The Management Theory Toolbox
Imagine boldly navigating the complex world of management with a broad range of management theories at your disposal. The Management Theory Toolbox promises you a mind-expanding experience. Prepare to think, rethink, and discover the theory that underlies management practices.
This isn't your typical management podcast. Yes, there are plenty of resources out there that will give you the ABCs of how to run a meeting, hire someone, or even how to fake a sick day without getting caught, but here we like to talk about the behind-the-scenes topics, those concepts and ideas which transcend specific management practices, the ideas which give birth to good management and business practices, rather than simply restate them. We aren’t going to give you specific tips and tricks for becoming an effective manager. Here at The Management Theory Toolbox, we’re interested in the why behind it all, the discoveries of behavioral science, psychology, business, and economics that will open our eyes to what’s happening behind the scenes.
If you're a manager, team leader, aspiring entrepreneur, business student or simply someone toying around with the idea of starting a business and you’re interested in a scientifically rooted discussion of management and business, one which systematically discusses the ideas behind the specific practices you’ve probably already heard a lot about, then this podcast is for you. One thing you’ll be able to count on in this podcast is that every statement is supported by research, and you’ll be able to download the show notes for each episode to find links and references to the source material for everything taught in each episode.
The Management Theory Toolbox
Episode 8: High-Involvement Management—Beyond the Hype and into the Evidence with Dr. Alex Bryson
Uncover the transformative power of high involvement management as we dissect its role in shaping dynamic workplaces. Engaging employees has become an art, and with Dr. Alex Bryson at the helm of our discussion, we promise to illuminate how selective hiring, comprehensive training, and fostering autonomy can significantly impact both company performance and employee satisfaction. Yet, there's more than meets the eye in this intricate dance of management practices; we tackle the variables and complexities that make it a nuanced challenge, resisting the lure of one-size-fits-all solutions.
Witness the delicate interplay of ethical and philosophical considerations in managerial decisions, where the quest for productivity meets the guardianship of employee well-being. Through the lens of real-world implications, we navigate the conundrum of optimizing profits while cherishing the happiness of the teams we lead. With vivid insights into the paradoxical nature of management practices, Dr. Bryson helps us reflect on daily leadership choices that inherently define what is right and just within the sphere of organizational management. Join us for a compelling conversation that promises to elevate your understanding of the workplace and equip you with nuanced perspectives for your management toolkit.
Dr. Alex Bryson [Guest] is Professor of Quantitative Social Science at UCL’s Social Research Institute, and a Research Fellow at the National Institute of Economic and Social Research, the IZA Institute of Labor Economics and WISERD. He is Chief Editor of Industrial Relations: A Journal of Economy and Society and an editor of the Journal of the Royal Statistical Society Series A and the Journal of Participation and Employee Ownership.
Travis C. Mallett [Host], received the Masters of Liberal Arts (ALM) in Management from Harvard University Extension School, where he has also earned Professional Graduate Certificates in both Organizational Behavior and Strategic Management. Travis previously received undergraduate degrees in Electrical Engineering, General Mathematics, and Music from Washington State University. He also served as an Engineering Manager at Schweitzer Engineering Laboratories, where he led a team responsible for developing and maintaining SEL's highest-selling product line. An innovative force in engineering, Travis holds numerous patents and has authored papers and books across diverse subjects. His passion for continuous learning and organizational excellence propels him to explore and illuminate the intricacies of management theories. Through his podcast, "The Management Theory Toolbox", he offers valuable insights on effective leadership, business innovation, and strategic methodologies.
We're living in a world where there are various options available to profit maximizing employers as to whether or not they wish to invest in the well-being of their workers. The question is which sort of employer are you?
Speaker 2:Welcome back to the Management Theory Toolbox. I'm your host, Travis Mallett, and I'm thrilled to have you join me on this journey of continuous learning and growth as we navigate the dynamic world of management. This isn't your typical management podcast. Yes, there are plenty of resources out there that will give you the ABCs of how to run a meeting, hire someone or even how to fake a sick day without getting caught, but here at the Management Theory Toolbox, we're interested in the why behind it all, the discoveries of behavioral science, psychology, business and economics that will open our eyes to what's happening behind the scenes.
