Involvement and Productivity – The missing piece of the puzzle?

Employee involvement and how it can boost productivity

Since the economic crisis of 2008, the UK has experienced a lengthy and worrying stall in productivity. There has been no sign of a return to pre-crisis levels of productivity growth, with the latest figures showing productivity in 2014 was just a fraction higher than the levels reached in 2007. 

The long stall in productivity is a cause for concern. On an enterprise level, the productivity of a business matters for its ability to compete in the marketplace and make a sustainable profit. On a national level, productivity matters for global competitiveness, for growth, for living standards, and for public services. 

Productivity also matters to growth. If we are to boost GDP, we need either to increase employment levels, increase the number of hours worked, or increase productivity. Productivity is central to wages and living standards and increasing productivity is crucial to competing with emerging economies, where labour costs are much lower than the UK.

IPA’s new report – Involvement and productivity – The missing piece of the puzzle? – argues that any approach to boosting productivity that neglects the workplace and the role of employee involvement is incomplete. Involving staff and giving them a voice at work can boost employee engagement – something that has clear links to organisational outcomes. Employees are well placed to be able to contribute to organisational decision-making, and to identify improvements in their own roles or in wider business processes that can boost productivity. 

In this report, we look at employee involvement in various forms, and how it could help address the productivity gap. We have articles from employers, from the HR community, from trade unionists, from academics, from think tankers, and others. We look at the labour market as a whole and at specific sectors. We examine the extensive evidence of the links between engagement and productivity; including from the Workplace Employment Relations Study, the Employer Skills Survey, CIPD surveys, and behavioural experiments. We look at various approaches to involvement, from engaging with employees to employees on boards; from schedule-based working to High Performance Working; from trade unions to financial participation; from task discretion to organisational involvement.