The way we organise our workplaces will play a vital role in the future of the economy and its ability to compete. Evidence shows that workplace innovation leads to significant and sustainable improvements both in organisational performance and in employee engagement and well-being.
Researchers have accumulated a substantial body of evidence relating to the impact of workplace innovation practices on productivity, manufacturing quality, customer service, financial performance and profitability, and a broad array of other performance outcomes.
One of the most significant studies, the Employee Participation and Organisational Change (EPOC) survey of 6000 workplaces in Europe, confirms that direct employee participation can have strong positive impacts on productivity, innovation and quality. Of firms which implemented semi-autonomous groups, 68 per cent enjoyed reductions in costs, 87 per cent reported reduced throughput times, 98 per cent improved products and services, and 85 per cent increased sales.
A representative sample of 398 Finnish manufacturing firms with more than 50 employees found that innovation practices such as employee involvement and labour-management cooperation are positively correlated with firm productivity. Research among 650 Dutch SMEs also indicated that companies with workplace innovation initiatives achieve higher productivity and financial results compared with other firms.
Another study based on 932 Dutch companies of different sizes in different private business sectors demonstrated that factors including participative and dynamic management practices, flexible organisation and smarter working lead to better performance in relation to turnover, profit, market share, innovation, productivity, reaching new clients and reputational capital.
Extensive Swedish surveys found a very clear link between flexible, empowering forms of work organisation and performance: flexible organisations were more productive (+20-60%), showed a much lower rate of personnel turnover (-21%), and a lower rate of absence due to illness (-24%) compared with traditionally organised operational units.
A review of some sixty American articles shows that the magnitude of the impact on efficiency outcomes is substantial, with performance premiums ranging between 15 percent and 30 percent for those investing in workplace innovation.
Workplace innovation leads to improvements in organisational performance and quality of working life. As well as enhancing productivity, empowering work practices such as self-organised teamwork increase employee motivation and well-being, playing a particularly important role in reducing stress, enhancing job satisfaction and mental health, and improving retention.
An evaluation of 470 workplace projects undertaken in Finland between 1996 and 2005 shows that improvements in quality of working life have a strong association with improvements in economic performance, and indeed may actually enable them. Findings suggest that participation is the main driver of this convergence between economic performance employee well-being.
Likewise a German study examined companies in the production, trade and services service where positive improvements were made in physical workload, sickness absence, ergonomics, work organisation, safety, style of leadership, and stress management. Managers in these companies reported improved performance across a range of indicators, resulting both from a decrease in absenteeism and an increase in social and vocational competences.
The 2013 European Company Survey of 30,000 establishments demonstrates a clear relationship between employee involvement and participation on the one hand and better business outcomes and workforce health on the other.
The benefits are only fully realised when workplace innovation practices run throughout the entire company including individual learning and discretion, self-managed teams, open and fluid organisational structures, delegated decision-making, simplified administrative processes, a coaching style of line management, regular opportunities for reflection, learning and improvement, high involvement innovation, entrepreneurial behaviour at all levels, and employee representation in strategic decisions.
Despite the evidence of performance and health benefits, successive surveys make clear that the spread of these practices is limited. Results from recent European Company Surveys, European Working Conditions Surveys and UK Skills and Employment Surveys show that job autonomy has not risen in the past decade while there has been an increase in job demands. Jobs in which employees have regular opportunities to exercise discretion and to learn on the job are enjoyed by less than 20% of the UK workforce. Well under 30% of UK workers are involved in decisions about how work is organised and the number has been declining steadily since 2001. One recent survey estimates the use of self-managing teams, a basic building block of good work organisation, at only 10%. The UK compares unfavourably with several other Northern European countries against many comparable indicators.
The limited spread of workplace innovation practices can be understood in terms of several interwoven factors, including:
- low levels of awareness of good workplace practice and its benefits amongst managers and business support organisations;
- an excessive tendency to see innovation purely in terms of technology;
- poor access to robust methods and resources for workplace innovation and sustainable change;
- ‘partial change’ – a failure to address the interdependent organisational practices that can undermine the success of a change initiative;
- ‘path dependency’ – previous choices relating to business strategy, human resources, capital investment and organisational culture can lock organisations in to established ways of doing things.
- the failure of vocational education and training to provide knowledge and skills relevant to new ways of organising work.
As a Workplace Innovation Practitioner, you will gain the knowledge, skills and practical resources to enable you to overcome each of these obstacles, and to build a systematic and sustainable programme of change within your organisation.
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Tutor’s tips: Importance of action planning and 4 F’s feedback flow chart, involving and engaging at an early stage, considering all 4 Elements and their interdependencies, focus on jobs and teams, how to engage people in innovation and improvement, your role and development as a leader.
Objectives
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