Speaker 2:Over the past several episodes, we've been building a way of thinking about organizations that has culminated in the idea of high involvement management, as discussed in episode 7,. The central tenet of high involvement management requires that the senior, middle and lower level managers all recognize human capital as the organization's most important resource, and we identified five specific management practices which comprise a high involvement management style Selective hiring, extensive training, decision making power, information sharing and collaboration. So that's it. We've uncovered the secrets to management. I can see the headlines now.
Speaker 2:How to Pulse your Company with these five secret ingredients for instant business success? Elevate your enterprise with these five spectacular shortcuts to business stardom or unlock success. Five miracle moves to transform your business overnight. Is high involvement management really the only thing we need to know? Of course not. If you've been following along in this series, you know that here at the Management Theory Toolbox, we don't believe there is a single unified theory of management or even a so-called correct answer to these complicated issues, and we aren't even looking for one. Our suspicions are immediately raised anytime someone suggests that management problems can be solved with a few simple tips and tricks.
Speaker 3:Management is more complicated than you think. You only see a tenth of what is true. There are a million little strings attached to every choice you make.
Speaker 2:Management is too complex, there are too many variables and if you're thinking those high involvement management practices sound an awful lot like those tips and tricks that I said you wouldn't find in this show, you're absolutely right, and that's why we're going to dive under the surface, where we'll find that there are still unanswered questions and ambiguous findings. But before we get to that, let's start with some of the evidence for the effectiveness of high involvement management. Several years ago, Dr Allison Conrad of the Ivy Business School wrote a nice article which summarizes some of the research supporting the effectiveness of high involvement management, and I'll link that into the show notes. Overall, the evidence for its effectiveness seems fairly robust. In one study, traditional production systems across three industries were compared with flexible systems involving teams, training and incentive pay systems all elements of high involvement management. Not only did the manufacturing plants using high involvement management show superior performance, but the workers had more positive attitudes and trust towards the organization. Other studies involving employees in the insurance industry found that when employees felt they had the power to make decisions, sufficient knowledge and information to do their job effectively and rewards tied to performance, firms saw not only higher employee retention but overall superior financial performance for the entire firm. Again, high involvement management practices seem to prove effective.
Speaker 2:Now that all sounds pretty straightforward but, as I mentioned, if we dive under the surface, we'll find that even these seemingly clear examples contain complexities that need consideration. And here to help us unravel these issues. No, that's not right. We're actually going to be making things more tangled, not unraveling them. And here to help us see how unravelable unraveling a bowl ununravelable there we go. And here to help us see how ununravellable these issues are is Dr Alex Bryson. Hi, Alex, and welcome to the show. Hi Travis, good to be here, Great. So before we get started, can you go ahead and introduce yourself and tell us a bit about your background and your work?
Speaker 1:Yeah, I'm a professor at University College London in Quantitative Social Science. I tend to crunch large-scale data sets on employers and workers to establish what's going on in the workplace, what's going on in the labour market, and that's what I teach my students as well. On today's subject, management practices, I've been working on that for 20, 30 years, you're great Thank you for joining us.
Speaker 2:So in recent episodes we've been talking about the concept of high involvement management and we're wondering about evidence for whether it's an effective constellation of management techniques. Before we dive into that, can you give us a quick explanation of what exactly is high involvement management?
Speaker 1:Yep, these are practices that are intended to get workers more involved in their jobs, and that involvement can take various forms. One that psychologists talk about is being in the flow, which is essentially being heavily invested in real time in the job that you're performing. A second component is with regards to decision making. So you can imagine that firms can design in or design out the extent to which you make decisions in your job, when you turn up what you do, the flow of tasks, who you interact with, and so on. You can imagine at one end of the spectrum you're basically a call-king machine.
