Partnership Resource Centre
Partnership And Productivity In The Public Sector – Summary Report
The Impact Of Workplace Partnership On Public Sector Productivity
Evidence Linking Productivity Gains to Partnership
Establishing causal links between workplace partnership and productivity isn't straightforward. The links between the social relationships within an organisation and their outputs is so complex that it is extremely difficult to untangle the effects of partnership from the many other factors that might have an effect on productivity or quality. In addition, partnership relationships differ sufficiently between organisations to make the validity of any comparison problematic. Most research on partnership, therefore, takes a qualitative case-study approach.
However, the wider body of research on the effects of different management practices and work organisation strongly indicates that partnership does improve productivity and quality, because of evidence that partnership can encourage the practices that are shown to do so. Practices shown to produce significant permanent increases in labour productivity include employee participation and cooperative relationships associated with less hierarchical management methods. A conducive environment is one in which partnership is seen to contribute to increasing employment security and the benefits of productivity increases are shared with workers.
The literature also suggests that, in the context of a high-involvement approach to management, unions have at worst a neutral effect and at best a positive impact on productivity. Moreover, there are strong indications that, along with genuine management commitment, a strong union base is one of the critical success factors in high-performing partnerships, and its absence is a feature of low-performing ones. This appears to be related to the role of strong and independent unions in ensuring that employee cooperation is not unfairly exploited.
Reasons Why Workplace Partnership Should Improve Productivity
The wider theoretical evidence reinforces those empirical findings, and the study analyses it into three sets of reasons why workplace partnership would be expected to improve productivity.
Organisational Reasons: Organisational Adaptation and the Environment for Decision-Making
Workplace partnership may enhance performance simply by giving rise to more effective decision-making than that which is possible under hierarchical-bureaucratic or market systems of governance. Workplace partnership involves a range of participative decision-making structures at various levels within the organisation, operating independently within their respective areas of competence in the context of an overarching general agreement about the aims and scope of the process.
This kind of system is particularly well-suited to organisational environments characterised by a continuing need to adapt structures and processes to meet changing demands, which applies not only to the modern firm but also to contemporary public services. Partnership can contribute to the delegation of decision-making authority to the most appropriate level, enabling the most relevant information to be mobilised operationally within an agreed set of overall organisational aims and priorities.
By its nature, such an approach requires the development of sustained trust, and the report argues that market approaches to public service management (characteristic of new public management) are deficient in their understanding of the importance and effects of trust, cooperation and commitment. Among the strengths of workplace partnership appears to be its capacity to develop and mobilise these qualities in support of the social, economic and political goals of governments in ways that enable appropriate technical solutions.
Relational Reasons: Commitment, Legitimacy and Mutual Trust
There are also reasons relating to employment relationships why partnership might give rise to improvements in productivity and performance. The argument assumes that a genuine commitment to the goals and practices of the organisation will give rise to initiative, willing cooperation and functional flexibility. Overall, the literature supports the idea that beneficial outcomes flow from such shared commitments to both objectives and process, and that partnership on that basis enables employees to believe that their organisation's success is in their interests too.
Where organisational processes, structures and relationships have some history, their outcomes are reasonably predictable and participants can be confident that the stance they adopt in response is appropriate. In the context of change, however, when organisational processes are new, the commitment-action-performance cycle makes it difficult for participants to decide whether or not they should commit. The solution is trust in the process, which undermines either side's assumption that the other's propositions in favour of change should be interpreted as strategic attempts to gain some advantage over the other. Where mutual trust is sufficiently high, change can be embarked upon in the confidence that its full benefits will eventually accrue to each participant in proportion to the costs borne.
But how to create the circumstances under which it is rational to advance trust, even though there is no history of relationships based on trust? Partnership can resolve this problem if it is based on guarantees that reduce or remove the risk that one party's adoption of a cooperative stance will be strategically exploited by the other.
Psychological Reasons: Control and Empowerment
The third set of reasons why partnership should improve productivity can be called psychological. They relate to the opportunities that partnership provides for employee autonomy and other forms of direct participation in decision-making. The literature on the psychological aspects of participation and employee involvement is vast and is generally associated with models of industrial democracy, which emphasise the importance of the workgroup and the need to encourage personal development and job satisfaction at work.
Research has demonstrated the links between participation and employees' psychological well-being, and between psychological well-being and individual performance, including the propensity to cooperate with managers and employees. The reasons are that when people have more control over their lives (including at work), when they are enabled to feel autonomous and equally valued, and when democracy reinforces their confidence in decision-making processes and their outcomes, they tend to respond positively.
This theory has to be tempered by evidence suggesting that certain practices designed to increase worker autonomy and direct participation in decision-making may, in some circumstances, lead to negative outcomes for individuals in terms of increased stress and work intensification. It has also been widely reported that direct participation, particularly team-working, tends to be accompanied by increased levels of mutual surveillance and social control within the group. However, these risks can be minimised by ensuring that direct participation is part of a coherent overall strategy that includes "partnership guarantees".
Workplace Relationships as the Foundation of Individual and Organisational Performance
What this brief discussion suggests is that, even if the direct causal link from partnership to productivity is less clear, the "procedural and substantive guarantees" on which effective partnerships are based, and which they reinforce, do contribute to the success of organisations in underpinning and enabling organisational adaptation and individual performance. As opposed to a top-down management system, in a genuine partnership environment, employees are treated as adult human beings with rights that must be respected under all circumstances. The scope of an employee's direct control over his or her work is maximised in an accountability system that links that control to responsibility to others. At the same time, structures of representative participation articulate and transmit employees' knowledge, opinions and interests within collective decision-making processes.
In this way, the interaction of the organisational, relational and psychological factors outlined above may well be mutually reinforcing through a virtuous spiral of cooperation, improved performance and individual benefit.