID pandemic with consolidated income accounts data, and shows comparative labor productivity and endowment of organizational capital of Spanish firms, as indicators of their capabilities at the outset of the new digital transformation wave proposed by the next generation EU program. Design/methodology/approach The paper first describes the recent evolution (quarterly 2020 data) of the Spanish non-financial corporate sector (gross value added, labor cost, capital formation, profits) in the assessment of the vulnerability and resilience of the sector to the shock of the COVID pandemic. Then second, it estimates a probit model to evaluate the EU country effects in the explanation of the different propensity firms in the European Company Survey database to adopt innovative management and organization practices. Findings In the Spring of 2020, the Spanish NFC were still recovering from the great recession (low resilience), and the severe contraction in value-added and profits of the corporate sector in the first three quarters of the year evidences its high vulnerability. The proved complementarity between organizational and information related assets implies that the low endowment of organizational capital of Spanish firms, could be a severe limitation for the advancement toward digitalization. Research limitations/implications The aggregate corporate sector data used in the analysis of vulnerability and resilience of Spanish firms does not account for the heterogeneous effects of the pandemic across economic sectors (manufacturing and services, for example) and across firms (large versus small ones). Originality/value The paper complements the country-level analysis of the impact of the COVID pandemic in the Spanish economy with the analysis of the impact of the pandemic in the performance of the corporate sector. It provides one of the first analysis of the current endowment of organization capital of Spanish firms and highlights its relevance for productivity growth.