Speaker 1:At the other end of the spectrum you're given a great deal of responsibility for that decision making. You're involved in everything that's going on. A third component is work of voice, involvement in the governance of the workplace, not just at the job level but at the organisational level. And the fourth component, I'd argue, is financial participation, involvement in the sense that you have a real stake in the firm. Of course all of us do in terms of the wage that we receive, but that's heightened when you have something like share ownership or something like that. That gives you additional involvement in what the firm is doing. But in most of the high-involvement management literature. They're primarily focused on this issue of decision making at the job level.
Speaker 2:Now your research also indicates that there's a relationship between high-involvement management and employee well-being. Can you tell us a bit about how a high-involvement management affects employee well-being?
Speaker 1:Absolutely so. Before I talk about that, bear in mind, in the management literature there are really two worlds. World number one is a world in which management practices are a technology that firms deploy to elicit greater productivity from their workers, and that they can do so without any regard to well-being. How so Well, by creating incentives, by monitoring their labour inputs or outputs, by getting them to work to specific targets, and there's a great deal of evidence to suggest that this does actually increase productivity.
Speaker 1:In a world in which we might not even have any interest whatsoever in the well-being of workers, however, there is another part of the management literature that says hold on a minute. We think that most of these practices operate through worker well-being. How can they do that? Well, these involvement practices can actually lead to improvements in organisational commitment and job satisfaction, because they engage you in your job more fully than a standard job, and they can do that by increasing the degree to which you have control over your job, the degree to which there's mental stimulation in your job, the degree to which there are social interactions with others in the workplace which you actually value as an individual. So those are all the good things, and they could conceivably result in improved productivity.
Speaker 1:Not necessarily, it has to be said, could be a scenario in which an employer is giving higher responsibility and autonomy to a worker who is actually rubbish at their job, at which point that's a disaster. But if you get the job match right that is, the link between who you employ and the job that you want them to do as an employer then this well-being can be one conduit by which the management practices can elicit increased productivity on the part of the worker, either because they're working more smartly, more efficiently or more avidly because they've got greater organizational commitments or job satisfaction. There is, however, a counter argument, and that is that some workers see this increase in their involvement as tantamount to work intensification. That is something that they might not like, because it implies greater effort and they're not being paid for it. So there is a conceivable scenario in which this labor intensification process leads to disengagement or conflict, as workers feel a lot is being demanded of them and they're getting little in return. So that's why it's an interesting and fruitful area for empirical investigation.
Speaker 2:Now I'm curious if the management practices don't take into account the individual's characteristics like you brought up the example of the employee who may not be skilled in particular tasks or particular job If the management practices are not taking into account their development level or their stress levels, identifying the individual motivations, can we really say that those are high-involved management practices?
Speaker 1:Well, you make a very reasonable point. My own view would be that any firm that was interested in deploying these practices should do a couple of things. Number one they should spend a great deal of time thinking about recruitment and retention of workers. So they should be screening workers to establish what type of worker. If workers are heterogeneous with respect to their tastes for high involvement, then it's very much incumbent upon the employer to make sure they get the right sorts of workers in in the first place. So that means spending time and effort on the hiring process Critically, in fact, we know from the literature is that people who aren't well suited to these practices tend to quit.
Speaker 1:They go back to jobs where high involvement is not part of the job package. So that tends to happen. Naturally there's self-selection out, but the employee needs to think hard about hiring. Secondly, as you quite rightly say, travis, there can be scenarios in which these high involvement management practices come across as very high in terms of labor intensification, and there's a literature on this. There's a theory and there's empirical evidence to suggest management must deploy supportive mechanisms. This is about training, this is about supervisory support and peer support to allow the worker to deal with those high levels of demand that are being made in such a way as to maximize productivity and minimize job-related stress.
Speaker 2:Interestingly, you've also found that high involvement management may actually lead to an increase in short-term absences. Is that possibly due to the increased productivity, the increased efforts, or are there other reasons?
Speaker 1:Yeah, so that's right. In a study for Finland, in fact, we identified the fact that the introduction of these high involvement management practices led to an increase in the taking of short-term absences, but no impact on the taking of long-term absences, and there are a couple of reasons for that. First of all, in the presence of high involvement management, workers are often capable of multitasking across different jobs. As such, they can be substitutes for one another in the labor process. That basically means that if, in a high involvement world, short-term stresses and demands are such that you feel the need to take yourself out of the workplace for a day or two, that will come at a minimal cost to the employer because they can redeploy the other workers to perform those tasks.
Speaker 1:That doesn't normally happen in the absence of high involvement management, where there are fewer workers who can substitute for you in your absence. The reason that these short-term absences do not result in long-term absences is because those short-term absences are people recharging their batteries in order to avoid long-term absences. And, bear in mind, it's not clear what an optimal level of absence taking would be from a profit maximizing firm. We do anticipate that long-term absences are really problematic because it's very difficult to get a substitute worker in to cover for long-term absences Short-term absences. If the workers are operating in a highly productive world and are avoiding long-term absence by taking more short-term absences, that could be profit maximizing.
Speaker 2:Speaking of profit maximizing, you also mentioned that half of your workers, although they might be more productive, might run into the issue where employers are not necessarily invested in maximizing their well-being because the return on investment is unclear or ambiguous and there might be high costs associated with some management restructuring to make that happen.
Speaker 1:You're absolutely right. So the first point there is is there a relationship between the well-being of workers and their productivity? And the answer is that is yes. We found this in two experimental studies one by Andrew Oswald, done many years ago, appeared in the Journal of Labor Economics, where they randomly assigned happiness believe it or not and found that people were more productive when they were randomly assigned into the happy group, and a second paper that's come out very recently in Management Science, which instruments for happiness using the weather outside, shows that workers who are happier are more productive in a call centre setting. And we've also had some observational studies, including panel studies tracking individuals and firms over time, that show increases in productivity over a five-six-year period when there is an increase in happiness within that workplace. So all of that is pretty clear.
Speaker 1:The question is for a given employer whether they're going to spend the time and effort that's required to make workers happier if, for example, they have cheaper management options available to them that perhaps deliver similar or better productivity without regard to their workers' well-being, and that is actually distinctly possible. They might go down the route, which is more about incentives, monitoring, records, which is well-established in the literature, the work of Nick Bloom and John Van Riener, for example, clearly illustrates, there are productivity returns to engaging in those sorts of management practices without any regard to worker well-being. Essentially, we're living in a world where there are various options available to profit-maximising employers as to how they deploy management practices, what management practices they deploy and whether or not they wish to invest in the well-being of their workers. The question is which sort of employer are you? So within the literature, there are some people who argue that certain management practices are universally applicable across all types of firms. In other words, if you do more of these things, productivity will follow. There are others who say actually no. What set of management practices are going to work for you as a firm are very much contingent upon the sorts of workers you wish to attract, the nature of the market that you're operating and the goods and services that you are producing, and so I think employers need to spend some time thinking about that, reflecting a lot upon the nature of the literature. Of course, oftentimes they don't do that.
Speaker 1:My own view is, generally speaking, firms are going to benefit most from investments in worker well-being where they're employing highly skilled labour which is difficult to replace. So it's no surprise to discover that many of the high-tech firms Google, apple, microsoft are the sorts of firms that at least present themselves as firms that are investing in the well-being of their workers. That's because they want long-term contract with those workers and quits are costly when labour turnover is less costly to the firm. It's not so clear to me that investing in the well-being of workers is profit maximising. So you have a world where there are multiple equilibria.
Speaker 1:There are different things that an employer could do in order to maximise profits. Of course, really interestingly, if you think of a Venn diagram, there might be a group of firms that are close to the middle. They could flip-flop one way or the other, and I think that's where policy could come in to try and create incentives, to try and generate what is, after all, a really important public good from a governmental and societal perspective, namely the health and well-being of workers. Because, of course, if workers are not healthy, if their well-being is poor, there's a negative externality for the rest of society in terms of health costs and so on.
Speaker 2:So to make sure I'm understanding this, you had mentioned previously that some workers will self-select themselves out of a high-involvement management workforce. So, bringing that to what you're saying now, it's possible that you could have a firm where everybody has been selected. Their temperament is to dislike high-involvement management practices. Yet that firm can be just as productive, if not more so, than another firm where everybody is aligned with high-involvement management practices.
Speaker 1:It's certainly conceivable, both in theory and in the empirical literature. As I've already intimated, there is a literature out there about the importance of management practices, but not necessarily the high-involvement flavor. Rather, this literature stems from what economists call a key principal agent problem. So where the principal is the owner of the firm and we as the workers, the agents, the contract is open, and it's very hard to contract in a clean, simple way. For effort Problem is shirking the idea that, okay, you've employed me, but maybe I'll go and make a coffee now. Maybe I won't be working, but maybe I'll play on my game or check my latest football score or something like that, online before getting on to the next task. Now employers might worry about that if they're saying hold on, I'm employing you to do X, y and Z, but you're doing X and Y and A and B.
Speaker 1:In that world you've got to create incentives for workers to do what you expected them to do when you contracted with them in the first place. And if you're really concerned, you might start to try and heavily monitor their effort. Now. That will work for some types of worker workers who perhaps don't really want to spend a lot of time and effort investing in firms, specific human capital in order to have decision-making responsibilities in their firm. They might just want to turn up for work, do the job they're told to do, take their pay packet and go home.
Speaker 1:There'll be other types of workers who'd find that monitoring highly intrusive or might actually adversely respond to pecuniary incentives, for example, if they believe that they're involved in a job where intrinsic job satisfaction is key, which is often the case with white collar occupations, which is why you rarely see financial incentives in terms of bonuses and the like deployed for teachers, nurses and so on. But what do you see instead? You see career incentives moving up a ladder over a long period of time, support structures in place, such as training, which are all geared towards trying to encourage workers to get involved in their jobs, to offer perhaps additional effort, and so, in the theory, would be a sort of gift exchange. We'll offer you this long-term contracts with career progression, training, responsibility, good job quality as indicated by job control, perhaps a voice in the workplace, in the expectation that you, as the worker, will reciprocate with effort over and above that which is standardly laid out in a contract.
Speaker 2:Now, in recent decades, high involvement management seems to have become a hot topic in the field of management theory, perhaps because of the rise of these large tech firms, as you mentioned earlier. How do you see the role of such management practices evolving in the future?
Speaker 1:Well, that's a really, really great question because you're straight into the issue of the diffusion of management practices. So if we start from the premise that high involvement management is the frontier, it's the optimal device by which to manage your workers, then you anticipate, if information is free flowing across firms, that other firms start to recognize the value of these practices and adopt them as well. And yet across most of the literature there is uneven adoption. These practices are not as common as you might think if you were just reading the pages of business magazines. There are many firms that make profits that do not undertake these management practices Now either. They are operating sub-optimally. Perhaps, for example, an economist would say they are operating in markets that are less than fully competitive. On the other hand, it could be that whatever they are doing is optimal from a profit-making perspective and in fact, for various firm-specific reasons, it will be highly costly for them to create the management practices that lead to improvements in worker well-being, and it's for that reason that we don't see them At the moment. The literature is somewhat uncertain about this. There is evidence that certain of these incentives, monitoring and targeting devices the more of it that you do, the more you see increases in productivity, almost linear returns, which is very unusual in this literature. You would anticipate diminishing returns after a certain point. So there is some credible evidence to suggest that actually many firms are operating at a suboptimal level in terms of the management practices that they are deploying, notwithstanding the fact that they perhaps are being profitable, to a point.
Speaker 1:That raises, then, the key question what is the barrier to diffusion?
Speaker 1:Ordinarily, one would think straight away about information and information flows and in fact, in some comparative work I've been involved in, what we show is that these management practices are much more diffusive the French case than they are in the British case, and there are reasons for this.
Speaker 1:One of them is the debt and strength of employer networks in France as compared to the UK case. In the UK case there's much more atomistic competition, as between firms. They do not share information about what's optimal in terms of management practices, whereas in France, as a tradition, there are structures in place where that information is shared, and it could well be that there are information deficits facing employers that need them to deploy suboptimal practices, and we might anticipate that policy interventions to create better information flows, as between employers, might lead to increased diffusion of these practices. Of course, there's one possible counter to that, which could be that many firms are just in a different space, that these practices are not universally applicable and indeed are contingent upon the environment in which the firms operate. At the moment, we don't have a literature that speaks to these issues.
Speaker 2:Thank you, this was definitely fascinating. Before we sign off, can you tell our listeners how they can find you in your work? Yes, so if they?
Speaker 1:just Google Alex Bryson, ucl, they will get me, because there aren't very many Alex Bryson's in the world, I'm glad to say, and I have a website at UCL that shows all my research. Or they can just directly email me at abrison at uclacuk. Always glad to hear from people and I'd be delighted to respond directly to any questions that they have. Thanks for having me, travis.
Speaker 2:Great. Thank you. That was really interesting how worker well-being is often tied to improved performance, but on the other hand, some employees may not want the higher intensity work environment associated with high involvement management practices. So is focusing on well-being for all employees actually the right thing to do? Or perhaps someone might argue the disregarding individual preferences like that is actually not cultivating the well-being of an employee. As long as our definition of well-being includes tailoring to the preferences of employees, then we could still say that high-involvement management practices are superior. But wait, I'm sure we all know someone who seems to shirk their responsibilities at work. Should managers really be expected to cater to the preferences of an employee motivated by shirking their responsibilities?
Speaker 2:A wise sage might smilingly point out that true well-being comes from growth and that making our employees uncomfortable as we enhance their skills, autonomy and decision-making power is a prerequisite to cultivating their well-being in the long run. That if people aren't being challenged by their jobs, if there aren't difficulties along the way, then they won't be satisfied and find meaning in it. At the heart of these issues lies the philosophical concern of balancing ethical considerations in organizational decision-making, and this fundamental concern intertwines the valuation of human capital, the complexity of high-involvement management and the ethical implications of balancing employee well-being with organizational goals. The issue reflects the philosophical struggle to define what is right or just in the context of organizational management. It challenges leaders to consider not just the philosophical or productivity outcomes of their management practices, but also the ethical dimensions of their decisions, particularly how they affect human well-being and dignity. Now, if you're expecting to find the answers to these complicated issues in a short podcast episode on management that you came across on the Internet, then you probably haven't been paying attention.
Speaker 3:Everything is more complicated than you think. You only see a tenth of what is true. There are a million little strings attached to every choice you make. You can destroy your life every time you choose, but maybe you won't know for 20 years and you may never, ever trace it to its source, and you only get one chance to play it out.
Speaker 2:That clip is from the 2008 postmodern psychological drama Sinecta Key, new York, where a funeral preacher reminds everyone that the choices we make can have profound impacts that we may never fully unravel. Of course, there's no way we'll be able to resolve these issues. I'm not even convinced that it's possible to articulate a clear problem statement that takes into account all the related issues, and although we may never be able to completely detangle these issues, to use the words of Harvard professor Michael Sandel, we live out some answer to these questions every day. Each day, like it or not, we are picking one of these paths. When we link employee rewards to performance metrics, which is typically a high involvement management approach, we may be choosing to value efficiency in high performance over employee well-being, leading to a competitive environment, potentially fostering stress and undermining collaboration. When we choose to approve or deny an employee's leave request, we may be choosing to value one employee's well-being over a team's workload, or vice versa.
Speaker 2:As Dr Bryson said in our interview, the question is what kind of employer are you? And that's what I want to leave you with this week. Maybe take some time this week to reflect on a particular action that you recently took at work. Try tracing out some of the interrelated threads, bringing some awareness to how that action may ripple throughout the organizational web and how that action reflects, or may be in conflict with your personal values. Trying to develop an awareness of the interrelated issues, understanding that these practices are not just simple tips and tricks that can be applied without thinking about it and that may just result in a better outcome for you, your employees and your stakeholders. So with that, thank you for tuning in to the Management Theory Toolbox. I'm your host, travis Mallett, and it's been a pleasure to learn and dissect these issues with you. Stay tuned for our next episode where we'll embark on our first major topic of organizational behavior, learning and perception. In the meantime, keep learning, keep exploring and keep adding to your management toolbox.
